A looming banking crisis in Yemen risks pushing millions into famine

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A man transports food by donkey across the mountain to areas of Taiz cut off from many supplies. Photo: Oxfam

Thursday marks a year of devastating conflict in Yemen, where an impending banking crisis now threatens millions of lives. Despite the fact that it is one of the world’s worst humanitarian crises, the conflict has had little media coverage and the global response remains insufficiently funded.

Airstrikes, fighting, and indiscriminate shelling in Yemen have killed more than 6,100 people, forced 2.4 million people from their homes, and left 21.2 million—82% of the population—in dire need of humanitarian aid.

Destruction of farms and markets, a de facto blockade on commercial imports and a long-running fuel crisis have made life progressively worse for civilians, and have made food prices skyrocket as agriculture has slowed and supplies have become scarce.

Now, international banks are more reluctant to provide credit to importers, meaning traders may have to halt shipments. The Central Bank of Yemen is struggling to stabilize prices in the food market, and for a country that imports 90% of its food, this could result in price hikes hitting a quarter of the population, already on the edge of starvation.

A February Oxfam food survey of 250 people in northwest Yemen found that almost two thirds of families rely on credit to buy food, but that they’re unable to pay back their debt, leading lenders to be increasingly unwilling to provide loans.

 “Close to 14.4 million people, more than half of all Yemenis, are hungry and the majority will not be able to withstand the rising prices for food if importers are unable to trade due to a crippled financial system,” said Sajjad Mohamed Sajid, Oxfam’s Country Director in Yemen.

People in Taiz city, in the front line of the conflict, told Oxfam in February that there were no vegetables or infant formula milk available in the market, and reported that in some areas, food prices have increased by 200%. Many said that they eat only one meal per day to leave enough food for their children.

“My husband, our eight children, and I still live in a tent. Hunger is terribly painful,” said Um Ali, who fled from Taiz after her house was completely destroyed. “Most nights I wake up thinking about the food I do not have – we can’t even afford to buy a bag of wheat. Sometimes I can only find dry bread, which I break into small pieces and dip in water to feed my children.”

Famous for its Sahweq, Yemeni hot sauce, the Taiz city shop used to serve long lines of people. Now empty, Bashir the owner’s son, studies despite schools being closed. Photo: Oxfam

Despite the challenges, humanitarian agencies are still managing to reach people with aid. Since July 2015, Oxfam has reached more than 730,000 people with water, food vouchers and cash transfers, including cash for work.

In order to stave off the collapse of Yemen’s economy, Oxfam is urging the international community to provide urgent support to the Central Bank of Yemen, as well as Yemen’s private banks and importers. 

We are also calling for all land, sea and air routes to Yemen to remain open to allow the regular and consistent flow of commercial supplies of food, fuel and medicines in to the country to alleviate the humanitarian crisis.

All parties to the conflict should resume peace talks and an immediate ceasefire. A real and sustainable solution can only be reached when all sections of society, including women, youth and the most marginalized communities, are actively engaged in shaping any future agreement, ensuring their rights and aspirations are recognized. Finally, we call on governments, particularly the US and the UK to stop fueling the conflict through arms sales.

“I am a mother and I do not want to see my children suffering, “said Ali. “I wish I could go back to our house and our previous life. I wish my kids could go back to school and eat bread, vegetables and chicken.”’


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