Exclusive - 5 Years of Houthi Coup Drives Yemen’s Economy Further towards Abyss
Five years of the Iran-backed Houthi militias’ coup against the legitimate authorities in Yemen has plunged even the wealthiest of people into poverty.
A once rich businessman, known as “Uncle Abdullah”, now finds himself in poverty due to the extortion and violations committed by the Houthis that have left the Yemeni economy teetering on the edge of the abyss.
Abdullah’s acquaintances hardly recognize him today in his worn clothes, when he once owned one of the largest wholesale pottery and home goods store in Sanaa’s renowned Bab market. The poor economy forced him to declare bankruptcy and shut his store.
He joins the long line of dozens of companies that have been forced to close and hundreds of businessmen who have seen their hard work evaporate at the hands of the militias, through their looting and hefty levies.
With a heavy heart, Abdullah, 49, speaks to Asharq Al-Awsat about how poverty has forced his three children to live in misery and deprivation after they had grown up wanting nothing.
“I thank God that I managed to come out from all of this with less losses. Many businessmen who have declared bankruptcy have gone mad and others, unable to take the shock, suffered strokes and died. Others have been jailed by the Houthis because they could no longer pay their dues, rent and other payments,” he explained.
Abdullah now earns a living as a street peddler, roaming the streets and pushing his small cart, selling random goods. “I don’t have any specific item that I sell. I always look for something that sells fast and earns me a profit, no matter how small,” he said, revealing that he sometimes sells boiled eggs and potatoes, or fruits and vegetables, and just days ago, candy on the occasion of the Eid al-Fitr holiday.
Economic experts had long warned that the Houthis’ unjust practices against Yemeni businessmen, such as customs fees, high taxes and levies, would lead companies to bankruptcy and harm the national economy, which would in turn impact the people.
Just last week, the Raha travel agency declared bankruptcy, shut its doors and laid off its employees. Sources from the company blamed the development to the poor economy caused by the coup, as well as the novel coronavirus pandemic.
Economic sources in Sanaa told Asharq Al-Awsat that several small and medium companies in Houthi-held areas are going bankrupt. The Houthis have tightened their grip on small businesses and the Yemeni people’s purchasing power has dropped because they are either not getting paid or are unemployed. High operating costs are also forcing business owners to close their doors because they can no longer pay back their loans.
More than 30 percent of businesses have been forced to close after losing more than 70 percent of their client base in Houthi-held areas, revealed Yemeni data. Forty-one percent of still operating businesses have been forced to dismiss more than half of their employees.
Small businesses make up more than 90 percent of Yemen’s economy. Forty percent of them have run out of business, deepening the economic crisis and plunging more people in poverty and unemployment.
Local economists told Asharq Al-Awsat that since their coup, the Houthis have sought to destroy Yemen’s economy and operate an alternate black market in an approach adopted by Iran’s Revolutionary Guards Corps in managing its parallel institutions in Iran.
“Economic activity has been limited to a war economy whereby state projects no longer exist, but have been replaced by small ones that are run by the Houthis,” they explained. The militias have sought hard since their coup to destroy the economy and establish businesses and establishments that reflect their sectarian affiliation.
With a lack of official figures, they estimated Yemen’s losses at over 100 billion dollars.