
3. Resources, Revenue and Incentives to Spoil
Yemen has been divided into several distinct territories over the course of the war, each with its own key military and political centres of gravity, broadly delineated borders and internal rivalries. Yet in at least one aspect the country continues to operate as a single coherent, if somewhat uneven, ecosystem.
Since at least 2016, and despite disruption to port access, trade has flowed across Yemen with an ease that belies the facts of the war. This trade includes fuel, weapons and other materiel, often mixed with basic goods such as food and medicine, and hard currency. As most of the rest of the economy has ground to a halt, the control of entry points (including land borders and ports), trade routes and local markets has become increasingly lucrative for local power brokers.
That trade of all kinds flows freely across Yemen is not surprising. In civil wars from Sierra Leone to Syria, rival groups have reached accommodations that create economic benefit for rank-and-file fighters and senior commanders, as well as a lifeline for the population. Access to resources also prolongs conflicts and, crucially, creates incentives to spoil peace processes and maintain the profitable status quo. This is particularly the case when a peace deal is likely to restore centralized state control of resources, and when demobilization would mean an end to predatory practices such as the imposition of fees at checkpoints.
In civil wars from Sierra Leone to Syria, rival groups have reached accommodations that create economic benefit for rank-and-file fighters and senior commanders, as well as a lifeline for the population.
Control of economic resources shifts incentives for engagement in peace deals. While access to resources and revenues is rarely the determining factor in conflict, so-called combatant self-financing ‘complicate[s] and prolong[s] hostilities, in some cases creating serious impediments to their resolution’.41
An integrated war economy
In interviews in early to mid-2017, Yemeni traders based inside the country and across the region told the same story: while it is often difficult to ship goods into Yemen, and into the port at Hodeidah in particular, trucking them overland through Oman or Saudi Arabia remains entirely feasible.42 Once goods have entered Yemen, they tend to arrive at their intended destination, despite crossing several internal borders. ‘It’s a free market,’ said a Sana’a-based businessman when asked why supermarkets in the capital are stocked with Saudi goods, including perishables such as juice and yoghurt. The electronics he sells are bought in Dubai and trucked into Sana’a within 48–72 hours – this timespan tallies with estimates provided by other traders and two people involved in the trucking business.
Overland trade has become increasingly lucrative. Trucks, if travelling into Houthi-controlled parts of the country, pass through dual customs facilities: first at the land border with either Oman or Saudi Arabia, and then when they move into Houthi-controlled territory. Their drivers must pay duties on the goods they are carrying at customs stations on both occasions, as well as fees (demanded by the militias that control each territorial entity) at as many as 15–25 checkpoints. Thus, groups on each side of the conflict benefit from trade. Traders estimate that checkpoint fees alone inflate the prices of basic goods such as wheat by 10–15 per cent.43
Traders interviewed also describe a relatively frictionless overland trade environment, once checkpoints are taken into account. Incidences of trucks being halted and searched are generally low, and have been since at least early 2016. However, when trucks are halted, the cost of releasing them can be high. One merchant reported having to pay YR3,000 (around $10 at the time) per item for the release of a shipment of electronics. Another said that smaller traders have taken to bringing goods into the northwest using passenger vehicles so as to avoid facing extortion from rogue checkpoint commanders.
