Yemen in the Grips of Optimism

The head of Yemen's new presidential council Rashad al-Alimi stands during a session of the Yemeni parliament during which he and members of the presidential council took the oath in Aden, Yemen April 19, 2022. (Reuters)
The head of Yemen's new presidential council Rashad al-Alimi stands during a session of the Yemeni parliament during which he and members of the presidential council took the oath in Aden, Yemen April 19, 2022. (Reuters)
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Yemen in the Grips of Optimism

The head of Yemen's new presidential council Rashad al-Alimi stands during a session of the Yemeni parliament during which he and members of the presidential council took the oath in Aden, Yemen April 19, 2022. (Reuters)
The head of Yemen's new presidential council Rashad al-Alimi stands during a session of the Yemeni parliament during which he and members of the presidential council took the oath in Aden, Yemen April 19, 2022. (Reuters)

It may be naive to speak of optimism seven years since the coup by the Iran-backed Houthi militias and the consequent eruption of the war. The recent changes however, have led to optimism because they have allowed the Yemenis to draw up scenarios that may have been impossible up until a few weeks ago.

The Yemenis came together for consultations in Riyadh in late March and early April. This was the first time hundreds of Yemenis meet since the 2012-2013 national dialogue.

The consultations inspired Yemen and the Saudi-led Arab coalition to declare a unilateral ceasefire, which was followed by a nationwide truce sponsored by the United Nations.

The Riyadh talks culminated in several agreements and decisions, capped with the formation of the Presidential Leadership Council (PLC) that will pave a new path for Yemen's future that would hopefully be marked by consensus.

The PLC proved a breakthrough in numerous issues that had been tied down by the previous narrow view of how to deal with the crisis. The former team, which is being replaced by the council, had used up a lot of time and means and exhausted its options in how to handle the crisis. Its policies had only led to more problems and crises, consolidating the state of failure and ineptitude.

Asharq Al-Awsat met with several Yemeni and western experts to discuss the challenges and visions in store for Yemen.

Zaed al-Thari had taken part in the political track of the Riyadh consultations. He told Asharq Al-Awsat that the PLC could be viewed as a new beginning "that is more aware of Yemen's diversity."

He said high hopes are pinned on the council and it has been tasked with heavy responsibilities.

Adam Baron, a writer and political analyst, said the Gulf mediation has a "long history" in Yemen. The Riyadh consultations could be seen as being based on the 2011 Gulf Cooperation Council (GCC) initiative.

The PLC, he continued, could be viewed as a peace council, should negotiations be held with the Houthis. It could also turn into a war council, if the conflict escalates.

Only time will tell which path it will take, he told Asharq Al-Awsat.

Challenges
Kamel al-Khodani, member of the national resistance's politburo, said the PLC will have to deal with many challenges.

A main challenge is how to activate state institutions and revive their duties in the interim capital, Aden, he told Asharq Al-Awsat.

It is also tasked with achieving political, security and economic stability, improving the living conditions of the people and stopping the collapse of the currency, manipulation of prices of commodities and oil derivatives.

The PLC can take advantage of the popular, Gulf, regional and international support to overcome these challenges and meet the aspirations of the people in reclaiming the state and peace, added al-Khodani.

Another challenge is for the council to actually work from inside Yemen, specifically Aden.

Huda al-Sarari, a human rights lawyer, noted that the presidential council, government, lawmakers and Shura Council had all returned to Aden for the swearing in of the PLC.

She hoped that they would remain and that they would continue their duties in the liberated areas so that the people would have renewed confidence in them. This will also help in providing services and addressing the economic crisis.

Another challenge facing the PLC is merging the armed forces and implementing the military and security aspects of the Riyadh Agreement, remarked al-Sarari.

The council would also be tasked with mobilizing all fronts against the Houhis if the militias fail to agree to peace and opted to violate the truce, she noted.

"We have grown accustomed to the Houthi violations of truces and agreements," she went on to say.

In fact, the militias' joining of a truce is only a ploy so that they could regroup and reorganize their ranks, she remarked, citing their ongoing desperate attacks in the Marib and Taiz provinces.

Adel Shamsan, a political analyst, told Asharq Al-Awsat that a main challenge facing the PLC is the "unification of the political front."

Once political views are united, then the military fronts will follow, he explained.

Sarah al-Ariqi, a member of the Yemeni Coalition of Independent Women, said the PLC has many challenges to overcome, chief of which is reaching urgent solutions that would allow the unification of the military and security institutions.

Other pressing issues are the organized and regular payment of employee salaries and achieving peace and stability in liberated areas.

None of these goals can be accomplished without the cooperation of all political forces and the support of Saudi Arabia, United Arab Emirates and international community, said al-Ariqi.

Gulf mediation
On whether the Gulf mediation will lead to a final solution in Yemen, GCC Ambassador to Yemen Sarhan Al-Minaikher told Asharq Al-Awsat that the council "will always support the choices of the Yemeni people as they seek to end their crisis through the political solution."

