On Yemen, UN Talks With Houthis, US Still Recognizes Hadi, What of Harak?

By Matthew Russell Lee

UNITED NATIONS, January 23 -- After Yemen's president and prime minister resigned, the UN on January 23 put out a summary of what its envoy Jamal Benomar is doing, mentioning talks with each and well as with the Houthis.

  What about Harak or the Southern Movement? We expect to have more on this soon. Here was the UN's note to correspondents:

"Today, 23 January, the Special Adviser of the Secretary-General on Yemen, Jamal Benomar, met with President Abd Rabbuh Mansur Hadi, Prime Minister Khaled Bahah and Houthi representatives. His consistent message to all political parties is that they need to engage in inclusive consultations with each other that will produce an agreement on how to move forward from the current crisis.
 
"The Special Adviser also had meetings with members of the diplomatic community in Sana’a.  In the immediate term, he will continue to actively engage with all parties and is seeking to meet with different political groupings in the coming days."

 Maybe that last part means Harak. At the January 23 US State Department briefing, the US spokesperson said the Hadi is still the president, as far as the US is concerned. We'll see.

When the International Monetary Fund held an embargoed press briefing on January 22, after the Houthi rebels in Yemen have held the Presidential palace for days, Inner City Press asked about the impact on the IMF's program with Yemen.

  IMF Deputy Spokesperson William Murray said that recent events are "not positive from an economic standpoint," but that the IMF's first review of its program will not be until the Spring.

  Where will the Houthis be then? And Hadi? And Saleh?

   Inner City Press also submitted questions on Sri Lanka and on Ebola and debt relief. On the latter, Murray spoke of an exceptional assistance program as with Haiti, but wouldn't specify debt relief. We'll have more on this.

 On Yemen, Murray referred back to the January 21 report and briefing by Masood Ahmed -- to which Inner City Press also submitted the question. In that briefing, Ahmed said:

"we are worried about the continued difficulties in Yemen, really because Yemen is already a country with a fragile economic recovery, with a large number of people living in poverty, and with already trying to cope with different shocks that the economy has undergone, and so this makes the uncertainty, makes it both harder to deal with those shocks and also it affects confidence, so that some of the private sector activity is affected.

"Of course we as an interactive institution don't have a view on the political developments in any country, but we can look at the economic consequences, which is what I was referring to. In terms of the implications for this on the price of oil, you know the price of oil, the markets build in both up side and down side risks into that price. So there's a risk of supply disruptions. That is one of the sources that can push up oil prices with the risk premium, not just from Yemen but also people have been concerned about supply disruptions in other oil producing countries, but there's also the risk that the world economy may turn out to be slower in terms of growth or there's a risk that in fact oil production may turn out to be higher in some countries than expected. If you remember, earlier on in 2014, people were expecting oil production in Libya to be relatively low for the year. As it happened, oil production actually increased at one point to 900, 1000 barrels a day and so that was unexpected. And some people say that was one of the reasons that was helping people to reestablish equilibrium in terms of their expectations. So I think that the market is always looking at both up side and down side risks and prices."

The IMF's Middle East and Central Asia Department Regional Economic Outlook Update as released on January 21, says “Yemen is at high risk because its banks are highly exposed to government debt against the backdrop of a weak fiscal position and limited financing options.”

    Referring to the demands for fuel subsidy cuts, the IMF report says “Yemen “is planning to increase non-oil revenue collection, contain the government wage bill, and continue fuel subsidy reform.” Is that still the case? How could the IMF know?
  
  Looking wider, the IMF report says that “conflicts, terrorism, and related security disruptions continue to be a prevailing concern in the region. Although airstrikes have slowed the advance of the so-called Islamic State (ISIS), conflicts in Iraq and Syria persist, creating significant economic and political spillovers for neighboring countries (especially Jordan and Lebanon). The security situations in Afghanistan, Libya, Pakistan, and Yemen also remain challenging. Conflicts cast a shadow over the economic outlook for the MENAP region, not only because they disrupt economic activity; they also reduce political space for the much-needed reforms and delay the return of confidence to the MENAP region.”  

 On January 19-20, the IMF's Olivier Blanchard answered Inner City Press' question about the impact of falling oil prices on Africa by saying "Nigeria will have to adjust. I do not know at this stage whether they can adjust on their own or they might need a program from the Fund. If they did any member is welcome to come at this stage I have no information about it.”

    A Yemen-like program?

   To the IMF's World Economic Outlook Update press conference, Inner City Press had submitted this question: “Please summarize what the decline in oil prices may mean for countries in Africa, and what the IMF is prepared to do about those countries negatively impacted.”

    As the second online question taken, this question was put to Blanchard, who responded:

“Most African countries are importers and so are helped. Some countries are not and the main example is Nigeria. Nigeria will have to adjust. I do not know at this stage whether they can adjust on their own or they might need a program from the Fund. If they did any member is welcome to come at this stage I have no information about it.”

  Earlier on January 19, the UN Security Council issued a Presidential Statement about, but not funding, the fight against Boko Haram. Security Council sources leaving the meeting told Inner City Press that for funding, those in the region -- i.e. Nigeria -- should be looked to first.

  But if Nigeria may even need to apply for an IMF program, is it reasonable for the powers in the UN and it Permanent Five members of the Security Council to expect it to be entire responsible for fighting Boko Haram?

  We'll have more on this.

Footnote: while Blanchard's "main example" was Nigeria, what about Angola? What about Equatorial Guinea? To the north, what about Libya? Questions, questions...

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