Instead of weakening the financial and military capabilities of the Houthi militia and eliminating their threat, some parties are playing an ambiguous role in enhancing them and helping them to survive.

---

Farida Ahmed (South24)

---

Nine years after the outbreak of the conflict in Yemen following the Houthi coup in 2014, there were expectations that the Yemeni parties would arrive at a peaceful solution to end the war and begin a comprehensive political settlement. However, during the negotiations, the right-wing religious groups went further as they laid down impossible preconditions, which the international and regional parties have acquiesced to. This has encouraged the Iran-backed Houthis to engage in a war beyond their borders by launching indiscriminate military operations. 

Nearly one month ago, the Houthi militia began launching ballistic missile and drone attacks across the Red Sea at alleged Israeli targets. Although all Houthi attacks aimed at southern Israel failed, the militia were able to hijack ’Galaxy Leader‘ (a ship owned by an Israeli businessman) on November 19, 2023 and dragged it to the coast of Al-Hodeidah, on the Red Sea. They also attacked three other commercial vessels, owned by multinational companies, on December 3, near the critical Bab al-Mandab Strait, that connects the Red Sea to the Gulf of Aden.

By exploiting the bloody Israeli war against Gaza, the Houthis apparently aim to win Arab public sympathy and thereby whitewash the violations of their militia in Yemen. In addition, they seek to achieve strategic Iranian goals in the maritime straits in the region as part of the conflict. The United States openly accuses Iran of supporting these incidents. 

The Houthi’s ballistic missile and drone attacks, including on commercial shipping, come at a time when concerted efforts are required to save Yemen from a war that has exhausted it and drained its strength and people. The regional community needs to be cognizant of the dangerous repercussions of such operations on Yemen and the region. 

It is important to focus on the parties that control the southern coasts of the Red Sea, the Bab al-Mandab Strait, and the Gulf of Aden. With their actions over the past days, the Houthis have established their ability to stir chaos in the region. The international community has become more concerned about this, especially the United States which is considering re-designating the Iran-backed Houthi rebels in Yemen as a terrorist organization, according to White House national security spokesperson John Kirby. 

Along with the security concerns and the accompanying threats, there is economic fear that the spillover of the Israel-Hamas war in the Red Sea will lead to a rise in oil prices and shipping insurance costs in the region that is vital for global trade. Furthermore, the growing threats would also lead to stoppage of a large part of the commodity supply chains. ’The Group of Seven’ (G7) nations have also called on the Houthis to “immediately cease their attacks on civilians and their threats to International shipping lanes and commercial vessels”.

It is important to state that securing an area as vital as the Red Sea and the Bab al-Mandab Strait, security-wise, militarily, and economically, requires eliminating the main threat to the stability of the region that overlooks the Red Sea, with Egypt and Saudi Arabia most affected. The Iran-backed Houthi threats affect the international crossings -- the Bab al-Mandab Strait and the Suez Canal -- which are considered the main arteries of global trade. Earlier too, the Houthis had carried out four drone attacks in October and November 2022 on oil ports in Hadramout and Shabwa (South Yemen). This led to the cessation of the Yemeni government’s oil exports, which continues even today. The Houthis had then warned all international shipping companies of bombing any oil ships heading toward the South Yemen ports. This in effect means that the Houthi threat still exists and may entangle more international players if it doesn’t stop.

Agreements that strengthen the Houthis

Despite all the developments, regional and international parties still adopt a policy of giving political concessions to the Houthis, especially Saudi Arabia. In April 2023, the latter came out with a roadmap draft following direct talks in Sanaa between a Saudi delegation and the Houthis, with Omani mediation. The roadmap includes a proposal that divides the path of the negotiations into three phases over two years. The first six months includes measures for building trust, such as paying the salaries based on the 2014 payrolls of the employees in the Houthi areas from the oil and gas revenues. It also includes steps such as lifting the restrictions imposed on land, sea, and air crossings, merging the Central Bank, and expelling the Saudi-led Arab Coalition forces from Yemen. Some of these points have been heavily criticized, especially by the Southern Transitional Council (STC), which has always refused to give the Iran-backed Houthis access to the oil and gas revenues of South Yemen. STC argues that accepting this proposal would enhance Iran’s clout in the Southern areas and along the coasts overlooking the Bab al-Mandab Strait and the Gulf of Aden.

Although Saudi Arabia didn’t deliver the written form of the roadmap to the Presidential Leadership Council (PLC-Yemen’s top executive political body), according to information obtained by ’South24 Center‘, the eight PLC members agreed on its main points without discussing the details. On the other hand, the Houthis have raised the ceiling of their preconditions, in effect blocking an agreement which was likely to be achieved, according to some Yemeni diplomats.

To achieve a safe exit out of the Yemeni quagmire, Riyadh has sought to facilitate overcoming the obstacles for the Houthis and to adapt to their preconditions. It played a mediation role during the talks. Riyadh has even marginalized the PLC from the whole process even though it represents the internationally-recognized government. Naturally, the anti-Houthi parties in Yemen have felt uncomfortable, although some of their leaders went along with many of the proposals of their Saudi funders. Submitting to the Houthi demands regarding the oil revenues while ignoring the South Yemen issue over all phases of the political process would undermine the Saudi efforts.

