How the World Bank and IMF Destroyed Yemen

According to a 2009 report by the World Bank, Yemen has “world-class deposits” of gold, and the World Bank is “surprised” that the country hasn’t been mined much for gold. Al Hariqah gold mine in Hajjah, Yemen, has proven gold deposits worth over 5 billion at today’s gold prices and could produce 200,000 ounces of gold annually. A UAE company based in the Cayman Islands, named Thani Dubai Mining and Cantex Mine Development, a Canadian-based company, secured rights in 2009 to explore and mine for gold in Hajjah. A 90-page document titled Yemen Mineral Sector Review catalogs, in detail, the vast wealth of mineral deposits in Yemen, and gold is only one of the highly desirable minerals sought by international markets found throughout Yemen. In total, 16 companies were mining minerals in Yemen in 2009, and the Saudis or the UAE own 13 of them with their offices in tax havens like the British Virgin Islands, the Cayman Islands, and Hong Kong. One mining company, Ansan Wikfs, stands out because of the large swath of land they have rights to mine in Yemen and Sudan. Ansan Wikfs tries to appear as a Yemeni mining company instead; it is just a shell company in the Caymans owned by the Shaher Trading Company, founded by the late Yemeni billionaire Shaher Abdulhak.

In the World Bank’s review of Yemen’s mineral sector in 2009, the World Bank clearly stated that a threat to mining in the country is the Houthi “insurrection” in northern Yemen because it gives a poor image of the country to investors. The document also states that accessing resources on tribal lands ‘may be difficult.’ Two months later, as people in Sadah protested the government cutting off cooking gas to northern villages, Yemen and Saudi Arabia launched Operation Scorched Earth. The military actions involved Yemeni ground troops attacking Houthi strongholds throughout north Yemen and the Saudi Air Force pounding tribal villages with relentless airstrikes.

Yemen has a large Shia population who were outraged by Saleh’s decision to launch Operation Scorched Earth with Saudi Arabia on Shia tribal lands. The mission failed to halt the Houthis revitalization movement, displaced over 50,000 Shia Muslims, and killed over 8,000 civilians. Operation Scorched Earth is one of the true origins of the conflict in Yemen because it upset tribal communities in western Yemen that had been long supporters of president Saleh and the Southern Separatist Movement. Both groups responded by allying with the Houthis and urging the people of Yemen to unite and oppose Saleh’s regime. Sparatic clashes broke out all over Yemen for the next year as Saleh loyalists engaged with the newly formed opposition forces. Southern Separatists fought with AQAP in Southern Yemen as the Houthis engaged with Saleh loyalists outside of Sanaa.

Saleh created the unstable ecosystem in Yemen after rising from the ashes of the Yemeni civil war in the late 1970s. Saleh’s administration worked to develop the oil and gas sector throughout Yemen to rebuild the country after decades of civil war. The changes led to a revitalization of the economy and turned Yemen into a petro-state until the early 2000s, when oil production in Yemen began to decline. Saleh had used oil as a political bargaining chip of his control for the last twenty years. But as Yemen ran out of oil, Saleh began to lose power and could no longer offer lucrative oil cutbacks to politicians in Saana, tribal leaders, or the Southern Separatist Movement.

Over 70% of the oil revenues funded state institutional development and paid civil servants, meaning that oil financed the construction of the school and the teacher’s checks. The World Bank supported the Social Welfare Fund created to wean the Yemen population off fuel subsidies and establish social programs to train people in high-demand skills like construction, engineering, and mining. By 2010, the World Bank was funding the SWF entirely and controlled most of the population in the palm of their hands. The World Bank knew that if it suddenly stopped financing the SwF, the people of Yemen would erupt. The World Bank’s document clearly states how volatile the topic of cutting fuel subsidies is in Yemen and how they have to use caution when making these cuts, but the UN, World Bank, and Saleh’s administration failed the people of Yemen.

