Jan 22, 2018

As the war in Yemen approaches its fourth year, there seems to be no shortage of suffering in the country. After the killing of former President Ali Abdullah Saleh on Dec. 4, the internationally recognized government, led by President Abed Rabbo Mansour Hadi, promised progress on various battle fronts, in particular to recapture Hodeidah, but little has been achieved in this regard.

As a consequence of the war, Yemen is currently witnessing the worst economic decline since the founding of the modern republics of North Yemen and South Yemen in the late 1960s. The current situation led on Jan. 5 to the head of the UN Office for the Coordination of Humanitarian Affairs (OCHA), Mark Lowcock, describing the situation as possibly the worst humanitarian crisis in half a century. The crisis has grown even worse since his statement's release due to a free-fall in recent days by the Yemeni riyal against foreign currencies.

Since Jan. 14, the riyal's exchange rate against the dollar has risen from 435 to 510 riyals, a loss of more than 17% of the Yemeni currency's value. This drop marks the riyal's lowest value and illustrates the toll the current war has taken on it. The riyal has lost more than 130% of its value since the launch of the Saudi-led coalition's military intervention in March 2015, at which time it traded at 215 riyals to the dollar.

As much as this poses a serious setback to the efforts by international humanitarian organizations to tackle the catastrophic humanitarian situation in the country, it will also contribute to furthering a major shift in the distribution of wealth and assets in the country, and this in turn will have grave implications in the long run.

The depreciation of the riyal has already increased the price of food to levels that most Yemenis cannot afford. The food supply has declined since the Saudi coalition’s decision in November to shut down all of Yemen's ports of entry — by sea, land and air — after a Houthi missile attack on the King Khaled Airport in Riyadh on Nov. 4.