July 29, 2020: Saudi Arabia, the UAE (United Arab Emirates), the STC (South Transitional Council) and the Yemen government have resolved their differences. The main problem was the STC effort to once more divide Yemen into two Yemens. The STC had a point as “two Yemens” was the norm for most of the last few centuries.

The main supporters of the last (2012) elected and current Yemen government are Saudi Arabia and the UAE. Together these two dominate Arabia and the Persian Gulf oil market. Yet there are differences. The UAE is less dependent on oil and was always more of a trading nation. Actually, the UAE is a coalition of smaller trading states, some with little or no oil. The Saudi are more inward looking as they have a lot more oil and administer the two most holy Islamic shrines. This confers enormous prestige, along with considerable wealth from millions of pilgrims a year. The pilgrim income was even more important before oil income became the main source of wealth after World War II.

These differences mean the UAE could get along with two Yemens while the Saudis cannot. It’s all about Iranian efforts to take control of the pilgrimage business because the Indo-European Iranians (Persians) consider the Arab (Semitic) Saudis unworthy and unable to administer those holy places. This ethnic animosity unites most Arabians behind the Saudi cause. The Saudis made some concessions to the UAE and STC, while threatening dissolution of the Yemen government to get that group on board. The new agreement is still unstable, as all Yemen unification agreements during the last half century have been. “Unstable” describes all of the Arabian Peninsula and the Persian Gulf region.

Meltdown

The Yemeni economy is collapsing because of the accelerating decline in the value of the Yemeni rial. Despite expensive efforts to maintain the value of the rial the exchange rate has again hit over 720 rials per dollar. That’s what it was in late 2018 and a lot of foreign exchange was spent to get it back under 700 rials per dollar. In early 2020 it was 623 rials per dollar and has been rising ever since.

At the start of the civil war (early 2015) it cost 250 rials to buy a dollar. By early 2018 it was 425 rials and six months later it was 650 rials. This was not unexpected. In early 2018 Saudi Arabia transferred $2 billion to the Yemen Central Bank to support the exchange rate of the Yemeni currency and keep food (and other) prices down in Yemen. This worked at first and the value of the Yemeni currency (the rial) immediately rose ten percent (against the dollar). That did not continue because the Shia rebels had looted the Central Bank of at least four billion dollars in rials in 2015 and that contributed to a rapid decline in the purchasing power of the rial as the rebels spent more of this loot. Then there were the counterfeit rials.

At the end of 2016 the U.S. and Germany revealed that they had detected and disrupted an Iranian currency counterfeiting operation that had already produced several hundred million dollars’ worth of Yemeni currency. This was apparently used to bolster the Shia rebels while at the same time weakening the Yemeni government and their Arab allies. The Iranian currency counterfeiting was carried out by the of IRGC (Iranian Revolutionary Guard Corps) Quds Force (similar to the U.S. Special Forces, but which specializes in supporting Islamic terrorists, not fighting them). Laws were broken in Germany to obtain the special materials needed to make the counterfeit bills. The remaining stocks of the counterfeit rials were apparently dumped into the Yemeni economy before everyone got to know how to detect the fakes and refuse to use them. The Shia rebels had always planned to use currency manipulation as a last-ditch weapon. By late 2016 the Shia rebels made financial preparations to abandon the capital (Sanaa) and that included withdrawing over a billion dollars’ worth of Yemeni currency from the economy and moving the cash north to Saada province. At the same time a lot of portable assets (computers, electronics of all sorts, some machinery) are being bought or “seized in lieu of revolutionary taxes” and also moved north.

Over the last two year more foreign donors have given up on Yemen, where so much of the aid gets stolen, especially compared to other disaster areas in need of aid. Recent fighting has disrupted production (and export) of Yemeni oil and natural gas. This has meant fuel shortages inside Yemen as well as higher prices for what fuel is available. The world has lost faith in the Yemeni economy and currency and now so have a growing number of Yemenis.

Fighting Fades

With all this economic chaos, food shortages and medical crises, there is still sporadic fighting. Clashes are infrequent, and often bloody. Such “battles” may generate over a hundred casualties (dead and wounded) over a day or two of fighting. This only takes place a few times a month. Same with Saudi airstrikes and rebel ballistic missile, rocket or cruise missile attacks on Saudi Arabia. The airstrikes cause fewer casualties than the ground battles and the missile attacks even fewer.

