Yemeni government signs $1 billion aid package with UAE fund

CAIRO (AP) — Yemen’s internationally recognized government signed a deal with the Arab Monetary Fund on Sunday, paving the way for $1 billion in economic aid for the Saudi-backed government, state media said.

The Abu Dhabi-based fund, a sub-organization of the 22-member Arab League, will disburse the $1 billion scheme from 2022 to 2025. The economic agreement aims to help the Yemeni government build monetary and fiscal stability through broad economic cooperation. reform, Saba news agency said.

Yemen’s civil war, now in its eighth year, has devastated the country’s economy and pushed half the population to the brink of famine. More than 150,000 people were killed in the conflict, including more than 14,500 civilians. On average, food prices are 60 percent higher than last year, largely because the war in Ukraine has cut off the country’s key wheat imports from Eastern Europe.

The conflict began in 2014 when Iran-backed Houthi rebels overran the capital Sanaa and much of northern Yemen, forcing the government into exile. A coalition led by Saudi Arabia, including the United Arab Emirates, intervened in 2015 in an attempt to restore internationally recognized government authority. The country’s central bank has since split between the warring parties.

The Aden branch of the Central Bank of Yemen has fallen under the control of the Saudi coalition. In recent years, the Aden branch has fueled inflation by printing new banknotes to pay debts and pay public sector wages. The banknotes printed in Aden are no exception in Houthi-controlled areas, whose central bank operates in Sana’a.

Sunday’s agreement was signed by Ahmed al-Maabqi, head of the Aden branch of Yemen’s central bank, in the presence of Saudi Arabia’s Finance Minister Mohammed Al-Jadaan.

In a statement issued by the Houthi finance ministry after the signing, the rebel group condemned the agreement and said the fund would only “serve the aggressor state, not Yemeni society”.

The Saudis have spent billions of dollars supporting Yemen’s internationally recognized government over the years, and the kingdom had previously pledged $3 billion in April to help its war-torn economy.