Aden (South24)

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The Iran-backed Houthis and Saudi media outlets announced yesterday that commercial ships had begun entering the port of Hodeidah "without detention or delay", as part of a truce agreement with the Saudi-led Coalition.

Houthi Deputy Foreign Minister Hussein Al-Ezzi tweeted on Sunday that "the direct transit of all commercial ships to the ports of Hodeidah - without detention or delay - is a first step in the right direction."

The Houthi official called for strengthening and expanding this step by "abolishing the UN inspection mechanism" for ships crossing to the important port on the Red Sea. On February 6, Al-Ezzi accused the United Nations of obstructing the licensing of a ship "without justification."

The Saudi newspaper Asharq Al-Awsat said today that "additional facilities were provided by the Coalition to ease the inspection of ships entering the port of Hodeidah."

The newspaper quoted Yemeni officials as saying that this comes "within the framework of confidence-boosting measures taken by the Arab Coalition for the success of the United Nations efforts to achieve peace in Yemen, and to reach an agreement to renew the truce and expand economic and humanitarian gains for civilians in militia-controlled areas."

In conjunction with this, local sources told "South24 Center" that the Houthis began obliging merchants to import through the port of Hodeidah instead of the port of Aden in South Yemen.

The sources said that the group seized shipments of commercial materials that were imported through the port of Aden at land customs outlets between North and South Yemen. The Houthis distributed "forms" pledging to import through the port of Hodeidah, according to the sources.

On February 7, the chairman of the Yemeni Presidential Leadership Council (PLC) Rashad Al-Alimi warned of "the repercussions of the Houthi actions against the private sector and the freedom of movement of people and goods between the governorates," during a meeting with the UN Envoy Hans Grundberg in Aden.

Repercussions on the port of Aden

In exclusive statements to "South24 Center", the head of the Chamber of Commerce in Aden, Abu Bakr Obaid, said that merchants began importing goods through the port of Hodeidah, which is controlled by the Houthis, because the group prevented the import process through the port of Aden.

He added, "The Houthis prevented the entry of any goods that are customs collected in the port of Aden to North Yemen and stopped them at their checkpoints. They stipulated that any goods be imported through the port of Hodeidah. The port of Aden is facing a major crisis because nearly 80% of the goods imported to Yemen go to North due to the dense population."

In early January, the Yemeni cabinet in Aden approved raising the price of the customs dollar by 50%, amid objections from the Southern ministers and the Southern Transitional Council (STC) and warnings of the move's repercussions on the port of Aden in favor of the Houthi-controlled port of Hodeidah.

The Council of Ministers approved decisions of the Supreme Economic Council headed by Yemeni Prime Minister Maeen Abdulmalik, which included raising the price of the customs dollar from 500 Yemeni riyals to 750 Yemeni riyals. The decisions also included a dose in the prices of fuel, electricity and water.

On February 6, press sources said that the Administrative Court in Aden suspended the decision to raise the price of the customs dollar, after a lawsuit filed by human rights activists and journalists against Prime Minister Maeen Abdulmalik and the Supreme Economic Council.

The Supreme Legal Committee of the STC blessed this decision. A statement added: "While the committee commended the Administrative Court's decision to stop that decision, it considered at the same time the need for the court's decision to follow judicial procedures to implement it in practice."

Economic expert Majid Al-Daeri believes that these developments will have serious repercussions on the port of Aden and other ports in South Yemen. He added to "South24 Center": "The price of the customs dollar in the Houthi areas is still only 250 riyals. This will constitute a severe economic blow to the internationally recognized government."

The head of the Center for Studies and Economic Media, expert Mustafa Nasr, agrees that the decision to open the port of Hodeidah will have "negative repercussions on the port of Aden and other government ports."

He told "South24 Center": "Opening the port of Hodeidah will certainly have negative repercussions on the port of Aden and other ports affiliated with the government, especially since the port was opened for the entry of containers. This will make the port of Aden and many ports within the framework of the internationally recognized government areas lose a lot of resources."

