The Minister of Information stated that the Houthis have devastated Yemen’s private sector, turning it into a funding source for their war and Iranian agenda.

Houthi Militias Devastate Yemen’s Private Sector, Claims Minister

Minister’s Statement on Economic Impact

Yemen’s Minister of Information, Culture, and Tourism, Muammar Al-Eryani, has accused the Iranian-backed Houthi militias of systematically destroying the private sector. He stated that the militias have turned it into a permanent funding source for their war efforts and Iranian sectarian projects, jeopardizing the livelihoods of ordinary Yemenis. Al-Eryani emphasized that this situation represents a significant aspect of the militias’ parallel economy and a primary source of financing for their conflict.

Targeting the Private Sector

In a recent press statement, Al-Eryani explained that since seizing control of the capital, Sana’a, and several provinces, the Houthis have implemented a deliberate strategy to dismantle the private sector. They have targeted major commercial houses, import-export companies, and investors by imposing illegal taxes, exorbitant fees, and arbitrary levies. This approach aims to drive these businesses to bankruptcy or force them to leave, paving the way for the Houthis to take over their operations or replace them with affiliated companies.

Economic Terrorism Tactics

Al-Eryani pointed out that the Houthis have exploited state apparatuses under their control, including tax and customs authorities, security forces, and judicial systems, to impose what he termed “economic terrorism.” They have levied taxes that can reach up to 300% of the legal dues, in addition to imposing illegal fees for “war efforts” to seize resources and tighten their grip on the national economy.

Impact on Small Businesses

The minister noted that these oppressive practices extend beyond large investors. Small businesses, street vendors, and even local markets have faced daily or weekly levies imposed by militia supervisors, effectively converting markets into ongoing “war piggy banks.”

Control Over Commercial Chambers

Al-Eryani confirmed that the Houthis have taken control of the Industrial and Commercial Chamber in Sana’a, appointing loyal leadership and obstructing transactions for hundreds of companies. They have refused to renew business registrations and imposed hefty taxes on companies and factories, estimated between $1 billion to $1.5 billion annually. The militia has also doubled customs fees on imports through the port of Hodeidah, with the “Restore Initiative” documenting the collection of $789.9 million in customs fees between May 2023 and June 2024.

Illegal Taxation and Revenue Collection

The minister added that the Houthis impose double customs fees at internal checkpoints after goods enter the ports. A report from the UN Security Council experts indicated that the Houthis collected 3.392 trillion Yemeni riyals in illegal fees in 2023. They also impose various levies under the guise of “cleanliness, improvement, health, and duties,” along with extortion for what they call “military manufacturing” and exploiting religious occasions for additional collections.

Seizure of Company Assets

Al-Eryani highlighted that the Houthis have seized hundreds of companies through what they term “judicial guardianship.” The “Sam Organization” documented the militia’s appropriation of assets and funds exceeding $1.7 billion, along with the confiscation of assets valued at over $2 billion, including 38 major companies in Sana’a alone.

Unfair Competitive Practices

The minister pointed out that the Houthis have established their own oil, import-export, and contracting companies, granting them customs exemptions and preferential exchange rates. They have forced traders to engage with them, creating an unfair competitive advantage. Additionally, they have closed factories and companies, monopolized fuel derivatives, confiscated goods at checkpoints, imposed price lists, and levied fines contrary to the law. They have also arrested and kidnapped traders and business owners for extortion.

Consequences for the Economy

Al-Eryani asserted that these policies have led to the bankruptcy or exodus of hundreds of companies and investors, resulting in the loss of thousands of job opportunities. This situation has devastated the middle class, increased poverty and unemployment rates, reduced GDP, and diminished industrial and commercial activity in areas under militia control.

Call for International Action

The minister stressed that the Houthis’ ongoing plunder of the private sector and its resources constitutes a blatant violation of national and international laws and human rights. He called for urgent action from the international community to condemn these practices, impose sanctions on the involved leaders, and support the legitimate government’s efforts to protect what remains of the private sector. This support aims to prevent the Houthis from financing their war through the resources of the Yemeni people.

Ongoing Investigations into Houthi Financing

Al-Eryani confirmed that efforts to expose the Houthis’ parallel economy continue, including investigations into the telecommunications sector, money exchange companies, and the misappropriation of humanitarian aid. These efforts support the restoration of the Yemeni state and aim to alleviate the ongoing suffering of the Yemeni people.

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