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Instruments of Pain: Conflict and Famine
Instruments of Pain: Conflict and Famine
A boy carries a sack of recyclable items he collected at a camp for internally displaced people in Dharawan, near Sanaa, Yemen, on 28 February 2017. REUTERS/Khaled Abdullah

Instruments of Pain (I): Conflict and Famine in Yemen

War is denying Yemenis food to eat. This special briefing, the first of four examining the famine threats there and in South Sudan, Nigeria and Somalia, urges the Saudi-led coalition not to assault Yemen’s most important port, Hodeida, and both sides to immediately resolve deadlock over the Central Bank.

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I. Overview

Yemenis are starving because of war. No natural disaster is responsible. No amount of humanitarian aid can solve the underlying problem. Without an immediate, significant course change, portions of the country, in the 21st century and under the watch of the Security Council, will likely tip into famine. The projected disaster is a direct consequence of decisions by all belligerents to weaponise the economy, coupled with indifference and at times a facilitating role played by the international community, including key members of the Security Council such as the U.S., UK and France.

Avoiding famine, if this is still possible, requires the Saudi Arabia-led coalition, supporting the government of President Abed Rabbo Mansour Hadi against Huthi rebels and fighters aligned with former President Ali Abdullah Saleh, to halt what promises to be a bloody battle for Yemen’s most important port, Hodeida. It also requires immediate action by both sides to put aside differences and enable central bank technocrats to address the liquidity problem, pay public-sector salaries nationally and regulate the riyal. For this to be sustainable, Yemenis need a ceasefire and a durable political settlement to have a chance at rebuilding the shattered economy.

II. Famine and Conflict

By numbers, Yemen is suffering from the largest food crisis in the world.[fn]The UN has issued a warning of impending famine in four nations: Yemen, South Sudan, Somalia and parts of Nigeria. “USG/ERC Stephen O’Brien Statement to the Security Council on Missions to Yemen, South Sudan, Somalia and Kenya and an Update on the Oslo Conference on Nigeria and the Lake Chad Region”, UN Office for the Coordination of Humanitarian Affairs (OCHA), 10 March 2017. This briefing is the first of a series Crisis Group will issue on the four situations. Crisis Group Statement, “Instruments of Pain: Conflict and Famine”, 13 April 2017. Crisis Group has reported extensively on Yemen since 2003. For the most recent analysis, see Crisis Group Middle East Report N°174, Yemen’s al-Qaeda: Expanding the Base, 2 February 2017; Alert, “Central Bank Crisis Risks Famine in Yemen”, 29 September 2016; Report N°167, Yemen: Is Peace Possible?, 9 February 2016; and Middle East Briefing N°45, Yemen at War, 27 March 2015.Hide Footnote According to the UN, an estimated seventeen million persons, 60 per cent of the population and three million more than were so afflicted at the start of the year, are food insecure and require urgent humanitarian assistance to save lives. Seven of the country’s 22 governorates are at a phase four emergency food insecurity level, one step away from phase five: famine. Areas affected include both government and Huthi/Saleh controlled governorates. UNICEF reports that 460,000 children suffer from severe acute malnutrition.[fn]“Yemen: IPC Analysis – Summary of Findings, Acute Food Insecurity Current Situation Overview, March-July 2017”, IPCinfo, 1 March 2017, http://reliefweb.int/report/yemen/yemen-ipc-analysis-summary-findings-acute-food-insecurity-current-situation-overview-0. Yemen Humanitarian Snap­shot (March 2015-March 2017), UNICEF, http://reliefweb.int/sites/reliefweb.int/files/resources/20170317_hum.snapshot_final_0.pdf.Hide Footnote

The evolving hunger crisis has both a supply and demand side, with an underlying motif of combatants pursuing war by any means with little to no regard for the population. According to a prominent Yemeni entrepreneur, “the real story of the humanitarian crisis is that Huthi/Saleh forces and the corrupt people around President Hadi are all benefitting from the war economy while the people of Yemen suffer”.[fn]Crisis Group interview, March 2017.Hide Footnote

The evolving hunger crisis has both a supply and demand side, with an underlying motif of combatants pursuing war by any means with little to no regard for the population.

