Houthi Aggression and a Roadmap for Peace in Yemen

This transcript is from a CSIS event hosted on September 4, 2024. Watch the full video here.

This transcript is based on a translation of Maged Al-Madhaji's remarks from Arabic into English that was conducted after the event, rather than the simultaneous translation from the event, for precision.

Dr. Alterman: Good morning and welcome to CSIS. I'm Jon Alterman, senior vice president, Brzezinski Chair in Global Security and Geostrategy, and the director of the Middle East Program. It is my pleasure to welcome you and Maged Al-Madhaji. Maged is the co-founder of the Sana'a Center for Strategic Studies, has been a researcher on Yemen, and is one of the most prominent researchers and thinkers about public policy issues in Yemen. Yemen has been very much in our minds as Red Sea security is a growing problem for the world, but Yemen continues to suffer under a civil war that has been seething for many years and arguably has been going on for decades.

You all have translation ear sets. Maged will speak in Arabic. They should all be set to channel 2 for English. We have translation both ways. Maged is going to speak briefly at the beginning, we will engage in a conversation, and then we will open the floor to questions. If you are here, there is a paper on your seat with a QR code. You can type in questions there, and they will appear on this iPad. If you're watching at home, there should be a way to ask questions in the event and the YouTube links. We will first listen to Maged, then Maged and I will have a conversation, and then we'll open it up to discussion.

Maged, welcome to Washington and CSIS. I have been thinking a lot about Yemen in recent months. What should we be thinking about Yemen?

Mr. Al-Madhaji: Thank you very much, Jon. I'm so glad to be here in Washington, D.C., especially during what appears to so many people to be an ambiguous period due to the upcoming U.S. election. Yemen keeps reminding the world that there is a real problem brewing in the southern Red Sea. Recently, a ship with more than a million barrels of oil was hit, and this is the latest in a series of incidents perpetrated by the Houthis south of Yemen. What does this mean for the world?

The world discovered a group more daring than it had imagined while struggling for many years to normalize the situation in Yemen, amidst Saudi Arabia’s least popular war in the history of the region. I believe that, over a period of ten years, the war Saudi Arabia was waging in Yemen was indeed hugely unpopular. Everyone was saying that the richest country in the world was bombing the poorest country. What happened because of this? The Houthis grew and developed contrary to political and security expectations—constituting a surprise and a challenge.

The periods before and after October 7th are totally different. It's a new era in terms of how the world views the Houthis. Prior, people were preparing to normalize with the group. In this new era, they turned into a cause of severe concern, targeting international interests in an audacious and unprecedented manner. One million barrels of oil are now liable to be spilled in an extremely critical area. Basic interests connected to the Red Sea and the region’s security architecture has been transformed

The Houthis can now not only direct their missiles against oil facilities in the Gulf, but they can also target all trade movements that pose a threat to their agenda. October 7th changed the Houthis’ status and weight in the “axis of resistance.” The group proved their utility and strategic importance relative to other groups allied with Iran. They are a winning racehorse, bold, and with a growing agenda. What is the danger, and what is striking about this group? First, they have fewer calculations than Hezbollah. They do not have the same calculations as Hezbollah. They benefit from wider geography, a larger population, and the ability to absorb more strikes than other groups.

The Houthis have an excellent geographical location, so they can bargain. They also have well-developed military capabilities and minimal obligations. From a humanitarian and political perspective, no one can pressure them. They hold few political obligations toward the citizens they govern. This opportunity, location, and modus operandi will allow the Houthis to be very effective in the coming period. The international response is weak, and the U.S. does not have a real policy toward Yemen.

U.S. policy toward Yemen has been governed either by attempts to address security threats like al-Qaeda or by a desire to align with the interests of its key ally, Saudi Arabia. The lack of U.S. policy is worse than bad policy. U.S. policy on Yemen is continuously influenced by domestic electoral considerations. This influence is recognized both by adversaries of the United States and enemies of common international interests. There will always be an opportunity to exploit election periods like this one.

