According to data from the Armed Conflict Location and Event Data Project ( ACLED), the frequency of most types of conflict events has been lower in the post-truce period (October 3 – December 31, 2022) compared to the same period of the previous year (Figure 1). Levels of conflict in the main frontline areas of Marib, Taizz, Al Dhale’e, Sa’ada, and Al Hudaydah have remained largely unchanged since the end of the truce. While it is not currently considered to be the most likely scenario, there is concern that a larger-than-anticipated decline in IRG oil revenue would have a catastrophic impact on government revenue and potentially lead to financial collapse, which would be marked by rapid currency depreciation and rising consumer prices in IRG areas. SBA authorities have threatened to continue these attacks and even to resume ground fighting if their demands – including payment of civil servant salaries (including for their military) and a larger share of the country's oil and gas revenues – are not met by the IRG. Though the frequency of conflict incidents has not re-escalated meaningfully, the Sana’a-based authorities (SBA) have adopted a more direct war on resources and continue to target oil export facilities in areas controlled by the internationally-recognized government (IRG). Throughout December, international actors continued to lead diplomatic efforts toward renewing the truce that expired in early October. Purchasing power for casual laborers also remained below last year in some governorates – by 39 percent in Socotra, 38 percent in Al Jawf, 22 percent in Marib, and 5 percent in Raymah – due to rising food prices, but also due to lower wage rates in Socotra and Marib. Additionally, purchasing power for pastoralists in December remained below last year in some governorates – by 61 percent in Al Jawf, 25 percent in Shabwah, 12 percent in Sana’a, 9 percent in Socotra, and 6 percent in Hadramout Valley – due mostly to higher food prices, but also to lower livestock prices in the case of Shabwah. While this has driven improvements in purchasing power for pastoralists and laborers compared to the same time last year, purchasing power remains significantly below the five-year average. However, livestock prices and labor wage rates have increased in the past year in many (but not all) governorates. While not part of the most likely scenario, food prices in IRG areas could also rise beyond what is currently anticipated should lack of revenue disrupt the foreign currency auction mechanism used to finance imports.Īccording to data from FAO, food prices remain significantly above average across the country. This is likely to lead to a resumption of fuel shortages and higher fuel prices in SBA areas. In response, IRG authorities and the allied Saudi-led coalition (SLC) are reportedly again delaying the clearance of fuel ships to dock in SBA-controlled ports. This is expected to reduce a key source of IRG revenue, further undermining the IRG's ability to provide public services and pay civil servants' salaries. In a shift of fighting tactics toward intensified economic warfare, forces of the Sana’a-Based Authorities (SBA) have continued to target oil export activities in areas controlled by the internationally-recognized government (IRG) since the expiration of the ceasefire in October. Given the high share of displaced households who are heavily dependent on assistance and the upcoming agriculture off-season in highland areas, Emergency (IPC Phase 4) outcomes are expected at the area level in Marib and Hajjah. Most poor households will likely continue to face Crisis (IPC Phase 3) and Crisis! (IPC Phase 3!) outcomes throughout the projection period, while some without income sources will likely face Emergency (IPC Phase 4) or worse outcomes. With prices of food and essential non-food commodities significantly above average, millions of households have likely been unable to compensate for reduced assistance rations since early 2022. As such, many households rely heavily on market purchases and humanitarian assistance for their food. Years of protracted conflict have taken a significant toll on Yemen’s economy, reducing opportunities for income-earning and eroding livelihoods.
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