UN envoy calls for economic rescue plan for Yemen

KUWAIT CITY — The UN special envoy to Yemen on Thursday called for an economic rescue plan for the war-battered and impoverished Arab nation.

"I propose the establishment of an economic rescue authority as soon as possible to save the Yemeni economy from further deterioration," Ismail Ould Cheikh Ahmed told a press conference.

He said the body would comprise experts proposed by Yemen's warring parties which are locked in five-week-old peace talks in Kuwait.

It would be consultative in nature and have the full backing of the United Nations and its agencies as well as the World Bank among others, Ould Cheikh Ahmed said.

"The Yemeni economy requires an urgent intervention... Economic deterioration is expected to boost inflation and price rises," he said.

Even before the war escalated in 2015, Yemen was one of the poorest nations on earth with unemployment of more than 40 per cent and over half its 25-million population living under the poverty line.

Ould Cheikh Ahmed said the peace talks had started discussing "security arrangements and specific details" regarding withdrawals and the surrender of weapons.

On Wednesday, he said the two sides were moving "towards a general understanding that encompasses the expectations and visions of the parties".

The main sticking point has been reaching agreement on a transitional government.

Shiite Huthi rebels and their allies are demanding a unity government, while the government delegation insists that President Abedrabbo Mansour Hadi's legitimacy be respected.

A Western diplomat told AFP in Kuwait that the UN envoy had proposed a "national salvation government" that would be "consensual and inclusive".