The Houthis are acting freely now because of the absence of U.S. policy and the election year. The U.S. faces electoral pressure to avoid escalation in the Red Sea, and the Houthis recognize this as a political opportunity they can exploit with minimal repercussions. The situation is concerning and could lead to later negative outcomes, because it reassures different groups that there will be no consequences for their actions.

The peace process in Yemen is at an impasse. We believe that under the current conditions of the UN-led roadmap, the Houthis would be granted a central role in Yemen. Given the group’s recent behavior, this outcome could have long-lasting consequences on regional security.

So far, it does not seem that the behavior of the Houthis in the Red Sea has transformed the nature of international engagement, particularly regarding the existing roadmap for Yemen. The roadmap remains an international political priority, but we believe that the implementation of the commitments outlined within it will increase the political and military strength of the Houthis. This empowerment will come at the expense of other parties in Yemen, especially the internationally recognized government. This is the general scene that opens the door to our discussion.

Dr. Alterman: For people who don't follow Yemen closely, it's very confusing. There has been a civil war going on since 2014, and Saudi intervention began in 2015. But for much of the world, they didn't have to care. Then, the Houthis began attacking Red Sea shipping after October 7th, and suddenly this has become an issue of global concern. Can you help us understand the relationships between the Yemeni civil war, the Saudi intervention, Gaza, and Houthi attacks on Red Sea shipping? What's the connection between all of them?

Mr. Al-Madhaji: The war in Yemen has been going on for 10 years. The Houthis turned against other groups and went on to occupy the capital, Sana’a. The problem relates to the Saudi intervention, which after persisting for more than ten years, started to recede. The political will of the Kingdom of Saudi Arabia to effect a military outcome declined due to a series of developments and international pressures. This shift led to the creation of the roadmap aimed at ending the war in Yemen and reducing the high costs the international community was paying as a result of it.

The international community wants to get rid of this headache called the Yemen war. There was a settlement ready and a huge political reward for the winning party. Things were stable and the Houthis were poised to win at the end of the battle. It was a similar situation to the Taliban in Afghanistan and any other place with a fanatical group and political and military instability. October 7th changed the landscape completely. The Houthis began prioritizing the needs of the “Axis of Resistance” over their own. The group became involved in the military confrontation over Palestine, first with the drone attacks. So basically, what did October 7th do?

The events of October 7th disproved the political assessments that suggested the Houthis are largely independent from Tehran. On the contrary, the Houthis’ commitment to the “Axis of Resistance” is stronger than their commitment to their own political success. The Red Sea is a very important arena for understanding the extraordinarily deep relationship between Sana'a and Tehran. Tehran’s priorities will always outweigh those of Sana'a. Tehran’s political investment in the Houthis also brought higher returns than expected. As a result, the Houthis were elevated from an ally at the bottom of the ladder to an ally at the top of the ladder, representing greater opportunity than other Iran-backed groups.

The Houthis have the capacity to impress supporters of the “Axis of Resistance.” They have been able to gather more of its supporters behind them than Hezbollah. The Houthis were able to become an inspiring model for groups of young people who see that mobilization on behalf of Palestine has destroyed sectarian divisions. After October 7th, the Houthis proved their effectiveness through their relations with other dangerous groups. The expansion of the Houthis to the other side of the Red Sea, with the political and security deals reached with factions such as al-Shabaab, has proved that they are smarter than other groups affiliated with the axis of resistance. October 7th proved that the Houthis are the winning racehorse in the “Axis of Resistance” movement.

Dr. Alterman: It sounds like, from your description, the Houthi theory of victory is that they emerge as the major power brokers in Yemen. However, it also seems to me that by threatening global shipping, the Houthis have made their victory unthinkable for many powers in the region—not just the Saudis, but the Egyptians, the Americans, and the Europeans. Do you think that the Houthis have made a mistake by raising the profile of their conflict and making it unacceptable for them to emerge as winners?

Mr. Al-Madhaji: Normative political expectations do not align with Houthi behavior. For instance, the Houthis have not behaved as though they have won the battle in Yemen, but as though they must still act out commitments to their allies. A segment of the Houthis believe that they are positioned to win the war in Yemen, but the Houthis generally view themselves as bigger than just Yemen.

