Yemen in Crisis: How Yemen can survive the fuel crisis and secure its future

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Yemen is a country in continuous crisis. More than half its population live below the poverty line and are in urgent need of humanitarian assistance. Fuel shortages, corruption, unemployment and violence have all become part of daily life. Now, a new crisis is unfolding: as fuel supplies run dry, food prices are soaring and water is becoming inaccessible. Fuel shortages and rapid inflation are sending shock waves through rural communities across the country. Millions of Yemenis are going hungry, drinking unsafe water and increasingly falling between the cracks of an inadequate social safety net, as they bear the brunt of yet another fuel crisis. Yemen
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  OXFAM BRIEFING NOTE 24 JUNE 2014 www.oxfam.org  Fuel queue stretching further than the eye can see in Hodeidah, May 2014. Photo credit: Chad Anderson/Oxfam  YEMEN IN CRISIS How Yemen can survive the fuel crisis and secure its future  Yemen is a country in continuous crisis. More than half its population live below the poverty line and are in urgent need of humanitarian assistance. Fuel shortages, corruption, unemployment and violence have all become part of daily life. Now, a new crisis is unfolding: as fuel supplies run dry, food prices are soaring and water is becoming inaccessible. Fuel shortages and rapid inflation are sending shock waves through rural communities across the country. Millions of Yemenis are going hungry, drinking unsafe water and in-creasingly falling between the cracks of an inadequate social safety net, as they bear the brunt of yet another fuel crisis.  Yemen’s gove rnment and donors must address immediate human im-pacts alongside the root causes of the fuel crisis. They must increase the provision of social welfare while also undertaking public finance reform, to ensure the safety of all Yemenis, the country’s stability and political transition.  2 1 THE FUEL CRISIS  A paralyzing fuel crisis has taken hold in Yemen, threatening the lives of the hungry, cutting off water to entire communities and putting the country‟s security  at risk. Yemenis are already suffering through a protracted crisis with more than half living below the poverty line and in urgent need of humanitarian assistance. 1  Diesel fuel has disappeared from fuel stations over the past six months, as a result of rampant corruption and attacks on pipelines. In a society heavily dependent on fuel, not only for the transportation and preparation of food, but also for the pumping of water for irrigation and consumption purposes, the situation stands to get a lot worse. Yemen relies on oil for more than 50 per cent of its revenue, 2  but an increasing number of tribal attacks on oil infrastructure in recent months have greatly reduced capacity, choking off the flow of money into the government treasury. This revenue has, in the past, allowed it to maintain generous fuel subsidies, 3  with diesel available to the public at the set price of 100 Yemeni rial (YR) ($0.46) per litre. This is one of the lowest pump prices and one of the highest fuel subsidies in the world. It cost the Yemeni government $3.07bn in 2013, equal to about 30 per cent of state income. But the government now says it can no longer afford to import fuel while maintaining the subsidy. This has led to numerous fuel shortages and a flourishing black market, which together have pushed the price of diesel up by as much as 400 per cent, far out of reach of most Yemenis. Fuel has just started to trickle into the market again, but with Yemen due to become a net importer of oil within the next few years, budget shortfalls and fuel shortages will only get worse. Yemenis are well aware of this and petrol stations in Sana‟a have already been forced to limit purchases, as residents scramble to stockpile fuel in advance of the next shortage. Unless the Government of Yemen and its partners act now, ordinary Yemenis will be pushed over the edge into disaster. 2 HUNGRY AND GETTING HUNGRIER The fuel crisis is driving rising levels of hunger as food prices soar. Hunger levels before the crisis were already extremely high with 10.5 million going hungry every day. 4  In June 2014, an Oxfam market survey found that the price of rice had increased an average of 73 per cent since the fuel crisis hit the western coastal governorate of Al Hodeidah at the beginning of the year. In the most extreme cases, families that paid YR250 ($1.16) for one kilogramme of rice at the beginning of the year, by June were paying YR650 ($3.02) for the same amount. The survey also  3 found that the price of flour had increased by an average of 49 per cent and the price of vegetables by 100 per cent in some rural areas. In June 2014 Oxfam staff met Ibrahim, who lives with his wife and 2 year-old son in Marqb, Al Hodeidah. Ibrabim is no longer allowed to purchase supplies from the local shop after taking YR20,000 ($93) worth of food on credit over the past two months, forcing him now to rely mostly on donations. “The farmers are not w orking their fields, so I can‟t  find any work and my family is dying.” Ibrahim, frail and thin himself, lost his one month old son in April. “There‟s no diesel. I