The crisis has exacerbated an already difficult complex situation. The 2015 Human Development Report (HDR) 2015 ranks Yemen 160^th among 188 countries and territories; which is a setback from the 154^th rank in 2014. An average of 40 per cent of the population are multi-dimensionally poor, with around 19.4 percent being severely poor. The World Bank estimates that the poverty level has doubled nationally from an average of 34.1 to 62 per cent. Poverty was already on an increasing trend between 2005 and 2014, but sharply deteriorated in 2015. In 2015, the economy of Yemen contracted by about 28 per cent of Gross Domestic Product (GDP). The decline of the hydrocarbon industry contributed further to the deterioration of the economic environment in Yemen. The latest decision by the Government to move the Yemeni Central Bank from Sana’a to Aden brings the economy at the forefront of the conflict and will further deteriorate the financial situation, particularly in Houthi and GPC-controlled parts of Yemen. The economic war of attrition risks to cause the complete collapse of basic service delivery and push the country to the brink of a famine. A case in point is the health sector. According to WHO, only 37% of hospitals remain fully functional. Institutional capacities built up over decades are eroded on daily basis making recovery and eventual reconstruction more difficult.

The escalation of the conflict, is seemingly affecting progresses made in the past two decades in terms of human development. The Preliminary Damages and Needs Assessment estimates the cost of the conflict at a (partial) total of USD19 B (USD7 B in damages and USD12 B in losses). Most of poverty alleviation projects programs associated with Social Welfare Funds (SWF), Social Fund for Development (SFD), its Labor-Intensive Work Program (LIWP)/Cash for Work (CFW) program and the Public Works Program (PWP) were suspended due to the conflict. The suspension of these programs due to lack of funding resulting from the conflict left millions of people without social protection and threw million others benefiting from associated employment and income generation schemes without income. The DNA also reports that 40 per cent of full time and 38 per cent of part time employees were laid off from manufacturing establishments. The effects of the conflict have been catastrophic to the private sector. The UNDP Business Survey Report estimates that over a quarter of all firms suspended their operations, including 35 per cent of the service sector, 29 per cent the industrial enterprises and 20 per cent of trading companies. This swelled further the already critical unemployment rate in the country. Combined with effects of conflicts in sectors (social, agriculture, fishery and livestock, trade and industry, banking system, etc.) worsened the humanitarian crisis.

Objectives of the EECR Cluster

An ER cluster has been activated in 2012. It has been recently re-named 'Emergency Employment and Community Rehabilitation (EECR) and aims at strengthening the resilience of affected families and communities through the provision of emergency and alternative income opportunities, protection and restoration of livelihoods and support to the rebuilding of communities and paving the way for longer term stabilization, peacebuilding and development. The cluster also supports the preservation and revitalization of services and institutions critical to the humanitarian action.