Displacing and destroying the national economy.. What are the risks of the Houthis controlling the Chamber of Commerce and the private sector in Yemen?

Last Wednesday, the Iranian-backed terrorist Houthi militia stormed the headquarters of the Chamber of Commerce and Industry in the secretariat of the capital, Sana'a, a week after a statement by the Federation of Chambers of Commerce condemning the attacks targeting the private sector.

The Union had denounced the Houthi arbitrary measures towards the private sector, which included stealing and plundering companies’ funds, imposing taxes, setting prices, storming some companies, and selling their products by force.

The Union also vowed to disclaim responsibility for the market running out of goods, and called for an urgent meeting that included all members of the chambers of commerce in Houthi-controlled areas, which would later determine its steps to confront the Houthi campaign, before the chamber of commerce was stormed.

According to private commercial sources from the Sanaa Chamber of Commerce, “The Houthi militia stormed the room led by the Minister of Industry in the Houthi government, which no one recognizes, called Muhammad Al-Mutahhar, one day after his meeting with Mahdi Al-Mashat, head of the Supreme Political Council of the Houthis.

The sources told "Yemen Shabab Net" that the Houthi militia appointed a Houthi leader called "Ali Al-Hadi" as head of the Chamber of Commerce in the capital secretariat, which is the largest chamber of commerce in Yemen, and removed the businessman Hassan Al-Kabous, Chairman of the Board of Directors of Al-Kabous Commercial Group.

The context of the attack on the Chamber of Commerce

The Houthi control over the Chamber of Commerce was not just a reaction to the angry statement from the Federation of Chambers of Commerce, but rather came in a broader context and was preceded by Houthi steps indicating a dangerous Houthi strategy for the private sector, the national economy, the relations of the Chambers of Commerce with the foreign market, and the economic threats launched by the Houthis against Saudi Arabia and the UAE. And the Arabian Gulf.

In the beginning, he took a dangerous secessionist decision to ban the Yemeni currency issued by the government in Aden (in its old, large-sized version and the new, small-sized version) and led to an effective division of Yemen’s most important sovereign symbols. The Houthis established 11 separatist customs on the outskirts of the liberated areas.

Controlling the capital of commercial and Islamic banks at the Central Bank in Sanaa is one of the first early steps taken by the Houthis in Sanaa. They later strengthened it by freezing the accounts of the Islamic Solidarity Bank in 2021, then controlling government and private debts at banks, estimated at 15 trillion riyals of the old edition.

Recently, Al-Houthi issued the banking law, which stripped them of even depositors’ funds, estimated at 6 trillion riyals, and of their activity in treasury bills, financing, and investment. In addition to $5 billion in central bank reserves, a billion dollars in Saudi deposits, and a trillion riyals in central bank funds.

Al-Houthi said in June 2022 that he would establish a stock exchange in Sanaa under an agreement with the Tehran Stock Exchange, after signing a memorandum of understanding between them at that time.

Al-Houthi intensified his economic attacks, or rather, his coordinated attacks within a clear strategic plan on the private sector, by absolutely banning imports except through the ports of Hodeidah. A document issued in September 2022 by Houthi customs and obtained by “Yemen Shabab Net” indicates that Al-Houthi forced merchants in areas under his control to reveal the total of their imports, even those they sell in the liberated areas.

The Houthis also intensified their attacks on the private sector, last February, by preventing merchants from importing except through Hodeidah only, and threatened to ban the activity of any Yemeni shipping company that is not subject to its command.

The US Treasury estimates the value of the assets seized by Saleh Al-Shaer, the economic arm of Abdo Al-Houthi, at more than $100 million. While the SAM Organization for Rights and Liberties estimates that the money they looted by force is more than a billion dollars, most of it from the private sector and from former leaders of the state.

During the first four years of his control over Sanaa, Al-Houthi had worked to completely monopolize the telecommunications sector. He seized control of Sabafon, declared the bankruptcy of Y, and bought MTN, which turned into U after blackmailing it with a file of judicial levies worth 500 billion riyals, according to sources. Judicial authority in Houthi-controlled areas, and monopolizes government communications, including fixed-line, landline Internet service, and Yemen Mobile from the mixed sector.

In addition to those sectors, the Houthis also took control of the real estate and fuel sectors, and local reports and reports of international sanctions experts indicate billions of dollars that the Houthis earn from their coercive control over those sectors, to rebuild their parallel economic sector dedicated to the war.

What does it mean when the Houthi militia stormed the Chamber of Commerce?

Over the years, the Houthi militia has used all weapons in order to achieve the goals set for it by Iran, to achieve its expansionist imperial ambitions in Yemen, the Horn of Africa, and the Arabian Gulf.

It is widely believed in Yemen that the pressures and war launched by the Houthis on the private sector and its commercial groups in the country over the past years were not enough for it to stop at a certain limit.

According to commercial and political sources who spoke to “Yemen Shabab Net,” the Houthis have two goals in storming the Chamber of Commerce, “the first is interim and the second is strategic, and both of them fall within the Houthi strategic economic plan that he has been working on for years.”