The deal that only gives them north Yemen is not enough for them. October 7th allowed them to redefine their political presence, not just as a local group, but as an actor with regional aspirations that can reformulate their role in the region. The behavior of Abdul Malik al-Houthi changed after October 7. He speaks differently from his podium and is now addressing a wider audience. He now presents himself as a great Islamic leader who is confronting Western designs of the region.

The Houthis’ aspirations are no longer limited to administering their presence in Yemen, although their military strategy still revolves around maintaining and expanding Houthi control of strategic resources, which are still in the hands of their adversaries. Their behavior, and nature of the coalitions that lead the group, suggest that their aspirations are broader.

Dr. Alterman: You said, as I've heard former U.S. ambassadors to Yemen say, that the United States has very rarely had a policy toward Yemen. Yemen has always been secondary to other policies that the U.S. is pursuing in the Middle East. As you pointed out, we have an election, there's an opportunity for the United States to have a policy toward Yemen. I'm especially interested in your view of what the goals of U.S. policy should be. You've described the Houthi vision of victory. What should the U.S. concept of a successful Yemen policy look like?

Mr. Al-Madhaji: U.S. policy toward Yemen only has been governed by security considerations, more specifically, interacting with the country as an area of concern because of Sunni extremist groups—namely the Islamic State group (ISG) and al-Qaeda. Beyond that, the political approach of the U.S. in Yemen has been to meet the interests of regional partners such as Riyadh and Abu Dhabi. Oman’s political priorities and national security interests were also considered. Yemen did not pose such a direct threat to international interests, but now the nature of these threats has changed radically.

The threats have grown larger than al-Qaeda and lone wolf attackers blowing themselves up on airplanes. Now, the threats posed by Yemen are changing the rules of international trade and leading to the rise of insurance prices in the Red Sea. Therefore, the United States must have a policy that ensures international interests are not threatened by what is happening in Yemen. Yemen is not a country locked in the middle of Asia, like Afghanistan, which can be given up. It is near the main maritime trade corridors in the world, on the doorstep of the southern Red Sea. U.S. policy must ensure international interests are protected and guarantee that there is a political balance among the parties in Yemen so that Houthis cannot overcome other groups.

Certainly, it is not possible to eradicate any party in Yemen, including the Houthis, but it is possible to support a political, economic, and military balance in the country that averts Houthi domination. If the group is able to dominate the country and move on to the next stage of international legitimation of its rule, they will be able to change the rules of the game in the Arabian Peninsula and the southern Red Sea.

This is an important strategic region that involves China, Russia, and many of the other parties that are active militarily in the Red Sea. The coast of Yemen overlooks the bank where the first Chinese military base in the region sits. China sees Yemen as an important corridor for its trade with Europe. Russia believes that there may be an opportunity to hurt the United States through Yemen. U.S. policy must ensure its capacity to neutralize these threats. This will only be achieved by fostering strong relationships with Yemeni partners that serve their interests and the interests of the United States beyond Riyadh and Abu Dhabi.

Dr. Alterman: To what extent does a successful U.S. policy have to address the distribution of power in Yemen and the way Yemeni political interests engage with each other? To what extent does it need to weaken the Houthis as a force? To what extent does the United States have to encourage what has been at least a stated goal of U.S. policy to improve the Yemeni economy and social conditions. The number of things that Yemen needs for prosperity is very long. Does that have to be a goal of policy? If not, what are the things that the United States absolutely needs to achieve?

Mr. Al-Madhaji: I think the roadmap being discussed right now must be reconsidered because it fails to contain the Houthis, and it will give them more strength. That should not happen. The United States must also be open to other options related to clearer political, military, and financial support for anti-Houthi parties. This will readjust the balance of power in the country. It will also give the United States leverage to better manage its individual and international interests in the Red Sea. It will reduce existing dangers.

