The current escalation between Saudi Arabia and the Houthis is weighing heavily on the economy. Indicators and figures show that the confrontation’s adverse effects are widening, extending beyond military and security concerns to economic activity across a range of sectors. Expatriate workers are at the centre of these repercussions.
Yemenis are among the groups most likely to be affected, given their particularly sensitive position. They come from a country where the Houthis are a party to the conflict, while living and working in Saudi Arabia, which has become a direct target of Houthi attacks. This raises concerns that, if the confrontation expands and continues, the pressures it creates could impose economic or legal burdens on Yemeni workers, affecting their circumstances and livelihoods.
Yemenis living in Saudi Arabia are therefore following developments hour by hour. For them, the issue concerns both their host country and the labour market on which they depend for an income that may become vulnerable to instability. The repercussions also extend to Yemen, where hundreds of thousands of families depend, to varying degrees, on remittances from workers in Saudi Arabia.
Saudi Arabia: Home to the largest Yemeni community abroad
Saudi Arabia hosts the largest Yemeni community abroad: more than 1.8 million people, including approximately 1.334 million men and 469,000 women, according to its 2022 census data. These figures do not, however, show precisely how many Yemeni residents are in the workforce. They include people of different ages and social backgrounds, as well as family members who are not active in the labour market.
Yemenis live in several regions of Saudi Arabia. Their presence in the south, particularly Asir and surrounding areas, is partly linked to geographical proximity and historical and social ties across the border. Large numbers have also settled in major urban and economic centres, notably Riyadh, Jeddah and cities in the Eastern Province. They work across multiple sectors, particularly construction, maintenance, workshops, wholesale and retail trade, transport and agriculture, alongside a wide range of services and other professions.
For decades, many Yemenis have regarded Saudi Arabia as more than a temporary place to live or a country in which to find work and earn a living. Some Yemeni families have lived there for many years, with generations growing up in its cities and communities. Years of war and unrest in Yemen have also reinforced Saudi Arabia’s role for some as a place of stability and safety, as well as a major source of income.
Over these years of residence, an extensive network of social, humanitarian and economic ties and interests has developed. For a large part of the Yemeni community, the relationship with Saudi society is deeper and more complex than the conventional relationship between a state and its expatriate workers.
Beyond employment, these connections encompass families, kinship, marriages, friendships, business ventures and interests built up over many years. Any abrupt change in Yemenis’ circumstances in Saudi Arabia therefore reaches beyond employment and residency to affect a social fabric formed over decades.
The war and Yemeni livelihoods
Yemenis, like other expatriate communities and workers in Saudi Arabia, have undoubtedly been affected by the current military confrontation. Its effects have extended beyond the battlefield, putting pressure on vital sectors of the Saudi economy, particularly energy and aviation. Both play a substantial role in economic activity and in sustaining its usual pace.
Yemeni workers are increasingly vulnerable in this context because some work in trades, services, commerce, construction, maintenance and transport. These sectors depend directly on market activity, consumption and movement. They therefore become more vulnerable the longer the escalation lasts, or if air travel and transport face greater disruption, working hours are reduced, or some organisations switch to remote working.
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🔴 ما الخيارات المتبقية أمام #السعودية وأي رد قد يفتح أبواب تصعيد إقليمي؟
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— (@NoonPost) October 12, 2026
The Yemeni economy is also in crisis
The crisis extends beyond Yemeni workers in Saudi Arabia to their families and relatives in Yemen. For hundreds of thousands of households, remittances from abroad are a major source of income for food, housing, medical treatment, education and other daily needs. In some cases, they may provide the family’s main or only income.
Any disruption a Yemeni worker faces in Saudi Arabia, whether losing a job, working fewer hours or earning less, can therefore quickly affect relatives in Yemen through a fall in remittances. A worker’s crisis in Saudi Arabia becomes a crisis for their family’s livelihood in Yemen, where the economy is already fragile, poverty is widespread, and job opportunities and incomes are declining.
Remittances from Yemenis abroad are an important source of income for the Yemeni economy and a social safety net for millions of people. Estimates of their total value vary, however, because of limited data and the large volume transferred through informal channels. Some estimates put remittances at about $6.2 billion in 2024, compared with about $3.7 billion in 2014. Broader estimates put the 2024 figure at approximately $7.4 billion, equivalent to about 38 per cent of GDP, according to those estimates.
