Hadi’s Days are Numbered. Only Accountability, Transparency, and Reform can Stop Yemen’s Decline

As the Houthis push on with their offensive against Marib, having taken over nearly four districts in the governorate since September 2021, observers are growing increasingly anxious, fearing the Internationally Recognized Government (IRG) under President Abdu Rabu Mansour Hadi will be brought down in the desert town east of Sana’a. Indeed, reports¹ suggest that the IRG’s position on the ground is thinning out. However, not only is the IRG losing to the Houthis in the north but it is also being threatened on several other fronts across the country. In the south, the IRG’s nominal allies, the Southern Transitional Council (STC) with its supporters, the United Arab Emirates (UAE), are building up troop numbers and capacities and re-deploying units. Provoking tension between STC forces seeking independence for the south and the IRG, this troop build-up is also spreading the IRG thin. On the west coast, Tarek Saleh, the nephew of former president Ali Abdullah Saleh and Commander of the Republican Guards, is encroaching on IRG territory in Taiz, while the UAE-supported Hadhrami Elite forces are pressuring IRG troops in the east.

This complex situation is a consequence of the conflicting interests of Arab coalition members in Yemen’s war. The initial March 2015 Arab coalition intervention under Saudi leadership aimed to reinstate the Hadi government in Sana’a and push the Houthis back to their home governorate of Saada. But instead, the Houthis are stronger than ever. The UAE, also part of the coalition, has been relentlessly pursuing its own interests in southern Yemen with the help of its armed allies, including the STC. This has left the IRG close to overpowered by armed groups supported by the UAE in areas that it supposedly controls. At the same time, the Saudis are becoming increasingly reluctant to continue their support to the IRG after its attempts to bring the IRG and STC back together into a unified front against the Houthis failed. In fact, the Riyadh Agreement, brokered by the Saudis in October 2019 to mend the fractures between the STC and IRG after the escalation of violence during the summer of 2019, increased rather than reduced fragmentation. This decline of Saudi support for the IRG, while other armed groups continue to receive support from regional allies, puts the IRG at a deep disadvantage.

In this context, it appears that the IRG is taking its last breaths. However, while members of the Arab coalition are undoubtedly digging the IRG’s grave, it is the IRG’s own corruption and economic mismanagement that is throwing it into the grave. Protests across Taiz, Aden, and Mukalla are indicative of the dire state Yemeni people are living in and reacting against.² With services collapsing across the country and government revenues being squandered abroad by the country’s political elite, there is little hope among Yemenis that life can improve. The IRG has been absent from Yemen, with cabinet members more concerned about their own future career prospects than the country they are supposed to serve. Unless the IRG rids itself of mass corruption, mismanagement, and the administrative disorganization within its newly established institutions, the end of the IRG presence in Yemen is likely.

The Riyadh Agreement has Become Irrelevant

To those who had expected the November 2019 Riyadh Agreement to mend the fractures within the anti-Houthi alliance under the IRG, the current developments in Yemen will have come as a shock. The Agreement was negotiated by Saudi Arabia after the STC had expelled the IRG from Aden in August 2019 in its quest to gain control over institutions and territory and further its independence project. Instead of bringing the two sides together, the deal further weakened the position of the IRG due to its faulty design and partial implementation. Today, Saudi Arabia is less vigorous in pursuing the deal’s implementation. This not only indicates Saudi Arabia’s lack of interest in sustaining the IRG but also leaves the IRG forces in disarray.

The Riyadh Agreement stipulates that the political and military structures under the respective leaderships be joined through institutional mechanisms. To this end, on 18 December 2020, a joint government was formed consisting of both the IRG and STC, while personnel changes in the security sector were to ensure that the unified security hierarchy, as it existed on paper, would also be actualized in reality. This included, for instance, the new Security Chief, Brigadier General Mutahhar Al-Shuaibi, appointed on 29 December 2020 by the IRG in an attempt to regain control of Aden police. The designers of the Riyadh deal underestimated the STC’s drive for independence and hoped the group could be appeased with direct participation in the IRG. Instead, as was the strategy in the past, the STC used its access to institutions not to become part of the state, but to hijack it for its own project. This showed that the STC was never going to let go of the security sector in Aden.

