Houthis Build Parallel Economy Worth Billions in Yemen

The Houthis have constructed an extensive parallel economy in northwestern Yemen that generates an estimated $2.5 billion annually. This financial system relies on a centralized network of customs duties, taxes, and religious alms. To tighten their grip on commerce, Houthi authorities revoked the licenses of 4,225 commercial agencies, which critics claim is a strategy to replace independent merchants with businesses affiliated with the group.

Beyond domestic taxation, the United States Department of the Treasury alleges the group earns more than $2 billion per year through illicit oil sales. These transactions are reportedly facilitated by Iran through a network of companies based in Dubai. While the group has expanded its military control along the Red Sea coast, international sanctions continue to limit the conversion of these territorial gains into sustainable economic growth.

This war economy operates alongside a severe humanitarian crisis affecting 22.3 million people. Public sector employees in Houthi-controlled areas remain unpaid, a situation the group blames on a Saudi Arabian blockade and the relocation of the Central Bank of Yemen to Aden.