The Yemen Revolution of Dignity

The Yemen Revolution of Dignity started in January 2011 and ended in February 2012. The uprising was part of the Arab Spring and had an estimated 12,000 protesters. Demonstrations led to the deaths of 2,000 citizens and hundreds more being injured, including the horrific event in 2011, where president Saleh ordered the Republican Guard to shell a protest camp in Change Square, killing dozens. President Saleh ordered Republican Guard to shoot a crowd of student protesters down from rooftops with live bullets and toxic gas as they left the Great Mosque after Friday Prayers. The ambush killed 52 and left 40% of the 32 survivors with brain damage and upper body wounds.

The Change Square Massacre caused high-ranking members of the Republican Guard to defect from the Saleh regime, including Ali Moshen, long considered the second most powerful man in Yemen. Moshen publicly stated after the massacre in Change Square, “we are going to protect the protesters.” Saleh promised to resign after ten months of protests and 33 years in power. The Yemen Revolution of Dignity continued despite Saleh’s promise to leave because the people wanted Saleh arrested for his crimes of corruption and human rights violations.

Saleh stepped down after signing an agreement in Riyadh brokered by the UN that broadcast on Saudi-state-run Al Arabia News. Before the televised signing, King Abdullah of Saudi Arabia proclaimed, “I declare the turning of a new page in the history of Yemen.” He added, “Saudi Arabia will remain the best supporter for Yemen.” The truth is that Saleh agreed to step down after a bomb planted in the mosque of the Presidential Palace exploded while he was inside. The attack nearly killed Saleh, leaving him with burns to 40% of his body, headwounds, and internal bleeding.

Former CIA Director John Brennan, who was Obama’s Assistant to the President for Homeland Security and Counterterrorism, met with president Saleh two weeks later, in July 2011, at a Saudi Arabian hospital. Brennan reportedly asked Saleh to fulfill his promise and honor the GCC-brokered deal to resign. Now I was not a fly on the wall in the hospital in Riyadh. But isn’t it logical to assume that Brennan gave Saleh an ultimatum that had a lot to do with the bombing that he had just survived weeks earlier and Saleh agreeing to resign?

The United Nations, the Gulf Co-operation Council, and the five permanent members of the Security Council supported the transfer of power deal to rewrite the constitution of Yemen, remove Saleh, who is a Shia Zaydi, and replace him with Mansour Hadi, who is Sunni. The propaganda in Riyadh at the Al-Yamama royal palace on November 23rd, 2011, when Saleh “signed” the agreement live on Saudi state-run media, was a move to give the deal a sense of legitimacy for Yemenis and the international community. The agreement assured Saleh and his family immunity from any prosecution, and in return, he would step down, handing over power to his vice president Hadi. Hadi was never a good choice for Yemenis because, as vice president of Yemen since 1994, he was a co-conspirator in the crimes of Saleh’s regime. The admitted orchestrator of the deal to remove Saleh and replace him with Hadi is former United Nations Special Envoy to Yemen Jamal Benomar. Benomar gloats in an article he wrote for Newsweek in early 2021 about how he negotiated the transition of power agreement and even chose the venue. Hadi took the oath of office in Yemen’s House of Representatives after receiving over 6 million votes in an election where he was the only choice.

In May 2014, the IMF and the government of Yemen were in talks about a $560 million loan requested by Yemen to bolster a quickly diminishing SWF. To secure the deal, president Hadi agreed to cut fuel subsidies by 20 to 40% in a phased wave of governmental cuts scheduled to start in October 2014. The SwF financed fuel subsidies and was created in 1996 by the World Bank to assist the poorest communities in Yemen. Yemen was in a desperate situation with the people’s growing dismay with the Hadi administration leading him to seek financial relief from the IMF because he was all tapped out at the World Bank. The World Bank’s 2010 Project Appraisal Document shows an acute awareness of the social unrest that would ensue if fuel subsidies were drastically cut, never-mind if fuel subsidies completely stopped. The IMF pressured the Yemen government to make cuts to the fuel subsidies earlier than planned, leading to unrest in the streets of Yemen.