Saudi-led coalition allies repeatedly have hindered the movement of aid and commercial goods to the population. Huthi/Saleh violations are most egregious in the city of Taiz, where their fighters have enforced a full or partial blockade since 2015, with devastating humanitarian consequences. They routinely interfere with the work of humanitarians, at times demanding the diversion of aid to themselves or denying aid workers access to populations in need, revoking visas or even detaining them.[fn]Statement to the Security Council on Yemen, Under-Secretary-General for Humanitarian Affairs and Emergency Relief Coordinator, Stephen O’Brien, 31 October 2016. Crisis Group interviews, representatives of humanitarian organisations operating in Yemen, March 2017.Hide Footnote They heavily tax all imports into their areas in part to finance the war effort and also run a black market in fuel, enriching military elites while driving prices up for trans­port of vital commodities.[fn]If goods are moved from Aden to Sanaa, they are taxed twice, once in the port of Aden by the Ye­me­ni government and again when they enter Huthi/Saleh territory. Importers and businessmen confirm that neither Hodeida port nor Aden port is functioning properly, as corruption is rampant at each. On the roads, militias in both Huthi/Saleh and government-controlled areas charge fees for movement of goods. Crisis Group interviews, March, April 2017.Hide Footnote

The Saudi-led coalition has strangled the flow of commodities into the country’s largest and most important port, Hodeida, which is under Huthi/Saleh control. Yemen is over 90 per cent dependent on imports for staple commodities such as wheat and rice; the UN estimates that 80 per cent of all imports for the north currently pass through Hodeida.[fn]Yemen on the ‘brink of famine’ as more than one third of the population faces starvation, UN warns”, ABC News, 24 February 2017.Hide Footnote Under the cover of UN Security Council Resolution 2216 (April 2015), which called for an arms embargo against Huthi/Saleh forces, the Saudi-led coalition aggressively imposed a naval blockade for the first year of the war. Three months after their military intervention, only 15 per cent of pre-war imports were entering the country, prompting UN humanitarian agencies to issue initial famine warnings. Following bureaucratic delays on the part of the Security Council, the coalition and the Yemeni government, the problem was partially resolved in May 2016 through a UN Verification and Inspection Mechanism (UNVIM) that led to an easing of restrictions, but by then coalition airstrikes had already damaged the port’s throughput capacity, contributing to long queues and delays.[fn]“In Hindsight: The story of the UN Verification and Inspection Mechanism in Yemen”, Security Council Report, 1 September 2016. The major air damage was done already in August 2015.Hide Footnote

The situation is about to become much worse, as the coalition appears determined to break a military stalemate that has largely held since September 2015 by attempting to capture the Red Sea coast, including Hodeida. It says that taking the port is necessary to stem the flow of weapons to Huthi/Saleh fighters and to bring them to the bargaining table. This reasoning is questionable, since the Saudi-backed Hadi government, not the Huthi/Saleh bloc, officially rejected the latest peace initiative of the UN special envoy, and the coalition’s navy and the UNVIM already monitor, albeit not perfectly, the port.

If the city is attacked and the [Hodeida] port closed, it will become the most important choke point in what already is a massive hunger challenge.

In any case, the campaign’s humanitarian risks are clear. Unlike Aden and areas in the south, coalition forces would not be greeted as liberators, and Huthi/Saleh fighters have had ample time to prepare defensive positions. The battle would likely be protracted and could close and further damage this vital entrepôt. Even if the coalition is able to secure the city, it is far from clear it would have the will or capacity to ensure imports cross battle lines into Huthi/Saleh-controlled areas of the north, where the bulk of Yemen’s population resides. Indeed, there is widespread agreement among Yemenis that the Hadi government would use control of the port to further squeeze Huthi/Saleh-controlled areas economically in an attempt to break that alliance or engender an internal uprising against it, an outcome the Saudi-led coalition has long predicted.[fn]Crisis Group interviews, three prominent members of Saleh’s General People’s Congress Party, four Yemeni businessmen, Adeni journalist, Hadi government official, Yemeni analyst from Taiz, March 2017.Hide Footnote The costs of such a strategy would fall disproportionately on the civilian population, with Huthi/Saleh fighters being the last to starve.

