Yemen Govt and Houthis reach economic agreement with Saudi mediation

Yemen's internationally recognized government and the Houthi rebels have reached a significant agreement to lift economic sanctions and increase Yemenia Airways flights from Houthi-held Sanaa, facilitated by Saudi Arabia.

The UN’s special envoy for Yemen, Hans Grundberg, announced that both parties will ease economic hostilities by reversing recent actions taken against banks in each other's territories and committing to avoid such measures in the future, Arab News reported.

The agreement includes increasing Yemenia’s flights from Sanaa to Jordan from one to three per day and introducing daily flights to Cairo and India. Discussions on administrative, technological, and budgetary issues related to the airline are also planned.

Moreover, talks will focus on addressing humanitarian and economic challenges under a UN-proposed peace plan known as “the road map.” Grundberg emphasized the UN's readiness to support the implementation of these measures and acknowledged Saudi Arabia's crucial role in facilitating the agreement.

The economic dispute had escalated when the government’s Central Bank sanctioned six banks in Houthi-controlled Sanaa, withdrawing their licenses after they refused to relocate to government stronghold Aden. The Central Bank withdrew pre-2016 banknotes used in Houthi areas and shut down currency-exchange companies. This followed the Houthis minting a new currency, viewed by the government as an attempt to establish an autonomous economy.

In response, the Houthis seized four Yemenia aircraft, announced plans to run the airline from Sanaa, and threatened to resume full-scale conflict. They also attacked oil terminals in government-controlled provinces, halting oil exports and banning the import of goods and gas through government-controlled areas.

The Yemeni government eased economic sanctions to mitigate the crisis in Houthi-controlled regions, in response to business community requests and international mediation efforts. While some critics argue the government conceded too much, supporters believe the agreement successfully brought the Houthis to the negotiating table for economic talks.