The impact of the establishment of the equally-divided PLC between North and South hasn’t been a magical solution to the Yemeni crisis which has been going on for three decades.

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Farida Ahmed & Ayad Qassem (South24)

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Two years have passed since the declaration (in Riyadh) about the formation of the eight-member Presidential Leadership Council (PLC). This came after former President Abdrabbuh Mansur Hadi unexpectedly transferred his power to the new body on April 7, 2022. This followed days of Saudi-led negotiations, sponsored by the Gulf Cooperation Council, with the anti-Houthi Yemeni parties and enjoyed regional and international support. 

The establishment of the PLC was viewed as a decisive turning point following seven years of conflict and the failure of the Hadi leadership in managing the crisis politically and militarily. The former Yemeni presidency had failed miserably in tackling the economic and services issues. In addition, its inability to keep under control the political and military parties allied to it and its relentless pursuit to fight the Houthis on the ground led to the creation of intra conflicts and rivalries. The near-monopoly that the Islamic Islah Party (the Muslim Brotherhood in Yemen) held over Hadi’s decisions fueled divisions within the government-controlled areas. This led to side battles that distracted the military forces away from confronting the Houthis and cost them many territories in North Yemen that the Iran-backed group took control of.

The most remarkable thing about the PLC is that it has put together various leaders who have different interests and ambitions and most of them enjoy legitimacy and influence on the ground. Despite the importance of having a balanced stage – with four members from South and four from North -, which brings together all the different parties, this structure of opposites has constituted a big political, military and economic challenge over the past two years. Moreover, the latest escalatory developments in the Red Sea and the Gulf of Aden as a result of the Israeli war on Gaza have basically postponed any peace talks in Yemen. This is particularly related to the fact that regional countries, foremost of which are Saudi Arabia, Egypt and the UAE, have been reluctant to engage in any new naval alliance that would restrain the Houthis.

The impact of the establishment of the equally-divided PLC between North and South hasn’t been a magical solution to the Yemeni crisis which has been going on for three decades. This is despite the relative positive progress in the South Issue .This issue was relatively delayed till reaching an agreement over a transitional phase and a subsequent comprehensive dialogue. The President of the Southern Transitional Council (STC), Aidrous Al-Zubaidi, as the PLC Vice President, along with PLC members Abdulrahman Al-Muharrami and Faraj Al-Bahsani, has moved the South issue to be part of the negotiations for a comprehensive solution prior to a final settlement. The STC appointed a negotiations team to prepare for that under the so-called “Negotiations Affairs Unit”. However, despite the fact that the two PLC Vice Presidents (Al-Muharrami and Al-Bahsani) joined the STC as a result of the Southern Consultative Meeting in May 2023, the Southerners have made no prominent impact by taking bold steps. They occasionally gain limited political manoeuvre space which quickly fades away due to some regional pressure. Furthermore, they had no direct involvement in the Saudi peace efforts with the Houthis last year. In this sense, their position is similar to that of the PLC and the Internationally-Recognized Government as all of them ”handed over the helm” to Riyadh and Muscat for the talks

The Decision-making Difficulty

The most prominent trouble that the PLC as well as the government and its institutions have faced over the past two years are the difficulties related to decision making. This is due to the lack of consensus among the anti-Houthis parties who differ on many political, military and economic issues. This is a result of the different strategic objectives of these forces. The most prominent of these is the South peoples' cause which according to many Southerners means the restoration of the South Yemeni state based on the 1990 borders before the unity. Although the PLC has included different parties as part of one joint authority, it has failed in taking some decisive decisions. A consensus among PLC members to prioritize the South issue during the political negotiations would enhance the position of the Council and help it to better manage the crisis in the country.

Building consensus over the establishment of a new government was expected to be a starting key point for institutional change, following the failure of the two governments of former Prime Minister Maeen Abdulmalik, from October 15, 2018 to February 5, 2024. Despite the appointment of ex-foreign minister Ahmad Awad Bin Mubarak as the new prime minister last month, a late step as the PLC took office two years ago, exclusive sources revealed to ‘South24 Center’ a precondition that the new appointee had to be a member of the former government. Additionally, the appointment of other government members has been gradually delayed. The appointment of a foreign minister on March 27 was the latest move in this regard. This clearly reveals the real dilemma faced by the current authority in making decisions or reaching a consensus around them. This has delayed much work as well as reforms in the state institutions. Accordingly, this has hampered improving the living and services standards. 

Moreover, the 59-member Joint Security and Military Committee, which was formed in May 2022, has taken no actions worthy of note. Its priorities include the redeployment of the military forces, finding a formula for compatible outcomes related to the structuring of military and security forces and strengthening the military fronts against the Houthis under the supervision of the Minister of Defense. However, this hasn’t been carried out and the committee has so far been a nominal one. Additionally, the periodical meetings in the most neutral subjects such as ‘The Central Organization for Control and Auditing‘ or the ‘Combating Corruption Authority' have been almost absent. It seems that there is no specific agenda of the PLC. So far, the PLC apparently has no priority list to tackle, including especially taking action regarding other institutional appointments. This is despite the fact that the judicial appointments were done relatively fast. It was expected that the other appointments would proceed at the same pace.

