Yemen’s economy has been undergoing lean years that weakened its powers and productive capacities and exhausted its physical, financial and human resources. To monitor the socioeconomic and humanitarian developments, the Economic Studies and Forecasting Sector at the Ministry of Planning and International Cooperation (MoPIC), in collaboration with UNICEF, has been issuing monthly Yemen Social and Economic Update since March 2015 in both English and Arabic. This issue No. (20) highlights a general and brief overview of the current socio-economic and humanitarian developments in Yemen.
Currently, the national economy of Yemen is facing a sharp contraction due to the financial and economic crisis and liquidity crunch that have paralyzed the economy and deprived 1.25 million public employees and their families of their main source of income. Suspension of oil and gas exports and limited donor support have resulted in expanded public budget deficit, which stood at YR1.59 trillion (equivalent to about US$7 billion) during January 2015-August 2016. Foreign exchange reserves have fallen to their lowest levels. Officially, the Yemeni Riyal has lost more than 30% of its value against foreign currencies by the end of 2016, compared to early 2015. This has caused inflation and worsened the suffering of Yemenis.
In parallel, unemployment rate has increased and food insecurity situation has worsened – today, more than 14 million people are food insecure. Yemen is facing an acute humanitarian crisis, where about 18.8 million people are in need of urgent humanitarian assistance (OCHA, November 2016). Public institutions and social services providers, health in particular, in several areas of the country are unable to perform their functions. Several public institutions work only two days a week and social service facilities lack the minimum operational costs.
To alleviate the humanitarian suffering of millions of Yemenis, and women and children in particular, we call on the donor community to provide the support needed to sustain and recover basic social services and resume their support for social protection programs that were suspended from early 2015.