5
Yemen Socio-Economic Update Yemen Economy in Lines Ministry of Planning & International Cooperation Economic Studies & Forcasting Sector Issue (20) Nov., 2016 Overall Socioeconomic Developments Data of the Central Statistical Organization (CSO) indicates that in 2015, Gross Domestic Product (GDP) declined by about 32.9% for to several reasons, including mainly, the ongoing war that adversely affected most of the Yemeni governorates causing damages to infrastructure and public and private enterprises and disrupted many economic and investment activities. Other factors include a sharp shortage of fuel, electricity, food, water, trans- portation, education and health care, suspension of donor development sup- port, freezing the public investment program and restriction of the foreign trade movement. In 2016, the GDP is expected to decline by -12.8% (MoPIC, Technical Team of Forecasting, 2016) due to the suspension of exports and the ongo- ing economic and social crises, and especially the liquidity crunch, that has deepened the economic downturn and led to the loss of purchasing power and expansion of unemployment and poverty. As a result of the above, the real GDP per capita decreased from $518 per person in 2014 to about $290 per person in 2016. Without reaching a political settlement on the conflict, the per capita income will undoubtedly continue to decline, which means that more people are expected to slide below the poverty line. Figure(1): GDP Growth Rate % Figure(2): Real and Nominal GDP Per Capita US$ First: Macroeconomic situation: F ACTS AND FIGURES The exchange rate in the parallel market has been fluctuating around YER305/USD during Mid Oct. - Nov. , 2016. people in need of humanitarian as- sistance, including10.3 million who are in acute need.* beneficiary cases have been await- ing the cash assistance of the Social Welfare Fund since early 2015. 51% of the population are food insecure. 7 million severely food insecure.* The public budget deficit (apart from the external funding) during Jan.- Aug. 2016, compared to YER450.6 bil- lion during the same period in 2015. Is the estimated decline in GDP, while the inflation rate rose by over 30% in 2015. 90% of the population lack access to electricity through the public grid.** # of IDPs in September 2016.* Sources: *HNO, November, 2016. ** WB, June, 2016. YER 305 / USD 18.8 million 1.5 million 14.1 million YER 685.1 billion 32.9% 24.3 million public employees are awaiting their salaries 1.25 million 2.18 million 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 10.0 4.6 3.5 4.0 4.1 3.3 2.2 -15.1 -9.6 -12.8 -32.9 3.2 5.1 5.0 0.0 -5.0 -10.0 -15.0 -20.0 -25.0 -30.0 -35.0 Nominal GDP per Capita US$ Real GDP per Capita US$ 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 1,038 1,276 1,343 1,280 1,278 1,310 1,245 1,369 1,190 1,091 939 693 704 707 714 721 723 595 590 591 518 809 339 290 0 200 400 600 800 1000 1200 1400 1600 Yemen’s economy has been undergoing lean years that weak- ened its powers and productive capacities and exhausted its physi- cal, financial and human resources. To monitor the socioeconomic and humanitarian developments, the Economic Studies and Fore- casting Sector at the Ministry of Planning and International Co- operation (MoPIC), in collaboration with UNICEF, has been is- suing monthly Yemen Social and Economic Update since March 2015 in both English and Arabic. This issue No. (20) highlights a general and brief overview of the current socio-economic and humanitarian developments in Yemen. Currently, the national economy of Yemen is facing a sharp contraction due to the financial and economic crisis and liquid- ity crunch that have paralyzed the economy and deprived 1.25 million public employees and their families of their main source of income. Suspension of oil and gas exports and limited donor support have resulted in expanded public budget deficit, which stood at YR1.59 trillion (equivalent to about US$7 billion) dur- ing January 2015-August 2016. Foreign exchange reserves have fallen to their lowest levels. Officially, the Yemeni Riyal has lost more than 30% of its value against foreign currencies by the end of 2016, compared to early 2015. This has caused inflation and worsened the suffering of Yemenis. In parallel, unemployment rate has increased and food insecu- rity situation has worsened – today, more than 14 million people are food insecure. Yemen is facing an acute humanitarian crisis, where about 18.8 million people are in need of urgent humanitar- ian assistance (OCHA, November 2016). Public institutions and social services providers, health in particular, in several areas of the country are unable to perform their functions. Several public institutions work only two days a week and social service facili- ties lack the minimum operational costs. To alleviate the humanitarian suffering of millions of Yemenis, and women and children in particular, we call on the donor com- munity to provide the support needed to sustain and recover basic social services and resume their support for social protection pro- grams that were suspended from early 2015. 1. Decline in GDP: INTRODUCTION Source: Central Statistical Organization, National Accounts, 2015. MoPIC, Technical Team of Forecasting, 2016. Source: Central Statistical Organization, National Accounts, 2015. MoPIC, Technical Team of Forecasting, 2016.

