Saudi suspends aid to Yemen after Houthi takeover

Yemen has often relied on Riyadh to finance everything from government salaries to welfare payments, but soon after Houthi fighters took over the capital in September, Saudi Arabia promptly suspended much of that aid.

SANAA // Saudi Arabia has suspended most of its financial aid to Yemen because of the growing political power of Shiite Houthi fighters friendly with Iran.
"The Saudis' approach is that 'we'll step back and let Yemen see the consequences of their choice of the Houthis and eventually they'll come to their senses'," said a senior Yemeni government official.
Yemen, which is battling an Al Qaeda insurgency, a southern secessionist movement, endemic corruption and poor governance, has often relied on Riyadh to finance everything from government salaries to welfare payments.
But soon after Houthi fighters took over the capital in September, Saudi Arabia promptly suspended much of that aid, concerned the rebels would use their military muscle to dominate domestic politics and project Iran's influence.
The Saudis also fear the movement's strong emphasis on Zaidi Shiite rights will aggravate sectarian tensions that Al Qaeda could exploit to carve out more space in Sunni areas and launch attacks against the kingdom.
A deal signed in September between political parties and the Houthis called for the formation of a unity government followed by the Houthis' withdrawal from the capital. But even though the new government has been formed, Houthi fighters continue to man checkpoints around the city and guard many state institutions.
"The Saudis have conditioned any aid on the implementation of the [deal]. The Houthis have to leave before they pay," the Yemeni government official said.
Despite the aid suspension, Saudi Arabia this week announced US$54 million (Dh198m) in food relief for 45,000 families. A western source said the Saudis were also still funding some development and infrastructure projects, but said had stopped making other essential payments.
The Yemeni official said the Saudis last paid $450m for social security payments, as well as $950m worth of fuel products in the summer, before the fall of Sanaa.
Riyadh then refused to pay $500m earmarked for military purposes, including the purchase of ammunition and spare parts for an ageing air fleet, the official said.
A western diplomatic source in Sanaa also confirmed Saudi aid had been suspended. "The Saudis see everything through the prism of Iran," the source said.
In early November, "the Saudis have said this to us, that the money has stopped coming in", said the source. The Saudis said that they could not be seen to be "putting money into Yemen while it may be used by the Houthis".
Finance ministry officials in Riyadh did not respond to requests for comment.
A Saudi foreign ministry spokesman said all financial assistance was handled through the finance ministry and so he was unable to comment.
Yemen has struggled to regain stability since 2011 protests that eventually unseated veteran ruler Ali Abdullah Saleh. The country is one of the poorest in the Arab world and more than half of the 25 million population is "food insecure".
Sanaa's finances have deteriorated rapidly this year as attacks on oil pipelines by tribesmen and militants deprived the state of key revenue. The government's fight against Al Qaeda militants and other rebels has also drained its budget.
The West is concerned that Riyadh's approach of withholding aid to Yemen's fledgling government may backfire and push the country towards more instability.
* Reuters