For Yemenis Abroad, Helplessness Looms as the Yemen Economy Faces Collapse

Money from loved ones working abroad has helped many Yemeni families survive a civil war that has left their country on the brink of famine. But without peace, the future looks bleak

BY CHRIS GELARDI

Ahmed Alhlme, 45, works at a bodega in Manhattan. He has no immediate relatives in New York – his parents and wife are deceased – but he still has a large family to feed.

Almost 7,000 miles away, in his hometown of Sana’a, the rebel-held capital of Yemen, an estimated 50 members of his extended family depend on the money Alhlme sends from his wages at the bodega to survive. They include his only daughter, six brothers, two sisters and all of their families.

“I don’t know how they’re going to eat,” he said. “Whatever I can, I help.”

Civil war between the internationally recognized government and the Houthi rebels has plunged Yemen into a state of chaos. Since 2014, fighting between the Houthis and the American-backed, Saudi-led coalition supporting the government, as well as other factions like the Islamic State and al Qaeda in the Arabian Peninsula, have taken more than 10,000 lives and displaced around 3 million people.

Yet despite the regular danger of bombs, landmines, snipers and armed drones, for most of those stuck in the country, hunger is the real threat.

United Nations reports outline a dire food situation for those caught amidst the fighting. Dwindling imports and skyrocketing food prices have made Yemen “one of the worst hunger crises in the world.” More than 17 million people – 65 percent of Yemeni households – are food insecure, with over 7 million requiring emergency humanitarian assistance. More than half of households are buying food on credit.

Alhlme came to the Unites States in 1991 with his father, who left the Arabian Peninsula’s poorest country to find better economic opportunity. Since then, Alhlme has worked in New York to provide for his relatives back in Yemen.

Today, Alhlme estimates that he sends between $400 and $500 to Yemen via Western Union and MoneyGram every two to four weeks. During a typical week, Alhlme claims that he works seven days in the bodega, often 12 to 13 hours a day. To mitigate New York’s high cost of living, he lives with his cousin, who doesn’t charge him any rent.

“I’m just working for them, to support them,” he said, referring to his family. “That’s it.”

 

Remittances in Yemen

Remittances have always played a significant role in Yemen’s modern economy. For decades, it’s been common practice for Yemeni men to migrate to rich Gulf countries like Saudi Arabia and the United Arab Emirates to provide for their extended families. But according to Scott Paul, senior humanitarian policy advisor at Oxfam America, as the financial situation in Yemen worsens, reliance on remittances is reaching dire levels for some families.

“The more people slide into crisis, the more dependent people become on the generosity of their loves ones,” he said.

According to data from the World Bank, remittances to Yemen totaled $3.4 billion in 2015 – almost nine percent of Yemen’s gross domestic product for that year. That’s up from between four and five percent in the years leading up to the stepping down of former president Ali Abdullah Saleh. And that’s only going to increase, as 2016 estimates show remittances in Yemen increasing two percent while the GDP continues to contract.

From Saudi Arabia alone, between 580,000 and 800,000 Yemeni migrants sent more than $2 billion back to Yemen in 2015, according to United Nations and World Bank data. That’s between $2,500 and $3,500 per person in a country that failed to set a $666-per-month minimum wage for foreign workers.

From the United States, nearly 41,000 Yemeni migrants sent $132 million, or around $3,200 per person.

For those who don’t have family sending them money from abroad, many have had to rely on assistance from those who do. According to Paul, “secondary remittances” have become commonplace in Yemen, especially among the rural population.

“For a lot of people in those rural areas, that’s the difference between life and death. That’s their one meal a day,” he said.

Alhlme said that this creates a difficult situation for his family. When their neighbors don’t have any food or money, they share some of the money Alhlme sends them so everyone can live.

“That’s why we’re working hard, why we’re working 12 hours a day,” he said, referring to Yemeni bodega workers in New York City. “All Yemenis – they support people.”

 

A disruption in the system

But how much Yemenis abroad are going to be able to continue to support their loved ones is uncertain.

According to reports from experts like those at the Sana’a Center for Strategic Studies, an independent Yemen-based think tank, that the Yemeni economy hasn’t totally collapsed is largely thanks to the foresight of the Central Bank of Yemen. Until recently, the Central Bank was the only national institution that stayed neutral in the war – even paying the military salaries of both rebels and government forces – thus allowing it to take stabilizing measures to steer the Yemeni economic system away from total disaster.

In September 2016, however, Yemeni President Abdrabbah Mansour Hadi decided to relocate the Central Bank from Houthi-controlled Sana’a to the then-government-controlled southwestern city of Aden, all but destroying its ability to act as a bilateral force that facilitates imports, dispenses government salaries, protects the value of the Yemeni rial and staves off widespread famine.

According to the Sana’a Center, the last time most of the 1.2 million Yemeni public sector workers received paychecks was August 2016. It estimated that, as most civil servants are head of households, this lack of money flow may have resulted in the loss of income for as many as 6 million people.

It isn’t just paychecks that are suffering from the Central Bank’s recent incapacitation, either. Money is becoming harder to transfer from abroad and between bank accounts, and a shortage of physical rial notes has prompted officials to put limits on the amount of money people can withdraw from banks.

Liny Suharlim, head of missions and Yemen country director for ACTED (Agency for Technical Operation and Development), said that even her aid organization has been having trouble receiving funds from its headquarters. She worries that, without the Central Bank acting as the only financial intermediary between the now completely disconnected Houthi territory in the north and the Hadi government territory in the south, the economy is going to be used as a weapon of war.

She pointed to an update in December, which revealed that Yemeni traders, unable to obtain new lines of credit, stopped new wheat imports into the country.

Functioning normally, Yemen imports about 90 percent of its food, 70 percent of which comes through the Red Sea port city of Houdeidah. But Saudi airstrikes damaged equipment and impaired its ability to unload cargo, compounding Yemen’s food scarcity.

“Yemen is… being starved slowly,” Suharlim said.

 

An unsustainable situation

President Hadi announced last month that Saudi Arabia agreed to deposit $2 billion into the Central Bank of Yemen. But with currency reserves rapidly depleting, the assistance only seems to be delaying economic destruction.

Waleed Alhariri, head of the New York office of the Sana’a Center, said that even with remittances, international aid and direct deposits from the Saudi government, the current financial situation in Yemen is untenable. “It’s almost like putting Band-Aids on the thing,” he said. “There’s no solution to this.”

When asked about her main concern for Yemen in the coming months, Suharlim of ACTED put it bluntly: “The total collapse of the financial institution, obviously.”

And Scott Paul, the policy advisor for Oxfam noted the falling number of possible short-term solutions. “Some of these problems can be solved by negotiations as the conflict continues,” he said. “Some of them can only be solved through peace.”

Alhlme hasn’t seen his family in over two years. He wants to visit them like he used to do almost annually, but with Sana’a now deep in Houthi territory, he’d have to fly into the barely-functioning airport at Aden, which is in the midst of a vicious power struggle. Even if he made it into Yemen, he fears that the roads from Aden to Sana’a would be dangerous and unpredictable, and President Trump’s recent travel policies eliminate the guarantee that he’d easily make it back to the U.S., even though he’s an American citizen.

All he can do is keep sending money, hope it reaches his family and trust it’s enough for them to survive.

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