Inside the Houthis’ expanding war economy in Yemen
Summary
Yemen’s Houthis have made military advances along the Red Sea coast. Despite gaining more land, their economic situation has not improved much because international sanctions still limit their business activities. The group already controls a large part of northwestern Yemen and collects revenue through taxes, customs, and fees, creating a war-focused economy worth about $2.5 billion a year.Key Facts
- The Houthis recently expanded their control along Yemen’s Red Sea coast, including the port city of Hodeidah.
- Their new military gains do not lift international sanctions that restrict trade and economic growth.
- Since 2014, the Houthis have controlled northwestern Yemen, the country’s most populated region.
- They run a centralized system to collect taxes, customs duties, religious payments (zakat), and other fees.
- A recent report estimated this “parallel economy” generates about $2.5 billion annually in revenues and costs.
- The Houthis revoked thousands of licenses of foreign company representatives, possibly to replace them with businesses linked to the group.
- Analysts say the group aims to secure financial power even if there is a future political settlement.
- The Houthis claim their economic changes support local production and small businesses, not just control.
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