A senior Yemeni merchant who fled from Sanaa to one of the Arab Gulf states said, “In the first phase of the raid, the Houthis want to forcefully implicate merchants and businessmen in smuggling weapons and drugs, especially since the United States announced weeks ago that the total drug shipments it seized from Iran are on their way.” To the Houthi militia in the Arabian Sea, Indian Ocean, and Gulf of Aden, worth one billion US dollars in 2022 alone.”

But the matter goes much beyond that, especially after Al-Houthi failed through traditional means to implicate merchants in his brutal war. A senior official in one of the largest commercial groups in Sanaa - who requested that his name or the name of the group not be revealed - told "Yemen Shabab Net" that Al-Houthi was unable to convict the group in which he works of any defect, despite his tireless attempts to find a loophole or mistakes and legal violations committed by the group to blackmail it. Control it or even enter into a partnership with it.

The official added, "By controlling the Chamber of Commerce, Al-Houthi wants to build a new commercial network affiliated with him, the latest mission of which is trade and commerce."

Most of the Houthi merchants revealed by the reports of sanctions experts on Yemen come from Saada Governorate. They are involved in the trade of prohibited weapons, drugs, fuel, and pesticides, such as “trader Daghsan, Fares Manna, Ali Qarsha, Saleh Al-Shaer, and currently Muhammad Abdul Salam and his group that operates in the name of a merchant called Al-Faqih,” according to what was reported by the Restoration Initiative, which was formed by merchants among those confiscated by the Houthis. Their money.

It is widely expected that, by controlling the Chamber of Commerce, the Houthis will seek to open broad trade relations in Dubai, Abu Dhabi, Riyadh, Jeddah and the Sultanate of Oman, specifically the merchants of Salalah, as well as trade groups in China and other countries.

Similar to the Iranian Revolutionary Guard, Al-Houthi wants to establish a number of his own terrorist cells, in the name of merchants, that also work to undermine security in the Gulf ports, which he describes as “aggression states.”

This explains the statement of Jalal Al-Ruwaishan, Deputy Prime Minister for Defense and Security Affairs in the (unrecognized) Houthi government, on June 2, when he said, “His group can destroy Saudi ports.” This is his second statement targeting Saudi and Emirati ports within three months.

Threatening trade and navigation in Yemen and the Arab neighbourhood

An informed source in Ibb Governorate said, “The social supervisor of the Houthi militia is making intense efforts with one of the commercial houses to force him to partner with him,” adding, “The Houthi tried to enter into the partnership with a capital worth no less than a million dollars.”

Houthi control over the Chamber of Commerce will enable severe restrictions on the movement of trade. The Federation of Chambers of Commerce's statement last week said, "The Houthis confiscate merchants' transactions, data, and license papers, and prevent them from being renewed for many months." Control of the Chamber of Commerce will give him additional ability to blackmail merchants.

In Al-Mahra, in the east of the country, customs police and security authorities had previously detained several shipments of advanced military communications equipment, drones, missiles, bombs and military equipment, which the mixed Yemen Mobile company was trying to introduce as belonging to it.

The report of the UN Security Council Sanctions Expert Group on Yemen stated that a new company called Al-Wadi is based in Sanaa and has opened another branch in Salalah, working in smuggling weapons, drugs and communications equipment to the Houthi militia.

In June 2022, Saudi Arabia included 8 people and 11 Yemeni companies on Saudi terrorist lists, on charges of supporting Al Houthi. A statement by the Saudi Presidency of State Security said, "Riyadh will continue to work to stop the influence of the terrorist Houthi militia, and to target the most prominent individuals and entities who provide financial support to it."

The US sanctions list stipulates that it includes entities owned by one or more of the banned individuals by 50 percent or more or in association with prohibited persons, whether the ownership is direct or indirect, which means that an attempt by the Houthis to enter into any partnership with any commercial company may lead to... To fall under US sanctions.

In September 2021, the UAE classified seven Yemeni businessmen, and eight affiliated companies, on the terrorist list and imposed sanctions on them for their role in financing the Houthis directly and indirectly through their financial activities.

A Houthi attempt to target the Gulf market

The Saudi-Iranian agreement did not calm the conflict between the two parties on a large scale as expected, almost three months after its signing. Iran attacked two ships off the coast of the Emirates and pirated them to its ports, in early May.

Jebel Ali Port was previously exposed to several explosions, in 2021, one of which occurred on a commercial ship trying to dock in the port. Dozens of sea mine incidents also occurred in Hodeidah, where the Houthis control.

Al-Houthi also previously displayed dozens of sea mines in the ports of Hodeidah, through which he only wants to connect its ports to the ports of Dubai, the Gulf, China, India and other countries that witness trade exchanges with Yemeni businessmen.

Also, the Bagel Cement Factory in Hodeidah Governorate is not working, and a document obtained by “Yemen Shabab Net” at the end of last year confirms that the Bagel Cement Factory is on the verge of complete collapse as a result of its deliberate disruption by the Houthi leadership.