Humanitarians argue that even at its reduced capacity, there is no alternative to using Hodeida in terms of location and infrastructure.[fn]“Statement on behalf of the Humanitarian Country Team in Yemen, on the Critical Importance to Maintain Al Hudaydah Port Open”, Relief Web, 4 April 2017.Hide Footnote If the city is attacked and the port closed, it will become the most important choke point in what already is a massive hunger challenge.

The more acute current problem, however, is on the demand side. Notwithstanding mounting challenges, food is still widely available in the markets, including Sanaa. Yet, Yemenis throughout the country increasingly are unable to purchase it. After two years of ground fighting and air bombardment, the economy is in tatters. Families and communities are approaching a breaking point, having sold their assets, spent their savings and exhausted extended networks of support. The situation is most severe for the more than three million internally displaced persons (IDPs) and residents of governorates like Hodeida, who were the poorest before the conflict. It also takes a particularly harsh toll on women and girls, who are typically the last to eat and in December 2016 made up 62 per cent of the four million people suffering from acute malnutrition.[fn]At the same time, child marriage is on the rise as parents use it to raise funds. Women are also carrying greater burdens; as many as 30 per cent of displaced women head their families. Fact-sheet, Gender Snapshot, Yemen, Care International, December 2016.Hide Footnote

A critical component of the purchasing power crisis is the inability of the central bank to consistently pay public-sector salaries since August 2016. This is a product of shrinking state finances, an acute liquidity crisis and the bank’s inability to move financial resources between areas controlled by conflict parties. The issue has become deeply politicised. Prior to President Hadi’s 19 September decision to move the central bank from Sanaa to Aden, there had been a tacit agreement between the warring sides to allow the institution to function relatively free of interference. Diplomats and economists widely agreed that the bank had remained largely impartial, facilitating the import of an increasingly limited list of basic commodities, protecting the value of the riyal and paying public-sector salaries nationally under increasingly difficult economic circumstances. But this did not last. Without revenues from hydrocarbons, which accounted for approximately half the government’s budget in 2014, or donor support, both solvency and immediate liquidity came under immense strain.[fn]Crisis Group Alert, “Central Bank Crisis Risks Famine in Yemen”, 29 September 2016.Hide Footnote

By moving the bank, the government argued, it could prevent the Huthi/Saleh bloc from using central bank funds for its war effort, while allowing the bank to dispense public-sector salaries nationally and stabilise the economy. The bank in Aden has printed much-needed currency to address the liquidity crisis (a move that was blocked by the Hadi government when the bank was in Sanaa); at least 160 billion Yemeni riyals (approximately $640 million) have been delivered to Aden as part of a 400-billion riyal ($1.6 billion) order from a printing company in Russia.[fn]Crisis Group interview, Yemeni bank technocrat and Western diplomat, April 2017.Hide Footnote However, there is little transparency as to how the money has been disbursed. Moreover, since the relocation, some salaries have been paid in the south but far fewer in the north, and the banking system has all but collapsed, putting additional pressures on the supply side, as commodity importers can no longer access letters of credit.[fn]The total public sector salary bill based on 2014 (pre-war) lists is approximately 75 billion Yemeni riyals ($300 million) per month. As such, the recently delivered riyals are far short of what is needed to meet outstanding public salary payments since September 2016. The bank in Aden has reportedly paid public sector salaries for December 2016 in all areas under its control, but only a small fraction of salaries in Huthi/Saleh-controlled areas for that same month. It cites as reason for non-payment lack of access to reliable employment lists in these areas (which the government says the Huthis refuse to share, an accusation the Huthi/Saleh authorities deny), the difficulty and risks associated with transferring funds to Huthi/Saleh-controlled territories and the Huthis/Saleh authorities’ unwillingness to deposit local tax and import revenues into the central bank in Aden. Crisis Group interview, Yemeni bank technocrat, April 2017.Hide Footnote