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Yemen Socio-Economic UpdateYemen Economy in Lines

Ministry of Planning & International Cooperation

Economic Studies & Forcasting SectorIssue (20) Nov., 2016

Overall Socioeconomic Developments

Data of the Central Statistical Organization (CSO) indicates that in 2015, Gross Domestic Product (GDP) declined by about 32.9% for to several reasons, including mainly, the ongoing war that adversely affected most of the Yemeni governorates causing damages to infrastructure and public and private enterprises and disrupted many economic and investment activities. Other factors include a sharp shortage of fuel, electricity, food, water, trans-portation, education and health care, suspension of donor development sup-port, freezing the public investment program and restriction of the foreign trade movement.

In 2016, the GDP is expected to decline by -12.8% (MoPIC, Technical Team of Forecasting, 2016) due to the suspension of exports and the ongo-ing economic and social crises, and especially the liquidity crunch, that has deepened the economic downturn and led to the loss of purchasing power and expansion of unemployment and poverty.

As a result of the above, the real GDP per capita decreased from $518 per person in 2014 to about $290 per person in 2016. Without reaching a political settlement on the conflict, the per capita income will undoubtedly continue to decline, which means that more people are expected to slide below the poverty line.

Figure(1): GDP Growth Rate %

Figure(2): Real and Nominal GDP Per Capita US$

First: Macroeconomic situation:

Facts and Figures

The exchange rate in the parallel market has been fluctuating around YER305/USD during Mid Oct. - Nov.

, 2016.

people in need of humanitarian as-sistance, including10.3 million who

are in acute need.*

beneficiary cases have been await-ing the cash assistance of the Social

Welfare Fund since early 2015.

51% of the population are food insecure. 7 million severely food

insecure.*

The public budget deficit (apart from the external funding) during Jan.-

Aug. 2016, compared to YER450.6 bil-lion during the same period in 2015.

Is the estimated decline in GDP, while the inflation rate rose

by over 30% in 2015.

90% of the population lack access to electricity through the public

grid.**

# of IDPs in September 2016.*

Sources: *HNO, November, 2016. ** WB, June, 2016.

YER 305 / USD

18.8 million

1.5 million

14.1 million

YER 685.1 billion

32.9%

24.3 million

public employees are awaiting their salaries1.25 million

2.18 million

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

10.04.6 3.5 4.0 4.1 3.3

2.2

-15.1

-9.6-12.8

-32.9

3.25.1

5.0

0.0

-5.0

-10.0

-15.0

-20.0

-25.0

-30.0

-35.0

Nominal GDP per Capita US$ Real GDP per Capita US$

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

1,038

1,276

1,343

1,280

1,278

1,310

1,245

1,369

1,1901,091

939

693

704

707

714

721

723

595

590

591518

809

339

290

0

200

400

600

800

1000

1200

1400

1600

Yemen’s economy has been undergoing lean years that weak-ened its powers and productive capacities and exhausted its physi-cal, financial and human resources. To monitor the socioeconomic and humanitarian developments, the Economic Studies and Fore-casting Sector at the Ministry of Planning and International Co-operation (MoPIC), in collaboration with UNICEF, has been is-suing monthly Yemen Social and Economic Update since March 2015 in both English and Arabic. This issue No. (20) highlights a general and brief overview of the current socio-economic and humanitarian developments in Yemen.

Currently, the national economy of Yemen is facing a sharp contraction due to the financial and economic crisis and liquid-ity crunch that have paralyzed the economy and deprived 1.25 million public employees and their families of their main source of income. Suspension of oil and gas exports and limited donor support have resulted in expanded public budget deficit, which stood at YR1.59 trillion (equivalent to about US$7 billion) dur-ing January 2015-August 2016. Foreign exchange reserves have fallen to their lowest levels. Officially, the Yemeni Riyal has lost more than 30% of its value against foreign currencies by the end of 2016, compared to early 2015. This has caused inflation and worsened the suffering of Yemenis.

