The International Monetary Fund(IMF) urged Yemen's internationally-recognized government on Friday to extend its payments of public sector salaries to the whole country to help the war-shattered economy to recover.
The IMF praised the government, based in the southern port of Aden after being ousted from the capital Sana'a by the Iran-backed Houthis, for already making some payments to workers and paying all pensions in areas of Yemen outside its own control.
"We urge the government to pay all civil service salaries throughout the country," the Fund said in a statement after an IMF team met Yemeni officials and private sector participants in Amman, Jordan on July 10-18.
Yemen has been dividedfollowing a 4-year bloody conflictbetween the Yemeni government's forces, backed by a Saudi-led coalition, and the Iranian-backed Houthi rebels who ousted the government in 2014.
The conflict hastriggered what the UN calls the world's worst humanitarian crisis, with most of the population in need for a type of humanitarian aid and immediate protection.
To further worsen the living conditions of ordinary Yemenis, civil servant salaries have been unpaid since September 2016 following the dislocation of the Central Bank of Yemen (CBY) under official decree.
After President AbdRabbu Mansour Hadi decided to move the CBY in September 2016, the banking sector has failed in mess, with Houthis rejecting the move leading to two central banks in the Arab poorest country.
But the government began paying salaries and pensions to Yemenis at least in some Houthi-controlled areas early this year and the IMF urged it to continue this practice and extend the payments to all parts of the country.
In its statement, the IMF said economic growth had "moved back into positive territory, albeit now from a much lower per capita income level" after sharp declines in 2014-17.
"Donor financing and increased hydrocarbon receipts were key factors in quelling last year's dramatic volatility in the exchange rate and food prices, and basic food imports increased toward prewar levels, supported also by humanitarian aid," it said.
The IMF also called for further donor financing, spending restraint by the government and improved revenue collection.
The war caused runaway inflation and restricted the flow of goods into and around Yemen, pushing millions into hunger and joblessness and crippling public services such as health and education.
The Houthis control the main population centers including Sana'a.
The conflict has also split the central bank into two - one based in Aden under government control and one in Sana'a under Houthi control - hindering public sector salary payments and imports.