The Saudis used troop salaries to incentivize STC forces to unify with the IRG structure. After the Agreement was signed, STC troops came onto the IRG payroll sponsored by the Saudis, rather than being UAE-funded. As this did not lead to an integration of the forces, between December 2019 and March 2020, the Saudis suspended the payroll for the STC forces, demanding the Security Belt, the STC’s military forces, hand over weapons that they had captured in Aden after having expelled the IRG forces from the city.³  As some STC commanders remained on the UAE payroll, they were able to retain some space for maneuvering outside of the IRG hierarchy, thus continuing to remain outside of the IRG structure. For example, they were accused by the IRG of obstructing the transition of the IRG cabinet to Aden as well as the work of Ministry of Interior forces in Lahj, Aden, and Abyan. The STC on the other hand accused IRG ministers of having left Aden with the intention of disrupting the work of institutions. The STC also complained about unilateral decisions and appointments, as well as provocative statements made on behalf of IRG ministers. Despite increased pressure from the Saudis, neither the STC nor the IRG made serious efforts to implement the Agreement. With this stagnation, and the IRG forces losing ground to the Houthis on the northern frontlines bordering Saudi Arabia, the value of the IRG as a strategic partner in Yemen seemed to further decrease in the eyes of the Saudis. And with that, the Saudis saw the troop payroll as a burden.⁴

Saudi Arabia gradually ceased to pay most of the IRG military’s salaries. Next to frustration with the IRG, there were also suspicions of corruption as troop numbers on the payrolls appeared to be falsified, a phenomenon that has been common in Yemen’s recent past. It is estimated that 70 percent of the named troops on the payroll of the IRG Ministry of Defense are fictitious.⁵ Wages for units such as the third and seventh military were suspended in 2017 and 2016 respectively, and army salaries were suspended completely by March 2020. In fact, army members have received only one or two salaries this year. While the Saudis suspended the financial dues allocated for subsistence to the Marib military forces, they continued to pay salaries to the forces in the border areas and the forces at the western coast. This lack of support weakened the IRG dramatically; it now lacked the credibility to face the Houthis. In early 2020, the Houthis were able to advance and make gains around Sana’a, and over the following year captured four districts in Marib governorate, as well as al-Jawf governorate to its north. At the time, Saudi-supported troops withdrew from these locations, reportedly to avoid direct battles with the Houthis. It was only thanks to the Ministry of Interior’s Special Forces and gunmen from Marib’s tribes that Marib did not fall completely to the Houthis.⁶

The Yemeni Government is Losing Territory

Since the beginning of 2020, IRG forces have increasingly lost ground to rival armed groups. That the IRG is today in this weak position on the ground is the result of the divisions within the Arab coalition: namely, the rift between Saudi Arabia and the UAE. The contradictory approaches of these key actors, coupled with the conflicting interests of local actors, have compounded the fragmentation of the IRG’s military support base throughout the years of the conflict. Consequently, it is not only the Houthis that are pushing to take territory from the IRG (e.g. in al-Jawf and Marib) but also armed groups that are supported by members of the Arab coalition are actively taking advantage and attacking the IRG. As well as the STC, they include Republican Guards on the west coast and Hadhrami and Shabwani Elite forces. These non-state groups’ troops are surrounding government forces and threatening to stifle the IRG on the ground. Unless the IRG turns the military tide in its favor, allowing it to break the siege in Marib and recover the losses in al-Baydha and Shabwa, major areas in Marib and Hadhramaut will fall into the hands of its adversaries.

Despite its official withdrawal from the conflict in 2019, the UAE has continued to support and strengthen forces in eastern Yemen. On Socotra Island, which was seized by the UAE from IRG command in the summer of 2020,⁷ STC forces have been trained by the Emirati army. The UAE also re-trained the Shabwani Elite forces, troops that had been established in 2017 to fight al-Qaeda and who later became affiliated with the STC. After clashes between the STC and IRG forces in 2019, most of the Shabwani Elite forces had been expelled from the governorate. Supported by the UAE, the Shabwani Elite forces were deployed at al-Alam camp as well as the Balhaf gas facility. What appeared to be an attempt to take control of Shabwa from the IRG was thwarted by IRG troops in October 2021. In the same way, the UAE supported the Hadhrami Elite forces in Barshid camp in Mukalla. The IRG’s First Military Regional Command in Hadhramaut Valley, having raised its combat readiness, demonstrates the expectation that the Hadhrami Elite forces will be heading towards Hadhramaut Valley, which today remains in the hands of the IRG. In the west, UAE-supported forces under Tariq Saleh, the former Republican Guards, are encroaching on the city of Taiz, the IRG’s most important stronghold in western Yemen. However, it is noteworthy that Saleh expressed his desire to join the battles against the Houthis in Marib on the side of the IRG.