In parallel, unemployment rate has increased and food insecu-rity situation has worsened – today, more than 14 million people are food insecure. Yemen is facing an acute humanitarian crisis, where about 18.8 million people are in need of urgent humanitar-ian assistance (OCHA, November 2016). Public institutions and social services providers, health in particular, in several areas of the country are unable to perform their functions. Several public institutions work only two days a week and social service facili-ties lack the minimum operational costs.

To alleviate the humanitarian suffering of millions of Yemenis, and women and children in particular, we call on the donor com-munity to provide the support needed to sustain and recover basic social services and resume their support for social protection pro-grams that were suspended from early 2015.

1. Decline in GDP: IntroductIon

Source: Central Statistical Organization, National Accounts, 2015. MoPIC, Technical Team of Forecasting, 2016.

Source: Central Statistical Organization, National Accounts, 2015. MoPIC, Technical Team of Forecasting, 2016.

Issue (20) Nov., 2016 Page 2 Yemen Socio-Economic Update

The public sector contributes to about 46% of GDP and 52.6% of aggregate demand and provides employment opportunities to around 31% of the employed population. As a result of the ongoing armed conflict in the country, the Public Investment Program, financed from the public budget, was suspended, maintenance and operating expenses of public institutions and basic social services providers were reduced, and the public cash assistance programme of the Social Welfare Fund (SWF) targeted at the poorest and most vulnerable people was stopped.

The main signs of liquidity crisis at the CBY include the late payment of public employees’ salaries and circulation of damaged banknotes that were supposed to be replaced. Liquidity crisis at the CBY is the result of:

Despite the severe reduction of expenses, the public budget defi-cit has still expanded, reaching YER1.59 trillion during January 2015-August 2016 due to the tax revenue drought, interruption of oil and gas export revenues and suspension of donor support. Until re-cently, 80.3% of the budget deficit has been funded through the over-draft from the Central Bank of Yemen (CBY). This has resulted in the depletion of liquidity available at the CBY. Since August 2016, the public budget has been facing difficulty in paying salaries of public employees (1.25 million employees in total). The requirement to pay salaries and interests on domestic debt is estimated at YER115 bil-lion per month, while the monthly public revenues cover only around 30% of this requirement.

In Yemen, 32% of households that depend on public salary as a source of income are already food insecure. Suspension of public al-locations and spending deepen the economic downturn and increases unemployment and poverty rates. The liquidity crisis can have di-sastrous consequences on the economic, institutional and humanitar-ian situation in the country unless it is immediately addressed and resolved.

2. Expansion of Public Budget Deficit and Liquidity Crisis:

170143

345

615

354234

105105

160

763

515

2010 2011 2012 2013 2014 2015 2016

-3-1 -16

Overdraft from the CBY

Jan.-Aug.

Treasury bills, Islamic sukook, and Gov. bonds

Figure(3): Sources of financing public budget deficit (Billion YER)

Liquidity Crisis and the Central Bank of Yemen

● Decrease of the public budget revenues and heavy reliance on liquidity available at the CBY, which totaled to about YER1.28 trillion, to finance the public budget deficit during Jan. 2015-August 2016. Thus, The CBY’s stock of available cash was depleted.

● Interruption in the cash flow cycle because the CBY used to periodically pump the hard-currency revenues of the public budget to the local market in exchange for withdrawing the local currency from the market to use it to finance the budget expenditures. However, this cycle has been broken.

● Decline in the CBY’s total foreign reserves from $4.7 billion in December 2014 to $0.987 billion, including banks’ deposits at the CBY and Saudi Arabia’s deposit, in September 2016 due to the sharp decline in the flow of foreign exchange resources to Yemen, in addition to financing basic import commodities, paying external debt service and easing the exchange rate crisis.

● Having difficulty continuing the policy of new banknotes issuance that amounted to about YER537 billion during January 2015-August 2016 due to the CBY’s inability to issue new banknotes and circulation of the newly issued bank notes remained in circulation outside banks.

● Waning confidence in the banking and economic situation due to the narrow horizon of political resolution and pessimism about the future of development.

2015 2016

200

O�cial Exchange Rate (YER/USD) Exchange Rate in Parallel Market (YER/USD)

Jan.

Feb.

Mar

.

Apr

.

May

.

Jan.

Feb.

Mar

.