Simultaneously with the establishment of the PLC, Saudi Arabia and the UAE announced providing a $3 billion grant as urgent support to the Yemeni economy. However, the extraordinary institutional weakness and the slow pace of reforms have contributed to a soaring recession and postponement in supplying the Central Bank of Yemen (CBY) in Aden with the remaining amount of the financial grant, of which it received only about $750 million, according to informed sources who spoke to ‘South24 Center’. It seems that Saudi Arabia has begun to demand strict governance procedures that are supposed to be implemented by the Yemeni side to avoid the corruption that emerged during the previous instalments. Moreover, Riyadh is disbursing its grant according to the developments in the political situation and the progress of the negotiation process with the Houthis.

In April 2023, the CBY was accused of money laundering under the pretext of the local banks’ reserves abroad. CBY’s officials haven’t revealed any data or details about the many questions raised relating to the Saudi deposit returns. The former government faced accusations from the UN of corruption in dealing with the previous Saudi deposit and the CBY's policies. This is despite the government's denial and the fact that the UN retracted some of the accusations later.

Since the CBY’s foreign reserves held in its accounts abroad have become limited, according to sources who spoke to ‘South24 Center, the bank has resorted to new measures to manage the foreign currency cash supplies in the local market. It has established a unified network which is deemed by experts as an important move by which the CBY would be able to closely monitor the movement of funds within exchange companies and banks. This enhanced oversight allows the Central Bank to track the origin and destination of funds, ensuring transparency and accountability in financial transactions.

Related: Central Bank Financial Unified Network, Explained 

Moreover, the move by the Houthi-controlled Central Bank in Sanaa of issuing a new coin (100 riyal) to replace damaged banknotes has aggravated the economic crisis. This comes amid warnings about the collapse of the currency value in the areas controlled by the Houthi militia. In response, the Central Bank in Aden issued a directive on April 2 asking all commercial and Islamic banks as well as local and foreign finance institutions to move their main headquarters from Sanaa to Aden within 60 days and threatened those that defy the order with legal action under Yemen's anti-money laundering and counter-terrorism financing laws. The 60-day ultimatum apparently serves as an opportunity to negotiate with the Houthis and pressure them to withdraw the recently-issued coin. It’s the first time that the Central Bank in Aden has taken such a step against the Houthis since it was moved to Aden in 2016. This is despite the fact that more than a year has passed since the Houthis were locally classified as a terrorist group. Nevertheless, the Houthi move to introduce a new 100-riyal coin has pushed journalists and experts from North Yemen - whose comments were seen by ‘South24 Center’ - to warn of its ramifications on “the remnants of the national state” and of enhancing the “separation” reality between North and South, according to them. 

Instead of limiting their responses to mere reactions, the state legitimate institutions need to reconsider the continuously delayed decisions, try to find formulas to agree around them and monitor the possible ramifications of these moves. The PLC’s lack of progress over two years since it was established is a proper moment to admit its clear shortcomings regarding its political, economic and military capabilities. This would guarantee correcting the PLC’s status and maintain its cohesiveness, and help in avoiding more complications.

Complications of Another Kind

In the year following the establishment of the PLC, its Southern members faced several challenges, including the formation and emergence of new political entities in South Yemen. The only explanation of these moves, sponsored by Saudi Arabia along with Yemeni political parties, is seeking to impact the political scene in South Yemen amid the STC’s big popularity and clout, especially after two PLC members joined it. The ‘Hadramout National Council’, that was declared in Riyadh in June 2023, hasn’t so far adopted any clear political objective except for the state’s responsibility in addressing Hadramout’s grievances and the local community’s right to run its economic, social and cultural affairs. This is according to the political and rights document issued by the council. Notably, this doesn't include the Hadramis’ right to manage their areas militarily. It is remarkable that the ‘1st Military District’, affiliated with the Muslim Brotherhood, controls the valley and the desert of Hadramout. This isn’t different from the ‘The Unified Council for the Eastern Governorates’ which was declared in January 2024, with the aim to unify the four governorates of Hadramout, Al-Mahra, Shabwa, and Socotra. Many Southerners consider this a dubious idea and another attempt to puncture efforts to unify the Southern ranks. 

On the other hand, comments have emerged at the regional and international levels amid the growing Houthi escalation in attacks on commercial and military vessels in the Red Sea and the Gulf of Aden. The PLC’s response has been limited to holding the Houthis responsible for any repercussions resulting from this. If the PLC does not exert more pressure on the regional and international bodies for a stronger response to the Houthi escalation, it will lead to more disastrous consequences on the economic and humanitarian situation in Yemen. Moreover, securing adequate basic needs at the local level will be more difficult over the next months. If PLC members and its affiliated military forces don’t support taking more effective options against the Houthis, the situation in Yemen will not stabilize for a long time in light of the group’s adherence to the rhetoric of violence and war. If the Houthis opt for peace, they would probably raise the ceiling of their demands and preconditions on the Yemeni file in return for halting the attacks on the vessels in the Red Sea. The Internationally-Recognized authority will pay a double price for this if it is exposed to international pressure ultimately.

Accordingly, it isn’t clear if the PLC and its legitimate bodies in Yemen are ready to read the current situation seriously. However, this will require more than an enthusiastic prime minister or subsequent appointments to deal with challenges. It isn’t clear also whether the PLC will place less weight on its relationship with the regional countries in a way that would give it more manoeuvring capabilities, especially regarding its stance toward the Houthis.