Currently, all the policy constraints are applied only to the legitimate regions of Yemen. The legitimate governmental authorities were trying to monitor the Houthis’ financial operations to weaken their control and financial flows, but those efforts were sabotaged by misguided policy interference. At the heart of any U.S. policy toward Yemen should be an effort to help make the anti-Houthi camp more balanced and stable. So, yes, the United States must be tougher on the Houthis. It should be clearer in neutralizing risks and intervening in favor of the Houthis’ opponents.

Dr. Alterman: To make sure I understood you correctly, what I heard you say was that the United States needs to support efforts to put more pressure on the Houthis through economic and military means. The Emiratis were criticized, partly on a sectarian basis, for enlisting what others said were jihadi groups to fight the Houthis. How should the United States think about the military piece? How much should the United States do the fighting, how much should it support others to do the fighting, and how should it differentiate between groups that are acceptable to engage with and groups that aren't acceptable to engage with?

Mr. Al-Madhaji: The United States should go through the official political process in its engagement with Yemen. There is a national army and other military forces present under the Presidential Leadership Council, including the Joint Forces on Yemen’s western coast. Of course, some are salafists, and we know that this is controversial and raises many concerns—especially about sectarian conflict. However, there are different forces in Yemen. There are legitimate political officials represented in the Presidential Council. They enjoy legal legitimacy and have armed forces associated with the Ministry of Defense. The United States should support some sort of unified military body among these parties.

We're not asking for U.S. boots on the ground. This would be costly and would not meet the needs of Yemenis. It would anger many parties and not be a popular policy. However, the U.S. must support a more aggressive Houthi containment strategy. It should support the ability of the opposition parties to coordinate a concerted military effort against the Houthis. This is feasible because these legitimate military forces follow a military leadership with a legal and legitimate status in the Presidential Council. Some opponents of the Houthis are dangerous, but this issue affects the interests of everyone, not just the United States. Some Yemenis are also worried that religious factions might be given an opportunity to seize control in a vulnerable country like Yemen. I agree with you on this. At the same time, this problem cannot be solved by ignoring the legitimate groups in Yemen. We must strengthen those parties.

Dr. Alterman: What is the role of all the international actors? Which international actors should be involved? There’s been a UN role, a Saudi role, an Emirati role, a U.S. role, and a UK role. Is that the right group of international actors, and what should that group, or some other group, be doing that they're not doing right now?

Mr. Al-Madhaji: There are more actors in Yemen than just that group. It’s not just the United States, the United Kingdom, Saudi Arabia, and the United Arab Emirates that are central players in Yemen. There are additional agendas and political interests at play. For example, we have the Sultanate of Oman, which is a political ally of the Houthis and has enabled them. Oman is also a mediator, but it has played a decisive role in the political and military development of the Houthis. Oman is indeed directly involved in Yemen. For a period, Qatar was a dominant actor in Yemen, in terms of financing and involvement. The Emirates and Saudi Arabia are now decisive parties in the equation, as well as the United States.

Any discussion about Yemen that does not recognize the concerns of regional parties will not succeed in producing a settlement. The more Saudi Arabia made its Gulf neighbors angry or concerned, the more these countries financed its adversaries in Yemen. Yemen is a sea of sand in which Gulf relations are rising and sinking. All the proxy conflicts are playing out there.

What does this dynamic mean? It means you have to deal with the situation because it will only lead to the empowerment of dangerous groups like the Houthis, ISG, or extreme salafists. The salafists also have ambitions that make many parties anxious.

Dr. Alterman: It sounds to me that the strategy of putting more pressure on the Houthis, economically and militarily, is the policy that the Saudis and the Emiratis have been pursuing since 2015. What are they doing wrong?

Mr. Al-Madhaji: There was a lot of corruption. There were a lot of erroneous assessments. And more importantly, the war was unpopular globally. It was framed as a few of the richest countries fighting against one of the poorest countries—although this was not an accurate characterization of the situation. Additionally, before October 7th, people thought that the issues in Yemen were a small problem. Now, the damage is huge, and it's not only a regional threat. It’s a global threat.