couldn‟t get transportation to the hospital and the doctor couldn‟t get to our village because of the fuel  crisis. No-one could afford to move while my son died in my arms after a few days of diarrhoea.” Tears filled his eyes as he told us his  surviving son cries from hunger pains every day. Oxfam visited 20 households in rural parts of Al Hodeidah and Hajjah in May 2014 to discuss the impact of escalating food prices. They found families putting themselves at great risk in order to survive. An astonishing 40 per cent of households reported skipping meals daily, and an additional 35 per cent were skipping meals every few days. Looking back to 2011,when the last fuel crisis pushed diesel prices up by 500 per cent, 5  provides a bleak indication of the direction in which Yemen is heading. According to an Oxfam assessment, conducted at the time in Al Hodeidah, food prices increased by 60 per cent over the course of the crisis. A report from the World Food Programme (WFP) indicated that 44 per cent of Yemenis were suffering from food insecurity by the end of 2011, up from 32 per cent in 2009. 6  Today, food insecurity remains high, at 41 per cent. 7  Another fuel crisis left unaddressed could spell catastrophe. 3 WATER SCARCITY “We have to walk more than an hour to get to the borehole  and the water is dirty ,” explained Aminah, mother of eight, as s he motioned to her donkey, “It‟s so hot now, even our donkey refuses to make the journey.”  Oxfam staff met Aminah in June 2014 in the small village of Mhalib, Al Hodeidah. Residents there lost access to piped water more than two months ago. Twelve per cent of Yemen‟s diesel consumption goes to power water pump generators that irrigate crops and provide water for household consumption in rural areas. 8  With an extremely low water table, generators are required to pump water from deep boreholes to irrigate crops and provide drinking water. However, as diesel prices skyrocket, farmers have found themselves unable to run their generators and rural households are now forced to travel further and endure longer waiting times to access water. Women and children usually bear the burden of fetching water in Yemen. In May 2014, Oxfam spoke with women at a borehole in Jemna‟a village in the western coastal governorate of Hajjah. They explained that they now have to travel to two or three boreholes before finding one in  4 operation and even then they face long queues. Oxfam also spoke with children who told how they are missing school to fetch water, which can now take up to six hours. Even before the fuel crisis took hold, one in two Yemenis did not have access to safe and clean drinking water. Oxfam is now seeing the situation deteriorate even further, with thousands of families who usually have access to safe water sources facing increased health risks as they are forced to turn to irrigation boreholes in search of water. By May 2014, taps in at least seven villages in Al Hodeidah had run dry, leaving over 3,000 households with no access to safe drinking water. 9  Facing the same difficulty as farmers, village water committees have not been able to purchase enough diesel to keep the water pumping. In three other villages, home to an additional 1,266 households, public water is only available in parts of the village or only for a few hours a day. 4 NO FRAMEWORK FOR RESILIENCE  According to the World Bank, Yemen spends more on the fuel subsidy than on health, education, and social protection combined. 10  As the current fuel crisis and the ensuing hyperinflation sends shock waves through rural communities, they do not have adequate access to essential services to protect them, or a social safety net to catch them when disaster strikes. And with each new crisis, they become increasingly less able to cope and more likely to fall below the poverty line. In addition to a lack of access to clean water, one in three Yemenis does not have access to sufficient health care services. 11  Most families have no access to any basic income support. Only 62 per cent of girls and 74 per cent of boys are enrolled in school. 12  Yemen urgently needs a functioning social protection system; however, this does not mean starting from scratch. Through the Social Fund for Development, 13  Yemen has made great strides in improving its health and education infrastructure. Further, Yemen‟s So cial Welfare Fund (SWF), the national social safety net, administers cash transfers to 1.5 million beneficiaries across the country. Oxfam has worked alongside the SWF since 2011, and, in 2012, distributed cash transfers to 100,000 households on the SWF list. Like all social safety nets the SWF faces challenges, but Oxfam has seen the Fund‟s distribution system navigate the most difficult of circumstances in order to maintain payments even in remote parts of the country. Unfortunately, the scheme remains severely underfunded, impacting the regularity of payments and preventing the Fund from reaching all those in desperate need. The SWF accounts for only 0.2 per cent of government spending, 14  while more than 400,000 applications remain on the waiting list. Payments need to be scaled-up as a matter of urgency, in order to provide the social safety net families need to be resilient.
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