How long can Saudi Arabia afford Yemen war?
The war in Yemen may prove just as dangerously costly for Saudi Arabia, where an economic downturn threatens its political system, as for Yemen, whose economy can only start to be revived when it ends.
During the first Gulf War (1990-1991), more than 800,000 Yemenis working in Saudi Arabia and Kuwait were forced to leave their host countries because Yemen did not provide political support to the international intervention against Saddam Hussein’s Iraq. Saudi Arabia also suspended all economic assistance to Yemen, aid that was resumed a decade later in 2000.
Saudi Arabia’s decision to minimize economic cooperation with Yemen as a result of what has been perceived as Yemen’s support of Saddam’s invasion of Kuwait reflects a long history of political animosity; this is a history that continues until our present day.
On March 26, 2015, 25 years after the first Gulf War, Saudi Arabia launched a war against Yemen that is proving to have detrimental effects on its economy much like the political and economic repercussions of the massive return of Yemeni workers in 1991.
The unification of two Yemeni states (the north Yemen Arab Republic and the south People’s Democratic Republic of Yemen) resulted in the formation of the Republic of Yemen three months prior to Saddam’s invasion of Kuwait. The newly formed country's economy inherited many structural problems and massive debt from the former two states.