More worrying yet, the government has not received a much-needed injection of foreign currency Hadi supporters expected would come from Gulf backers once the bank moved. The small amount of domestic revenue that is generated is not being deposited in central bank accounts, as the country’s various administrative centres are acting autonomously. Neither Huthi/Saleh-controlled territories nor Marib governorate, which is technically controlled by the Hadi government and is the main producer of oil and gas for Yemeni consumption, are making revenues available to the central bank in Aden. The Hadi government is also not depositing oil export revenues from the Masila basin in Hadramout, which came back online in August 2016, and is instead using an external account in Saudi Arabia with no oversight of expenditures.[fn]Crisis Group interviews, Western diplomat, Adeni businessman, April 2017. Letter from the Yemeni foreign ministry in Sanaa presented to the International Monetary Fund, World Bank, European Union, Russian Federation, and UN special envoy to Yemen, 31 March 2017, on file with Crisis Group. A bank technocrat argued that the reason for opening an external account in Saudi Arabia is technical. The central bank in Aden lacks a functioning SWIFT system (which it says will be resolved soon), the ability to interact with correspondent banks and access to its international accounts. The government thus opened the external account so it could mobilise money for expenditures related to, for example, the gradual resumption of some debt financing. Crisis Group interview, April 2017.Hide Footnote In the absence of access to foreign exchange, pumping additional riyals into the market would create inflationary pressures.

Each side blames the other for the economic disaster. The government says it cannot pay salaries in Huthi/Saleh-controlled territories until these remit tax and other import revenues to the bank in Aden (nationally these revenues accounted for around 30 per cent of pre-war government income). The Huthi/Saleh authorities accuse the government of trying to starve the north and refuse to recognise or share accounts with Aden. As the two sides bicker, Yemenis across the country are slowly starving.

III. What Is Needed

Addressing the looming famine is a complex challenge that requires immediate action to prevent a worsening of the situation and to deliver lifesaving assistance to those most in need. Yemenis are set to starve as a result of the financial consequences of the war, but this trend can still be arrested and even reversed if political actors choose to do so. The following steps are urgent:

  • The Saudi-led coalition should halt plans to invade the port of Hodeida.
     
  • The Huthi/Saleh authorities, the Yemeni government and the Saudi-led coalition should work with the UN envoy to reach a deal that allows technocrats in the central bank in Aden and Sanaa to devise a plan for the resumption of public-sector salaries nationally,
    disbursement of social-welfare cash transfers to the poorest Yemenis and performance of basic banking functions free of political interference until a comprehensive political settlement is reached. This compromise should contain several elements, including:
    • cooperation between the central bank in Aden and the branch in Sanaa, where the majority of bank technocrats and infrastructure are still located;
       
    • agreement by the Huthi/Saleh forces and the government not to interfere with decisions made by technocrats in the central bank, nor to divert the bank’s injections of liquidity for other purposes;
       
    • commitment by all parties to ensure that hydrocarbon, customs and tax revenues are accurately deposited/reflected in the national central bank system; and that the central bank has access to at least some commercial banks and to foreign central banks where it has reserves on deposit. (Currently its accounts are blocked, in part as a result of uncertainties on the part of foreign central banks regarding the move from Sanaa to Aden and the appointment of a new bank management by President Hadi.)
       
    • agreement to pay public-sector salaries nationally based on 2014 pay lists (these exclude any additions made by the Huthi authorities since the February 2015 coup); and
       
    • Saudi Arabia and the United Arab Emirates should agree to help finance, along with the World Bank and other donors, the approximately $500 million needed to fund emergency cash transfers to the poorest Yemenis for one year using 2014 social-welfare lists.

To be successful, these stopgap measures ultimately must be supplemented and supported by a ceasefire and peace agreement that allow Yemenis the chance to rebuild state institutions and the economy. To this end:

  • the Huthi/Saleh authorities and the government should reengage immediately with the UN special envoy to secure a ceasefire and resumption of talks based on the UN envoy’s roadmap; and
     
  • the UN Security Council should take prompt action to rejuvenate the political track by passing a long-overdue new resolution under its mandatory Chapter VII authority demanding an immediate ceasefire, unfettered humanitarian access and a return to talks based on the existing UN roadmap, which requires compromises from both sides.

