Mechanisms for the Recovery and Reconstruction of the Yemeni Economy 10.35781/1637-000-171-007

Abstract

This study examines the mechanisms for the recovery and reconstruction of Yemen’s economy in the post-conflict period, with a focus on assessing the economic damage caused by the conflict, exploring options for unifying monetary and fiscal policies, transforming humanitarian aid into development investments, and identifying sustainable reconstruction financing models. The study seeks to determine how Yemen can effectively transition from humanitarian response to sustainable development while addressing the challenges of institutional fragmentation.
The research employed descriptive-analytical, deductive, and applied approaches to assess the current economic situation, develop a conceptual framework for sustainable recovery, and propose practical policy measures.
The findings indicate that Yemen’s Gross Domestic Product (GDP) contracted by nearly 60%, while per capita income declined by 71%. The division of monetary institutions contributed to the loss of effective monetary policy control and the depreciation of the national currency. The study emphasizes that sustainable recovery requires restoring state authority, unifying economic institutions, and establishing an independent national body for reconstruction and economic recovery with a clear legal mandate and strong governance mechanisms. It also highlights the importance of prioritizing productive sectors, particularly agriculture and fisheries, and promoting labor-intensive projects.
The study recommends establishing an independent reconstruction authority, creating a separate sovereign reconstruction account, strengthening oversight and accountability mechanisms, enhancing private-sector participation, adopting decentralized implementation approaches, and exploring the use of Islamic Sukuk as a sustainable source of reconstruction financing.
Infrastructure.
Keywords: Yemen; Economic Recovery; Reconstruction; Post-Conflict Recovery; Financing Mechanisms; Central Bank Unification; Decentralization; Independent Reconstruction Authority; Private Sector; Islamic Sukuk; Infrastructure.