Yemen struggles to recover lost revenues amid corruption and smuggling

The internationally recognized Yemeni government is struggling to recover lost public revenues and unify institutional accounts due to widespread corruption and smuggling. These issues have reached levels that exceed the government's current capacity to contain them, creating tension with international donors who are monitoring reform progress.

The Presidential Leadership Council has announced comprehensive measures to combat smuggling as part of a broader reform effort to protect sovereign outlets and undermine the war economy, which serves as a funding source for the Houthis. The Higher Committee for Combating Smuggling is working to implement practical steps, including tightening control over land and sea ports, closing illegal crossings, and increasing oversight of goods movement.

Economic experts note that corruption has become deeply embedded in the state's vital sectors, particularly the military and security sectors. This system of corruption is often supported by violence and weapons, manifesting through practices such as phantom armies, double salaries, and the smuggling of fuel and arms. Experts suggest that regaining control over public revenues depends on the political will to confront these entrenched networks.