Yemen Monitor / Newsroom:
A new study published by the Mokha Center for Strategic Studies reveals that between 2014 and 2025, the Houthi group systematically reshaped the private sector in areas under its control, creating a parallel economy tied to its political and military structure that provides sustainable funding for its activities.
The study, titled “The Parallel Economy: How the Houthi Group Is Reshaping the Private Sector and Turning It into a Pillar of the War Economy,” analyzed approximately 68,000 business registrations and commercial licenses to track changes in commercial activity. It found that economic networks linked to the Houthis expanded significantly while the influence of Yemen’s traditional merchant families declined.
According to the study, the Houthis’ control extended beyond the military seizure of resources to the construction of a financial and administrative system that redirected economic activity to serve the war economy. This was achieved by controlling the issuance of business licenses and commercial registrations, granting preferential treatment to companies linked to Houthi leaders, and imposing taxes, fees, and levies throughout every stage of the commercial supply chain.
The report argues that these policies transformed the private sector from an engine of economic growth and investment into a primary source of financing for the group. The Houthis reportedly focused on the country’s most profitable sectors, particularly oil, energy, currency exchange, financial transfers, trade, and imports.
The study estimates that the group collects approximately 1.5 trillion Yemeni rials (around US$2.5 billion) annually from the private sector through taxes, customs duties, fees, levies, and additional payments imposed under the label of the “war effort.”
According to the findings, the general trade and import sector accounted for about 26% of all newly registered businesses, reflecting what the study describes as the Houthis’ strategy to dominate supply chains and control the movement of goods within territories under their control.
The study also notes that commercial networks affiliated with the group do more than generate revenue; they also help procure military and technological supplies. It cites international reports indicating that commercial networks have been used to smuggle dual-use materials, including electronic technologies and semiconductors, that can be utilized in the development of drones and missile systems.
The report concludes that the Houthis have succeeded in creating a new business class aligned with the group at the expense of independent merchants and traditional business families. It warns that the continued existence of this parallel economy could pose a long-term obstacle to efforts to rebuild the Yemeni state after the conflict ends.
Finally, the study criticizes what it describes as inadequate government and international efforts to monitor commercial networks linked to the Houthis, track financial flows, and oversee supply chains that may be used to support the group’s military activities.