Data from the World Food Programme on wheat, flour and diesel prices support the argument that Yemen remains a single market despite being divided politically and militarily. While prices in Houthi-controlled territories are typically higher than elsewhere – and there are regional variations in liberated areas of the country – prices generally move in concert, albeit with some time lag between regions. An increase in the price of fuel in Aden, for example, tends to translate into a broader increase nationally in the subsequent weeks, while higher wheat prices in Hodeidah filter through across the country as traders exploit the arbitrage opportunity: moving goods from an area where prices are lower into one where they can extract greater profit.44
Although the banking system has been severely damaged by the war, overland trade is facilitated by existing and new hawala45 money-transfer networks, which are increasingly integrated with currency-exchange businesses. Businessmen involved in overland trade collect earnings and currency from expatriate Yemenis who hope to send money home, and use this money to underwrite the cost of goods and shipping, paid for in dollars or regional hard currency. When the goods arrive at their destination, they are sold into the local market in Yemeni riyals. In this type of transaction, a local relative of the expatriate worker in question then receives the riyal equivalent of the money from a family member of the businessman involved, minus a fee and often at an exchange rate advantageous to the businessman or money exchanger used. ‘People are profiting two, three times over from their businesses,’ said a Yemeni analyst.46
Profits are also extracted from bringing illicit goods into the country. These goods include small arms, ammunition, military technology (including components for surveillance and attack drones) and hard currency. A UN Panel of Experts, formed in 2014 to oversee a sanctions regime imposed on Yemeni individuals by the UN Security Council and given a wider remit as part of an April 2016 Security Council resolution, has documented instances of such goods being interdicted at checkpoints.47 Its most recent report, a draft of which was made available to Security Council members in August 2017 and which was provided to the author, notes that ammunition prices in Yemen have fallen since the war began, suggesting a steady supply across country. The report notes that arms and munitions provided by the Saudi-led coalition to its local partners are being sold and transferred to Houthi and Saleh forces on a regular basis; this claim is in line with other information and anecdotal evidence provided to the author.48
Sources with an understanding of internal arms sales say that weapons are widely available in local markets, and can pass freely both within territory controlled by the Houthis and through areas outside of their control. Arms are transferred between these zones along established smuggling routes, the most important of which cross southern Mareb and southern Shabwa governorates before transiting into the highlands through tribal territories in northern Al Bayda.49
The exceptions to the flow of trade are the city of Taiz and contested areas of the Al Bayda governorate, the two sites of the fiercest and longest-lasting front-line fighting in the war. The Houthi–Saleh alliance imposed an effective blockade on Taiz until 2016, when local and southern militias were able to seize control of a mountain road linking the city with the neighbouring Lahj governorate. In Al Bayda, skirmishes along key supply lines have led to areas controlled by anti-Houthi–Saleh groups being cut off for days at a time.
Customs, checkpoints and taxation
Table 1: Yemen customs authority locations income (2013)
Customs collection location |
% of total customs revenues (Total: $1.065 billion) |
---|---|
Hodeidah port |
41 |
Aden free zone |
26 |
Al Tuwal border crossing (Saudi Arabia–Yemen) |
10 |
Shaheen border crossing (Oman–Yemen) |
5 |
Sana’a airport |
5 |
Aden port (Mualla) |
4 |
Al Wadiyah border crossing (Saudi Arabia–Yemen) |
3 |
Salif port (Hodeidah) |
1 |
Mokha port |
1 |
Mukalla port |
1 |
Source: Yemen Customs Authority.
Customs and taxation make up the bulk of income for the Houthis. While a relatively small proportion of pre-war state revenues was generated by taxation, customs and excise, income from customs fees in particular grew in the years before the conflict broke out, peaking at around $1.2 billion in 2014. The Tax Authority was most active at Yemen’s three main ports – Hodeidah, Aden and Mukalla – and at land borders with Saudi Arabia (in Hadramawt and Sa’dah) and Oman (in Al Mahra). Sana’a airport, now closed, was also a major revenue generator, accounting for around 5 per cent of the Tax Authority’s income in 2013.
Ports and trade routes
Since 2015, control of customs collection points has been divided between different groups. Hodeidah port and Salif port to its north were controlled by the Houthi–Saleh alliance before its collapse, as was Sana’a airport and the Al Tuwal border crossing with Saudi Arabia (which has been sealed off since 2015). As of December 2017, they were still controlled by Houthi forces. Aden port was largely inaccessible during the first six months of 2015, as it was the site of fighting between the Houthi–Saleh alliance and local militias. Since 2016, it has been controlled by southern militias backed by the UAE. Mukalla port was seized by AQAP during its takeover of the city in April 2015, but it has been under the control of UAE-backed Hadrami forces since early 2016. The Al Wadiyah crossing with Saudi Arabia in northern Hadramawt is under the control of Islah-aligned forces, while the Shaheen crossing with Oman in Al Mahra governorate has become a busy access point for trucks from the sultanate and beyond. Many smaller ports – such as Nishtoun in Al Mahra, Ash Shihr in Hadramawt and Al Beidah in Shabwa – have also become far busier since the outbreak of war.
