Yemen's Government Inks $1 Billion Aid Package With UAE-Based Fund

The Yemen government has reportedly inked a deal with the Arab Monetary Fund on Sunday to receive $1 billion in economic aid.

The agreement was signed by Ahmed al-Maabqi -- the current head of the Aden branch of the Central Bank of Yemen, in the presence of Saudi Arabia's finance minister, Mohammed Al-Jadaan, Equity Pandit reported.

The fund, which is based in Abu Dhabi, is a sub-organization of the 22-member Arab League. It will pay out the $1 billion program from 2022 to 2025, which will assist the Yemeni government in establishing fiscal stability in the strife-torn country through wide-ranging economic reforms, The Equity Pandit reported, citing the official state news agency of Yemen, SABA news agency.

The kingdom had previously pledged $3 billion in April to help its war-torn economy.

The ongoing civil war in Yemen, which is entering its eighth year, has killed more than 150,000 people, including over 14,500 civilians. Famines have ravaged the country, and food has gotten 60% more expensive than it was last year, largely due to the war in Ukraine that has impacted the country's critical wheat imports from Eastern Europe.

Following the seizure of the capital of Sanaa in 2014 by the Iranian-backed Houthi rebels, a coalition led by Saudi Arabia, which had included the UAE, had intervened in 2015 and set up a government, which is currently internationally recognized.

The Central Bank of Yemen is divided between the two sides, with the Aden branch being under the control of the Saudi-led forces, while the Houthi branch's central bank operates in Sanaa. Recent reports claimed the Aden branch printed new banknotes, which are not accepted in Houthi-controlled regions, to clear debts and pay public sector salaries. However, this seems to have helped fuel inflation in the country.

The rebel group issued a condemnation of the agreement. In a statement, the Houthis said that this deal would "serve the aggressor state, not Yemeni society."

The conflict in Yemen is one of the major flashpoints for the greater Sunni Shia conflict that rages across the Muslim world, with Saudi and Iran emerging as the leaders and de facto heads of the Sunni and Shia factions, respectively. In Yemen, Houthis allege persecution by Sunnis, owing to which the clash started between the two groups.