Brett Prowse, Sana'a
Violence erupted in Yemen on July 20, as the government's structural adjustment "reforms" — implemented at the demand of the World Bank and International Monetary Fund — resulted in the long-expected removal of subsidies that triggered a doubling of fuel prices. More than a dozen confirmed deaths were reported across the country in the day-long melee.
Police, paramilitary and military forces regained control of the capital's streets before nightfall and the city awoke the following morning to calm streets and a heavy military presence.
The World Bank has long pushed the US-aligned government headed by Ali Abdullah Saleh to stop subsidising basic necessities. While widespread protests were expected, it is apparent that the regime was as incapable of preventing chaos as it is of dealing with the inevitable social consequences of the harsh neoliberal policy measures.
From mid-morning, the capital Sana'a was paralysed by spontaneous and militant street demonstrations which converged on the parliament and commercial districts. Large street demonstrations were also reported in many regional areas.
The demonstrations represent a rare show of public unity and voice in a country where public dissent is barely tolerated. When they are permitted, protests are generally to the advantage of the ruling People's General Congress party or its myriad of political clients, including members of the "opposition".
Frustrations boiled over at the demonstrations, and violence erupted in many areas across the country. Sustained small-arms fire, sporadic heavy machine gun fire and explosions were heard across the commercial districts of Sana'a. During the melee, some government and corporate buildings were besieged and government forces replied to stone throwing protesters with tear-gas and automatic weapon fire. The government's heavy handed response resulted in more than a dozen confirmed deaths with, ominously, no deaths reported amongst government forces.
Equitable fuel
Unlike in most First World countries, fuel pricing in Yemen has far wider-reaching consequences than the weekly petrol bill. Yemen is one of the poorest countries in the world, with significant poverty, massive gender inequality, bellowing environmental problems (deforestation, unsustainable water usage and dramatically diminishing biodiversity to name a few). This situation is exacerbated by a highly corrupt authoritarian regime that is US President George Bush's "democratic" darling of the Arabian Peninsula.
In an arid country where there is virtually no surface water and the majority of agricultural land is irrigated with water pumped up for as much as one kilometre from bores, fuel pricing ultimately governs the cost of living. All transportation, power generation, groundwater irrigation, industrial activities and most households are powered by fuels which have now (at least) doubled in price overnight.
The result for Yemeni households, a majority of which already spend more than 50% of their budget on food, will be immediate and steep increases in the price they pay for energy, transport, food and water. There are few domestic commodities in Yemen that will not be significantly impacted by the removal of these subsidies and the majority of the population is in a poor position to cope with the wide ranging price hikes. If the planned removal of subsidies on basic food stuffs such as wheat, flour and sugar goes ahead, the plight of many Yemenis will turn from dismal to potentially fatal.
To compensate for the price hikes the government has announced steep increases in the long stagnant salaries of public servants (without actually allocating extra funds to the ministries to pay these salaries). However the overwhelming majority of the population, that are not in the service of the state, must manage this crisis themselves. In a country where incomes are just 3% of those in Australia and where more than 40% of the population lives in poverty and without access to safe drinking water, the government's actions are bound to have devastating results.
The neoliberal blame game
There is an argument to be made for the reduction of the diesel fuel subsidy on environmental grounds, as it has contributed significantly to Yemen's increasingly unsustainable pumping of ground water. However, this issue could have been addressed through other policy initiatives.
Acutely aware of the heavy domestic criticism it faced, the government initially blamed the removal of subsidies on the World Bank. Of course the removal of subsidies forms a key element of the government's neoliberal economic reforms, which are mandated by the IMF-World Bank "structural adjustment" doctrine. However, following heavy public criticism, some say threats, from the departing head of the World Bank in Yemen last year, the government moved its focus away from the bank and instead blamed large-scale cross-border fuel smugglers for the planned removal of fuel subsidies.
Whilst it is clear that subsidised diesel fuel was being smuggled out of Yemen to neighbouring countries, the scale of this activity is by no means a justification for a blanket removal of all subsidies on all fuels and certainly no justification for the suffering that will follow.
More recently the government has justified the removal of fuel subsidies by claiming that a budget deficit must be avoided. Critics of this justification point out that curbing rampant government corruption and reducing military expenditure would be a more socially responsible and effective means of avoiding a deficit. The government receives the lion's share of its income from oil exports but much of this money is spirited away as it passes through the sticky fingers of the regime and its web of political clients.
Oil, corruption & neoliberalism
Subsidies on essential items were seen as a mechanism for distributing the portion of the country's oil income that actually made it to the government coffers. The removal of fuel subsidies and the pending removal of basic food subsidies will ensure that even less of Yemen's oil wealth directly benefits its population.
The July 20 demonstrations and the ensuing violence were a manifestation of long-festering frustrations over persistent poverty, growing inequality, corruption, new taxes and the rising cost of living. The removal of subsidies is highly compatible with Yemen's pending WTO membership, the World Bank-IMF economic development mantra, and the policies of Yemen's more powerful trade partners.
However, exactly what Yemen will be producing, trading and eating in this new "reformed" and "liberalised" economy is a question that does not seem to have been posed, let alone answered. Like all religions, the neoliberal economic doctrine that the government of Yemen is pursuing requires unquestioned faith and a blinkered view of history.
From 91×ÔÅÄÂÛ̳ Weekly, July 27, 2005.
Visit the