Yemen Fears Worsening Humanitarian Crisis After US Aid Cuts

A Yemeni volunteer offers food ration to a Yemeni man in the province of Lahj, in southern Yemen, on March 3, 2025, during the holy Muslim fasting month of Ramadan. (AFP)
A Yemeni volunteer offers food ration to a Yemeni man in the province of Lahj, in southern Yemen, on March 3, 2025, during the holy Muslim fasting month of Ramadan. (AFP)
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Yemen Fears Worsening Humanitarian Crisis After US Aid Cuts

A Yemeni volunteer offers food ration to a Yemeni man in the province of Lahj, in southern Yemen, on March 3, 2025, during the holy Muslim fasting month of Ramadan. (AFP)
A Yemeni volunteer offers food ration to a Yemeni man in the province of Lahj, in southern Yemen, on March 3, 2025, during the holy Muslim fasting month of Ramadan. (AFP)

US President Donald Trump's decision to shut down the US Agency for International Development (USAID) is expected to have adverse effects on Yemen's humanitarian and developmental situation.

The agency has been pivotal in supporting policy improvements, good governance, and local community empowerment, especially in light of the country's dire economic conditions caused by war and unrest.

Yemen is currently facing the worst humanitarian crisis in modern history, with the United Nations reporting millions of people affected.

Warnings are mounting over worsening food security and the increasing number of people needing aid, as the local currency collapses, prices soar, and diseases and epidemics spread.

Health and education systems are in disarray, and women and children, particularly in displacement camps, are bearing the brunt of the crisis.

While government officials and local civil society organizations fear the potentially harmful impact of Trump’s decision on vital development projects in health, education, food security, and social and economic protection for women and children, a senior Yemeni official from the Ministry of Planning and International Cooperation believes the decision will not directly affect government programs and activities.

The source, who requested anonymity, told Asharq Al-Awsat that USAID funding does not enter the Yemeni government’s budget. The government also lacks full authority to implement, manage, or even oversee the development projects funded by the agency.

The source revealed that the parties responsible for implementing these projects—USAID, the World Bank, and UN agencies—are the ones that determine the nature, locations, and operational budgets of the projects. Government input is typically considered only in the narrowest of circumstances.

In April, the Yemeni government signed a five-year agreement with USAID to provide aid. However, the new US administration’s decision effectively renders this agreement null and void.



Lebanon Bans Dealing with Hezbollah Financial Entity

A view shows Lebanon's Central Bank building in Beirut, Lebanon April 4, 2025. REUTERS/Mohamed Azakir/File Photo
A view shows Lebanon's Central Bank building in Beirut, Lebanon April 4, 2025. REUTERS/Mohamed Azakir/File Photo
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Lebanon Bans Dealing with Hezbollah Financial Entity

A view shows Lebanon's Central Bank building in Beirut, Lebanon April 4, 2025. REUTERS/Mohamed Azakir/File Photo
A view shows Lebanon's Central Bank building in Beirut, Lebanon April 4, 2025. REUTERS/Mohamed Azakir/File Photo

Lebanon's central bank has banned banks and brokerages from dealing with a Hezbollah-affiliated financial institution, according to a circular, a sign of the group's diminished sway over state affairs since its devastating war with Israel.

Keeping up military pressure on the Iran-backed group, Israel on Tuesday launched some of its heaviest airstrikes since a ceasefire in November, saying it hit training camps and weapons depots in east Lebanon. A security source in Lebanon said 12 people were killed, five of them Hezbollah fighters, Reuters reported.

Hezbollah has faced mounting pressures since the war, including financial ones.

In the circular, dated July 14 and reviewed by Reuters, Banque du Liban prohibited all licensed financial institutions in Lebanon from dealing directly or indirectly with unlicensed entities and listed Hezbollah's Al-Qard Al-Hassan as an example.

The US Department of Treasury imposed sanctions on Al-Qard Al-Hassan in 2007, saying Hezbollah used it as a cover to manage "financial activities and gain access to the international financial system".

Bolstered by its powerful arsenal, Hezbollah had long exercised decisive influence over Lebanese state affairs, but it was unable to impose its will in the formation of a post-war government in February.

Al-Qard Al-Hassan, founded in 1983, describes itself as a charitable organisation which provides loans to people according to Islamic principles that forbid interest. Israel struck some of its branches during its war with Hezbollah last year.

Operating as a not-for-profit organisation under a licence granted by the Lebanese government, it has more than 30 branches, mostly in southern Lebanon and the Bekaa Valley.

SHADOW ECONOMY

A Lebanese official said the central bank move had been in the works for months, and reflected US pressure on Lebanon to take action against Hezbollah's financial wing.

Nassib Ghobril, chief economist at Byblos Bank, said Lebanese banks were already careful to avoid dealing with Al-Qard Al-Hassan because it is under US sanctions.

"The important point is that finally the authorities are addressing the shadow economy in Lebanon, which is the real problem," he said, adding that authorities had long failed to address its "toxic effects".

In June, the European Commission included Lebanon in an updated list of high-risk jurisdictions presenting strategic deficiencies in their national anti-money laundering and countering the financing of terrorism.

Last year, global financial crime watchdog FATF placed Lebanon on its "grey list" of countries under special scrutiny.