Felix Arabia Becomes a Failed State

In July 2014, the Yemen government increased gasoline prices by 60% and diesel by 95% to appease the IMF, which asked Yemen to cut the fuel subsidy program and raise fuel prices to offset the country’s growing debt that has been blooming since Yemen’s Revolution of Dignity in 2011. The decision to raise fuel prices led to hundreds of thousands of protesters flooding the streets of Saana. Fuel prices spiked dramatically, causing bread transport to rise by 20% overnight. Rural Yemeni farmers, who account for 60% of the population, could not afford the fuel to run their equipment leading to widespread unemployment and barren markets. Yemen’s civil workers are the country’s backbone and consist of everyone from construction workers and engineers to doctors and teachers, who had their paychecks stopped in January 2014. The principal difference between the Yemen Revolution of Dignity in 2011 and the protests that gripped the country in 2014 is that the people protesting in 2014 weren’t just the youth, poor, or marginalized populations in Yemen that shook Saana in the Revolution of Dignity. The protest in 2014 was Yemen’s working class, tribal community, students, and poor people who organized protests in every province of Yemen.

The fuel subsidy cuts were supposed to be supported by social programs targeted at people reliant on these subsidies. By 2014, the Yemen government had made zero cuts to the fuel subsidy program and failed to set up the programs the World Bank called safety net programs. On January 1st, 2014, payments on loans granted by the World Bank to Yemen were due, and the country needed help to pay the loan fees. The SwF required more money to disperse to 5 million Yemenis now enrolled in the program. To complicate the issue, the World Bank, European Commission, and United Nations Development Program, which created and funded the SwF, failed to help Yemen set up the social programs that were supposed to be a safety net for the most vulnerable populations across Yemen. The SwF went from covering 100,000 Yemenis in 1996 to over 1 million in 2000. According to Yemen Poverty Assessment Report 2007 (PDF) conducted by the United Nations Development Program, 77% of the fuel subsidies went to families above the poverty line, and only 13% went to chronically low-income families.

The World Bank secured loans for the SwF from the United Kingdom’s Department for International Development, America’s Institute for Defense Analyses, and the United Nations Development Program to name a few international shapeshifters. Reforms to the SwF aimed at targeting people in chronic poverty also drew the attention of the World Food Program, which started to work closely with the SWF’s food assistance programs in 2009. The World Bank’s 2010 Project Appraisal Document details how the Yemeni government was supposed to make cuts gradually from 2010 to 2014.

As Yemen began to lose control in late 2014, the Houthis were closing in on capturing Aden when Hadi and members of the internationally recognized government escaped to Saudi Arabia. Quickly after Hadi arrived in Riyadh, the GCC pushed resolutions through the United Nations Security Council to blockade Yemen and authorize the GCC to wage war on the Houthis and AQAP. The resolution explicitly states that securing the maritime passageways around Yemen is vital to international commerce, and the UN Security Council fears that an unstable Yemen threatens the security of the Arabian Peninsula.

According to international law, a blockade is illegal if the negative impact on civilians is greater than the direct military advantage gained from the embargo. Begging the question of why an entity established to protect nations from powerful overaggressive adversaries would allow the blockade of Yemen to continue for eight years. The UN Security Council is well aware of the humanitarian crisis in Yemen, and they have reported on the indiscriminate bombing of civilian areas since the GCC-led intervention. The UN isn’t just turning a blind eye to war crimes in Yemen. They are signing off on war crimes in Yemen.

Joziah Thayer is a researcher, writer, and antiwar activist from New England. He founded, an unmonetized research based information site to combat mainstream narratives that often mislead the public and the #OpYemen an online campaign to inform the world of the ongoing atrocities in Yemen.