Apr

.

May

.

Aug

.

Sep.

Oct

.

Jun.

Jul.

Aug

. -D

ec.

280270260250

320310300290

240230220210

214.9 214.9

250 250

305

270

300

245

2252.1

1.30.987

4.75.3

6.2

4.5

5.9

6.9

8.27.87.5

6.15.7

5.04.4

3.7

1.51.01.21.0

2.9

1.0

0.0

3.0

2.0

5.0

4.0

6.0

8.0

7.0

9.0

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

Jun.

Sep.

2013

2014

2015

2016

2016

The sharp decline in the CBY’s foreign reserves has weakened creditworthiness of the national economy, thereby shaking customers’ con-fidence in the national currency. The official exchange rate increased from YER214.9 /US$1 in March 2015 to YER250 /US$1 in early April 2016, i.e. by about 16.3%. At the same time, parallel market exchange rate increased gradually from YER215/US$1 in March 2015 to YER305/US$1 in November 2016, i.e. by about 42%. The increase in exchange rate in the official and parallel market is expected to continue unless the oil and gas exports are resumed, and donor support or deposits at the CBY are obtained. This will result in higher inflation rates and deteriora-tion of the purchasing power of the national currency and worsening living standards, particularly in light of the heavy reliance on imports to meet the domestic food and non-food needs . It is worth mentioning that import restrictions and liquidity crunch has contributed to curb the escalating pace of US dollar exchange rate.

New banknotes are currently being printed in Russia and will be pumped to cover expenses for salaries of public employees and other neces-sary budget items in the beginning of 2017. Unless this new issuance coincides with an increase in the flow of foreign exchange revenues, the value of the national currency is expected to be further depreciated.

3. Exchange Rate Appreciation and Foreign Reserves Depletion:

Figure(4): Total Foreign Exchange Reserve of CBY (Billion USD) Figure(5): Official and Parallel Exchange Rate (YER/USD)

Source: Ministry of Finance, 2016.

Source: CBY, 2016.

Issue (20) Nov., 2016 Page 3 Yemen Socio-Economic Update

0

100

200

300

400

500

600

20162015

Jan.

Feb.

Mar

.

Apr

.

May

.

Jun.

Jul.

Aug

.

Sep.

Oct

.

Jan.

Feb.

Mar

.

Apr

.

May

.

Jun.

Jul.

Aug

.

Sep.

Oct

.

Nov

.

Dec

.

Oil (Vegetable) Onion Red Beans Sugar Wheat Flour

0

100

200

300

400

500

600

700

800

900

0

1000

2000

3000

4000

5000

6000

7000

8000

9000

20162015

Jan.

Feb.

Mar

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Apr

.

May

.

Jun.

Jul.

Aug

.

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.

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DieselCooking Gas Petrol

PETR

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Consumer prices have significantly increased during 2015-2016, compared to the pre-crisis period. As the figures (6,7) indicate, prices varied from time to time, reaching high levels in most ground confrontations-affected areas, such as Taiz governorate, where prices were the highest compared to other governorates. In general, the average consumer price inflation rate is estimated to reach about 30% in 2015 and 7% in 2016.

According to information released by the World Food Program (WFP), prices of several commodities, such as wheat flour, oil vegetable and sugar have been relatively stable over the past few months of 2016 due to the liquidity crisis and the sharp decline in the aggregate demand. However, the national average cost of the minimum food basket was still much higher (24.1%) during October 2016 than in the pre-crisis period. Similarly, prices of petrol, diesel and cooking gas were 23%, 26% and 72% higher during October 2016 than those in the pre-crisis pe-riod. This is mainly attributed to the import restrictions, absence of electricity through the public grid, appreciation of US dollar exchange rate, expansion of black markets and monopoly, which resulted in higher production, transport and storage costs and prices of goods and services. As a result, the living standards of people, particularly the poor and low-income ones, have dramatically deteriorated.

Preliminary actual data indicate that goods and services exports declined by about 80.2%, and imports decreased by about 49.1% in 2015 compared to 2014. This is mainly due to repercussions of the ongoing war, which resulted in the following:

Despite the lack of available data on foreign trade during 2016, it can be inferred through the available customs data that there was an increase in the customs value of imported goods by about 44% during January-September 2016, compared to the same period in 2015. However, exports are still almost com-pletely suspended. Oil and gas exports constitute over 80% of the total merchandise exports of Yemen but they have not been resumed naturally so far, except for exporting oil quantities that have been stored in Al-Dhaba Port in Hadramout governorate.

