The Studies and Economic Media Center (SEMC) has warned of the consequences of the regional war between the United States and Israel on one side, and Iran on the other, for Yemen\u2019s economy, stressing that the continuation or expansion of the war would worsen the country\u2019s economic and humanitarian conditions.<\/p>\n
In a paper issued by the center titled \u201cThe implications<\/em> of the U.S.-Israeli-Iranian War on the Yemeni Economy,\u201d<\/em> the SEMC called for urgent measures by the government and relevant authorities to mitigate economic shocks, manage demand for foreign currency, stabilize prices, improve supply chain efficiency, and reduce the effects of rising shipping and insurance costs.<\/p>\n The paper included a broad analysis of the ways the war could affect Yemen\u2019s economy, beginning with higher energy and fuel prices, passing through disruptions in maritime shipping and supply chains, and ending with the impact on local market prices, increased pressure on the import bill, and strain on the local currency.<\/p>\n The paper noted that Yemen\u2019s economy already suffers from extreme fragility due to years of war, the halt of oil and gas exports, declining public revenues, and heavy dependence on imports, foreign aid, and remittances from expatriates, making it more vulnerable to external shocks.<\/p>\n It also pointed out that maritime shipping prices to Yemeni ports have risen sharply, with the cost of transporting containers from China to Aden doubling, in addition to extra war-risk fees. This has led to rerouted shipping paths, delayed arrivals of goods, and higher transportation and storage costs.<\/p>\n The paper further explained that these developments have directly affected commodity prices in local markets, with expectations of increases ranging from 15% to 35% at minimum in the short term, due to overlapping factors including shipping costs, insurance, exchange rates, and rising fuel prices.<\/p>\n The paper stated: \u201cThe regional war does not produce a single effect on Yemen\u2019s economy, but rather a chain of interconnected shocks transmitted through multiple channels, beginning with energy and navigation, and extending to exchange rates, food security, and overall economic stability.\u201d<\/em><\/p>\n It confirmed that Yemen depends heavily on imports, importing around 90% of its food needs, making it highly sensitive to any disruptions in supply chains or increases in shipping and insurance costs. It also noted that remittances from expatriates are one of the country\u2019s main sources of foreign currency, and any impact on Gulf economies due to the war would negatively affect these remittances, in addition to the possibility of reduced foreign aid.<\/p>\n The paper concluded by emphasizing the need for coordinated action between official institutions and the private sector to confront the war\u2019s repercussions through flexible economic policies, improved resource management, and limiting the impact of external shocks on citizens.<\/p>\n