Barran Press
The internationally recognized Yemeni government held an "extraordinary" meeting on Thursday, June 6, 2024, in the city of Aden, the declared temporary capital of the country. The meeting aimed to discuss an "urgent action plan" with the goal of "ensuring the provision of local market needs, fuel for power plants, and reducing the drain on hard currency."
According to the official Yemeni news agency Saba, the government meeting was chaired by Eidros Al-Zubaidi, a member of the Presidential Council and head of the Supreme Committee for Sovereign and Local Resources.
The meeting focused on discussing the problem of power generation deficit in the electricity sector and possible urgent solutions to stabilize the service during the current phase. It also explored strategic plans that could be initiated to provide energy from alternative and cost-effective sources, reducing reliance on diesel-fueled power plants, which impose a significant burden on the state treasury, according to the agency.
The meeting addressed the issue of the deteriorating local currency and its main causes, including the weak state revenues from foreign cash due to the halt in oil and gas exports resulting from the internationally classified Houthi group's targeting of export ports in Hadramout and Shabwa.
In this regard, the meeting discussed the "urgent action plan" of the Ministry of Oil and Minerals to operate the Aden refineries and return them to service. The plan aimed to start refining crude oil to ensure the provision of local market needs, fuel for power plants, and reduce the significant drain on hard currency caused by importing fuel and petroleum derivatives from abroad.
According to the agency, the meeting expressed its support for the recent decisions issued by the central bank and the directives of the Minister of Transport to quickly transfer the revenues of the Yemeni Airlines company to its accounts in the banks of the temporary capital, Aden. These measures are expected to effectively halt the drain of foreign cash in the liberated provinces to the areas controlled by the Houthi group, as well as to stop the most important sources relied upon by the group.
The meeting also called for the "speedy implementation of the presidential decision to transfer government entities and institutions from Sanaa to the temporary capital, Aden," including the Social Development Fund and the Public Works and Roads Project.
According to the agency, if legal, administrative, and financial centers of revenue-generating entities and some funds remain under the control of the Houthi group, they would be able to seize the financial resources of these entities and funds in hard currency.
Yemen is facing a severe cash crisis as the local currency continues to depreciate. The exchange rate for the Yemeni riyal reached its lowest level against foreign currencies in Aden and areas controlled by the Yemeni government, reaching 1760 riyals against the US dollar, compared to 1676 riyals in late April. The Saudi riyal also recorded 464 riyals for sale, compared to 441 riyals previously.
The Yemeni economy also faces harsh challenges due to the monetary division imposed by the internationally classified Houthi group as a terrorist organization. The challenges intensified after the group targeted oil export ports in October 2023, preventing the internationally recognized government from exporting oil.