The Yemeni economy in 2022.. high prices and widespread corruption
During the year 2022, the Yemeni economy witnessed a number of transformations that were reflected in the form of an expansion of the poverty gap, hunger, unemployment, and the expansion of the humanitarian crisis to include most of the population in the country.
The Yemeni economy received the year 2022 with the repercussions of the Russian-Ukrainian war, which caused supply chains to stop, with a number of countries imposing restrictions on their exports, especially of main commodities, wheat, of which Russia and Ukraine are the two most important countries that supply wheat to Yemen.
The supply of wheat has decreased in Yemen, causing its prices to rise by thirty percent, compared to what it was before the outbreak of the Russian-Ukrainian war, not to mention the high import bill for basic commodities, which increased the Yemeni balance of payments deficit, with the decline in the volume of remittances of Yemeni expatriates.
The rise in prices is the most key feature that the Yemeni economy witnessed during the past year, as it recorded more than seven new price doses of fuel, in addition to the increase in the prices of food commodities by more than thirty percent.
The price hikes included most of the Yemeni regions in the year 2022, with the price of one petrol tank with a capacity of 20 liters rising to YR12,000 in the Houthi areas and more than double that in the government-controlled areas.
The value of the national currency witnessed a continuous deterioration with a state of fluctuation during the past year, as the Yemeni riyal opened the year 2022, at a level of 1020 riyals against the dollar, to decline by about two hundred riyals at the end of the year to reach the level of 1200 per dollar, with expectations of a greater decline in the new year in light of the mounting economic challenges.
While there was no improvement in the exchange rate of the local currency, which continued to fluctuate, the crisis of levies imposed by the Houthis intensified, not to mention Houthi further restrictions on the private sector, the closure of activities and the confiscation of property and companies under various pretexts.
During the past year, the Houthis stepped up the pace of collecting levies and royalties, which included mango, grape and lemon farmers, private schools, hospitals, coffee farmers, and owners of small shops...etc.
The past year also witnessed a decline in employment opportunities with an increase in the unemployment rate, in addition to the irregular payment of salaries of civil workers, a large part of whom are looking forward to the year 2023, any signs or indicators to solve them, in a way that contributes to improving the deteriorating living conditions.
In the last quarter of last year, the Houthis escalated their conflict on the economic side, reaching a peak with their targeting of oil and gas export ports and facilities in the liberated governorates, which caused the cessation of oil and gas exports, thus depriving the state budget of an important tributary that will increase the size of economic difficulties during the new year. .
Indicators of these difficulties emerged with the statement of the Head of the Presidential Leadership Council, Rashad Al-Alimi, that the government faces the danger of non-disbursement of salaries in the coming months with the cessation of oil and gas exports, with expectations of a new deterioration in the value of the Yemeni currency, a rise in inflation and a deterioration in the purchasing power of the national currency.
In the field of combating corruption, the past year witnessed a number of events related to the spread of corruption on both sides of the conflict, as Houthi corruption cases were revealed in the new funds established by them, not to mention Houthi corruption and extortion of international humanitarian organizations, looting of humanitarian aid and government revenues and transfer them to support the war effort while continuing to refuse to pay the salaries of employees.
While the government side in the liberated areas was suffering from rampant corruption, with the continued absence of any state general budget and final account, in addition to what was revealed of corruption in the prime minister’s office worth $45 million in the prime minister’s office, which is a difference in the fuel prices of Yemenia Airlines, that caused the ticket prices to rise.