As for the Amran Cement Factory, Mahdi Al-Mashat granted it permission to his brother Tawfiq and granted him 10,000 bricks from the factory’s quarries and crushers, free of charge for ten years. An informed source working in public works in Sana'a told "Yemen Shabab Net" that Al-Ittihadiya, which claims to be a cement factory, is an imported cement mill.

Engineer Adnan Al-Athwari said that Hodeidah Cement does not contain scientific data in its registered name, and he indicated in a post on Facebook that the name appearing on Hodeidah Cement is fraudulent and contains a lie and pretense, and that its quality is not yet known. Ship movement in Hodeidah ports indicates that cement is one of the most imported goods for Houthi militia merchants.

Other sources in Hodeidah reported that the Houthi militia transformed the Al-Duhaa Al-Sham line, north of the city of Hodeidah, into an industrial city for imported goods at the expense of the private sector. This also includes the establishment of a series of grain silos.

Two sources in two of the largest trade groups in Yemen told "Yemen Shabab Net" that the Houthi militia has restricted their import movement. An official working in one of the groups in Hodeidah said, "The group temporarily laid off hundreds of workers in one of its factories located south of the city as a result of the militia preventing the company from importing except through Hodeidah."

While the second source said, "The company where he works in Hodeidah has not yet received any goods from Hodeidah ports, due to Houthi abuses."

For his part, a senior official in one of the chambers of commerce said that the Houthi storming of the chamber in Sanaa is rejected by all chambers of commerce and will not be dealt with anymore.

The head of the Presidential Command Council, Rashad Al-Alimi, said that the Houthi militia seeks to build a parallel and destructive economy at the expense of the Yemeni private sector, as is the Iranian Revolutionary Guard, according to the Yemeni news agency “Saba.”

Al-Alimi added, during a meeting with the UN envoy to Yemen, Hans Grundberg, on Sunday, that the Houthi militia’s actions against the recent banks and institutions aim to create a new banking system similar to Hezbollah and the Revolutionary Guard.

Trade exchange between Yemen, Saudi Arabia and the Emirates

The volume of non-oil trade exchange between the Kingdom of Saudi Arabia and the Republic of Yemen is approximately 16.2 billion Saudi riyals during the past five years (2015-2019 AD).

While Saudi non-oil exports to the Republic of Yemen amounted to 13.8 billion Saudi riyals during the past five years (2015-2019 AD), and in 2019 they amounted to approximately 4 billion Saudi riyals.

The list of the highest exporting sectors was occupied by the foodstuffs sector, with exports amounting to 1.2 billion Saudi riyals, followed by the packaging sector with a value of 520 million Saudi riyals, and then the building materials and petrochemicals sectors with values of 464 and 431 million Saudi riyals, respectively, for the year 2019. According to what was reported by the Saudi Export Development Authority. While the total remittances from Yemeni expatriates in the Kingdom to Yemen are estimated at approximately $3.6 billion annually.

In 2020, Saudi Arabia signed a memorandum of understanding between the Export Development Authority of the Saudi Ministry of Commerce and the Yemen Reconstruction Program on an agreement to support the private sector in Yemen that includes several areas, the most important of which is increasing trade exchange between the two countries through the private sector, in accordance with Saudi Vision 2030.

In October 2022, the General Federation of Saudi Chambers of Commerce approved the Yemeni-Saudi Business Council, with a direction between the two sides to activate it and serve the interests of both parties.

The volume of Saudi investments in Yemen at the beginning of 2015 amounted to more than $6 billion, including announced investments by businessmen exceeding $4 billion, and there are undeclared investments estimated at about $2 billion, which are large amounts that affect the capital of the owners of these projects.

According to Abdullah bin Marei bin Mahfouz, Chairman of the Yemeni-Saudi Business Council, to Asharq Al-Awsat newspaper, these investments are concentrated in cement, fish, and sugar factories, in addition to investments in the real estate and tourism sectors, many of which are in Sana’a, Hodeidah, and Ibb.

The volume of trade exchange between Yemen and the UAE amounted to more than three billion dollars in 2013, according to data from the Central Bureau of Statistics in Sanaa. Imports included raw and food materials, industrial equipment and supplies, electronics, and other miscellaneous imports.

The Houthis could exploit these significant relationships to carry out attacks in response to the UAE’s designation of some of its companies as terrorists, or to achieve Iranian goals in the UAE, which has also already begun launching attacks against the UAE since 2019, the most recent of which was last May.

What about trade relations with China?

Charge d'Affaires of the Chinese Embassy in Yemen, Shao Zheng, said last Thursday, June 1, that his country wants to increase trade exchange with Yemen to $6 billion annually, compared to $3 billion currently.

The Chinese diplomat added, in a press conference attended by members of the Chamber of Commerce in Sayun in the Hadhramaut Valley, where Chinese oil companies are active, that "Beijing wants to open a direct trade line with Yemen."

At the same conference, Cheng renewed the Chinese government's disavowal of the canceled memorandum of understanding between the Chinese Anton Oil Company for oil exploration and services and the Houthi militia. In this context, Houthi control over the most important Yemeni chambers of commerce may lead to China banning commercial activity or increasing the restrictions imposed on it.