4. Rise of Inflation Rate:

5. Foreign Trade Restrictions and Foreign Exchange Movement:

Figure(6): Price Trend of Fuel (YER/Unit) Figure(7): Price Trend of Main Food Commodities (YER/Unit)

Figure(8): Customs value of imported goods Jan.-Sep, 2015-2016 (Million YER)

● Exposure of export-geared activities, that depend on imported production inputs, to losses and closure of many services companies operating in ports and airports such as shipping, customs clearance, tourism and travel agencies.

● Vessel entrance and clearance delays and incurring fines applied to ships due to delays.● Increase in insurance charges on shipments imported to Yemen. ● Scarcity of some imported goods, including medicine, and expansion of monopoly and goods smuggling across borders, thereby resulting

in prices upsurge and contributing to escalation of the humanitarian crisis.● Yemen is ranked the worst country worldwide in the Trading Across Borders indicator (in the World Bank’s Doing Business Report 2016).

1,252,954

867,295

2016

2015

Jan.-Sep.

Jan.-Sep.

Deterioration

in dealings with

outside world

Suspension of donor

development support

External banks` suspension of

dealings with Yemeni banks in terms of

transfers and opening letters of credit

Difficulty to transferforeign

currency accumulated at

Yemeni banks to banks abroad

Restriction of the foregin trade movement and halt of exports

and foreign investement

Suspension of the public budget`s

foreign exchange revenues

Description / Year 2014 2015 %Change

Goods Exports of which: 7723.7 1438.9 -81.4

- Oil and gas of which: 6395.7 979.6 -84.7

Government share 2429.4 520 -78.6

Services Exports of which: 1687.5 428.4 -74.6

Remittances 3303.7 3305.7 0.1

External grants to Gov. 1614 45.4 * -97.2

Government Loans 545.3 63.3 -88.4

Oil companies investment 2340.8 270.7 -88.4

Source: CBY, preliminary data, 2016* Does not include humanitarian support and support to warring parties.

Table(1):Inflow of Foreign Exchange Resources to Yemen during 2014-2015

Source: WFP, Yemen Market Watch Report, Issue No. 6, October 2016.

Source: Preliminary data form Customs Authority, 2016.

Issue (20) Nov., 2016 Page 4 Yemen Socio-Economic Update

Figure(9):Workers laid off & reduced employees’ pay

Figure(10): Prevalence of Food Insecurity %

Figure(12): Schools Affrcted by Conflict as of 25 Oct. 2016

Findings of the pre-crisis Workforce Survey 2013-2014 indicated that 44.8% of the young people were neither in education nor at work. The pri-vate sector enterprises sustained direct damages in 2015 and were severely affected by the fuel shortage and total absence of public grid power. This has had a negative impact on the private sector workforce. A questionnaire of the Yemen’s Business Climate Survey, conducted by Small & Micro Enterprise Promotion Service (SMEPS) during August-October 2015 in Sana’a, Aden, Taiz, Hadramout and Hodeida, indicated that 41% of en-terprises laid off 55% of their workforce on average. Additionally, 7% of those businesses have applied pay cut by about 49% and laid off around 64% of their employees, while 3% of them have reduced employees’ pay by half. Although, there are no most recent data available, it is assumed that labour market situation has dramatically worsened.

Recently, the liquidity crisis has deepened the decline in aggregate demand and economic activity, thereby worsening the already-high un-employment problem and escalating poverty and deprivation in the com-munity.

Food insecurity indicators are worsening every day, reaching alarming levels, where an estimated 14.1 million people are food insecure. This means that at least one in two Yemenis does not have enough food. Ac-cording to the 2016 Global Hunger Index Report issued by the Interna-tional Food Policy Research Institute (IFPRI), Yemen is placed among the poorest 6 countries, out of 118 countries worldwide.

The most prominent reasons for food insecurity include rising prices for food, fuel, water and medicine, accompanied by the loss of job and income opportunities and internal displacement of millions of citizens. Moreover, the liquidity crisis has directly affected about 1.25 million public employ-ees and their families, thereby reducing not only their food purchasing power, but also their access to basic goods and services. Other reasons include the lack of public social welfare programmes, and overstretching of informal/traditional social protection mechanisms to protect the poorest and most vulnerable people.