The Houthis September 2021 incursion into southern areas was unexpected; particularly their unopposed entry into districts in Shabwa,⁸ in districts where the support to the STC is high.⁹ From their position in Shabwa, the Houthis were able to block the road between Shabwa and Marib, enter Harib district and lay siege on Marib from the south. This was a strategic advantage for the Houthis to gain strength in Marib. The Houthis are also making an attempt to control the road linking the southern governorates of Abyan and Shabwa. STC forces dominant in the area, which are nominally in the IRG camp and would be expected to defend this area from the Houthis, appear to be standing by, waiting for a chance to strike the IRG rather than fight the Houthis. An IRG army commander explained in an interview how the STC could have supported the IRG army, stating that STC logistical support was especially needed.¹⁰ The support was not given, however. Troop movements on the ground have raised suspicions that UAE-supported forces and the Houthis are making a concerted effort to disperse IRG forces in order to weaken them simultaneously, on multiple fronts. In Al-Bayda, for instance, the Houthi incursion was facilitated by the withdrawal of the UAE-supported Al-Amalikah Brigade from areas in Al-Bayda, allowing Houthis to storm it without resistance, as well as preventing any reinforcements to the resistance troops in Al-Bayda by the STC-led Security Belt forces in Yafea. A news report from Al-Ayyam, a newspaper closely affiliated with the STC, defended the STC position in Al-Bayda battles, stating that it was not the STC’s responsibility to liberate areas from the Houthis which are not considered part of southern Yemen. The Houthi entry into Al-Bayda facilitated this advance towards Shabwa and strengthened positions along the neighboring province of Abyan, where the IRG forces are stationed.

Mass Corruption and the Deteriorating Economy are Undermining the Government

While the Arab coalition is laying waste to the IRG militarily, the IRG’s devastating handling of the economy pushes it further towards the tipping point. The economic catastrophe, including the collapse of the currency, and the deterioration of services are the greatest challenges the IRG is facing today. Since June 2020 there have been widespread protests against the authorities in cities nominally under IRG control, such as Mukalla, Aden, and Taiz, testifying to the tragedy currently unfolding across Yemen. Public services funds are drying up because of greatly reduced government revenues, a collapsed local currency, the decrease of Saudi economic support, government members accruing large bills while in exile, mass corruption, and grave Central Bank mismanagement. All across the IRG territory, extended electricity blackouts and high prices for food and water are pushing Yemenis over the brink.

With the beginning of the war, Yemen’s oil exports nearly collapsed. Given that the export of crude oil makes up 80 percent of government revenues, the stark reduction of the oil trade removed the foundation of Yemen’s economy. The little oil that is still traded is exported from Hadhramaut. Revenues from Hadhrami exports are deposited in the Central Bank and are meant to be spent on public sector salaries and services. However, revenues mobilized in other governorates under the IRG, including from taxes, customs, or public services, are not paid to the Central Bank. Specifically, Shabwa, Marib,¹¹ and al-Mahra¹² refuse to deposit revenues into the Central Bank, citing STC control over Aden, where the Central Bank is based.¹³ The IRG thus relies on grants provided by donor countries, particularly Saudi Arabia. The Kingdom pledged to deposit US$2 billion¹⁴ into the Central Bank, to fund fuel imports and public sector salaries. Saudi oil grants, which amounted to US$4 billion,¹⁵ particularly supported the electricity sector in areas under the IRG. While the Saudis made a fifth installment of the oil grants into the oil refinery in Aden in November 2021, their continued support for Yemen’s economy is now contingent on Central Bank reform..

The Central Bank of Yemen bears responsibility for a large part of the economic crisis, as the bank’s mismanagement of the currency and its inability to control the banking market in the liberated areas has contributed to this major collapse in the currency. Between 2017 and 2020, there were many appointments to the position of Central Bank governor; these appointments were made without necessary consideration nor acknowledgement of the political realities. A report submitted by international experts to the UN Security Council regarding corruption and money laundering, which mentioned leaders in the Central Bank before it was amended, shows that there are also imbalances in the Bank’s financial position. This was confirmed by other local reports¹⁶ about a deficit in some of the Bank’s accounts abroad – especially with weak funding for it as the Yemeni riyal has reached its lowest level ever, at approximately 1,500 riyals per dollar. This affects other services, such as electricity generation, fuel prices, and foodstuffs.

