Paper details

Paper authors	Achim Wennmann
In panel on	Bringing Political Economy back to Centre-Stage
Paper presenter(s) will be presenting	In-Person / Online

Abstract

Incompatibilities over control of the economic resources represent a major reason for the armed conflict in Yemen, including grievances associated with wealth sharing and marginalisation, and have also accentuated political conflict over the control of institutions. Various conflict actors instrumentalise the economy to consolidate their own political position, while control over revenue generating assets and institutions managing the economy has been a driver of conflict dynamics. As a result all economic actors - from the humanitarian, financial or business sector - operate within the realities of a divided Yemen. In spite of the de-facto existence of two currencies and banking systems, many economic transactions nonetheless take place across Yemen’s internal divisions and international borders, albeit at significantly increased costs. In the face of the evolution of Yemen's economy in times of war, a small number of powerful individuals have deeply entrenched economic interests in the status quo. These actors have positioned themselves to benefit from the economic blockade of Northern Yemen, the fracturing of central banking, the creation of two currencies, and the new patterns of territorial control. However, there are constituencies within the trading and banking community that still believe in the value of a neutral economy that can help bring the country together. This paper explores the possible avenues to deal with the political economy of a 'closed access' economy in Yemen as a contribution to relieving the humanitarian crises and to finding a political settlement.

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