There is also a war going on with Islamic terrorists. The remaining ones in Yemen belong to AQAP (Al Qaeda in the Arabian Peninsula) or ISIL (Islamic State in Iraq and the Levant). Both these terrorist groups are still around but largely keeping their heads down in rural hideouts. Most of these are in central Yemen and areas to the east. Baida province used to be a major AQAP base area but not so much now as more AQAP factions disperse to other areas in central and eastern Yemen. Anywhere an Islamic terrorist can find a hospitable tribe, they can usually arrange refuge . AQAP has few active members left in Yemen and the only remaining local support is from some separatist Sunni tribes in the south and east. Since 2017 AQAP has been under heavy attack by the Americans and the Arab coalition, so the Islamic terrorists have responded by shifting more of their attacks from Shia rebels to the government and Arab coalition forces. ISIL and AQAP have been fighting each other a lot after mid-2018 and since early 2020 ISIL has not been very active. ISIL lost this war and some ISIL factions are known to be hiding out in Shia rebel territory. That requires offering some cooperation with the Shia rebels, and that apparently includes useful intel on what is going on in the rest of Yemen, where ISIL still has fans. ISIL and AQAP are both trying to rebuild, especially after the losses (including defections) during its battles with each other. That’s another reason why Yemen is a slow-motion war made slower by hunger, disease and poverty.

July 28, 2020: The Yemeni government accuses the Shia rebels of looting the government banks accounts the rebels controlled in the port city of Hodeida and the national capital. These accounts are, under an agreement with aid donors, mainly the UN, to be used by the rebels to pay civil servants in areas they control. Over the last few years, it has become more obvious that the rebels were looting those accounts while preventing them from being audited. Now some audits have taken place, despite death threats against auditors, and the looting charges proven. The rebels continue to insist they are innocent but the growing body of evidence says otherwise.

July 27, 2020: The UN warns that the Monsoon in August rains may cause floods that will revive the cholera epidemic. So far this year there have been more than 100,000 new cases of cholera in the south, where there have also been unusually heavy rains and flooding. Southern Yemen is the only part of the Arabian Peninsula to get adequate (for widespread agriculture) rainfall and that’s largely because of the annual monsoon rains. Some years the monsoon delivers too much water and there is a lot of flooding. The Monsoon Season is from June to September while there is also a lesser period of Winter Rains in January. The rest of the time there is usually no rain at all throughout Yemen. Floods generated by the rains spread whatever cholera there is to previously uninfected areas.

The cholera epidemic has been going on since 2016, with over a million people infected so far and over 5,000 of those infected dying, about half of them children. Naturally Yemenis are more concerned with cholera than with the covid19 pandemic. The rebels are not alarmed at the covid19 threat, which is understandable given the number of diseases still active in rural, and urban, Yemen. There were no verified covid19 cases in Yemen until mid-April and most were subsequently either in Aden or rebels held Sanaa. There is still a belief among many Moslems that Allah will protect the faithful. Iran used to believe that but the massive covid19 casualties in Iran changed minds. The rebels still deny that there are any covid19 infections in Sanaa but foreign aid and diplomatic officials know better. For most Yemenis covid19 is not considered a major threat. Cholera, malnutrition and much else are more immediate and more lethal threats throughout Yemen. So far Yemen has reported 484 confirmed covid19 deaths. That comes out to 16 dead per million population. Saudi Arabia has 80 dead per million so far, the UAE 35, Iran 192, Egypt 46, Israel 53 and Iraq 113.

July 22, 2020: Saudi Arabia has put restrictions on the movement of Yemeni government officials seeking to fly between Aden, Qatar and Turkey. The Saudis believe that Turkey has recruited (rented) some of the Hadi officials. Most of the Yemen government has operated out of Saudi Arabia since 2015. Abd Rabbuh Mansur Hadi was the last (in 2012) elected president of Yemen. New presidential elections were delayed by the civil war.

July 20, 2020: In the southwest (Abyan province) government troops resumed fighting STC forces. For several months STC militias have been trying to drive all government troops out of the province. There were some casualties on both sides but the fighting has been low intensity. The recent round of fighting was triggered by the ambush and killing of the head of government special forces in Abyan province. This fighting continued for about 48 hours.