In Hodeidah port and the affiliated Salif port, according to well-connected sources, the key individuals overseeing customs and other tariffs were Houthi-affiliated. With the division of the country into spheres of influence, the Houthi–Saleh alliance also created its own customs facilities at key overland access points. The most notable of these were two checkpoints, positioned respectively in the Dhammar governorate and Al Bayda. Both were run by Houthi commanders. Officials in Sana’a and elsewhere say that they are generating revenues comparable with those earned in Hodeidah.
Figures provided to the author suggest that the former Houthi–Saleh alliance was earning over YR10 billion (around $30 million) a month from customs collections before the infighting of December 2017, while the Hadi government, if it were to control all of the customs collection points outside of Houthi territory, would earn around YR18–20 billion ($54–60 million).50 Figures from the central Customs Authority in Sana’a, however, show income from Hodeidah dwarfing revenues from other governorates. This lends credence to claims that revenues from Houthi-controlled institutions were being redistributed directly by the movement’s military leaders rather than returned to state institutions (Houthi officials deny this).
Before their dominance over the highlands and the west coast of Yemen was sealed, the Houthis had already consolidated control over the finance departments of most major government institutions. They also led taxation of local markets and businesses, levying increasingly prohibitive fees on firms. Anecdotal evidence suggests that Houthi leaders control many key smuggling routes, particularly for fuel, and have been able to earn substantial revenues by selling fuel to state fuel stations and into the black market.51
This set-up provides considerable incentives for the Houthis’ military leadership to continue to prosecute the war, despite the civilian toll and even in the face of the internal schism with Saleh loyalists. The Houthis have a steady income stream for the first time in the movement’s 13-year history. As discussed in more detail elsewhere in this paper, the current UN-proposed peace deal is heavily weighted towards the creation of interim security arrangements and the creation of a unity government that would demand oversight and control of customs receipts, as well as the dissolution of internal customs checkpoints. This would weaken the Houthis as a movement and local Houthi commanders specifically. Anecdotal accounts from Sana’a and elsewhere in Houthi-controlled territory detail the purchase or seizure of valuable property, land and businesses by Houthi military commanders.52
The Hadi government’s revenues
The Hadi government has struggled to gain control over customs and tax revenues, even where duties, fees and taxes are levied. However, it has been able to restore some income from Yemen’s hydrocarbons resources. The outbreak of the war saw conflict reach two of the country’s main oil- and gas-producing governorates, Mareb and Shabwa, with key export pipelines cut off as a result. Production was also halted in Hadramawt when AQAP seized the oil terminal on the south coast that was used to store and export oil produced in the governorate. A liquefied gas export project, Yemen LNG, was shut down at the same time.
The country’s oil and gas production facilities remain a major prize for the parties to the conflict. It was widely assumed that part of the Houthi–Saleh alliance’s military strategy during the early days of the war was to achieve control of oil facilities in Mareb and Shabwa in order to ensure a sustainable source of rents. Tribal groups in Mareb, Shabwa and Hadramawt secured the oil fields in their respective governorates, while UAE-backed paramilitary forces have controlled export facilities in Hadramawt and Shabwa since the ouster of AQAP in 2016.
Since AQAP’s withdrawal, the Hadi government has been quietly negotiating with the different forces on the ground, first to export oil held at the Ash Shihr storage and export facilities in southern Hadramawt, and then to resume production and export from fields in central Hadramawt. In July 2016, a European oil trading firm, Glencore, entered into an agreement with the government to buy 3 million barrels for around $40 a barrel.53 The same firm has reportedly been offloading around 2 million barrels every two months since January 2017. At the time of writing, more than 14 million barrels had been sold at an estimated average price of around $50–55 a barrel.
Before accounting for production and storage costs and payments to local groups, oil sales had earned the government around $700–770 million in around a year. A plan to truck oil produced at oil fields in Mareb to export facilities in the south, if successful, could bolster government income in 2018. In interviews, foreign officials said that the Hadi government initially refused to reveal where the income from the oil sales was being deposited, before conceding that it was being held in a privately held account at Saudi Arabia’s National Commercial Bank, better known as Al Ahli Bank.54 The government has given some details of how the money is being used, but officials have no oversight of the spending.
Oil income reduces the Hadi government’s dependence on Saudi Arabia. This also makes Saudi officials less inclined to underwrite the Hadi government’s initiatives.
