What Are the Reasons Behind the Delay of the Saudi-Emirati Deposit?

Meanwhile, according to him, "YCB wants to confirm that it has the tools and the needed foreign currencies to intervene in the exchange market and meet the export needs even at the short-term".

He added: "On the other hand, receiving the massive deposit will enable YCB to withdraw a larger part of Yemeni riyal excess liquidity from the market to the bank. This is very important as it will have a positive impact on the exchange rate stability".

The Economic Committee drew a link between improving the living and economic conditions of people with a set of measures which must be taken to achieve these goals.

The committee said: "We previously offered our vision in this issue. There are important measures which have to be made, foremost of which are restructuring of the Central Organization for Control and Accounting, the Anti-Corruption Commission, and YCB. A real structure l would eradicate corruption and corrupt elements".

The committee believes that "oil, gas and other central revenues should be transferred to YCB in Aden and closing any internal or external government bank accounts outside the framework of the YCB".

It added: "All absurd appointments should be reversed as well as reducing the personnel’s of government and the diplomatic missions to the minimum level in addition to the immediate halt of paying the salaries in foreign currency to those who stay in hotels and, homes abroad. Everybody who stays away from his job headquarters has to be dismissed".

The committee pointed out that "taking such internal measures along with the support of brothers and friends, especially KSA, and UAE would make the needed impact in the economic reality as well as improving people's life standards and getting out of the state of economic collapse".

Speculations 

According to the Higher Economic Committee "the economic conditions in the country during 2023 will be gloomier with the current imbalances and the lack of drastic and real reforms".

The committee said: "The prospects of the scene don't sound well and raise concerns. The International-recognized government expects that it will not be able to resume exporting crude oil from its areas of control and then sell it on the international market, and there are no clear indications that this problem can be resolved soon.”

It added: "The government seems not able to complete applying the economic reforms which it could support by revenues that help it to cover its costs simultaneously with suspending crude oil exports".

At the same time, according to the committee, "there are growing doubts about the feasibility of the strategy of the YCB leadership to manage and solve the financing crisis, and the ability of this administration to create a positive impact that contributes to containing the repercussions of these new changes".

The committee listed the most important expected economic repercussions during 2023 as follow:

1- The government will likely face a big deficit in the general budget in a way that undermines its ability to fulfil most of its duties towards people in the areas under its control. This included funding public services, paying the salaries of the public sector's employees regularly. These changes will increase the deterioration of people's living conditions.

2- The ability of the government to provide sufficient allocations to fund the operational cost of its affiliated different military and security entities is expected to decrease. Consequently, the government may face growing challenges at the level of securing the areas under its control and maintain the readiness level of its forces across the confrontation fronts against its Houthi rivals. This requires an urgent need to fix the big imbalance in the government's system including changing the head of the governorate due to his inability to achieve any noticeable success, especially at the economic level.

3- The local currency exchange rate within the government's controlled areas is likely to see a gradual decrease during the few coming weeks. This is due to the inability of the Central Bank in Aden to hold its weekly auctions to sell hard currency to importers in light of the suspension of the only source to fund these auctions which is the government's revenues from crude oil exports.

4- The gradual expected decline in the local currency exchange rate will have a negative and tangible impact on the living conditions of citizens in government-controlled areas. This is not a result of the decline of purchasing power but also due to the decline in the overall economic activity and the increase in inflation rates. Thus, this has affected the availability of job opportunities in light of the fluctuations of the exchange rate of the national currency against foreign currencies.