Sources told ’South24 Center‘ that Saudi Arabia has sharply pressured the PLC to accept the Houthi precondition related to paying the employees’ salaries in the areas under their control from the IRG (Internationally Recognized Government of Yemen) oil revenues. The roadmap hasn’t identified the oil-rich areas in Yemen that would cover the problem of paying the Houthi salaries. However, it is a known fact that 80% of Yemen’s oil and gas are pumped from Hadramout and Shabwa in South Yemen. 

On November 28, 2023, the Hadramout National Council (HNC) declared it ‘Presidium’, comprising of 23 members. Saudi Arabia backed the establishment of the HNC in June 2023, through which Riyadh has sought to confront the STC’s stance toward some articles of the roadmap. Saudi Arabia will use the presence of Hadramis within the HNC, especially those who hold Saudi citizenship, to make them accept the Houthi preconditions. This comes amid the fact that Hadramout produces the largest share of oil in the country. In view of this, Saudi Arabia will soon seek to engage HNC in the Riyadh-led negotiation process with the Houthis. 

Dangerous repercussions

Giving the Houthis part of the oil and gas revenues in the IRG areas, whether in South Yemen or Marib, will lead to a financial deficit for the current government. The consequences will be as adverse as that following the cessation of oil exports due to the Houthi drone attacks against the Southern ports last year. Economic sources told ’South24 Center‘ that “the size of the oil revenues may barely cover the budget required to pay these salaries, especially in view of the difference in the price of the riyal between Sanaa and Aden”. This means that the entire lot of salaries which will be sent to Sanaa will exceed by 1000% those paid in South Yemen. This is because the number of employees within the Houthi areas is four times bigger than those in the IRG areas. Moreover, the riyal exchange rate in Sanaa is nearly three times bigger than in Aden. 

Undoubtedly, the failure of the IRG to present an attractive model in its areas in comparison to the Houthi ones will intensify its shortcomings and failures, especially if it pays the employees’ salaries in the militias’ areas. This may lead to public discontent, especially in South Yemen. Moreover, employees in the Houthi areas are to be paid salaries that will be 300-350% higher than of their counterparts in the IRG areas. This measure will likely further reduce the value of the riyal in the Central Bank of Aden. Additionally, the IRG’s commitment to pay the Houthi salaries may lead it to fail in finding the funds for the salaries in South Yemen. In this situation, North Yemen will end up receiving salaries in a regular way from South Yemen’s coffers. In contrast, Southern employees will face hardship in receiving their salaries. Furthermore, the purchasing power of the riyal in South Yemen will decrease. This will lead to the shrinkage of revenue and possible irregularity in paying the Southern salaries. 

In practical terms, there will be repercussions on the political process if the Houthis are granted a new concession by the Yemeni government. Such a concession will push the Houthis to use it as a pretext for the war, even if they don’t abide by the truce or move forward toward peace. Furthermore, this will lead the Houthis to raise the ceiling of their demands to include clauses that may be difficult to achieve. This is in light of their previous attitude of placing preconditions for peace. After obtaining them, they then raise the ceiling of their demands without carrying out their side of the obligations. For example, the 2018 Stockholm Agreement proposed paying the salaries in Houthi areas from the Port of Al-Hodeidah’s revenues. However, this has not been fulfilled by the Houthis to this date.

It should also be noted that paying the employees’ salaries in the Houthi areas will weaken the public front in the anti-Houthi South Yemen areas. This will be due to the exacerbation of the economic and living conditions that would be produced by the agreement. But it will support the Houthi’s public face in the North as they will portray the extraction of “sovereign wealth” as a victory. Ultimately, the pressure on the Houthis as a result of the salaries crisis will be reduced. This would also financially enhance the Houthi’s military capabilities through the big revenues generated from the Port of Al-Hodeidah, the tobacco industry, taxes, customs, and other aspects which they won’t share with the IRG. This in turn would increase the Houthi desire for a military adventure against South Yemen, which will always be under the looming shadow of this threat. In the long run, the Houthi’s access to new financial resources would not only strengthen their efforts to enhance their military arsenal and develop their arms industry, it would ultimately make the Iran-backed militia a significant threat in the areas neighboring Saudi Arabia and the maritime navigation routes. 

What has been even more surprising is the Saudi policy of exerting maximum pressure to reach a deal with the Houthis. This comes at a time when the Houthi military behavior not only threatens the region but the international community as well in the area, especially in the Red Sea. Instead of weakening the financial and military capabilities of the Houthi militia and eliminating their threat, some parties are playing an ambiguous role in enhancing and helping them to survive.

Conclusion

Securing the region is an important factor for its stability and protecting its international shipping lanes. It appears that the time has come for the international community to seriously consider supporting the credible political and military parties, especially the Southern forces and the STC who have presented a successful method of fighting the “terrorist” organizations and the militias’ activities in several operations and managed to destroy their resources over the past years. 

Moreover, the threats emerging today require serious thinking for backing the establishment of an independent state in South Yemen, and discussing the nature and scope of this support. This will be one of the factors to establish security and stability in the region. This was encouraged by PLC Vice President and STC President Aidrous Al-Zubaidi during his latest speech on the occasion of the 56th anniversary of the independence of South Yemen on November 30th.

Southern leaders should firmly stick to their stances with respect to any elusive agreement that may ultimately weaken their political and military gains. The imminent risks posed by the Houthis in South Yemen and its sovereign maritime lanes must necessarily lead to putting the spotlight on maritime and aerial deterrence along with the deployed ground forces to confront the possible risks in the Gulf of Aden, the Bab al-Mandab Strait, and the Red Sea.