Oil income reduces the Hadi government’s dependence on Saudi Arabia. This also makes Saudi officials less inclined to underwrite the Hadi government’s initiatives. ‘People complain that we are not paying for things in Yemen but the government has its own income now,’ a Saudi official said.55 This arguably provides clear disincentives for the Hadi government to accept the terms of a peace deal that establishes a unity government. An interim administration would insist on oversight of and access to oil revenues. Oil rents have also allowed the Hadi government, which has little credibility among the different groups in Yemen, to build its own patronage networks, particularly among disaffected southern Yemenis who have been marginalized by the emerging centres of power in the south and by Salafist groups.
Mareb and Mukalla: complicating factors
Oil resources have also benefited the local government of Mareb, which is led by a prominent tribal leader, Sultan al-Aradah. While exports from facilities in Mareb have been frozen since the early days of the conflict – oil is transferred instead to an export terminal on the west coast that cuts through the current front lines – the state-run Safer Exploration Production and Operations Company operates a small refinery and natural gas bottling facility on-site. Gas production has continued throughout the war, while the refinery has been running at or close to capacity (estimated at 8,000–10,000 barrels a day) since at least late 2015, using locally produced oil.56
At the outset of the conflict, al-Aradah instructed local authorities to deposit revenues from oil and gas sales at the local branch of the Central Bank of Yemen rather than transferring them to Sana’a. The money has been used to pay for local fighters (many of whom have been formally inducted into the military), civil servants, basic services such as water and electricity provision, and local infrastructure. Over the course of the war, a governorate historically seen as troubled and underdeveloped has become, in the opinion of its residents, safer, more stable and more prosperous.
It is unclear what incentives al-Aradah would have to accept the terms of a peace deal that creates a unity government in which he has no say, and which is likely to demand control of Mareb’s oil and gas resources. When asked whether he agreed with the terms of such a deal, and whether or not he had been consulted on this by the UN, a senior Marebi tribal leader said: ‘The problem in Mareb before the war was that no one listened to us. We fought the Houthis, built a local government and helped our people. But no one has asked us what we want after the war. Who is this deal for exactly?’57
Since the Hadrami Elite Forces seized Mukalla port and its surrounding areas, the local government has reduced the customs fees levied on cargoes, increasing the volume of trade passing through the port. With the port seen as the most secure in Yemen and, allegedly, having the least oversight over inbound cargoes, it has become a busy and lucrative trading station, providing the local government with a considerable income stream. These revenues are augmented by income from oil exports and cash payments from the Hadrami Elite Forces’ chief sponsor, the UAE.
Smuggling
A Chatham House mapping of key trade and smuggling routes into and within Yemen demonstrates that goods of all kinds, including food, fuel, money and arms, enter the country freely, and that licit and illicit goods pass freely between rival territories.
Mukalla port was seized along with the rest of the city by AQAP in April 2015. Day-to-day administration of security and of the port was handled by an ostensibly local staff largely made up of Saleh-era officials.58 Cargoes continued to be discharged at the port, with trade allegedly funded by individuals in the Gulf states and in the city itself. Smuggling networks originating in Mukalla supplied arms and fuel to Houthi–Saleh-controlled territory.59 It is said that these smuggling networks have remained operational since the ouster of AQAP in April 2016.60
Similarly, smuggling networks operating around Nishtoun port in Al Mahra, Ash Shihr port in Hadramawt and Al Beidah port in Shabwa have reputedly provided a steady supply of arms to the Houthi–Saleh alliance since the beginning of the war. Weapons and other military technology have also allegedly been imported via the Shaheen border crossing with Oman. Often, members of local groups know and disapprove of the smugglers’ activities but fear reprisals – which range from dismissal from their jobs to assassination – should they act to stem the flow of arms. ‘People in Shabwa know who the sheikh is who brings arms in and smuggles them to Sana’a, he was close with Saleh,’ said a well-informed southern contact, echoing similar comments made by other sources. ‘But saying anything or doing anything is too dangerous.’61
External sources of funding and support
External funding and support have played a key role in many groups’ rise and sustained success during the conflict. From the beginning of the war, Saudi Arabia underwrote the day-to-day running of the Hadi government and, reportedly, provided the funds to arm, equip and pay tens of thousands of soldiers and militiamen in the northeast of the country. Senior militia leaders opposed to the former Houthi–Saleh alliance reported travelling to Riyadh to collect payments during the early days of the conflict.62 Such payments are now made in Mareb. Saudi Arabia has also funded Islah-affiliated armed groups in Taiz, as well as some Salafist militias. It is unclear whether the kingdom has also provided funds for governance and services.
