Houthi attacks on oil infrastructure ‘driving Yemen’s government into bankruptcy’

AL-MUKALLA: Yemen’s internationally-recognized government is on the verge of bankruptcy after Houthi attacks on oil facilities in southern Yemen halted all oil exports, and it may not be able to pay public employees in areas under its control in the near future, officials have warned.

A government source told Arab News public employees in liberated provinces might not receive their salaries in the coming months, adding that the country could experience severe fuel shortages and protracted power outages as a result of attacks forcing the government to stop importing fuel.

“Starting next month, the government may not be able to pay employees’ salaries, in addition to the projected shortages of oil derivatives used to generate energy, particularly in Hadhramaut, Aden, and Shabwa,” the government official, who asked to remain anonymous, said.
Last month, the Iran-backed Houthis staged two drone attacks on oil terminals in Hadramout and Shabwa in an effort to halt tankers from delivering the nation’s oil exports from the government-controlled territories to the global market.

The Houthis conducted another strike last week against a commercial port in Shabwa as an oil tanker was offloading fuel, ignoring worldwide criticism, primarily from the UN Security Council, as well as domestic indignation.

The group, who boasted about the accuracy with which their drones hit their targets, claimed they would cease striking oil tankers and infrastructure in government-controlled regions only if the government paid public employees in areas under their control.

During a meeting in Riyadh with the ambassadors of the EU, China, France, Russia, the UK and the US to Yemen on Monday, Rashad Al-Alimi, head of the Presidential Leadership Council, warned that the Houthi attacks would exacerbate the already dire humanitarian situation by fueling hunger, as thousands of public servants would not be paid and the government would be unable to fund food imports.

He said that for the first time, the hunger they had long feared is now likely to materialize “in its most horrifying forms.”

Although it had previously threatened to withdraw from the Stockholm Agreement and the most recent truce, both of which were mediated by the UN, the Yemeni government decided not to resume military operations this time to punish the Houthis for the attacks. Instead, it asked envoys to support a package of economic measures to pressure the Houthis to stop their attacks.

The measures would include pressuring businesses to move operations out of Houthi-controlled areas, limiting the movement of goods bound for Houthi areas through government ports, asking international shipping companies to cut ties with Houthi-controlled ports, blacklisting businesspeople who trade with the Houthis, and cutting banks that conduct business with them off from the SWIFT payment system.

However, some Yemeni officials say, the government is concerned that international powers and mediators, who pushed it to halt its military offensive to expel the Houthis from the western city of Hodeidah in 2018 due to fears of exacerbating the humanitarian crisis, will not agree to the government’s latest punitive measures for the same reasons.