"Once all Yemeni parties agree to join negotiations over the comprehensive solution, then they will find all the support from the GCC, which will be keen on hosting those talks," he added, citing consultations that were held for 110 days in Kuwait in 2016.

Al-Khodani stressed that the Yemenis believe that there can be no solution to the crisis "without the brothers in the Gulf."

"All parties know this, including the Houthis," he said.

He noted the positive atmosphere that prevailed during the intra-Yemeni consultations in Riyadh that were sponsored by the GCC.

The consultations confirmed that Yemen is part of the Gulf and that the Yemenis see in the Gulf an extension of their Arab identity, he stated.

Thari said: "It goes without saying that Yemen is part of its Arab Gulf environment and it is an integral part of it."

"The Gulf states, starting with Saudi Arabia, have always supported development and stability in Yemen," he noted.

"The change in the political leadership and establishment of the PLC provides a serious opportunity to overcome some of the main causes of the internal crisis," he continued.

He hoped that that would pave the way for Yemen's return to the Gulf fold and for Gulf-sponsored peace negotiations and national dialogue to be held.

Future scenarios
Asked about what the future has in store for Yemen, Shamsan replied: "The coming days will be full of hope and the rapid developments confirm this."

He also hailed the GCC for declaring its continued support to Yemen as it embarks on a new path towards peace and ending the war.

Sarari painted a less optimistic vision, hoping first that the new government would set aside its usual disputes over shares and instead focus on uniting ranks and ending the Houthi coup, either through peaceful means or through the military solution.

The PLC will then be able to carry out economic reforms, provide services to the people, pay salaries throughout the country and create sustainable solutions through reaping oil revenues, she added.

The military aspect of the Riyadh Agreement could then be implemented. The judiciary would then be revived. Active efforts to fight corruption would kick off. Audit agencies would be activated in order to boost transparency and sound governance. She also stressed the need to fight terrorism and secure international marine navigation.

Al-Khodani believes that the scenarios for the solution will be limited to two options.

The first would see the Houthis succumbing to calls to end the war. They would sit at the negotiations table, abandon pro-Iran slogans and agree to hold elections.

The second scenario would see the continuation of the war to liberate Sanaa and other regions from the Houthis.

Al-Ariqi said either scenario will end the suffering of the Yemeni people, a need that the international community believes in.

Journalist Faisal al-Shabibi remarked: "The best scenario is the political solution that everyone wants in order to stop the bloodshed and preserve what remains of the state."

Unfortunately, the solution remains out of reach "given the Houthis' intransigence and ideology that is alien to Yemen and detached from reality."

The militias want to impose their views on the Yemenis by force, he added, while also citing previous governments' miserable experience with the Houthis, who have always reneged on any signed agreement, since the eruption of the first war in June 2004 and to this very day.



Borderless Europe Fights Brain Drain as Talent Heads North

Eszter Czovek, 45, packs up her house as she moves to Austria, in Budapest, Hungary, October 28, 2024. REUTERS/Bernadett Szabo
Eszter Czovek, 45, packs up her house as she moves to Austria, in Budapest, Hungary, October 28, 2024. REUTERS/Bernadett Szabo
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Borderless Europe Fights Brain Drain as Talent Heads North

Eszter Czovek, 45, packs up her house as she moves to Austria, in Budapest, Hungary, October 28, 2024. REUTERS/Bernadett Szabo
Eszter Czovek, 45, packs up her house as she moves to Austria, in Budapest, Hungary, October 28, 2024. REUTERS/Bernadett Szabo

