Houthi appetite for conflict comes at a cost to Yemen

The country’s humanitarian crisis will worsen if, as expected, the US imposes a terrorist designation on the militants

Taher Mohammed knows all about the Houthis’ appetite for conflict. For eight years, he and his family hunkered down as the Yemeni rebels laid siege to their city of Taiz while battling forces loyal to the country’s ousted government.

The former factory worker regarded the Iran-backed group as the aggressors in the civil war, during which hundreds of thousands of people lost their lives due to fighting and disease, while millions more were pushed deeper into poverty.

Now Yemen is engulfed in fresh turmoil that has pitted the Houthis against the US and its allies, who responded to the rebels’ attacks on shipping in the Red Sea with air strikes and sanctions. This time, however, Mohammed “strongly supports” the Houthis’ actions and lauds the militants for taking a stand against Israel’s war in Gaza.

“The coming months will be difficult in Yemen because the US and UK are against us, but that’s fine. The most important thing is that we support our brothers in Gaza,” Mohammed said.


Yet even as the Houthis bask in their new-found popularity across the Arab world, their intervention in the Israel-Hamas conflict and the military response raises the stakes for Yemen and jeopardises a tentative peace process that had brought a period of relative calm.

Businesspeople and aid agencies also warn that a US terrorist designation on the Houthis, due to come into effect on Friday, as well as higher shipping costs resulting from the rebels’ attacks, threaten to worsen Yemen’s humanitarian crisis by impeding the delivery of vital goods.

There are also fears about the durability of a fragile truce agreed in 2022 that gave Yemenis some respite from the war that erupted a decade ago when the Houthis seized the capital Sanaa and ousted the government.

Before the Israel-Hamas conflict began in October, the Houthis and Saudi Arabia, which led the coalition against the rebels, were on the verge of sealing a deal that mediators hoped would inch the warring parties closer to a more permanent ceasefire to end the conflict.

It included a commitment from Riyadh to pay public sector salaries for up to 12 months in Houthi-controlled north Yemen, where civil servants have not received wages for years. The proposed payment was the main incentive for the Houthis, and would have helped to alleviate some of the biting poverty in areas under their control.

As recently as December, UN envoy to Yemen Hans Grundberg lauded the “significant step” taken by all parties over the peace process. But a month later, as the US increased air strikes and the rebels continued to attack shipping, Grundberg expressed concern about “recent developments” and stressed the need to “safeguard the progress of peace efforts”.

Saudi Arabia, which is keen to extricate itself from Yemen, avoided joining the US-led coalition against the Houthis and reiterated its commitment to the peace process in meetings with US and UN envoys last week.

But a further complication stems from the US designation of the Houthis as a Specially Designated Global Terrorist group, which analysts say will make it virtually impossible for Saudi Arabia to pay salaries in the Houthi areas.

Rafat Al-Akhali, an analyst and former Yemeni minister, said Saudi Arabia did not want to jeopardise the peace process, but that “it seems highly unlikely that Riyadh can proceed with paying over $100 million a month to the Houthis if they become designated as a terrorist organisation.”

The US move could also have implications for businesses operating in Yemen, which relies on imports for 90 per cent of its food needs. Some take solace from the fact that Washington has pledged to provide licences for transactions related to food, medicine, fuel, remittances and ports operations to mitigate the impact of the sanction on long-suffering Yemeni citizens.

But aid groups have warned of the potential dire repercussions for Yemen, where more than 21 million people, two-thirds of the population, require humanitarian aid. Rising shipping costs have already hit shipments to Yemen, with imports via the Red Sea down 17 per cent in December on a month-on-month basis, according to the UN’s World Food Programme.

Abdulwasea Mohammed, who works for aid agency Oxfam in Yemen, said businesses were already worried about higher prices. “They don’t think that bigger international suppliers could be convinced to deal with Yemen any more because of the [terrorist designation],” he said. “This would further complicate the existing, multilayered crisis we have.”

A manager at a Yemeni company said that price increases had not yet fed through into the costs of goods. But when they do, businesses expect challenging discussions with the Houthi authorities, who are tough in their dealings with the private sector and do not like prices going up.

“That’s going to be a difficult conversation,” the manager said.

The other fear is that the US could upgrade its designation of the Houthis to that of a Foreign Terrorist Organisation (FTO), a more serious category that allows for few, if any, exemptions.

“There is a chilling effect with what the Americans have done now, but at least we can show our bankers and suppliers overseas what’s covered [by sanctions]. With the FTO you just can’t do that,” said the manager. “Aid groups are right to be very worried, [as] an FTO would very rapidly prevent almost all commercial activity, or make it very difficult.”

A further threat to Yemen is a resumption of the conflict inside the country – either because the Houthis feel emboldened to resume their offensive or because pro-government and other factions mobilise against them.

Analysts noted that the Houthis were recruiting fighters, and pointed to activity by Yemeni factions on front lines that had gone quiet during the truce.

Hisham al-Omeisy, a Yemeni analyst, said that before the Houthis began the campaign in support of the Palestinians, “their popularity was sinking and a lot of people were disillusioned” with the repressive rule in the areas they control and dire economic conditions.

But the wave of support in Yemen and the wider region over their stance means the rebels “feel super empowered right now”, Omeisy said. “This gave them a golden opportunity to distract people ... The Houthis will now take all the woes and pin it on external forces.”

– Copyright The Financial Times Limited 2024

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