World Bank: Houthi Blockade on Oil Exports in Yemen Worsens Food Security

Yemen’s GDP is projected to contract by 1% in 2024 (WB)
Yemen’s GDP is projected to contract by 1% in 2024 (WB)
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World Bank: Houthi Blockade on Oil Exports in Yemen Worsens Food Security

Yemen’s GDP is projected to contract by 1% in 2024 (WB)
Yemen’s GDP is projected to contract by 1% in 2024 (WB)

The World Bank said on Friday that the Houthi blockade on oil exports has led to the deterioration of food security in Yemen to unprecedented levels.
It stressed that Yemen’s economy continues to confront deepening challenges as prolonged conflict, political fragmentation, and escalating regional tensions drive the country into an even more severe humanitarian and economic crisis.
In the Fall edition of its Yemen Economic Monitor (YEM) entitled “Confronting Escalating Challenges,” the WB revealed that Yemen’s GDP is projected to contract by 1% in 2024, following a 2% decline in 2023, exacerbating the 54% drop in real GDP per capita since 2015.
It then affirmed that the conflict has pushed most Yemenis into poverty, while food insecurity has reached historic levels, with over 60% of the population now facing inadequate access to food.
The report also underscored the significant economic hardships caused by the continued Houthi blockade on oil exports, which contributed to a 42% drop in fiscal revenues for the internationally recognized government in the first half of 2024, preventing it from providing essential services to the population.
The suspension of the government oil exports, combined with a heavy reliance on imports, has intensified external pressures, leading to a depreciation of the Yemeni Rial in the Aden market from 1,619 per US dollar in January 2024 to 1,917 by the end of August, it noted.
Living Conditions Deteriorate
Since 2023, the WB report said living conditions have deteriorated drastically for the majority of the population.
In July 2024, World Bank phone surveys indicated that severe food deprivation more than doubled in some governorates.
Also, economic fragmentation between Houthi-held and government-controlled areas continues to worsen, with disparities in inflation and exchange rates undermining both stability and future recovery efforts.
Simultaneously, regional tensions, especially in the Red Sea, have led to a more than 60% reduction in traffic through the strategic Bab El-Mandeb Strait and the Suez Canal.
However, the report said these disruptions have not yet resulted in significant increases in consumer prices.
“Yemen’s economic and humanitarian challenges are growing more acute, yet the opportunity remains to reverse this downward trend with the right support,” said Dina Abu-Ghaida, WB Country Manager for Yemen.
She added that immediate action is required, including addressing fiscal and external imbalances, mitigating food insecurity, and fostering greater stability. “We remain committed to working closely with partners to support Yemen’s recovery and pave the way for a sustainable future.”
Potential Risks
In its report, the WB further detailed the potential risks to Yemen’s banking sector, which faced mounting tensions between the Houthis and government-controlled government over regulatory control in the first half of the year.
While regional and international mediation efforts have helped ease some tensions, the report said the situation remains fragile, and the report recommends strengthening institutional resilience to manage inflation and fiscal challenges.
It also suggests improving trade routes and access to financial services to ease economic pressures and prevent further fragmentation.
The report affirmed that Yemen’s economic outlook for 2025 remains bleak, with the continuation of regional conflict and internal strife threatening to deepen the fragmentation and worsen the social and humanitarian crisis.
However, it noted that a potential peace dividend could spur rapid economic recovery, should a durable peace agreement be reached.
“This would pave the way for vital external assistance, reconstruction, and reforms necessary to stabilize the country and its economy,” the report said.

