Yemen is witnessing angry demonstrations in protest at a government decision to stop subsidies on oil derivatives, doubling their prices. According to government sources, removal of the subsidies is necessary to right the national budget, but protestors describe the price rises as the “last straw”. The decision was taken during the holiday of Eid Al-Fitr, following pressure from donors and the World Bank as part of the process of economic reform. The government says the measure will save more than 700 billion YR (US$3.5 billion). Most of this money currently goes to smugglers who buy oil at the subsidised prices and then sell it at international prices. For consumers, the decision means that prices are set to double. The government says it will reduce the impact of the price hikes on ordinary people by increasing salaries and pensions, and giving cash supplements to the poor. Cash assistance will be given to 250,000 Yemenis, in addition to those already receiving such support. The US government also said this week it would help by providing US$30 million. Observers noted, however, that government pledges in Yemen can take a long time before being implemented. While the removal of subsidies aims to reduce corruption, observers warn that price increases could lead to further instability, with religious and tribal groups in the north and south already threatening separation. Houthi Shiite groups organised a large demonstration on August 4 in the capital, Sanaa, and threatened to escalate their actions if the government did not cancel its decision. Thousands of demonstrators in Sanaa, Taiz and other cities withdrew from the demonstrations, however, after Houthi supporters used their own slogans instead of slogans against the government, as previously agreed. “The Houthis wanted to exploit the demonstrations for their own interest, like the Yemen Muslim Brotherhood Al-Islah Party did in the demonstrations of 2011. But we will not keep silent,” said Bushra Maktari, a demonstration organiser. “Both of these groups are reactionary and against the modern state.” Youth and tribal groups from various cities called for more protests to put pressure on the government, though the latter says the decision to remove the subsidies was taken with the approval of all parties and was a necessary step to protect the country from economic collapse. One day before taking the decision, Yemeni President Abd Rabbuh Mansur Hadi met with former president Ali Abdallah Saleh and General Ali Muhsen in the Grand Mosque in Sanaa. It marked the first such meeting since Saleh handed over power in February 2012. Hadi said that the meeting was an important step towards national reconciliation, but many Yemenis looked at it as a return of the old regime with the same old faces. Members of the country's main parties, including the Al-Islah, Socialist and Nasserite parties, expressed their refusal to support the removal of the subsidies on social media, though none issued an official statement. They are under the threat of punishment if they are seen to be “spoiling” the transition and the implementation of the outcome of the country's national dialogue. UN experts arrived in Sanaa on August 3 to monitor the transition. Information on groups suspected of challenging the transition will be handed to a UN panel that could impose sanctions, including travel bans and the freezing of assets. The UN experts met with a group of ten ambassadors representing the countries sponsoring the transition. The ambassadors issued a joint statement expressing their support for President Hadi's call for national reconciliation and improved security and stability in Yemen.