The UAE has funded a broad array of armed groups, and has also provided cash for governance and basic services in the south of Yemen. As of July 2017, it was paying salaries to the Security Belt and different Elite Forces militias in Aden, Lahj, Abyan, Shabwa, Hadramawt and Al Mahra. It was also underwriting the day-to-day running of Mukalla with cash, equipment and the fuel required to generate electricity for the city. Upon the liberation of Aden, the UAE provided funds, people and equipment to rebuild schools and hospitals there. In 2016, the then governor of Aden, Aydrous al-Zubaidi, said that the UAE was providing funding for the local government while complaining that he needed more support.63 The Hadi government, he said, was not providing any resources to the local government.
Saudi Arabia and the UAE have been reluctant to provide large-scale funding to the Hadi government. For example, they refused to inject large sums of dollars into the Central Bank of Yemen after Hadi had announced he would move its headquarters from Sana’a to Aden in September 2016. Several officials from the Hadi government said they had been given assurances that the move would lead to an injection of funds. ‘They are worried about corruption, that the government can’t be trusted with billions of dollars,’ said a Western official who was involved in talks over the central bank.64
Iran
Saudi Arabia and the UAE, in justifying their aggressive stances on Yemen, have repeatedly claimed that they intervened because the Houthis are an Iranian-funded movement and military force. The Houthis have long been accused by Saudi Arabia and the US, among others, of receiving support from Iran via Lebanon’s Hezbollah.65
There is mounting evidence to support claims of backing from Tehran, but the exact extent of Iranian support for the Houthis remains unclear. Drones that the Houthis have obtained strongly resemble Iranian-manufactured unmanned aerial vehicles (UAVs). Researchers provided with access to some of these UAVs, captured by Emirati forces, concluded that the ‘acquisition of Iranian-designed Qasef-1 UAVs supports allegations that Iran continues to bolster the capacity of Houthi and Saleh-aligned forces through the transfer of new technology and advanced weaponry’.66 Diplomats have also reported direct interactions with Hezbollah advisers during meetings with the Houthis, although this could not be confirmed independently.67
Western and non-Western officials interviewed for this paper agreed with a broad narrative concerning Iranian involvement in Yemen. This narrative asserts that before 2011 measures to support the Houthis (and the southern separatist movement) were ‘speculative plays’ by Iran:68 low-cost initiatives that gave its intelligence services and Al Quds force operatives access to a country that borders Saudi Arabia, its key regional rival, and is adjacent to important international trade routes.
Iranian support, consisting largely of capacity-building and advice to Houthi commanders, increased in 2011. Yet when the Houthis entered Sana’a, Saleh was a far more important backer.Iranian handlers had little influence over the Houthis’ overall strategy, and despaired at times at the latter’s intransigence and lack of political nous.69
Since 2015, Iran’s support has further increased considerably. A cadre of highly skilled Iranian or Hezbollah operatives is allegedly advising the Houthis directly on the ground, supporting in particular the latter’s use of ballistic missiles, surface-to-surface missiles and UAVs, as well as remotely operated boats used to disrupt maritime traffic off the coast of Yemen. In November 2017, Saudi Arabia accused Iran of being behind a ballistic missile attack on Riyadh airport, declaring the incident an ‘act of war’. The missile was launched from Yemen almost 900 kilometres into Saudi Arabia, the furthest a missile had travelled since the beginning of the war. Riyadh claimed that fragments of the missile bore Iranian markings.
Yemen is a low priority for Iran, and the latter’s involvement in the conflict continues to be seen by analysts as no more than speculative.
Yemen is a low priority for Iran,70 however, and the latter’s involvement in the conflict continues to be seen by analysts as no more than speculative. From Iran’s point of view, engagement with the Houthis in Yemen has the added benefits of providing an opportunity to probe Saudi defence capabilities, and of offering a diplomatic and public relations tool to offset accusations of Iranian-backed atrocities in the Syria conflict and elsewhere. According to two intelligence officials, one Western, one from the MENA region, Iran may view Yemen as a ‘laboratory’ in which it can test Riyadh, and gauge the US’s ability to support Saudi Arabia in preventing cross-border attacks and assaults on vessels passing through Yemeni waters.