 



Half of Yemen’s Population Face Mounting Risks from Climate Change

Al-Garehi Al-Gharbi camp in the Abs district of north-west Yemen. (Norwegian Refugee Council)
Al-Garehi Al-Gharbi camp in the Abs district of north-west Yemen. (Norwegian Refugee Council)
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Half of Yemen’s Population Face Mounting Risks from Climate Change

Al-Garehi Al-Gharbi camp in the Abs district of north-west Yemen. (Norwegian Refugee Council)
Al-Garehi Al-Gharbi camp in the Abs district of north-west Yemen. (Norwegian Refugee Council)

Already suffering from a prolonged conflict as a result of the Houthi coup against the legitimate authority, Yemen is facing mounting risks brought on by climate change, the World Bank warned on Thursday.
Many populations are facing threats from climate change, such as extreme heat, drought, and floods, the WB said in its newly released Yemen Country Climate and Development Report (CCDR).
Stephane Guimbert, World Bank Country Director for Egypt, Yemen and Djibouti said that Yemen is facing an unprecedented convergence of crises — conflict, climate change, and poverty.
He called for immediate and decisive action on climate resilience, a matter of survival for millions of Yemenis.
“By investing in water security, climate-smart agriculture, and renewable energy, Yemen can safeguard human capital, build resilience and lay the foundations for a path to sustainable recovery,” he said.
The WB report said half of Yemenis are already exposed to at least one climate hazard — extreme heat, drought, or flooding — with compounding effects on food insecurity and poverty.
These risks, it showed, are expected to intensify without immediate action and Yemen’s annual GDP could decline by an average of 3.9% by 2040 under pessimistic climate scenarios, largely due to decreased agricultural productivity and infrastructure damage.
Navigating Challenges
Despite these challenges, the CCDR identifies strategic opportunities to strengthen resilience, improve food and water security, and unlock sustainable growth, the WB report noted.
For example, it said, targeted investments in water storage and groundwater management, coupled with adaptive agriculture techniques could lead to productivity gains of up to 13.5% in crop production under optimistic climate scenarios for the period of 2041 to 2050.
The report also spoke about risks to the fisheries sector, considered as a critical source of livelihood for many Yemenis.
Its projections indicate a potential decline of up to 23% in fish stocks due to rising sea temperatures and altered marine ecosystems.

The WB report also said that climate change exacerbates existing health challenges in Yemen, leading to increased healthcare costs and strain on already fragile health systems.
“It is projected that climate-related health issues could cost the country over $5 billion in excess health costs by 2050,” it noted.
“Addressing these challenges requires integrating climate resilience into public health planning, with a focus on vulnerable groups such as women and children.”
Concerning infrastructure, the report said urban areas and critical infrastructure are especially vulnerable, and without adaptation measures, economic shocks will disproportionately affect already fragile communities.
As for the private sector, it has a critical role to play in addressing Yemen’s pressing development challenges, said Khawaja Aftab Ahmed, IFC’s Regional Director for the Middle East.
“Harnessing its potential through innovative financing mechanisms and guarantee instruments and creating a conducive investment climate can help mobilize the climate-focused funding the country urgently needs to build a greener and more resilient future,” he said.
The WB report also said that Yemen also has immense potential for renewable energy, which could serve as a key component of its climate response and recovery.
It showed that harnessing renewable energy resources not only offers a pathway to reduce reliance on fossil fuels but also enables the creation of a more resilient power infrastructure.
“This will be essential in supporting vital services such as healthcare, water supply, and food distribution, particularly in conflict-affected areas,” it said.
Global Coordination
The World Bank highlighted the significant commitments and coordination from the international community to support Yemen in coping with climate shocks and building broader resilience.
It said securing sustainable peace will be required to unlock the financing and take the action needed to build long-term resilience to climate change.
The CCDR then underscored the importance of flexible, risk-informed decision-making to adapt climate actions to Yemen's uncertain political landscape.
Under a “Peace and Prosperity” scenario, it said, a higher level of adaptation can be implemented, yielding greater economic and social benefits.
Yemeni Minister of Water and Environment, Tawfiq Al-Sharjabi, stressed the importance of integrating climate action into development strategies and adapting to climate fluctuations.
The minister was speaking at a special session to discuss the WB report on the sidelines of the 29th Conference of the Parties to the United Nations Framework Convention on Climate Change (COP29) held in Baku, Azerbaijan.
He said the report represents a significant contribution for Yemen in addressing climate change and will facilitate access to various climate financing options amid the structural and technical fragility faced by institutions due to the war.
The report, Al-Sharjabi added, aligns closely with Yemen's urgent priorities, particularly in the areas of water and food security, enhancing livelihoods, and promoting area-based climate adaptation approaches.