Economic talks between Yemen’s internationally recognized government and the Houthis have stalled after months of preparations, a senior government official told Almasdar Online. 

The official, who spoke on condition of anonymity, said the government delegation was ready to participate in UN-sponsored talks in Amman, Jordan, scheduled to start on Wednesday, but is unable to move forward due to the Houthis' intransigence.

While the talks haven’t been cancelled, it’s unclear whether they will take place on the originally scheduled date or at a later time.

The official accused the Houthis of deliberately thwarting any economic settlements that focus on distribution of Hodeidah port revenues to pay state employees’ salaries.

In the run up to the scheduled talks, a Houthi ban on new banknotes issued by President Abdrabbuh Mansour Hadi’s government has further exacerbated various crises in the banking sector and created further division in financial institutions.

The talks are supposed to include measures to unite the warring branches of the Central Bank of Yemen under a united leadership. 

Since September 2016, the central bank has been split along the conflict’s battle lines between Hadi’s government in the interim capital in Aden and Houthi-held Sana’a. The talks are supposed to help unify the leadership, while at the same time guaranteeing neutrality and independence for both governments in exchange for the Houthis lifting their ban on the new banknotes. 

The talks are also designed to highlight a mechanism to prevent an environmental disaster by agreeing to empty the Safer floating storage and offloading (FSO) terminal near Ras Isa port, which has held 1.7 million barrels of crude oil since 2015. 

UN Special Envoy to Yemen Martin Griffiths is seeking to introduce a plan that includes payment of state employees’ salaries in Houthi-controlled areas using the fees collected from Hodeidah port.

The last UN-sponsored economic talks between the Yemeni government and the Houthis, which were held in Amman in May 2019, failed to reach an agreement on revenues from the port of Hodeidah and the sale of oil that has been held in the nearby Ras Isa export terminal.

The overall aim of the UN-sponsored initiative is to achieve an economic settlement that will end divisions in the financial and banking system by unifying the work of the central bank. In theory, the success of the economic settlement would pave the way for a political settlement, which would include an end to the war and the formation of a national coalition government with all parties, including the Houthis, according to a UN envoy briefing at the Security Council last week. 

Last week, the UN announced the signing of a prisoner exchange agreement between the government and the Houthis, after a week of talks in Amman. A joint statement from the office of the UN envoy and the International Committee of the Red Cross (ICRC) said that representatives of the parties to the conflict immediately began to exchange information for the next exchange as a first step toward fulfilling the parties' obligations to release all prisoners and detainees.