Saleh, the UAE and ‘secrecy jurisdictions’
Before December 2017, an important source of funding for the conflict was the wealth that Ali Abdullah Saleh built up over the course of 33 years in power, and which had been stowed abroad in investments and tax havens. A 2013 Chatham House report warned that, in the event of a civil war, Yemeni elites would be able to draw on a considerable pool of resources hidden abroad.71
Since the beginning of the civil war in late 2014/early 2015, foreign intelligence agencies and analysts, including the UN Panel of Experts, have identified tens of millions of dollars belonging to Saleh’s family and the transfer of funds within his financial network. Khaled Ali Abdullah Saleh, the former president’s son, was said by the panel to have laundered almost $84 million through a bank account in the UAE within a three-week period in 2014, while a reputed Saleh ally, the businessman Shaher Abdulhaq, was found to have transferred around $3 million dollars to Raydan Investments Limited, another Saleh family-controlled financial vehicle.72
The role of Oman
Western and other officials and intelligence analysts believe that at least some of the illicit goods, weapons, technology and cash flowing into Yemen first pass through neighbouring Oman. The volume of trade through the sultanate into Al Mahra has led to accusations that the government of Oman is playing a ‘double game’ and quietly supporting the Houthis.
Omani officials deny this and counter that they will not contribute to the deepening humanitarian crisis by sealing off the border. They also express frustration at the position they find themselves in with regard to the war – which they strongly advised Saudi Arabia not to pursue – during a period of tensions within the Gulf Cooperation Council (GCC). Early in the crisis, Oman offered to play the role of mediator with the Houthi–Saleh alliance but found Saudi Arabia’s then-deputy crown prince and defence minister, Mohammed bin Salman (who subsequently became crown prince in 2017), to be uninterested in its involvement when the offer was made in mid-2015. One Omani official complaint is that the sultanate was frozen out of discussions by the UN and US during 2015, only to be drafted in to support talks in 2016.
Omani officials have worked to build the capacity of Houthi political representatives before and during periods of mediated talks. But they have found the experience a trying one, in part because of the Houthis’ resistance to negotiations of any kind; and also because of criticism from Saudi Arabia and the UAE, and from their many media outlets, for working with the Houthis. (The latter is particularly galling to Oman, given that Saudi and other intelligence officials and diplomats used Muscat as a discreet meeting place for direct talks with the Houthis and GPC representatives.)
Counterterrorism, the US and the UAE
An overwhelming priority for US policymakers working on Yemen since 2001 has been the ability of Yemeni and American forces to engage in counterterrorism operations in the country. This stance remains largely unchanged. US diplomatic and military personnel were evacuated from Sana’a in early 2015. US officials then became frustrated by the Saudi-led coalition’s focus on the Houthi–Saleh alliance, with the Saudi-led coalition aerial campaign doing little to target AQAP. US officials were also frustrated by the US’s inability to operate or gather intelligence in the country.
The entrance of the UAE into the south and its role in the recapture of Mukalla offered the US an opportunity to return to the Yemeni theatre, working alongside one of the few regional militaries that senior Pentagon officials see as competent (US Defense Secretary James Mattis has described the UAE as ‘Little Sparta’ on the basis of his past encounters with Emirati special forces in Afghanistan).73 In mid-2016, a contingent of US troops from the elite Joint Special Operations Command began working with their UAE counterparts in what the Pentagon said was an advisory capacity. In January 2017, a small contingent of US soldiers took part in a raid on a village in central Yemen in an operation aimed at killing local AQAP commanders and gathering intelligence. The US has since increased the volume of its drone strikes and airstrikes in cooperation with the UAE and partner forces.
Analysts have questioned whether the US can continue its official line that it is not part of the Saudi-led coalition, given its direct participation in airstrikes.
The presence of US troops in Yemen and the deepening of UAE–US cooperation in the south have led to several important questions. Analysts have questioned whether the US can continue its official line that it is not part of the Saudi-led coalition, given its direct participation in airstrikes. Human rights advocates have argued that the US should be held accountable when UAE forces are accused of the arbitrary arrest and torture of suspected extremists and political Islamists. Some southern Yemenis also argue that the US, knowingly or not, is playing an instrumental role in the UAE’s growing influence over southern Yemen; and that it is in practice supporting the UAE’s anti-Islah campaign and indirectly lending capacity support to southern secessionists, in contravention of stated US policy.
