Aden- In one of the markets of the city of Aden in southern Yemen, Adnan Ahmed sits in front of his small shop, calling for a loud voice on passers -by, perhaps one of them is accepted to buy something from his fastest goods, which have ravaged the repercussions of the monetary division between the two parts of the country, which was born known as the “dual economy”, taking off the stability of the markets and confusing the trading scales upside down.
Adnan, a vegetable seller, tells Al -Jazeera Net as part of his suffering, saying: “I buy a tomato basket from areas Houthis With 5 thousand riyals (in the old currency), but I need in Aden 30,000 in the new currency to pay its price.
He adds that his shop has become free of customers and that the movement of the market is almost suspended, and that “the sale has declined to more than half; every day we lose more than we earn … I lost during the past months about two million riyals, and I do not see hope for an improvement soon.”
The suffering of Adnan does not represent an individual situation, but rather reflects a frequent daily reality in various Yemeni markets, north and south, where citizens and merchants alike tolerate the consequences of the critical division between Sanaa and Aden. This division is due to the presence of a central bank and two parallel banking systems, which exacerbated the collapse of the currency and led to almost complete paralysis in the commercial environment and a large response in the living conditions.
One currency and a price stormed with Yemenis
The direct impact of this division appears on the details of the daily life of citizens. Muhammad Al -Otaibi, a daily wage worker in Aden, receives 10 thousand riyals (in the new currency), but when this amount is sent to his family, who lives in the areas of the Houthi control, its value is shrinking due to the exchange difference to equal to barely a thousand riyals in Sanaa.
“Sometimes I feel that I am working here to lose there,” Al -Otaibi says to Al -Jazeera Net.
The beginning of the critical crisis
According to local economic reports, the roots of the monetary crisis in Yemen date back to 2014, when the Houthi group took control of the capital, Sanaa, which prompted the internationally recognized government to transfer the headquarters Central Bank To the city of Aden in 2016.
In 2020, the Houthis deepened this division by preventing the circulation of printed banknotes after 2016 in their areas, which led to an official division in the currency, despite its nominal form.
Since that time, the two parties have exchanged escalating cash measures that have strengthened this division. While the Central Bank in Aden continued to issue new paper currencies, the Houthis refused to circulate, and even resorted to the issuance of 100 riyals coins from the category of 100 riyals on the pretext of treating damaged papers, and recently, they announced minting a new coin of 50 riyals, in addition to issuing new paper currencies of 200 riyals and offering them for trading.
This step was met with a categorical rejection by the Central Bank in Aden, which issued an official statement in which he described these publications as “fake currencies and a futile act”, considering that they are part of what he described as a “systematic economic war against Yemenis.”
The riyal loves
Economic observers believe that the monetary division was directly reflected in the indicators of inflation and the collapse of the Yemeni riyal, especially in the internationally recognized regions of the government -recognized government.
The large expansion of the monetary supply led to unprecedented inflation, which was translated with a historical collapse in the local currency exchange rate, as the dollar price touched the 2830 riyals barrier this week, compared to only 215 riyals at the beginning of the war in 2015.
Economists warn that the continuation of this division will lead to more fragmentation of the Yemeni economy, the expansion of the poverty gap, and the increase in exposure to the black market.
Between economics and politics
The economic researcher Wafik Saleh believes, in a statement to Al -Jazeera Net, that the monetary division caused the disintegration of the structure of the national economy, and directly contributed to the deterioration of the value of the riyal and the decline in confidence in the official banking system.
He explained that the dispersion and loss of resources between two struggling powers led to a noticeable decline in public services, the deterioration of living standards, as well as the growing speculation and the expansion of the black market.
Saleh pointed out that the great disparity in the exchange rates between the different areas of control has left wide price gaps in the prices of basic commodities, which increased the suffering of citizens, the heaviest of the merchants and the inability of the trade movement, due to the restrictions imposed on transferring money and transporting goods between the regions.
Politics fails the economy
According to other experts, addressing the critical division is no longer a technical or financial issue, but has become a political issue, which cannot be overcome without compatibility between the parties to the conflict.
In this context, Mustafa Nasr, head of the Center for Studies and Economic Media, confirms that the critical division is one of the most prominent manifestations of the ongoing political crisis in Yemen.
This is due to the Houthi group’s control of the state’s policy and sovereign institutions, foremost of which is the Central Bank, which contained a cash reserve of about 5 billion dollars before the outbreak of the war, and then it was completely exhausted.
Nasr adds – in his interview with Al -Jazeera Net – that the monetary division caused widespread damage to the Yemeni economy, as it caused severe difficulties in opening documentary credits to import basic commodities, and also complicated financial transfers inside and outside the country, which negatively affected the lives of millions of citizens, especially employees who face significant losses when transferring their salaries between different areas of control.
Nasr explained that the Houthi regions are currently witnessing a rise in prices despite the formation of the dollar price forcibly, while the government regions suffer from a continuous collapse in the value of the riyal and excessive inflation, which increases the suffering of citizens, especially those who depend on their entry into the local currency.
He said that “dealing with the monetary division in Yemen requires a comprehensive political solution, as monetary and financial policy cannot be united without real progress in the path of peace. The issue is no longer purely economic, but political in essence.”