Currency Rout Pushes Embattled Yemen to Brink of Starvation

  • Rial sell-off caused wheat prices to surge 40 percent in a day
  • Worsening food crisis adds to suffering after two years of war

Anwar Abdullah goes to work every day but he hasn’t been paid in five months. When prices for wheat, sugar and other staple foods spiked earlier this month, the Yemeni school teacher feared for his three children.

A civil war that flared into a regional conflict has devastated Yemen’s economy and pushed millions to the brink of starvation. The local currency’s depreciation and the bombing of ports and roads have disrupted the distribution of food imports on which the poorest Arab country depends. Two of every three of the nation’s 27 million citizens struggle to get enough food to survive, according to the United Nations.

“The situation is deteriorating rapidly because of the conflict,” Reem Nada, a spokeswoman for the UN’s World Food Programme, said by phone from Cairo. “The current level of hunger in Yemen is unprecedented.”

Yemen is part of a broader crisis that’s also convulsing Nigeria, Somalia and South Sudan. Humanitarian operations need $4.4 billion in aid by the end of March to avert a “catastrophe” in these countries, UN Secretary General Antonio Guterres said on Wednesday. The UN declared a famine in parts of South Sudan on Feb. 20.

Wholesale prices for wheat in the Yemeni city of Taiz surged by more than 40 percent on Feb. 12, when the black-market value of the currency, the rial, plunged 30 percent against the U.S. dollar. The latest price spike suggests that food imports, which provide for 90 percent of the country’s needs, could become even harder for people to afford.

“What can we do? We have nothing,” Abdullah, 38 years old, said on Feb. 14 from the capital Sanaa. “With the new price hikes, we will go begging in the streets.”

Saudi Troops

Yemen was already unstable before the outbreak of civil war in March 2015 plunged it into chaos, allowing al-Qaeda to thrive. Houthi rebels drove President Abd-Rabbu Mansour Hadi’s government from Sanaa to the southern port of Aden. Saudi Arabia and Arab allies began bombing Houthi forces and deployed ground troops to support Hadi. Most foreign powers recognize Hadi, while the Gulf Arabs’ regional rival, Iran, recognizes the Houthis.

The economy shrank by 28 percent in 2015, as Yemen’s already modest output of oil tumbled, and was set to contract further in 2016, according to the latest available data from the World Bank.

“We are looking at a serious risk of starvation for a large proportion of the population,” Sherin Varkey, UNICEF’s acting representative for Yemen, said by phone from Sanaa.

The rial slumped to 390 to the dollar on the black market on Feb. 12, after trading at about 300 for several months, money changers in Sanaa, Aden and the city of Taiz said by phone. As a result, a 50 kg (110 pound) sack of wheat, which many Yemenis buy to make bread, jumped 42 percent that day to 8,500 rials, while the same amount of sugar rose 27 percent, according to Ahmed al-Sharabi, a food wholesaler in Taiz.

“The rial is very much overvalued and the government isn’t in a position to defend it,” Peter Salisbury, a senior research fellow at Chatham House, said from London. “If the rial devalues, it worsens the hunger crisis in the country.”

The rial returned to 300 per dollar on the black market on Feb. 14, as both the Hadi government and the Houthis imposed controls on money changers. It has fluctuated to as much as 330 to the dollar since then, Taha Ahmed, a Taiz-based money changer, said by phone.

Four of Yemen’s 21 provinces -- Abyan, Hadhramaut, Taiz and Hodeida -- are experiencing a food “emergency,” meaning that more than 15 percent of their populations suffer from “acute malnutrition,” the UN said in a Feb. 10 report.

“Hodeida and other ports operated by the Houthis are operating way below capacity and in many cases have been bombed quite severely,” Adam Baron, a Yemen specialist at the European Council on Foreign Relations, said by phone from Vienna. “Roads have been bombed, crucial bridges have been bombed, fuel costs are astronomical.”

Najeeb Mohammed lives in Taiz, on the front lines of the war. The crisis has cost him his sales job and his apartment, which was damaged in fighting, and the father of five scrapes by as a motorcycle-taxi driver. “Even tea is a luxury,” he said by phone. “This is no longer a life.”

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