Economy
Red Sea attacks trigger surge in profits for Houthis
Increased imports through Houthi-controlled ports have led to bigger revenues for the Iran-backed group, while ports under government control -- and Yemeni civilians -- suffer.
By Faisal Abu Bakr |
ADEN -- Imports of food and fuel via government-controlled ports in Yemen have dropped amid the Houthis' Red Sea attacks, but have risen at ports controlled by the Houthis, who appear to be profiting from the chaos they are creating.
Through their Red Sea aggression, the Houthis are furthering the agenda of Iran, which seeks to gain control over Bab al-Mandeb strait, the strategic southern gateway to the key trade corridor, and to weaken the Yemeni government.
"The Houthis are fulfilling Iran's agenda by putting pressure on international shipping and also putting economic pressure on the legitimate government," said Deputy Minister of Legal Affairs and Human Rights Nabil Abdul Hafeez.
The increase in imports through Houthi-controlled ports has led to bigger revenues for the Iran-backed group, officials and experts in Yemen said.
In contrast, ports under government control have seen a decline in imports.
Fuel and food imports through ports under Houthi control increased by 44% in January and February, compared to the same period in 2023, the World Food Program (WFP) said in an April 1 Yemen food security update.
Total fuel and food imports to the government-controlled ports of Aden and al-Mukalla meanwhile dropped by 15.6%, compared to the same period in 2023, the WFP said.
A number of international shipping companies deal only with the port of Aden, a source at the port told Al-Fassel, requesting anonymity.
Aden is the largest port in Yemen "and safe for maritime navigation, especially in light of the current turbulent conditions in the Red Sea region," he said.
"But commercial companies have begun to increase multifold the insurance premiums for goods carried by ships to ports under the legitimate government's control, such as the ports of Aden and al-Mukalla," Abdul Hafeez said.
This has led to high costs for consumers, and has driven down the volume of imports to those ports, he said.
In contrast, he said, "we see that the number of ships coming to the Houthi-controlled port of al-Hodeidah is clearly increasing."
"The terrorist acts carried out by the Houthis in the Red Sea are not intended to support Gaza," he noted. "The real goal is to attack commercial operations and threaten the safety of international navigation."
Imports fund Houthis' arsenal
The United States on January 17 renewed its designation of the Houthis as a terrorist group because of their repeated attacks on international shipping.
Despite this designation, economist Fares al-Najjar said, the Houthis are still importing through al-Hodeidah port and are still waging an economic war through their attacks on ships in the Red Sea and regional waterways.
The movement of ships to al-Hodeidah port has increased in frequency, "and this increases the revenues that the port generates for the Houthis, which were earmarked [in past agreements] to pay employees' salaries," he told Al-Fassel.
The Houthis, however, use the revenues of al-Hodeidah port to build up their economic and military arsenal, "without thinking about the lives of citizens," he said.
Revenues generated by the port of al-Hodeidah between June 2022 and October 2023 amounted to approximately $2.7 billion, al-Najjar said.
He noted that "50% of the oil derivatives that reach the Houthis come from Iran as in-kind support, and is thus a net amount that they use for their war effort."