There are no recent official statistics detailing the value of remittances from Saudi Arabia alone. Nevertheless, the country remains one of the most important destinations for Yemeni expatriates and a potentially major source of these transfers. Its position as home to the largest Yemeni community abroad heightens the economic and humanitarian risks.
What about residency and work permits?
While Yemenis in Saudi Arabia were cautiously awaiting the outcome of the latest escalation and any measures that might affect their circumstances, events took an unexpected turn. The Saudi government announced procedures to regularise the status of Yemenis living in the country illegally, starting on 11 October. Those eligible were given a two-month grace period to regularise their status under the specified rules.
The measures cover two main categories: Yemeni workers whose residency permits have expired and those reported absent from work, provided they hold a valid Yemeni travel document. They offer some Yemenis without legal status an opportunity to regain it and continue working lawfully. The move recalls the 2015 initiative, when Saudi Arabia allowed large numbers of Yemenis to regularise their status, benefiting approximately half a million people.
The timing of the move, coinciding with the escalating confrontation with the Houthis, has prompted interpretations that go beyond its stated legal and procedural purpose. It raises questions about the political, security and economic implications the policy may have in the current circumstances.
One interpretation is that the move seeks to bring as many Yemenis without legal status as possible out of a legal grey area and into the formal employment and residency systems. A worker with a formal contract, a known employer, current residency documents and up-to-date records is more visible within the administrative system than someone whose residency permit has expired or whose employment status is irregular.
Although the stated purpose of regularisation is to regulate the labour market and protect the parties to employment contracts, it also provides administrative and security benefits. These include reducing the number of people living in the country without legal status and strengthening the state’s ability to manage its resident population. This takes on additional importance during periods of military and security tension.
Officially…
Regularizing the status of Yemeni nationals in the Kingdom:
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- Under the directive of the Custodian of the Two Holy Mosques and in response to a request from the Chairman of the Yemeni Presidential Leadership Council, Rashad Al-Alimi.
- Initiation of procedures to regularize the status of all Yemenis currently in the Kingdom through irregular channels.
- Possession of a Yemeni passport is a prerequisite for benefiting from this regularization process.
- The start date and guidelines for the regularization procedures will be announced via the official accounts of the General Directorate of Passports and relevant authorities.
- The regularization process is being conducted through cooperation between the Ministry of Interior, the Ministry of Foreign Affairs, the Ministry of Human Resources, and SDAIA.
The move also has political significance of equal importance. Riyadh appears keen to distinguish between its dispute and confrontation with the Houthis and its treatment of Yemenis living in Saudi Arabia. Although it classifies the Houthis as a hostile group and faces military attacks from them, it has not treated the Yemeni community as an extension of the group or held it responsible for the consequences of the confrontation. Instead, it has offered an opportunity to regularise the status of people at risk of breaching regulations or losing their legal standing.
This can be interpreted as an implicit political message: Saudi Arabia’s confrontation targets the Houthis as a military and political entity, rather than Yemenis as a people or a community living within its borders. That distinction is particularly important for Riyadh, which has extensive political, economic and social ties with Yemen and supports Yemeni forces opposed to the Houthis.
A third interpretation is that the decision forms part of efforts to regulate the labour market and reduce the number of workers without legal status, rather than allowing their circumstances to deteriorate into a greater administrative, security and economic burden. Offering a route to legal status gives the authorities and the labour market scope to accommodate people able to work lawfully, rather than automatically pushing them towards breaches of the law or deportation.
There is also an intertwined political and humanitarian dimension. Deporting large numbers of Yemenis while their country faces military escalation and extremely difficult economic and humanitarian conditions could intensify pressures in Yemen. It could increase the number of returnees seeking scarce jobs or cut off income for families dependent on remittances from relatives in Saudi Arabia.
Sweeping measures against Yemenis at the height of the confrontation with the Houthis could also have allowed Riyadh’s adversaries to exploit the situation politically and in the media, while fuelling resentment towards Saudi Arabia among sections of Yemeni society. The regularisation policy can therefore be seen as a means of helping Riyadh separate its management of the military confrontation with the Houthis from its relationship with the wider Yemeni public.
The move to regularise Yemenis’ status thus appears to have several dimensions. On the surface, it is an administrative measure concerning employment and residency, but its timing carries broader political, security and humanitarian implications. Even as Riyadh escalates its confrontation with the Houthis, it appears keen to prevent that confrontation from becoming a crisis with Yemenis living in Saudi Arabia, maintaining a distinction between its military adversary and the Yemeni community, with its social and economic interests.
