Not just a proxy war: Yemen’s strategic importance

Not just a proxy war: Yemen’s strategic importance

Yemen is a relatively small, poor, and remote country. However, recent airstrikes by a Saudi-led coalition against the advancing Houthi rebels have highlighted the strategic importance of this country. 

When the Arab Spring led to an unprecedented wave of popular uprisings, Yemen seemed to be on a trajectory towards non-violent and democratic change.

The ouster of long-time ruler Ali Abdullah Saleh in 2011 and the awarding of the Nobel Peace Prize to Tawakkol Karman, one of his most vocal critics, seemed a manifestation of this.

However, Mr. Saleh’s attempts to return himself or his son to power by cynically aligning with the Houthis, a rebel group he fought during his 22 years as President, has led to a severe internal crisis which threatens to cause wide-spread regional instability.

The situation in Yemen is not only dangerous for domestic reasons. A number of factors make the increasingly volatile situation in Yemen especially complex.

There is a real risk of contagion throughout the Gulf region. Further regional escalation could cause major instability at best and armed conflict at worst. In any case, the consequences would be felt across the world.

Recent escalation marks a shift in regional policy

Several aspects highlighted by the recent escalation of the situation in Yemen stand out especially.

To begin with, Yemen is yet another token in the increasing regional struggle for power between Saudi Arabia and Iran.

Similar to the situation in Lebanon, Iraq and Syria, the conflict in Yemen resembles a proxy war being fought between the world’s dominant Sunni nation, Saudi Arabia, and its Shi’a adversary, Iran. In Yemen, the recent Saudi-led (and US-supported) airstrikes by a coalition of Sunni states to check the advance of the Shi’a Houthi rebels, allegedly backed by Iran, mark a new and dangerous level of escalation between the two regional heavyweights.

So far, conflicts between the two powers remain restricted to the territory of client states. If, however, Iran were to enter the fighting on the side of the Houthis, a direct confrontation between Saudi Arabia and Iran could result.

The airstrikes and the Sunni coalition also mark a sign of a risky foreign policy shift for the Wahhabi kingdom to what has been called a ‘post-American phase’.

As America re-balances to the Asia-Pacific and withdraws from the Middle East, the House of Saud has become more focused on a self-reliant foreign policy. This shift first became apparent in 2011 when Saudi Arabia crushed a Shi’a revolt in neighboring Bahrain by leading Gulf Cooperation Council troops across the causeway.

The latest Saudi assertiveness may be the effect of the young, influential defence minister, the newly-enthroned King Salman’s son Muhammad. It may also reflect Saudi anxieties over the atomic deal by the P5 + 1 with Iran.

In any case, it highlights the seriousness with which Saudi Arabia views the advance of the Houthi rebels close to its own territory.

Whether the airstrikes will defeat the Houthis or stabilize the situation in Yemen remains questionable and much will depend on whether Saudi Arabia can avoid being drawn in to a long and draining campaign.

Global economic repercussions

Economically, Yemen is important to the global flow of oil. In the resource-rich Arabian Peninsula, Yemen is only a minor player in the global oil business.

Because of a lack of investment and continuing attacks on its infrastructure, Yemen’s oil production has decreased since 2001. (It just about produces 131,000 barrels of crude oil per day and its oil reserves are barely bigger than those of the United Kingdom.)

Yet a major escalation of its conflict would have severe repercussions across global oil markets for geo-strategic reasons. Yemen is located adjacent to the Strait of Hormuz, the world’s most important energy choke-point, and to the Bab-el-Mandab Strait, which controls access to the Suez Canal.

Disruptions of these seaborne supply routes to Asia and Europe, to which there few alternatives, would result in increased volatility in the oil price. If these transport routes are temporarily blocked, for instance by mines dropped in the narrow shipping lanes, the current global supply overhang could quickly diminish.

Potential for deeper conflict

Furthermore, Yemen’s inherent instability and its porous borders pose a direct threat to its neighbors Saudi Arabia and Oman. In a worst case scenario, Yemen’s situation could lead to disruptive spill over-effects in the whole Golf region.

Yemen’s large population of over 26 million people is very poor (according to the UN, GDP per capita in 2012 was not even 1,400 USD). Sixty three percent of its people are under the age of 24.

In addition, Yemen’s society is deeply influenced by ancient tribal loyalties. It is also divided between Sunni (65%) and Shia (35%) factions.

Its remote mountains and desert plains have long been a safe haven for terrorists, especially al-Qaeda in the Arabian Peninsula (AQAP), which controls much of the Hadramawt province.

Yemen’s lawlessness could also be exploited by other Islamist extremists such as Islamic State (IS). IS has already claimed responsibility for the bombing of two Houthi mosques in Sana’a which resulted in more than 140 casualties.

Whether this will prove as the ‘Middle East’s Franz Ferdinand Moment’ is for future historians to decide. The attacks nevertheless provided one possible pretext for the intensifying of the rebellion and the subsequent airstrikes.

Without doubt, the situation in Yemen is highly complex and dangerously combustible, and Saudi-led airstrikes are not likely to produce a settlement. As recent history throughout the region has shown, military interventions rarely ever produce peaceful resolutions to entrenched conflicts, especially if religious undercurrents are involved.

The international community has an interest to promote peaceful and diplomatic solutions which involve all relevant parties. This is especially true for Yemen.

Otherwise, regional instability will continue to adversely affect investment and business sentiment, or worse, lead to full-blown armed conflict between the region’s major powers.

About Author

Marc Moussalli

Marc Moussalli is an independent political risk consultant. Previously, he worked for major financial institutions in London and Frankfurt. As Managing Director, he advised some of Europe’s largest institutional investors. He holds an MA in International Relations from the University of Leicester and a BA in Business Administration from DHBW Mannheim.