Yemen’s internationally recognized government signed a deal with the Arab Monetary Fund on Sunday, state media said, paving the way for the Saudi-backed administration to receive $1 billion of economic aid.
The Abu Dhabi-based fund, a sub-organization of the 22-member Arab League, will pay out the $1 billion program from 2022 to 2025. The economic deal aims to help the Yemeni government establish monetary and fiscal stability through wide-ranging economic reforms, the SABA news agency said.
Yemen’s civil war, which is entering its eighth year, has decimated the country’s economy and pushed half of the population to the brink of famine. More than 150,000 people have been killed in the conflict, including over 14,500 civilians. On average food is 60% more expensive than it was last year, largely due to the war in Ukraine that has cut off the country’s critical wheat imports from Eastern Europe.
The conflict began in 2014 when the Iranian-backed Houthi rebels seized the capital of Sanaa, along with much of northern Yemen, forcing the government into exile. A Saudi Arabia-led coalition, including the United Arab Emirates, intervened in 2015 to try to restore the internationally recognized government’s power. The country’s central bank has since been divided between the warring sides.
The Aden branch of Yemen’s central bank falls under the control of Saudi coalition forces. In recent years, the Aden branch has helped fuel inflation by printing new banknotes to pay off its debts and cover public sector salaries. Aden-printed notes are not accepted in Houthi-controlled areas, whose central bank operates from Sanaa.
Sunday’s deal was signed by the governor of the Aden branch of Yemen’s central bank, Ahmed al-Maabqi, in the presence of Saudi Arabia’s Finance Minister, Mohammed Al-Jadaan.
In a statement issued by the Houthi’s Finance Ministry following the signing, the rebel group denounced the agreement and said the fund will only “serve the countries of aggression, not Yemeni society.”