Earlier, the damage used to only be a source of concern for countries in the region. Now, it worries the entire world. We are no longer the only ones hurt directly. I always give an example of how the Houthis’ behavior in the Red Sea will manifest in the future, as this is the main issue. Many parties are currently waiting for the Gaza war to end with the expectation that the threat from the Red Sea will subside. But for the Houthis, the situation is no longer about Gaza. They are pursuing a political opportunity through a method that will continue to allow them to ratchet up pressure on others as a means of reducing pressure on themselves.

If somebody burns a copy of the Qur’an in Stockholm, the Houthis will respond by targeting Swedish ships in the southern Red Sea. If somebody, or a right-wing politician in some country “insults Islam,” the Houthis will respond in a manner which serves their interests. We will not see a more rule-abiding or calmer version of the group. This is what the world now realizes. This is the difference between now and the ten years that preceded October 7th. Therefore, any sort of tough approach requires recognizing the Houthis as a threat to shared regional and global interests.

Dr. Alterman: I just have a few more questions. I would encourage members of our audience to use the sheets to send questions using the QR code. If you're watching at home or in your office, please send a question through the event page on the CSIS website or in the comments section on the YouTube stream. Maged, how do the Houthis make money?

Mr. Al-Madhaji: The Houthis are better at nothing than making money. They impose large taxes. They get oil from Iran and sell it domestically. They have a big business of selling ammunition from Yemeni territory. The Houthis are one of the most important vendors of ammunition in Africa, especially to rogue groups. According to our information, and we follow this closely, Sana'a is now viewed as dominant in in the East African ammunition market. They sell ammunition for pistols, Kalashnikovs, and other weapons. The Houthis produce locally in factories that were used by the Yemeni military and have since been developed further by the group.

They sell to Somalia, Sudan, and the Central African Republic. The ammunition also goes to other places around the world. The Houthis can collect money from everything imaginable. They lead and engage with smuggling networks that bring hashish into Saudi territory. This was an ancient trade that was carried out by independent contractors, and now the Houthis dominate these smuggling operations.

They can collect exceptional amounts of money while having no public obligations to fund. The Houthis do not pay for hospitals; the United Nations does this. They do not pay salaries to government employees despite the fact the Houthis collect three times the amount that the internationally recognized government collects in legitimate areas. And now, the international roadmap gives the Houthis the ability to pay the salaries of their soldiers and employees, as well as fund their activities using Yemeni wealth and strategic resources. Fundamentally, we are helping the Houthis become richer.

Dr. Alterman: Were you surprised that the Saudi-Iranian agreement last March in Beijing didn't have more of an impact on Houthi behavior, on Houthi relations with the Saudis? Was that a surprise to you or did you not expect it to have any impact?

Mr. Al-Madhaji: It did not have influence on the situation in Yemen. It did not change anything. Its only purpose was to protect Saudi Arabia from Houthi attacks. It did, however, curb Saudi Arabia’s willingness to support its political and military allies. In this sense, the deal had a negative impact on the balance of power, especially given that Iran remained committed to supporting its allies politically and militarily. Saudi Arabia was able to neutralize the Houthis from posing a threat to them through the agreement, but not restrain them from carrying out attacks against opponents at home or in the Red Sea. Chinese trade exporters who use the Bab al-Mandeb Strait to reach Europe have now even been affected.

Dr. Alterman: Before I go to the question, and there's some excellent questions here—thank you for that—can you describe the impacts of the war on the tens of millions of Yemenis? There's been a war in the north for more than 20 years. There's been a war that's ravaged much of the country for almost a decade. What does that mean for Yemen? What does it do for Yemen? How does it affect tens of millions of Yemenis all over the country?

Mr. Al-Madhaji: Let me give you some examples. Yemenis, not just the bulk of the population that resides in Houthi controlled areas, have not received salaries for 10 years. The remaining population in areas controlled by the government are also suffering, as the government has struggled to pay salaries ever since the Houthis targeted the oil sources. Due to the blockade on food at the Yemeni ports and the complexities of shipping, import costs are very inflated. This is a country that imports 90 percent or more of its goods.

