CAIRO (AP) — The internationally recognized government of Yemen signed an agreement with the Arab Monetary Fund on Sunday, state media said, paving the way for the Saudi-backed administration to receive $1 billion from economic aid.
The Abu Dhabi-based fund, a 22-member sub-organization of the Arab League, will disburse the $1 billion program from 2022 to 2025. The economic deal aims to help the Yemeni government establish monetary and fiscal stability through sweeping reforms, the Saba news agency said.
Yemen’s civil war, now entering its eighth year, has decimated the country’s economy and pushed half the population to the brink of starvation. More than 150,000 people have been killed in the conflict, including more than 14,500 civilians. On average, food is 60% more expensive than it was last year, largely due to the war in Ukraine which has cut off the country’s essential wheat imports from Eastern Europe. East.
The conflict began in 2014 when Iran-backed Houthi rebels seized the capital of Sanaa, as well as much of northern Yemen, forcing the government into exile. A Saudi-led coalition, including the United Arab Emirates, intervened in 2015 to try to restore power to the internationally recognized government. The country’s central bank has since been split between the warring parties.
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 debts and cover public sector salaries. Banknotes printed in Aden are not excluded in areas controlled by the Houthis, whose central bank operates from Sanaa.
Sunday’s agreement was signed by the governor of the Aden branch of Yemen’s central bank, Ahmed al-Maabqi, in the presence of Saudi finance minister Mohammed Al-Jadaan.
In a statement released by the Houthis’ finance ministry following the signing, the rebel group denounced the deal and said the fund will only serve “aggression countries, not Yemeni society”.
The Saudis have invested billions of dollars to support Yemen’s internationally recognized government over the years, with the Kingdom already pledging $3 billion in April to help its war-battered economy.