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The United Nations fears that the US designation of Houthis could harm Yemen's economy

By Michelle Nichols

UNITED NATIONS (Reuters) – The United Nations fears a U.S. decision to put Yemen's Houthi rebels back on the list of terrorist groups could harm the war-torn country's economy, particularly commercial imports of essential goods, it said a senior U.N. aid official on Wednesday.

The U.S. move, announced last month, takes effect Friday and imposes tough sanctions on the Iran-aligned group aimed at cutting off funding and arming the Houthis as they step up attacks on ships in key shipping routes deployed on the Red Sea.

U.N. relief operations director Edem Wosornu said that while the humanitarian community was concerned about “potential negative impacts,” he noted that Washington had issued exceptions to mitigate the impact on civilians in Yemen, where the U.N. says there are more than 18 million people live people need help.

“Nevertheless, we fear that there could be impacts on the economy, including commercial imports of essential goods on which the people of Yemen depend more than ever,” Wosornu told the UN Security Council.

“Humanitarian aid cannot compensate for gaps in the supply of commercial goods. Such impacts can reverberate across the country. Yemen’s already fragile economy cannot absorb further major shocks,” she said.

Yemen has been mired in conflict since the Houthis ousted the government from the capital Sanaa at the end of 2014. The Saudi-led military coalition intervened in 2015 with the aim of restoring the government.

But in recent months, the Houthis have attacked ships in and around the Red Sea, saying they were acting in solidarity with Palestinians in Gaza. It has disrupted global trade, stoked inflation fears and heightened concerns that the fallout from the Israel-Hamas war could destabilize the Middle East.

Wosornu said transportation costs to the Yemeni ports of Hodeidah and Aden “have increased significantly since November due to ongoing hostilities.”

“The World Food Program has reported an increase of up to 110% in container shipments to Yemen. Other humanitarian organizations have seen freight rates increase by up to 318%,” she told the council.

The United States and Britain have carried out strikes against the Houthis in Yemen to stop the ship attacks. They described the measures as necessary and proportionate and justified as self-defense.

Commenting on the U.S. decision to redesignate the Houthis as a terrorist group, U.S. Deputy Ambassador to the United Nations Robert Wood said: “The United States seeks to specifically target the Houthis' terrorist activities while preventing any humanitarian harm to the Houthis People in Yemen who deserve to be given the chance for a better future.”

(Reporting by Michelle Nichols)

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