Brussels, 13 April 2017

Appendix A: Map of Yemen

Map of Yemen. International Crisis Group/KO/February 2016. Based on UN map no.3847/Rev.4 (January 2004)
Men unload boxes of nutritional supplements from a helicopter prior to a humanitarian food distribution carried out by the United Nations World Food Programme in Thonyor, Leer county, South Sudan, on 25 February 2017. REUTERS/Siegfried Modola
Statement / Global

Instruments of Pain: Conflict and Famine

For the first time in three decades, four countries, driven by war, verge on famine. Over coming weeks, Crisis Group will publish special briefings on Yemen, South Sudan, Somalia and Nigeria. Each conflict requires tailored response; all need increased aid and efforts to end the violence.

The last time the UN declared a famine was in 2011, in Somalia. The last time it faced more than one major famine simultaneously was more than three decades ago. Today we are on the brink of four – in Yemen, Nigeria, Somalia and South Sudan.

The spectre of famine is primarily the result of war, not natural disaster. According to the UN, more than twenty million people, millions of them children, are at risk of starvation. This is happening in man-made crises and under the Security Council’s watch. In some places, the denial of food and other aid is a weapon of war as much as its consequence. Combatants’ fighting tactics often make the problem worse.

Both sides of Yemen’s conflict, for example, fight with little to no regard for the local population. The Huthis and former President Ali Abdullah Saleh’s forces, on one hand, and their opponents in the Saudi Arabia-led coalition, on the other, have repeatedly strangled the flow of aid and commodities to areas controlled by their rivals. The impending Saudi-led push to recapture the Red Sea coast, including the port of Hodeida – the main entry point for imports on which much of the country depends – and the battle that offensive will provoke risk creating another major chokehold on supplies.

Critical norms, including adherence to International Humanitarian Law, are fast eroding. For the first time in a generation, most indicators suggest the world is becoming more dangerous.

Elsewhere, too, the actions of governments and their opponents exact high humanitarian tolls. In north-east Nigeria, Boko Haram’s attacks on rural communities and the destruction wrought by fighting between its insurgents and the military caused the acute food crisis. The curtailing by Lake Chad basin states of economic activity, aimed at weakening the insurgency, has damaged communities’ livelihoods and increased their vulnerability.

Fighting in South Sudan often involves indiscriminate killing of civilians, sexual violence and pillage by state and non-state armed actors alike. Civilians in Southern Unity state must constantly flee armed groups, rendering them unable to farm or receive assistance and creating conditions for famine. Many resort to hiding in swamps; to seek food is to risk attack. 

The risk of famine is thus closely tied to the spike, over recent years, in war and its fallout, particularly mounting human suffering. Critical norms, including adherence to International Humanitarian Law (IHL), are fast eroding. For the first time in a generation, most indicators suggest the world is becoming more dangerous.

The Nigerians, Somalis, South Sudanese and Yemenis over whom famine looms have already suffered intense, in some cases protracted conflict. The impact on those most affected is more than a passing tragedy. The displacement, destruction to livestock and local communities and the threat of a lost generation, without education or socio-economic prospects, hinder prospects for building sustainable peace.

Beginning today with publication of the special briefing Instruments of Pain (I): Conflict and Famine in Yemen, and continuing over the next few weeks with similar special briefings on South Sudan, Nigeria and Somalia, Crisis Group will describe these crises’ roots and the measures necessary to prevent their further deterioration. Each requires a unique response: challenges of access and funding vary, as do ways to quiet and eventually end the wars that have increased risks of famine. Each special briefing will offer detailed prescriptions.

Overall, though, governments of the states affected and their backers should:

  • show far greater respect for IHL, particularly by allowing in aid and protecting those delivering it. They must avoid tactics that contribute to the risk of famine, like the Hodeida offensive, the curtailing of Lake Chad basin trading or predation in Southern Unity state;
     
  • increase and sustain funds for relief efforts. Shortfalls are not the only financial challenge – in Yemen, for example, the central bank’s failure to pay public sector salaries has left many Yemenis unable to buy food that is available. But humanitarian efforts in all four crises are chronically underfunded; and
     
  • renew efforts to calm violence and bring those conflicts to a sustainable end. The spike in war over recent years, which has already caused more civilian casualties, mass displacement and terrorism, now threatens to starve millions. Without redoubled efforts to end those conflicts, 2017 promises to be not the low-water mark, but rather a way-station on the descent to something far worse.