The US–UAE working relationship also saw the UAE float the possibility of a greater US role in the campaign against the Houthi–Saleh alliance, on the basis that this was about pushing back against Iran. In late 2016, reports emerged of a UAE plan to capture Hodeidah, the last major port in Yemen under Houthi–Saleh control, with the consent of the US. The Obama administration demanded that planning for the operation be halted, according to a former US official, but the Trump administration subsequently asked the UAE for a more detailed plan before deciding its stance on the mission. Humanitarian agencies – including the UN, and the UK’s Oxfam – warn that an assault on Hodeidah could push Yemen into a starvation crisis.
A framework for peace?
The UN has acted as lead mediator in Yemen since the 2011 uprising. Its special envoy, Jamal Benomar, played a key role in negotiating the terms of the GCC-backed initiative that froze what many feared was an incipient civil war. Benomar remained a prominent figure during the political transition of 2012–14, with his team playing an important role in the National Dialogue Conference of 2013–14 and leading regular meetings between foreign diplomats in Sana’a. In September 2014, Benomar brokered the Peace and National Partnership Agreement, a deal aimed at preventing civil war and allowing the transition to reach a peaceful conclusion by handing the Houthis, who had entered Sana’a with Saleh’s support, some political power.
Benomar could not prevent the Houthis’ continued power grab and expansion, or the outbreak of war, however, and he was replaced by Ismail Ould Cheikh Ahmed in April 2015. The new envoy took the lead in mediation after the passage of a UN Security Council resolution enshrining the UN’s role as chief mediator in Yemen but placing considerable restrictions on the special envoy’s room for manoeuvre in negotiations.
Ould Cheikh Ahmed attempted to convene peace talks in Switzerland and Kuwait, with varying success. Two rounds of talks in Switzerland collapsed, while the talks in Kuwait lasted for more than 90 days but ended inconclusively in August 2016. After the Kuwait talks ended, US Secretary of State John Kerry began to promote his own plan, which similarly did not make any real progress. The Kuwait talks and the Kerry plan came as Saudi Arabia, the Houthis and Saleh signalled a willingness to make concessions in order to end the war. These efforts were arguably thwarted by the Houthis’ lack of negotiating experience, the relative lack of influence of Houthi delegates to the talks within the wider Houthi movement structure, and the Hadi government’s refusal to countenance a deal that would marginalize or remove the president. Perhaps most importantly, neither party could not come to an agreement on the sequencing of any deal (see below).
Provisions discussed in Kuwait included face-saving security measures (including a nominal Houthi–Saleh withdrawal from Sana’a, Taiz and Hodeidah which, in the telling of officials involved in the talks, would have changed little in the structure or location of forces).74 The provisions also included a political agreement under which Ali Mohsen al-Ahmar – a controversial figure for many Yemenis – would have been removed as vice-president and President Hadi consigned to a figurehead role (a proposal referred to by some participants as the ‘Queen of England’ scenario). Deeper political discussions would have been deferred until after a peace deal (described as a ‘glorified ceasefire’ by one person involved),75 with key issues decided by a committee based on the National Body formed at the end of the National Dialogue Conference.
The Kerry plan was more explicit in calling for the removal of Hadi, and for the appointment of a new vice-president who would take on the day-to-day administration of the government. This plan was to involve sequenced preparatory steps leading to a ceasefire, direct negotiations over the formation of a unity government, and Houthi–Saleh withdrawals from key areas.
Sticking points during the Kuwait talks and the Kerry-led negotiations included sequencing, confidence-building and the level of concessions made by each side. During the Kuwait talks, the Houthis refused to sign up to the deal because they wanted assurances on the formation of a unity government, while the Hadi government demanded Houthi–Saleh withdrawals before moving forward with discussions over political measures. The Hadi government ultimately quit the Kuwait talks because of (well-grounded) fears that most diplomats involved favoured a solution that would sideline Hadi.
Sticking points during the Kuwait talks and the Kerry-led negotiations included sequencing, confidence-building and the level of concessions made by each side.
