Local councils are among Yemen’s most important state institutions. Responsible for providing basic public services to millions of Yemenis, local councils represent official governance and the Yemeni state for vast swathes of the population. The intensification of the conflict since March 2015, however, has undermined the councils’ ability to operate effectively in most areas of the country. The councils depend heavily on central government financing and, to a lesser degree, local sources of revenue such as taxes on basic utilities and telephone usage. As such, Yemen’s precipitous economic collapse, the subsequent decline in government revenues and the incapacitation of the Central Bank of Yemen (CBY) have compromised local councils’ ability to operate. The nonpayment of civil servant salaries and Yemenis’ decreased purchasing power contribute to Yemen’s alarming humanitarian crisis while limiting local councils’ ability to extract local sources of revenue.

Generally speaking, a shortage of revenues has left local councils across Yemen unable to operate anywhere near to their full capacity. The most obvious exceptions to this rule can be found in Marib and Hadramawt governorates, which enjoy relative stability and comparatively greater economic resources. These local councils are functioning at a much higher level than their counterparts. Some local councils, such as those in Ibb and Hadramawt governorates, have also received donations from Yemeni businessmen that have helped to continue operations to some extent.

The increased violence and instability since March 2015 have also largely overwhelmed local police and the judiciary — institutions that previously provided a degree of local order. As a result, local councils have been afforded little protection in their operations. As the state’s ability to provide either security or public services has eroded, civilian trust in either local councils or the state itself has fallen. In many areas this absence of effective official governance has created fertile ground for non-state actors to assert their authority, including over local councils. The autonomy and maneuverability of local councils in Houthi-controlled areas is restricted by the Houthis’ adoption and implementation of a centralized mode of governance, in which local-level processes such as the distribution of revenues or humanitarian aid are controlled by the Houthis at the center. In the areas under Houthi control, Houthi supporters closely monitor local council activity.

Although interference in local councils is arguably more consistent in Houthi-controlled areas, local councils also face interference elsewhere. Aden is a prime example: local councils in the southern coastal city are vulnerable to interference from competing armed militias that form part of a broader power struggle between southern secessionists and the internationally recognized Yemeni government.

Given the central role that local councils previously played in providing public services to their communities, the currently reduced capacity of local councils is cause for much concern as the conflict rages on and Yemen’s economic and humanitarian crises deepen. Although the majority of local councils in Yemen are not fully functional, local councils remain important instruments for the communities they represent, particularly in coordinating humanitarian relief efforts with local and international non-governmental organizations. Throughout the conflict, local council members have also been directly involved in local mediation and dispute settlement. They have leveraged their deep knowledge of complex local socio-political, economic and tribal dynamics to coordinate ceasefires, prisoner exchanges, and the safe passage of essential commodities and humanitarian aid across frontlines. Thus, irrespective of how the conflict progresses, it is imperative that local, regional and international actors not only seek to prevent local governance structures from collapsing, but also plan to enhance the capacities of local councils in post-conflict scenarios.

Prior to the onset and intensification of the current conflict, several parties had advocated in favor of a new, decentralized model of governance in Yemen. For example, such calls were made during the National Dialogue Conference. The conflict has inadvertently set a process of decentralization/regionalization in motion, whereby Yemen has become increasingly fragmented; local interests, local demands, and local actors are in the ascendancy. In the absence of central state authority, a number of effective local, self-governance models have emerged, notably in Marib and Hadramawt governorates. At some stage a new system of governance will arguably need to be drawn up to reflect the new realities on the ground. Local councils are among the best-equipped and best-established institutions to support such a shift away from the previous centralized model.

Key Recommendations

• Regional and international stakeholders should coordinate efforts to restore the Central Bank of Yemen to a fully functioning unified national entity, able to facilitate the payment of public sector salaries and the operational costs of local councils regardless of the council’s location or leadership.
• The international community should provide technical assistance and take constructive measures to develop a mechanism between the warring parties to allow for the nationwide collection and redistribution of state revenues — such as taxes and customs — with a view to re-establishing public services in all areas.
• The internationally recognized Yemeni government should allocate additional funding for local councils. The Social Fund for Development (SFD) should be used as an intermediary institution to channel allocated revenues to local authorities and jointly to implement projects re-establishing the delivery of public services.
• International donors and international non-governmental organizations (INGOs) should include local councils as key players in channeling financial support to, and empowering them in liaising with, other local actors. Such inclusion would leverage local councils’ deep understanding of local contexts, increase the councils’ legitimacy and encourage communities to unite under formal government structures. Financial support to local councils should also include an oversight mechanism to avoid the misappropriation of funds.
• The Yemeni government should issue temporary regulatory instructions to officially devolve more powers to the governorate and district level. These instructions should:
  • authorize local councils to access and develop sustainable resources at the local level and spend the associated revenues on their needs;
  • allocate a share of sovereign resources to each governorate based on transparent financing criteria;
  • ensure local councils have sufficient administrative powers to supervise service provision, govern effectively and deter local patronage networks;
  • allow local councils to nominate leaders to formal positions in local security services and supervise the performance of these services.
• International stakeholders should support local capacity-building programs to empower local judiciary and professionalize local security services.
• Regional stakeholders should refrain from intervening in the activities of local judiciary and security services, or creating parallel competing entities that would undermine state legitimacy.
• All stakeholders should promote bottom-up, inclusive forms of local governance to curb the appeal of non-state actors.
• A comprehensive assessment should be undertaken to identify the groups and individuals in control at both the governorate and district levels — including evaluating their local support base and ability to provide public services — to inform and develop strategies for the restoration of state functions post-conflict.