This also led to a rise in container costs from $3,000 to approximately $7,000 or $8,000 even prior to October 7th. After the Houthi intervention in the Red Sea, the cost rose from $7,000 per container to $15,000. I am talking about shipments coming from China. These are numbers that affect the daily lives of citizens, including their ability to buy rice and wheat. Essentially, Yemenis do not have the capacity to buy the simplest goods, and the few things that do enter the country have become more expensive. After the Houthi attack on Tel Aviv, which resulted in an Israeli casualty, insurance companies again increased costs following Israel’s targeting of the Hodeidah port. We are talking about prices above what people can handle.

In addition to the destruction of infrastructure, which has led to the obstruction of the trade and the cessation of commercial businesses, Yemen is paying the price for climate change. There are massive rains in Yemen. There are floods that have not stopped for over a month. This extreme weather has struck impoverished areas in Yemen. The war has disrupted the natural flow of life in Yemen, and for over ten years, Yemenis have been living in unprecedented levels of poverty.

Dr. Alterman: I'm going to turn to the questions. I’ll tell you now, we're not going to get to all of them. You've elicited a number of very interesting and difficult questions, and one is: the World Food Programme (WFP) and other humanitarian groups have had ongoing challenges providing food assistance to Yemenis. What's the path forward to ensure that food can consistently get to those in need? Part of that question involves the Houthis' insistence on getting payment or taxing food that goes into Houthi controlled areas.

Mr. Al-Madhaji: Houthis not only impose taxes; they also divert most of the aid to the hands of their followers. We have published a series of reports on how humanitarian aid has been redirected. The problem with the food distribution process is that it does not guarantee the arrival of food. Before the reductions in humanitarian assistance, our reports said that around 70-80 percent of the core aid went only to those loyal to the Houthi movement. Moreover, a substantial portion of that aid is being used to directly fund military operations or benefit Houthi fighters. This has always been a subject of great controversy. How does the WFP monitor the delivery of aid? There have been struggles on many levels about the Houthis continuously imposing their conditions, but in general, the international community was happy to pay the bill and didn’t do their due diligence on where things ended up. This has changed now. There are discussions between the UN and the Houthis regarding humanitarian aid and medicine, but this is not enough.

The issues have not yet been resolved. They have not set any limits. About two months ago, the Houthis carried out a coordinated attack against activists, humanitarian workers, and employees of international organizations and UN agencies. This includes the Deutsche Gesellschaft fur Internationale Zusammenarbeit, which has now closed its office in north Yemen. Around 100 local Yemeni humanitarian workers are detained. Any local humanitarian employee, because of the lack of protection afforded to them, cannot help but comply with Houthi dictates. Otherwise, they will be accused of spying for the United States. The Houthis gathered the managers of international organizations, including the resident representative of the UN in Yemen, in a hall like this one and gave a speech where they chanted their slogan and insulted the female UN employees. Despite the unprecedented scene, the United Nations said nothing. There is not a red line drawn by international organizations toward the Houthis that has not been violated by the group. There has been no response.

Dr. Alterman: What should people do about that?

Mr. Al-Madhaji: Establish red lines. Barriers should be set. The Houthis stormed the Office of the High Commissioner for Human Rights (OHCHR) and looted materials, including testimonies of victims, who were supposed to feel safe with their confessions being conveyed to the OHCHR. For three days, the Houthis tampered with these documents, compromised the information, and then handed them over to the United Nations. The UN did not say anything, except for a short statement, which did not say that some operations will be suspended or that meetings with Houthi political leaders will stop. The UN has to do something. How can we expect that their employees adhere to international humanitarian standards if no protection is offered to them? We must start establishing harder red lines, and there must be a response if Houthis cross them.

Dr. Alterman: I'm still not sure how one deals with the Houthis when they cross the red lines, because they've been crossing red lines on security in the Red Sea. Let me ask you about security in the Red Sea or a number of questions about the U.S. military operations attacking launch sites in Yemen. Some say the U.S. should be even more aggressive. How should the U.S. think about the military component of its Yemen strategy? How do Yemenis perceive U.S. and allied military operations in the Red Sea?