As the table (2) indicates, food insecurity is divided into five phases. Although Yemen has not reached the fifth phase (Famine) yet, pockets of severe food insecurity are present in some districts of Hodeidah, which can develop into famine. This would further exacerbate the humanitarian situ-ation and undermine social peace in the country.

The basic social services, including education, health and water, are col-lapsing in several areas of the country and the humanitarian needs are on the rise, which puts growing pressure on the humanitarian situation in the country. As of October 2016, 1,604 schools have been damaged or de-stroyed as a result of the ongoing war. This threatens to deprive 720,000 students of their right to education. About 2 million children, including 513,000 IDP children, in Yemen are currently out of school. This repre-sents 27% of the 7.3 million school-aged children. The liquidity crisis and the non-payment of teachers’ salaries for months have contributed to undermin-ing the educational process in the country.

In parallel, the health sector is going through the worst phase: the Health Resources Availability Mapping System (HeRAMS) evaluation indicates that the health system in 16 out of 22 governorates is functioning at less than half capacity. Only 45% of 3,507 health facilities is functioning at full capacity, whereas the rest are partially or totally not operating. Additionally, 6 out of 10 health facilities are unable to provide nutrition and child health services. The health sector is suffering from the lack of sufficient staff, medicine and equipment, in addition to the lack of operational costs for health services and non-payment of health staff salaries for months, which severely affects the continuity of health services.

Second: Social and humanitarian situation:1. High Unemployment Rates:

2. Exacerbating food insecurity:

3. Limited access to basic social services:

$

$

% 3% 7

+

% 41% 48 of enterpriseshave reduced

the employees' pay by 50%.

of enterprises have reduced the employees'

pay by 49% and laid o� 64% of their workers

concurrently.

of enterprises laid o� 55%

of their work force

of enterprises have not reduced

employees' pay or laid o�

their workers

51.0

JuneJune

World triple F-crisis: Pricesof Food& Fuel, and Financialcrisis in 2007-2008

Repercussionsof 2011 crisis

Repercussionsof ongoing war

Mar.-Apr.

48.3

41.1

44.5

31.5

44.0

22.0

20032014

2008 2009 20112015 2016

0

100

200

300

50

150

250

%73

%2

%10

%15

Mar

ib

Al B

ayda

Al J

awf

Al D

hale

'e

Aby

an

Shab

wah

Sa'a

da

Lahj

Ade

n

Am

ran

Sana

'a

Dha

mar

Haj

jah

Ala

man

ah Ibb

Taiz

z

Al-H

odei

dah

Al M

ahw

it

Occupied by armed group

Housing IDPs

Totally damaged

1,604 schools

in 20 governoratesare either damagedor occupied by IDPs

or armed groups

Partially damaged

%38

%45Fullyfunctional

6 out of 10 facilitiesunable to providechild health and

nutrition services

Completelynon-functional

Partiallyfunctional

%17

Table(2): Phases of Food Insecurity

Description/Year 2014 June 2015 June 2016Million people % Million

people % Million people %

Emergency (Phase 4) 4.8 18.3 6.1 22.7 7.0 25

Crisis (Phase 3) 5.8 21.9 6.8 25.6 7.1 26

Phases 3+4 (Food Insecurity) 10.6 40.1 12.9 48.3 14.1 51

Stressed and Minimal (Phase 1&2) 15.4 59.2 13.8 51.7 13.3 49

Source: Food Security Information Systems Development Program, IPC, 2014-2016.

Source: CFSS, 2014. And FSIS, IPC 2015-2016

Source: SMEPS & GIZ, Business Climate Survey, August-October, 2015

Figure(11):Functional and non-functional health facilities (%)

Source: WHO and MoPHP, Preliminary Findings, September 2016. Source: OCHA, Yemen Humanitarian Needs Overview, November 2016.

Issue (20) Nov., 2016 Page 5 Yemen Socio-Economic UpdateYemen is one of the world’s most water-scarce countries.

According to Yemen National Social Protection Monitoring Survey (NSPMS) 2012-2013, only 29% of households had ac-cess to water inside the dwelling, while 23% of households had to walk for over 30 minutes to access water. Water pro-vided through the public network is currently almost absent in several areas of the country due to the physical damage of war, inability of local authorities to provide operational and fuel costs and rehabilitate water and sanitation facilities and inability of consumers to pay water bills. This deprives peo-ple, particularly the low-income population groups, from their right to water provided through the public grid. Children and women often bear the burden of carrying water to their homes.