Officials who were present at the Kuwait talks wonder whether having an actual draft agreement available for discussion would have facilitated matters. ‘Perhaps part of the problem was that neither delegation saw a written version of any draft agreement, and they began to lose faith in what they were being told by the UN and diplomats,’ said one Western diplomat.
In contrast, the Houthi–Saleh alliance formally committed to the Kerry plan at meetings in Oman in November 2016, according to two people present. However, the Hadi government refused to sign, despite assurances from Saudi Arabia that the president would do so. Hadi government officials saw the deal as giving too much credence to the Houthis’ commitment to the initiative, and as too quick to remove President Hadi – thus in effect handing the initiative to the ‘putchists’ in Sana’a.
The role of Saudi Arabia
Officially, the UN-led mediation process has been focused on finding an arrangement acceptable to the former Houthi–Saleh alliance and to the Hadi government. Yet in reality, the figures involved have conceded that the success or failure of any agreement will be contingent on Saudi Arabia’s approval in general, and on that of Crown Prince Mohammed bin Salman in particular.
During the Kuwait talks, members of the Hadi government’s delegation complained that the meaningful negotiations were actually taking place after hours at the temporary residence of Mohammed al-Jaber, the Saudi ambassador to Yemen, between the Saudi official and representatives of the Houthi–Saleh alliance but without representatives of the Hadi government. Hadi is said to have been infuriated that his delegation was being cut out of talks that would in effect have meant his political marginalization.76
According to a senior Hadi ally, however:
Regarding the Kerry proposal, the Americans received certain promises from the Saudis. What was proved is that, if it is not in our national interest, we can take the decision [not to compromise]. There is very real, very strong cooperation between President Hadi and the Saudis. But he has the last say […] and this is I think what he proved. I don’t want to underestimate the influence the Saudis and others have, but President Hadi has the last say.77
The question of what Saudi Arabia would want from a deal is hard to answer. Officials involved in current negotiations concede that they do not have clarity on the definition of success for the Saudis, and that the kingdom’s openness to deal-making in mid-2016 has been replaced by a less conciliatory approach since the US presidential election in November of that year.
The previous US president, Barack Obama, had barely hidden his distaste for the Gulf states, calling them ‘free riders’ and freezing arms transfers in late 2016 in response to alleged Saudi violations of international humanitarian law.78 President Donald Trump, in contrast, has made his admiration of Saudi Arabia and the UAE clear, and he made it a priority to visit Saudi Arabia in the early months of his administration. According to a Western diplomat:
There was a definite [Saudi] shift after the [US] election from an approach of ‘we need a deal’ to thinking there might be a military solution to the war after all, and that the Americans might help, and it’s still unclear where [they] stand on that.79
Domestic politics are also likely to play a major role in Saudi Arabia’s calculus. The public face of its war effort since 2015 has been Mohammed bin Salman, the ambitious son of King Salman bin Abdulaziz al-Saud. Named defence minister upon his father’s accession to the throne in early 2015, bin Salman has since been elevated to the position of crown prince. He has led high-profile and risky initiatives, reflecting the fact that he has gradually become seen as the ‘minister of everything’ and his country’s de facto ruler. In addition to the Yemen war, these initiatives include economic reforms, an embargo against Qatar, a purge of rival princes, and attempts to bolster Saudi influence in Lebanon.
Western and Saudi officials concede that, while costly and unpopular among some segments of Saudi Arabia’s elite, bin Salman’s war in Yemen cannot appear to be ‘lost’ in the eyes of the public if he is to become king, as is widely anticipated. Given that the war has been presented as a much-needed Saudi pushback against Iran and the Houthis (the latter as a Hezbollah-like Iranian proxy), it is unclear whether a deal that removes President Hadi and gives preferential treatment to the Houthis can be sold to the Saudi public – and to the wider regional Arab public – as a victory.
Diplomats from several Western countries say that they have insistently lobbied bin Salman in private to end the war, but to little effect. Some dismiss as naive suggestions that public criticism of Saudi Arabia’s role, or a more overt admission that it is seen as the ‘real’ counterparty to the Houthis and Saleh loyalists in peace talks, would create more pressure on the kingdom to compromise. ‘We want a successful negotiation, and embarrassing the Saudis and humiliating Hadi would not have worked,’ said one official who has worked closely with the UN envoy.