"We know that during the past period, customs and tax revenues declined by 280 billion riyals, according to estimates, due to opening the way for the import of oil derivatives through the port of Hodeidah," he added.

"Opening the port of Hodeidah will make the government ports witness a very large decline in their revenues, and this will be directly reflected in the customs and tax revenues that the legitimate government collects. This will be beneficial for merchants who import to the Northern regions and will increase the Houthis' revenues," he added. 

Additional war resources

The port of Hodeidah is one of the main sources of financial resources for the Houthis in North Yemen. In December 2018, the "Stockholm agreement" between the internationally recognized legitimate government and the Houthis halted the progress of the Southern Giants' Brigades towards the liberation of the port.

The UN agreement stipulated that the port's revenues be used to pay the salaries of civil servants in areas under the control of the Houthis, which was not adhered to by the group, which is demanding that the salaries of soldiers and civilians be paid from the revenues from the sale of crude oil in South Yemen.

In May 2020, the Yemeni Ministry of Foreign Affairs accused the Houthis of "plundering the revenues from the fees for importing oil derivatives from the special account in the Central Bank in Hodeidah, which amounts to more than 35 billion Yemeni riyals (about $60 million) allocated to paying the salaries of civil servants."

The ministry said in a statement that this constitutes "a flagrant violation of the understandings of the temporary measures to import oil derivatives to the port of Hodeidah, which were agreed upon with the Office of the Special Envoy of the Secretary-General of the United Nations in Yemen."

A senior STC official accused the Yemeni government of abandoning the condition of using the revenues of the port of Hodeidah to pay the salaries of employees, in favor of the Houthis.

The Deputy of the Department of Foreign Affairs of the STC, Anis Al-Sharafi tweeted that "the Stockholm agreement stipulated that the revenues of the port of Hodeidah be deposited in a special bank account supervised by the United Nations, and that money is spent to cover the salaries of employees in the areas controlled by the Houthis, then the truce agreement came on April 2, so the government exceeded that condition, and abandoned The revenues of the port of Hodeidah are in favor of the Houthis, which prompted them to demand more.

He added, "Since 2015, Southerners have been calling for the transfer of the mechanism for inspecting ships entering the country's ports to the port of Aden, including several letters and efforts made by the STC and the Minister of Transport, but nothing of that happened. Then we are surprised today by a move to open the port of Hodeidah without inspection."

Al-Sharafi criticized the decision to raise the price of the customs dollar, accusing the government headed by Maeen Abdulmalik of increasing prices "in a way that guarantees the recession of the ports of Aden and Mukalla in favor of the port of Hodeidah and supporting the Houthi treasury."

Commenting on the political dimensions of the decision to open the port of Hodeidah, expert Mustafa Nasr said: "In principle, any efforts towards peace, restoring peace to the country, and re-development and reconstruction, in my opinion, are a positive step that serves the citizens, regardless of their status."

He added, "However, these efforts must be within the framework of a sustainable peace based on justice, and there must also be clear procedures for restoring and building the state in accordance with the principles previously agreed upon, which strengthens the status of the state and eliminates any entities outside it."

Expert Majed Al-Daeri described the coalition's decision regarding the port of Hodeidah as a "dangerous decision," noting that it represents "an economic rescue for the Houthis" and enables the group to "the largest source of revenue in northern Yemen."

Al-Daeri believes that the decision will not contribute to the peace process, pointing out that the Houthis "were suffering from a huge economic and financial problem, which limited the activity of the group's war machine." He pointed out that these economic obstacles may end after the decision to open the port of Hodeidah.

Al-Daeri referred to the smuggling of Iranian weapons to the Houthis, which he expected to multiply after the opening of the port of Hodeidah. He added, "The Houthis will resume the war and the peace process will be impossible."