Yemen Scenarios: End of Saudi financial support

Saudi financial support to Yemen’s economy, worth over $2.2 billion since March 2018, has been crucial in helping Yemen to escape economic collapse. With this financial support coming to an end, and no alternative financing in place, Yemen could see the riyal lose almost half its value over the coming six months. This would cause food prices to almost double again, increasing food insecurity and pushing Yemenis into a heavier reliance on humanitarian aid, regional patronage and negative coping mechanisms, including criminality and informal taxation.
These scenarios were developed in January 2020 through team mapping and analysis exercises by four Yemen researchers, validated through interviews with key stakeholders. The draft report was further developed and revised on the basis of a literature review, rounds of extensive revision and input from ACAPS economists. Subsequently, as the Saudi deposit to CBY Aden depleted, the report was updated in May 2020 to reflect the impact of COVID-19 both on Yemen and developments in south Yemen.