Until recently aerospace engineer Pedro Monteiro figured he'd join many of his peers moving from Portugal to its richer European neighbors in the quest for a better-paid job once he completes his master's degree in Lisbon.
But tax breaks proposed by Portugal's government for young workers - up to a temporary 100% income tax exemption in some cases - plus help with housing are making him think twice.
"Previous governments left young people behind," said Monteiro, 23, who is studying engineering and industrial management at the Higher Technical Institute in the Portuguese capital. "The country needs us and we want to stay but we need to see signs from the government that they are implementing policies that will help."
Monteiro cites in particular the cost of buying or renting a home amid a housing crisis aggravated by the arrival of wealthy foreigners lured by easy residency rights and tax breaks, Reuters said.
He is doubtful the government's new measures will be enough.
"Some of my friends are now working abroad and earn substantially more money... and have better career development opportunities," he said. "I'm a little bit skeptical concerning my job opportunities here in Portugal."
Portugal is the latest country in Europe to seek to tackle a brain drain holding back its economy. Tax breaks for young workers in the budget currently going through parliament will take effect next year and could benefit as many as 400,000 young people at an annual cost of 525 million euros.
Talent flight to wealthier countries of the north is a problem Portugal shares with several others in southern and central Europe, as workers take advantage of freedom of movement rules within the trade bloc. Countries including Italy have tried other schemes to counter the flight, with mixed results.
By exacerbating regional labor shortages and depriving poorer countries of tax revenues, it is yet another hurdle for the EU as it tries to improve its ebbing economic growth while addressing population decline and lagging labor productivity.
Donald Trump's victory in US elections this month raises the stakes, with the risk of across-the-board trade tariffs on European exports of at least 10% - a move that economists say could turn Europe's anaemic growth into outright recession.
About 2.3 million people born in Portugal, or 23% of its population, currently live abroad, according to Portugal's Emigration Observatory. That includes 850,000 Portuguese nationals aged 15-39, or about 30% of young Portuguese and 12.6% of its working-age population.
More concerning still is that about 40% of 50,000 people who graduate from universities or technical colleges emigrate each year, according to a study by Business Roundtable Portugal and Deloitte based on official statistics, costing Portugal billions of euros in lost income tax revenue and social security contributions.
DEMOGRAPHIC HELL
"This is not a country for young people," said Pedro Ginjeira do Nascimento, executive director of Business Roundtable Portugal, which represents 43 of the largest companies in the nation of 10 million people. "Portugal is experiencing a true demographic hell because the country is unable to create conditions to retain and attract young talent."
Internal migration within the EU is partly driven by the disparity in wages between its member states. Some economic migrants also say they are looking for better benefits such as pensions and healthcare and less rigid, hierarchichal structures that give more responsibility to those in junior roles.
Concerns are mounting over the long-term viability of Europe's economic model with its rapidly ageing population and failure to win substantial shares of high-growth markets of the future, from tech to renewable energy.
Presenting a raft of reform proposals aimed at boosting local innovation and investment, former European Central Bank chief Mario Draghi said in September the region faced a "slow agony" of decline if it did not compete more effectively.
Eszter Czovek, 45, and her husband are moving from Hungary to Austria, where workers earn an average 40.9 euros ($29.95) per hour compared to 12.8 euros per hour in Hungary, the largest wage gap between neighboring countries in the EU.
The number of Hungarians living in Austria increased to 107,264 by the beginning of 2024 from just 14,151 when Hungary joined the EU.
Czovek's husband, who works in construction, was offered a job in Austria, while she has worked in media and accounting at various multinationals. She cited better pay, pensions, work conditions and healthcare as motives for moving. She also mentioned her concern over the political situation in Hungary, which she fears might join Britain in leaving the EU.
"There was a change of regime here in 1989 and 30 years later we are still waiting for the miracle that will see us catch up with Austria," Czovek said of the revolution over three decades ago that ended communist rule in Hungary.
Since Brexit, the Netherlands has replaced Britain as a preferred destination for Portuguese talent while Germany and Scandinavian countries are also popular.
Many Europeans still head to the United States in search of better jobs - about 4.7 million were living there in 2022, according to the Washington-based Migration Policy Institute, which nonetheless notes a long-term decline since the 1960s.
In 2023, 4,892 Portuguese emigrated to the Netherlands, surpassing Britain for the first time, which in 2019 received 24,500 Portuguese.
At home, they face the eighth-highest tax burden in the Organization for Economic Co-operation and Development (OECD) even as house prices rose 186% and rents by 94% since 2015, according to property specialists Confidencial Imobiliario.
A single person in Portugal without children earned an average of 16,943 euros after tax in 2023 compared to 45,429 euros in the Netherlands, according to Eurostat.
Portugal will offer under 35s earning up to 28,000 euros a year a 100% tax exemption during their first year of work, gradually reducing the benefit to a 25% deduction between the eighth and tenth years.
Young people would also be exempted from transaction taxes and stamp duty when buying their first home as well as access to loans guaranteed by the state and rent subsidies.
"We are designing a solid package that tries to solve the main reasons why the young leave," Cabinet Minister Antonio Leitao Amaro said in an interview with Reuters.
'THINGS WON'T CHANGE'
Leitao Amaro said he did not know for sure if the tax breaks would work but that his government, which came into office in April, had to try something new.
"If we don't act ambitiously, things won't change and Portugal will continue down this path," he said.
The Italian government has already found that tax breaks used as incentives are costly and open to fraud.
In January, Italy abruptly curtailed its own scheme that was costing 1.3 billion euros in lost tax revenue, even as it lured tech workers such as Alessandra Mariani back home.
Before 2024, returners were offered a 70% tax break for five years, extendable for another five years in certain circumstances. Now, it plans to offer a slimmed-down scheme targeting specific skills after it attracted only 1,200 teachers or researchers - areas where Italy has a particular shortage.
Mariani said the incentives were key to persuading her to return to Milan in 2021 by allowing her to maintain the same standard of living she enjoyed in London.
"Had the opportunity been the same without the scheme, I would not have done it at all," said Mariani, now working at the Italian arm of the same large tech company.
With her tax breaks poised to be phased out by 2026 unless she buys a house or has a child, Mariani faces a drop in salary and she said she's once again eyeing the exit door.