WITH hindsight Shawki Hayel, Yemen’s most successful industrialist, made a mistake putting his food-processing plant in his hometown of Taiz. The town straddles the front line where northern Houthi rebels are fighting the Saudi-backed government in the south and the war has been harshest. Imports of flour for his biscuits are haphazard because of a Saudi-led blockade at Hodeida, the country’s largest commercial port. Warlords on the road in between erect checkpoints to rob travellers and merchants. And then there is the problem of payment. Abd Rabbo Mansour Hadi, the president, moved Yemen’s central bank from Sana’a, the capital seized by his northern Houthi foes in January 2015, to Aden, a southern port now controlled by soldiers from the United Arab Emirates (UAE), but had to leave its bureaucrats and database behind. Government employees have not been paid since July. Banks have stopped issuing letters of credit or cashing cheques.

As Yemen’s formal economy collapses, a war economy has taken its place. For a fee, any truck can pass checkpoints without inspection, no matter what it carries. Weapons-smuggling is rife; particularly, says a diplomat, of Saudi-supplied arms. So cheap and plentiful are hand-grenades that Yemenis throw them to celebrate weddings. Sheikhs offer their tribesmen as fighters for neighbouring countries willing to pay for regional influence. (One warlord supposedly presented his Saudi backers with a payroll of 465,000 men.) For a further fee—call it performance-related pay—they might even advance. Ending the conflict might cost the warring parties their livelihoods, so they have stopped talking to the UN’s special envoy. When the unfortunate diplomat arranged a ceasefire-monitoring centre in Saudi Arabia, the Houthis bombed it. “They and their sons make millions at the expense of hungry Yemenis,” says a frustrated mediator.

Outsiders have added greatly to the fragmentation of Yemen. Iran has long backed the Houthis with weapons, but ideas are just as lethal an export. Yemen’s population is comprised of roughly equal numbers of Shafii Sunnis and Zaydi Shias, inclusive sects whose followers once prayed side-by-side in the same mosques. But after Iran’s Shia revolution in 1979, ayatollahs in Iran’s holy city of Qom paid for hundreds of Zaydis to enroll in their seminaries. Many returned to preach the virtues of Iran’s more mainstream Shiism, and hung portraits of Iran’s supreme leader, Ali Khamenei, in their homes.

Saudi Arabia countered by exporting its own Wahhabi version of Sunni Islam. Radical preachers, such as Muqbil al-Waddai, opened retreats in the desert, where at prayer-time trainees bowed down to Kalashnikovs laid in front of them. With Sunnis concentrated on the coast and in the east, and Shias predominating in the highlands of the north-west, their rival creeds prised the country apart. Such are the animosities that Yemen, stitched together in 1990, is now disintegrating. The south seethes at the northern bullies who bombarded their roads and sniped at their citizens when they briefly conquered Aden in the early months of the war. The north decries the southern traitors who invited Saudi and Emirati forces to drop bombs on them and isolate them by land, air and sea after the outsiders joined the war in March 2015. The fact that gains on the ground are often secured by tribal understandings and payments rather than by fighting accounts for the high share—three-fifths—of all casualties that are caused by air strikes. Reluctant to take risks, Saudi pilots fly high, out of range of anti-aircraft fire. That spares Saudi lives, but imprecise bombing increases Yemeni civilian casualties. The UN says over 7,000 Yemenis have been killed in the two years of war. Hospitals were attacked 18 times in 2016.

Not according to plan

Hunger is also taking a toll. Yemen imports 90% of its food, so the warring parties control its supply as yet another weapon. Without electricity to keep it cool, much of what gets through perishes. Of some 27m Yemenis, 7m are going hungry, says the UN, almost double the figure in January. Some 3m people have fled their homes, but of Yemen’s neighbours, only Djibouti accepts refugees. Yemen, says the UN, is the world’s largest humanitarian crisis.

Saudi Arabia insists all this is a price worth paying for reinstating the president the Houthis chased out of the capital in 2015. They had reason to worry. After the fall of Sana’a, Iran boasted that Shias had won a fourth Arab capital (along with Baghdad, Beirut and Damascus), this time in their Saudi rivals’ backyard. Some Houthis pointed artillery purloined from state armouries northward, and said they might march to Mecca. Others fortified positions on the Red Sea through which 4m barrels of oil pass every day en route to Europe. Vowing to push Iran back, the new Saudi king’s impulsive son and defence minister, Muhammad bin Salman, saw a chance to prove his mettle.

But even if the diagnosis was accurate, the prince’s response has been fatally flawed. War has only exacerbated the manageable threat that Saudi Arabia faced at the start. No matter how often its loyal press report victorious advances, the front lines have in fact changed very little. But Saudi Arabia now looks more vulnerable and Iran looms larger than ever. The Houthis mount regular raids dozens of kilometres into Saudi Arabia, often unopposed. Missiles land as far north as Riyadh, most recently striking an airbase there on March 18th, and disable coalition naval vessels in the Red Sea. Scores of Saudi and UAE tanks have been struck. As always, al-Qaeda and Islamic State fill the copious ungoverned spaces, perhaps offering a refuge for fighters fleeing Iraq and Syria. As a war it predicted would quickly end enters its third year, Saudi Arabia seems without an exit strategy. “Yemen [is] in danger of fracturing beyond the point of no return,” said a recent UN report.

The UAE, which masterfully captured Aden with an amphibious landing in August 2015, had vowed to make the city a model for the rest of the country. A year and a half on it still refuses to let in journalists, so it is hard to measure its success. Security has improved, say locals, but governing institutions remain sorely lacking. Destitute refugees from Aden arriving in Djibouti insist they have seen no evidence of the billion dollars the Emirates claims it is investing in reconstruction. In the territories it has captured, the coalition’s forces battle over the spoils. Mr Hadi’s own southern tribesmen are but one of four forces scrapping for control of the port and the airport. Al-Qaeda is another.

Those who should know better egg them on. “All permanent members of the UN Security Council are against the war, but they are all ready to sell Yemen for arms,” says an ex-UN official who worked on Yemen. By night Saudi Arabia launches American-made Reaper combat drones from an American base in Djibouti. In order to buy silence, King Salman promised China $65bn of investment on a visit this month. Saudi Arabia’s people, fed up with the austerity measures put in place to help with their country’s budget deficits, would rather the money was spent at home.