Mr. Al-Madhaji: I cannot give advice to the U.S. Department of Defense on how to target the Houthis. This is not the platform for that. I think we all realize that right now in its military dynamic with the United States, the Houthis are the political victor. In their military actions, the United States and the United Kingdom have harmed the Houthis little, and the Houthis have been able to present themselves as heroes fighting against the United States for the sake of Palestine.

Over three months, the United States has paid for expensive missiles to be shot down by cheap drones. This is not a problem for Yemenis; it might be a tax problem for Americans. The problem for Yemenis is that the United States’ response is weak and makes the Houthis appear stronger, able to withstand attacks from the United States, and deal blows in return. Therefore, for many angry people and extremists, the United States made the Houthis into heroes.

Dr. Alterman: Let me ask again: what's the solution? If the current strategy of relieving civilian suffering strengthens the Houthis because they either tax or steal the assistance, what can the United States and its allies do differently to get different outcomes?

Mr. Al-Madhaji: Here is a simple and direct answer. The United States need not increase its military activity in Yemen, because this is not wanted and enjoys little popularity. The U.S. should invest more in the military and political opponents of the Houthis. This is the only available path.

Dr. Alterman: Do you have ideas about how the United States and its allies can increase economic pressure on the Houthis without endangering vulnerable Yemenis who live under Houthi control?

Mr. Al-Madhaji: You have to trace the warlords that are making financial gains. There are many financial institutions, money changers, and merchants who have established networks in Houthi territories. The Houthis have been able to bury money among them. When imposing sanctions, the United States needs to ensure that it does not cause harm to the fragile and weak commercial structure in Yemen. It must make distinctions between merchants who existed before and after 2015. You need to account for the political pressure that may be exerted on some large merchants and industrial companies, forcing them to serve Houthi interests. These entities should be granted exceptions as the United States seeks to undermine the Houthis financially.

Houthi money moves through Salalah, Dubai, Oman, Riyadh, and the south of the Kingdom. They have many investments in China and other places. There are commercial agents who establish agencies in Yemen, as well as businessmen and financiers affiliated with the Houthis. There are some efforts underway to crack down on these networks. Recently, the Ministry of the Treasury has been issuing semi-periodic official regulatory directives on the topic.

I think we are on the right track, but we must differentiate between harm to the economic allies of the Houthi movement and harm to the fragile trade movement in Yemen. This requires greater effort in tracking and investigating the sources of the Houthis’ wealth, how it moves, and who buries it.

Dr. Alterman: Somebody notes that you said the Houthis are working with al-Shabaab. What does “working with al-Shabaab" mean? Is it sharing money, arms, bases, members, messaging, ideas, WhatsApp groups? I mean, when you say they're working, what does that really mean?

Mr. Al-Madhaji: There is coordination and an alliance between the two parties. One of the Houthis’ military commanders, Abdulwahid abu Ras, recently appointed deputy foreign minister, paved the way for greater military and political coordination between the two groups. There are multiple sources which indicate that the two parties met. In the early 1990s, the Somali pirates and the Shabaab movement reshaped the security picture in the Gulf of Aden and the outskirts of the Indian Ocean through their various attacks. This led to the deployment of U.S. military ships to the area twenty years ago, in addition to those sent by other countries.

The Houthis are now threatening international interests in the southern Red Sea. On one side of the sea is the Houthi movement, and on the other side is the Shabaab movement. If these groups strengthen their collaboration, we will witness things like more information exchanges and more coordinated military responses by the two most dangerous groups on the Gulf of Aden. If the scope of this issue expands, and the Houthis manage to shatter all barriers, then this will need to be dealt with in addition to an ISG presence in Kassala and southern Sudan, the Portland Mountains, and the Somali ports. The southern Red Sea region is an area with extensive political and social marginalization. There are many angry groups for the Houthis to invest in.

