Yemen, long considered one of the poorest countries in the Middle East and North Africa (MENA) region and world, is now grappling with what is widely regarded as the world’s worst humanitarian crisis. A recent report by the World Bank sheds light on the devastating impact of the ongoing conflict, which has plunged the country deeper into poverty and instability.
Since the conflict erupted in 2014, Yemen has experienced a staggering 52 percent contraction in real GDP per capita, pushing two-thirds of its population—around 21.6 million individuals—into dire need of humanitarian assistance. The conflict has not only ravaged the economy but also exacerbated food insecurity to alarming levels, with over 17 million Yemenis facing food shortages and 3.5 million experiencing severe malnutrition.
The report underscores the fragmentation of Yemen’s economy into two distinct zones, each governed by different institutions and policies, leading to widening disparities. While a UN-brokered truce in 2022 brought a glimmer of hope, subsequent challenges, including a Houthi-imposed blockade on oil exports in 2023, have further exacerbated economic difficulties. This blockade has severely impacted foreign currency liquidity, leading to currency depreciation and price increases, exacerbating the plight of Yemen’s already vulnerable population.
Amid escalating poverty and food insecurity, households are resorting to desperate measures, depleting traditional safety nets and engaging in detrimental coping mechanisms such as withdrawing children from school or engaging in precarious work. The lack of access to safe drinking water and sanitation facilities has also led to recurrent outbreaks of preventable diseases, further exacerbating the humanitarian crisis.
Looking ahead, the report suggests that a lasting truce or peace agreement could swiftly improve Yemen’s economic prospects. Innovative analysis using night-time light emission data during the 2022 truce indicates a sharp increase in economic activity, highlighting the potential for economic recovery under stable conditions. However, achieving lasting stability and prosperity in Yemen hinges on resolving political disputes and addressing structural issues through an equitable and inclusive peace settlement.
The World Bank’s report underscores the urgent need for concerted international efforts to address Yemen’s multifaceted crisis, emphasizing the importance of addressing economic barriers, conflict-related grievances, and structural challenges to pave the way for Yemen’s recovery and lasting stability.
