Cauterization therapy: will legitimacy survive its difficult economic situation?!

Yemen

Yamanat

Hossam Radman

The roots of the economic crisis that legitimacy is going through date back to the year 2022. When the government was deprived of its most important resources after the attack on oil export ports by the Houthis, and since then, economic experts began to ask:; Not because of the speed of the collapse, but because of the government’s ability to hold on!

Thanks to the international confidence that crystallized in the Central Bank and the Ministry of Finance, the government was able to recover a large part of its assets abroad to cover its expenses and pay the payroll.

For example, the $600 million that the French and British helped the government to legitimately use from Special Drawing Rights belongs to government funds from the North Yemen era that were deposited overseas in the 1970s.

Despite the importance of this international aid, the Yemeni government would not have survived without the generous funding from the Arab coalition countries that it promised at the end of the Riyadh consultations.

But this time, Saudi and Emirati financing was not part of the war economy, but rather a prelude to the process of economic recovery and institutional governance. It was therefore conditional on urgent reforms, which the legitimate authority has avoided throughout the past period.

Alongside this government evasion, the economic impasse of legitimacy built for three years, until things reached an unsustainable turning point in 2025.

Despite the grim situation, the fate of legitimacy is still in its hands, and it has two options to overcome the crisis:

Either the government exports oil against the wishes of the Houthis or in agreement with them.

Or the government will complete the reforms required of it to absorb part of the financial support from its allies.

It is right to do both, but reforms now seem more urgent because they strengthen governance procedures and ensure financial sustainability.

What is dangerous about the crisis of economic legitimacy is that it has not only angered popular support in the liberated areas, but rather widened the strategic gap with the Houthi group:

Despite the combination of objective conditions against the Houthis after the imposition of sanctions and the destruction of the Hodeidah port; Legitimacy has not been able to provide the internal conditions that would allow it to exploit opportunities to shift the balance of economic power in its favor, with a view to subsequently changing the balance of political and military power.

Therefore, the path towards strategic determination against the Houthis and the path towards improving living conditions in the liberated areas; This begins first with dealing with the difficult economic situation of legitimacy, and the treatment here must be done all at once, through a set of reforms.

According to what has been confirmed by Gulf and Western diplomatic sources; The “recipe for reforms” includes five points, which are not miraculous, and which were approved by the Presidential Leadership Council, and which remain for the government to implement, namely:

1- Approve a general budget for the government, which is obvious in any respectable country.

2- Liberalize the price of the customs riyal, knowing that raw materials such as food and medicine are excluded and will remain subsidized. But it makes no sense for the state to pay the difference in dollars to a car dealership or luxury furniture importer, when it is unable to pay the salaries of its employees.

3- Increase the electricity tariff in the commercial and government system, while with citizens the tranche system is activated based on consumption.

4- Provisioning of the State account at the Central Bank from all government economic organizations and local authorities.

5- Approval of the Import Coverage Committee, which has been identified and whose members have been agreed, and all that remains is to make a decision on this matter.

These reforms benefit the state, citizens, business and international donors, and the only party that benefits from their obstruction is the Houthis, or the parasitic traders who are complicit with him.

Legitimacy is today facing a fateful turning point and no one will be able to save it. Either he will take the initiative to treat himself, or he will continue to see his incurable illness spread throughout his economic, political and security body, which will soon cause him to enter the phase of clinical death.

As for the political elite, civil society activists and opinion leaders; They can side with the citizens in a populist way by shouting and demonstrating aimlessly, or they can turn these reforms into a program of action that will be pressured to bring the government out of stagnation and save what can be saved.

From the writer’s wall on Facebook

Yemen