July 19, 2020: The Shia rebels are still trying to extort some cash from anyone to allow a 45 year old Yemeni oil tanker to be “disarmed” and made safe from exploding or simply deteriorating to the point where the million gallons of oil into the Red Sea, causing pollution along the Yemeni Red Sea coast as well as portions of the Saudi Red Sea coast. That could disrupt Saudi desalination operations. The tanker is called “Safer” because that is the acronym of the Yemeni State oil company that owns the retired tanker, which is permanently moored offshore 50 kilometers northwest of Hodeida and, until seized by the Shia rebels in 2015, was a key element for exporting Yemeni oil. At the time of its capture the Safer had about a million barrels of oil on board that was awaiting transfer to a seagoing tanker that would take the oil to whoever bought it. The rebels have not allowed anyone from the UN or inspect Safer since then, despite warnings that without maintenance explosive gasses build up in the storage tanks and that creates the risk of large explosions and a massive oil spill into the Red Sea.

The rebels are demanding the oil on the Safer be sold and they receive most of the proceeds. The government refused to allow this. The rebels also demand that sanctions on Iran be lifted as well. That is not going to happen. The rebels have also offered to relinquish control of the tanker for a large payment (ransom) of, say $50 million or so.

The Shia rebels have allowed some SAFER company maintenance crews on board to deal with dangerous leaks. The hull is deteriorating and the rebels want to keep the tanker intact because if the oil leaks the rebels can no longer threaten to do it themselves. The rebels are believed to have the tanker rigged with explosives, so the rebels can use the threat of blowing the tanker up as a final effort to avoid defeat. The pollution would be a disaster for some Shia fishermen but apparently Iran has promised compensation.

July 13, 2020: In northwest Yemen Shia rebels launched four ballistic missiles towards the Saudi capital (Riyadh, a thousand kilometers away in central Saudi Arabia). The rebels claimed this attack included five slower explosive laden UAVs and that many of these weapons landed in the Saudi capital. The Saudis say they intercepted the missiles with their Patriot ABMs (anti-ballistic missiles) and the UAVs were shot down by Saudi jet fighters. There are a large number of foreigners in Riyadh so you cannot conceal missiles or explosives-equipped UAVs hitting targets. All that was reported overnight were explosions in the night sky, indicating a Pac-3 missile intercepting a ballistic missile. Not a common sight over the capital but not unknown either since Iran started supplying the Yemeni rebels with longer range ballistic missiles.

Since 2015 the Yemeni rebels have, with components and tech support from Iran, launched over a hundred ballistic missiles at Saudi Arabia. The Saudis point to these Iranian ballistic missiles and Iranian UAVs as pretty clear evidence that Iran was still smuggling weapons in. Iran denies everything and when confronted with physical evidence insists that the Yemeni Shia make the stuff locally, obtaining technical help via the Internet.

Saudi Arabia also released jet fighter gun video of two large (Predator size) Iranian Shahed 129 UAVs being shot down after crossing the border into southern Saudi Arabia on July 2nd. These explosives laden UAVs can reach the Saudi capital and the size of the explosion when the UAVs are hit with the cannon fire confirms the UAVs were carrying a lot of explosives. Iran keeps making these attacks because they only have to get lucky, and score a hit once or twice, to frighten and embarrass the Saudis. Iran blames all this on the Yemeni Shia rebels, who admit they receive aid from Iran. Foreign (including UN) investigators conclude that the rebels are acting with the help of Iran and would not be able to launch ballistic missiles and UAV attacks on Saudi Arabia. The smuggling program to support these missile and UAV attacks from Yemen is high and has become one of many complaints Iranians have against their government.

July 2, 2020: A Saudi F-15 shot down two Iranian Shahed 129 UAVs over Yemen. The F-15 brought back video of the intercept.

June 28, 2020: Off the Yemen coast an American warship intercepted yet another Iranian arms shipment headed for Yemeni Shia rebels. This cargo included 200 RPG grenades, 1,700 assault rifles, several types of portable missiles plus a large quantity of components for ballistic missiles and UAVs. This is the third such shipment U.S. warships have intercepted since late 2019.