Suspension of the social welfare programs has exacer-bated the social and humanitarian situation. In January 2015, the Social Welfare Fund suspended its public unconditional cash transfer programmes that targeted 1.5 million beneficiary cases, or approximately 8 million direct and indirect beneficia-ries. In addition, there is only limited donor assistance avail-able to support social protection programmes for the poorest and most vulnerable people in Yemen.

The humanitarian needs update issued by the Office for the Coordina-tion of Humanitarian Affairs (OCHA) in November 2016 indicate that about 18.8 million people in Yemen are in need of some kind of hu-manitarian assistance, including 10.3 million who are in acute need. An estimated 3.8 million of people are on the move, including 2.18 million IDPs as a result of the ongoing war. Most of those IDPs (51%) are in Hajja, Taiz and Sana’a governorates. IDPs are exposed to the loss of their livelihoods, which exposes them to the risk of food insecurity and malnutrition.

On the other hand, as of October 2016, more than 7,000 people have been killed and over 36,000 injured due to the ongoing war in the coun-try. The actual numbers of casualties are undoubtedly more than the sta-tistics indicated in figures (13,14) due to the non-functionality of many health facilities and lack of a formal and comprehensive database of war casualties.

In conclusion, In light of the foregoing, Yemen’s economy has lost its resilience, which was clearly reflected in the significant decline in GDP per capita,

public budget inability to provide public employee salaries and depletion of foreign exchange reserves. Thus, the Yemeni Rial value kept criti-cal depreciation against foreign currency every month. The traditional economic policies are no longer viable to prevent further risks on the economy and printing banknotes is only a temporary remedy that has serious adverse effects on the national currency value. The best option is to deposit foreign deposits at the Central Bank of Yemen (CBY) and reach an economic settlement, even unwritten, to resume oil and gas exports.

Meanwhile, the already fragile social and humanitarian situations are worsening every day, with about 18.5 million people in need of urgent humanitarian assistance. Taking into consideration the fact that basic social services systems are at the verge of collapse, the public social wel-fare programs are unavailable, and that there is a lack of operational costs, development and humanitarian organizations and donors are urged to allocate more funding for programs in Yemen in order to prevent the exposure of millions of people, and women and children in particular, to further risks of poverty, malnutrition and deprivation.

Credit: Yemen

Contact PersonFor more detailed information about items in this update please contact:

Mr. Abdulmageed Albatuly Email: [email protected] Tel.:+967 771 555 730 www.mpic-yemen.org

214

702

3,259

374445

163313

1,048

20162015

Jul.-

Sep.

Apr.-

Jun.

Jan.

Children killed ormaimed by armed

forces and armed groups

-Mar.

Jul.-

Sep.

Oct.-

Dec.

Apr.-

Jun.

Jan.

Mar.

8,000

7,000

6,000

43,88836,8187,070

527

7,359

1,917

5,000

4,000

3,000

2,000

1,000

20152016

Mar.

Apr.

May.

Jun.

Jul.

Aug.

Sep.

Oct.

Nov.

Dec.

Jan.

Feb.

Mar.

Apr.

May.

Jun.

Jul.

Aug.

Sep.

Oct.

Dead

Dead

Injured

Injured

Casualties trendline

Tot. casualties

4. Growing humanitarian needs:

Sector December 2014

November 2016 % Change

Food Security 10.6 14.1 33.1%Health 8.4 14.8 76.4%Wash 13.4 14.4 7.7%Nutrition 1.8 4.5 147.6%Protection NA 11.2 NAEducation 1.1 2.3 108.7%Shelter, NFI, CCCM 0.55 4.6 738.8%Refugees & Migrants 0.91 0.37 -59.6%

Table(3): Number of people in need of humanitarian assis-tance by sector (million person)

Source: -OCHA, Yemen Humanitarian Needs Overview, November 2016. - OCHA, Yemen Humanitarian Needs Overview 2015, December 2014.

Source: OCHA, Yemen Humanitarian Needs Overview, November 2016.

Figure(13): Casualities Reported by Health Facilities (as of 25 October 2016)Figure(14): Children Killed/Maimed by armed forces and

armed groups (Jan 2015 - Sep 2016)