Dr. Alterman: What would Houthi escalationlook like? Do you think it is possible that the Houthis will once again attack Saudi Arabia? Will they once again attack the United Arab Emirates? If we do get to a ceasefire in Gaza, will that have any impact on Houthi military operations in the Red Sea?

Mr. Al-Madhaji: The Houthis still have different options in the Red Sea. If my characterization is correct, security intervention is a form of limited military pressure that ensures civil goals are met but does not lead to too severe of an escalation in targeting U.S. ships. The Houthis possess the ability to launch more intensive drone and missile salvos, posing a real threat to vessels. There has not yet been a widespread deployment of sea mines, yet they have the capacity to do this. The Houthis control a chain of islands in the middle of the Red Sea, including Kamaran Island, and if they spread sea mines around regional waters, the group can do much damage. Therefore, the Houthis are still pursuing a policy of calculated escalation.

The Houthis have unmanned submarines, sea mines, and missiles that they haven't used a lot. These remain strategic weapons for the group. I believe that they can indeed harm international military assets in the Red Sea. These are dangerous avenues that I think the Houthis can escalate through when it suits them. The Houthis have military capabilities to harm oil facilities in Saudi Arabia or in the Emirates. They have the full spectrum of military capabilities, because they have accumulated a significant and dangerous military reserve over the past years.

In the event of a ceasefire or truce in Gaza, I think that the Houthis will halt their activities to send a message that they are true to the declared goals of their operations. However, will this mean that they will stop their operations in the southern Red Sea and Bab al-Mandeb when it again becomes politically convenient? No, this will not happen. If they feel threatened, if one of their allies in the “Axis of Resistance” feel threatened, or if the Houthis want to send a political message or increase their popularity, they will again use low-cost drones to target ships passing through this trade corridor.

Dr. Alterman: Should we be paying special attention to oil tankers? Are they paying special attention to oil tankers? What is their interest?

Mr. Al-Madhaji: They feel that the political benefits and the media attention they receive when they target oil ships is higher compared to other vessels. They began targeting them on a regular basis after attacking the Greek ship that is likely to sink. Two other ships have now been targeted, one of which CENTCOM announced was a Saudi oil tanker and the other was a ship flying under the Panamanian flag. These two incidents took place directly after the attack on the Greek oil ship. Targeting oil tankers is a core priority of the Houthis’ military strategy. They realize that the more harm they cause, the larger the gains. The specific question is: who determines these goals? Are they determined by the Houthis only, or are they determined by the the “Axis of Resistance”?

Dr. Alterman: Let me ask a slightly unfair question: In 2018, the Emiratis were threatening to attack the Houthis in Hodeidah, and the Americans leaned on the Emiratis and said, "Do not do that." And they reached the Stockholm Agreement, and we have sort of been in a stalemate since. In your judgment, was that a mistake of U.S. policy to not have a major military operation deal a a military blow to the Houthis? Or do you think we would be in a difficult situation, as we are now, either way?

Mr. Al-Madhaji: Yes, it was a big mistake many of us committed. There would have been a cost, definitely, but there will always be a humanitarian cost to any military action that changes the political landscape. If the attacking troops had won in the battle for Hodeidah, it would have changed the whole balance, the whole military scene, and we could have avoided a lot of what we're witnessing right now. The political and military size of the Houthi group would have been much smaller than it is now. The opportunity to achieve a political settlement based on a political balance would have been possible.

Yes, in 2018 the United States and the international community made a grave mistake. The Joint Forces were only 2 kilometers from the port of Hodeidah. There would have been a cost to pay for four or five months. Now we have been paying the cost for more than seven years.

Dr. Alterman: Maged Al-Madhaji, I haven't run out of questions, but I have run out of time. I want to thank you very much for coming, for honoring us, and for having such a thoughtful and wide-ranging discussion. I want to thank the audience here and the audience on the internet. We certainly hope to continue conversations about Yemen, and hopefully we will get to the point where you feel there is a U.S. policy on Yemen that is leading toward a better life for Yemenis and Americans alike. Thank you.

Mr. Al-Madhaji: Thank you, Dr. Alterman.

 (END.)