The Yemeni government’s decision to move their central bank headquarters from the capital to the southern city of Aden could have catastrophic implications for the country, experts say.
The move, designed to deliver a blow to Houthi forces, will hit the entire country by dismantling the “last state institution” left, Farea Al Muslimi, an analyst with the Middle East Institute in Washington, said.
Yemen President Abdrabbu Mansour Hadi said on Momday that Finance Minister Monasser Al Quaiti had been appointed head of the central bank, whichwould be moved from the capital to Aden.
Government ministers, who relocated to the southern port city after the capital was seized by Houthi forces in September 2014, are applying economic pressure to “try to make the Houthis surrender” Al Muslimi told 7DAYS from Beirut.
“The logic behind it is to take control of all the salaries from the government that are paid to 1.2 million Yemenis in the public sector,” he said, which includes Houthi state employees and troops that have fought on both sides of the 18-month conflict.
While the decision was designed to strangle the Houthis, it would strangle the entire country, Al Muslimi added, saying: “Technically they think it will deal a blow to the Houthis, but it’s much more dangerous than that.
“It’s a blow to the last institution in Yemen. It’s the last central institution keeping this country together.”
He said from a logistical point of view, Aden lacks the infrastructure for the proper functioning of the economic institution.
“There is no moving the central bank from a technical point of view. It will take forever merely from a logistical perspective,” said Al Muslimi, who is also co-founder of think–tank the Sanaa Center For Strategic Studies.
“There is no clear mechanism for the bank’s functioning or security in Aden.”