UN Special Envoy for Yemen, Hans Grundberg, revealed on Thursday, June 13th, that he has extended invitations to President of the Presidential Leadership Council, Rashad Al-Alimi, and the head of the Houthi-controlled Supreme Political Council, Mahdi Al-Mashat, for a face-to-face meeting to discuss the economic crisis and de-escalate tensions.

During his briefing to the UN Security Council, Grundberg stated that he had sent a letter to Al-Alimi and Al-Mashat on June 1st, urging them to refrain from further escalation and encouraging dialogue without preconditions under UN auspices. He noted, however, that he has not received a positive response yet.

"A face-to-face meeting of the parties to discuss these issues is of paramount importance," Grundberg emphasized. "I urge regional and international actors with influence to exert their full weight to bring about these direct talks between the parties."

He highlighted that since the escalation in the Red Sea, he has strived to ensure that the focus remains on achieving a peaceful resolution to the conflict in Yemen. However, instead of making tangible progress in fulfilling their commitments and completing the roadmap, the parties have reverted to zero-sum equations.

"This zero-sum mentality is clearly reflected in the economy," Grundberg stated. "The economy has contracted sharply following the Ansar Allah attack on oil export facilities in October 2022, leading to a complete halt in crude oil exports and severely impacting the Yemeni government's revenue."

He continued, "In the banking sector, the situation of one state with two competing monetary authorities and different currencies was already unsustainable, but it has become more complex due to a series of escalatory measures. Ansar Allah's announcement in March to introduce its 100-rial coin into circulation to address the deterioration of paper notes of the same denomination was a challenge to the monetary authority of the Central Bank of Yemen, which responded in April by demanding that all banks relocate their headquarters from Sana'a to Aden and announced punitive measures against banks refusing to comply."

"In response, the branch of the Central Bank under the control of the Ansar Allah group banned all banks headquartered in Aden from operating in areas under its control," Grundberg explained. He warned that if banks in Sana'a are isolated from international financial transactions under punitive measures, "the impact will be catastrophic for the economy, disrupting imports of essential goods, including food and medicine, and financial remittances through banks."

He concluded, "Overall, these developments will deepen divisions and fragmentation in the banking sector while simultaneously opening the door to potential military escalation. To avoid this scenario, my office has held intensive meetings in Riyadh, Aden, and Sana'a to discuss concrete proposals for resolving this crisis. I have sent a letter to Al-Alimi and Al-Mashat calling for dialogue without preconditions."