Save Yemen’s Economy and be Accountable, or Yemen will Collapse

The picture in Yemen looks increasingly grim, not only for the IRG but also for all those Yemenis who feel unrepresented by the current de facto authorities. However, not all hope is lost, with troops in Marib town putting up strong resistance against the Houthis, and the Saudis, instead of completely cutting their support, making future support contingent on reforms. As Yemenis, we must take this last straw of hope and push our government to do all that is possible to preserve the Yemeni state as it is recognized internationally. This means that the current government must survive by implementing genuine economic and military reforms. The cabinet members must return to Aden and begin working for the Yemeni people, rather than just for their own benefit.

To combat corruption, the IRG should install accountability and transparency mechanisms. This should be done in cooperation with local civil society groups, the private sector, and international organizations, to ensure that no single actor dominates the mechanisms. The IRG must make an effort to mobilize more revenues across its territories while also exporting oil and gas, in order to increase and improve service provision across the board and pay government and military salaries. Based on these efforts, the IRG and Saudi Arabia must re-evaluate their partnership, in order to improve relations and for the IRG to re-gain the support necessary to survive the current economic and military problems. None of this will be possible unless the UAE begins workings towards the common goals of the coalition, which are to protect the IRG and re-install an internationally recognized government in the capital of Sana’a.

However, given the behavior of the IRG’s cabinet and local politicians, who continue on the path of corruption and political infighting, the chances that the IRG can turn the current trend around are slim. If the IRG loses its allies, the various regions of Yemen cannot be held together in order to reach a comprehensive political agreement. It appears momentarily that the territory of Yemen could be split between multiple armed groups, with the Houthis in the north and the UAE-supported troops in southern areas. It is likely that battles over territorial control between these groups will continue even after a collapse of the IRG. Most likely, under these conditions, the local currency will collapse, services will cease entirely, and salaries will no longer be paid, aggravating the humanitarian crisis, which is already referred to as the worst in the world. 

In this scenario, in Marib, hundreds of thousands will be displaced. This includes people and families who have already been displaced and sought refuge there; it is estimated that the governorate currently hosts one million internally displaced people. Many of the newly arrived residents include journalists, politicians, and members of political parties and activists, who escaped persecution by the Houthis. A Houthi takeover of Marib will jeopardize these people’s lives. Elsewhere, in Taiz, the power struggle over the city between UAE-supported troops under Tareq Saleh and the IRG forces affiliated with the Islah Party will increase the suffering of residents. The already besieged city will be suffocated, leading to further humanitarian deterioration in the country’s most populous governorate. At the same time, southern governorates such as Aden and Lahj will not be able to absorb the displaced people from these areas. This relates not only to the already devastating economic situation in southern areas but also, most of all, due to discrimination against northerners by STC forces.¹⁷ A further destabilization of Hadhramaut, in the case of a collapse of the IRG, could lead to al-Qaeda regaining territorial control, after it had been pushed out of Mukalla in April 2016.¹⁸

All the while, the Houthis are looking for opportunities to use the current crisis to their own advantage. While they were able to more or less maintain the stability of the local currency, the Houthis are trying to present themselves as a wider force for stability. By trying to take control of Marib, the Houthis are seeking to increase their access to oil and gas resources, given that supplies provided through al-Hodeidah port are insufficient for the areas they control. Although this goal risks a prolonged electricity and fuel crisis, as their Marib offensive may lead to supply being cut off, the Houthis are pushing onwards. After the Houthis have taken Marib, it is unlikely that the Houthis would stop at the north-south border of 1990; instead, if Marib is won by the Houthis, the group will push to re-take the entire country. The Houthis represent the most repressive and violent regime the Yemeni people have witnessed in modern history. The Houthis will bring neither stability nor any kind of respect for human rights or international law. If the international community wants to avoid this scenario, it must invest in Yemen’s economic recovery today and establish real mechanisms for accountability together with local partners.

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Ahmed al-Shargabi is a Research Assistant at the Yemen Policy Center as well as a Program Assistant at the Yemen Polling Center, Taiz, Yemen. He supports YPC in project implementation across a variety of areas, including security, civil society and politics. The wide networks he established in media, military, civil society, and state institutions, both as a civil society activist at the Media tent at the Change Square in Sana’a in 2011, and as a YPC researcher, have given him detailed insights into the dynamics of the Yemen war. The author thanks Adam Baron for his comments on an earlier version of this article.

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