Some commercial operators are looking to resume activities in Yemen, following gains made by Saudi-led coalition forces since July and President Abdrabbuh Mansour Hadi’s return to the country in September. However, the outlook for Yemen remains extremely volatile and operators there remain exposed to considerable security and political risks. A protracted conflict, continued threats from militant groups and unresolved political divisions will all continue to present extremely challenging conditions for companies looking to operate in Yemen. This briefing provides four likely developments for Yemen in the months ahead.
Coalition forces will remain entrenched in Yemen
Progress made by Saudi-led coalition forces has largely stalled since the recapture of Aden and subsequent rapid advance through Lahij and other southern provinces from July. Coalition forces have failed to dislodge Houthi fighters in Taiz and in mid-October, pro-government fighters were forced to withdraw from al-Bayda province, reversing earlier gains. A major offensive launched in September in resource-rich Marib province has since advanced only incrementally, highlighting the ineffectiveness of a strategy that has relied largely on local forces and air strikes to dislodge Houthi rebels and their allies. Since April, the coalition has been forced to deploy increasing numbers of ground troops to challenge Houthi rebels and support local forces.
Resistance to the coalition’s ground campaign will only increase as pro-government forces advance further north into the Azal region, which has traditionally supported Houthi rebels and forces allied with ousted President Ali Abdullah Saleh. Therefore even greater military engagement by the coalition may be required to overcome resistance and break the stalemate that exists in some areas. Reports that Sudan has deployed more than 800 soldiers in Yemen since 17 October to secure Aden and support offensive operations in Taiz highlights the continued expansion of coalition involvement in the conflict. Casualties among coalition forces, including the deaths of 45 Emirati soldiers in a Houthi attack in September, have only seen foreign powers deepen their role in the conflict and Saudi Arabia has not provided any indication of the expected duration of its operations in Yemen.
It is unlikely that a negotiated solution to the conflict will be agreed upon in the near term. Several earlier rounds of UN-backed peace talks have failed and though further negotiations are planned, President Hadi’s government has been reluctant to participate and has dismissed concessions offered by Houthi leaders and former President Saleh. Even should a settlement be agreed, coalition involvement will persist indefinitely given the weak state of political and security institutions in Yemen. Poor security and a reliance on irregular militias and tribes to control territory will limit the ability of foreign forces to withdraw from Yemen without risking further destabilisation. A desire to prevent the spread of Iranian influence in the country will also likely affect coalition decision making, though any weakening of public support for the conflict in coalition countries could pressure them to reduce their commitments in the longer-term.
Terrorist groups will remain strong and threaten recovery
Militant groups have continued to expand and carry out major attacks amid an ongoing political and security vacuum. On 6 October, four bombings hit buildings in Aden, killing 15 Emirati soldiers in an Islamic State (IS)-claimed attack that also unsuccessfully targeted Yemen’s prime minister. PGI has noted (access report here - https://at.pgitl.com/gQe2G4ao) that al-Qaeda and the Arabian Peninsula (AQAP) has also taken advantage of the conflict to capture areas in southern and eastern Yemen, notably seizing the port city of Mukalla in April and parts of Zinjibar on 14 October. Furthermore, there were further reports on 22 October that AQAP militants took control of buildings in Aden’s Tawahi district.
Continued militant activity and the weakness of counter-insurgency efforts will see the threat to personnel and infrastructure in Yemen persist, greatly undermining prospects for investment and development. Militant activity will threaten critical national infrastructure and deter foreign companies from returning staff. Several rocket attacks against the Balhaf liquefied natural gas plant over 2013-2014 demonstrated the intent of militant groups to target critical energy infrastructure. Coalition forces have already deployed to secure access to the port and airport in Aden, and the presence of foreign personnel at sensitive locations could increase the attractiveness of attacks against infrastructure.
Any redeployment of coalition and pro-Hadi forces away from government-held territory such as Aden to support offensive operations elsewhere in Yemen could increase that territory’s vulnerability to attack. The vulnerability of infrastructure will remain dependent on developments in the wider conflict, including the actions of tribal forces. Fighting in Marib province may threaten key oil and gas infrastructure in the region. As evidenced by disruption of a plot in October to blow up a gas pipeline in Marib, there is a continued threat to pipelines and other energy infrastructure, which have been targeted regularly by local tribes and other groups in the past in response to disputes with the government. A perceived weakening of the Houthi threat in some areas may see the re-emergence of past tensions, increasing the risk of disruption to key infrastructure in Marib and Shabwa provinces.
Southern secessionists re-empowered by conflict
The pro-independence Southern Movement has strengthened its influence and territorial presence as part of the anti-Houthi coalition with the government, though this alliance may become a source of increasing instability. In a Yemen outlook published in March (access report here - https://at.pgitl.com/oxRQKBIi), PGI highlighted that the advance of Houthi militias into southern Yemen in 2015 forced a temporary but fragile alliance between Hadi and the Southern Movement, which has long advocated secession of the formerly independent south. The movement extended its control of areas in Aden following intense fighting with Houthis in March and April. As exemplified by pro-independence protests in Aden on 14 October, tensions between the government and those in favour of secession are likely to increase amid perceptions of a diminishing Houthi threat. The re-emergence of secessionist activity in the south will present a further challenge to stability and territorial integrity in Yemen. Civil unrest linked to secessionist activity is likely to continue in Aden and may affect commercial and maritime operations in the city, as has happened in the past.
Worsening tensions between secessionists and the government will undermine efforts to re-establish the Hadi’s authority in Yemen, undermining the Saudi-led coalition’s strategy. Should the Southern Movement be viewed as a threat to stability in the south, coalition forces could come under pressure to suppress the movement, thereby risking local hostility to their presence. The Hadi government continues to rely on Southern Movement militiamen to secure territory, and tensions between the Southern Movement and the coalition would serve to further weaken and even delegitimise Hadi.
Activists in southern Yemen remain deeply opposed to a new constitution proposed in 2014 that would divide Yemen into six federally organised regions. Any future attempt by Hadi to revive this plan, which he has supported previously, would only serve to provoke tensions and mobilise opposition to his already weak government. These long-running tensions over the distribution of political power in Yemen underscore the difficulty of securing a lasting political solution to the secession issue.
Disruption to port access and commercial operations to continue
In light of the expected continuation of the conflict and difficulties the government will face, commercial operations will remain extremely difficult in Yemen. Port operations will continue to be disrupted by the naval blockade enforced by the coalition and Yemeni authorities. Ongoing instability and the continued competition for territorial control will deter foreign firms, including international oil companies, from returning staff, complicating efforts to resume operations. The maritime blockade and vessel searches by coalition forces are intended to prevent the supply of weapons or other prohibited items to Houthi rebels, but these measures have led to unpredictable delays of around two days. There is also continued confusion over which authority is permitting vessels to berth, which presents a further source of disruption. On 11 October, port authorities closed the port of Hodeidah and ordered all berthed vessels to leave, highlighting the impact of ongoing military operations in Yemen.
The conflict has contributed to a major deterioration of already poor infrastructure. The poor provision of public serves, including shortages of power, water and fuel, have triggered protests in Aden, Taiz, Hodeidah and other cities. Since July, the coalition has intensified air strikes on transport infrastructure to cut off Houthi supply lines. Air strikes have caused severe damage to key bridges and roads in Houthi-controlled areas, including in and around Sana’a. On 1 October, a coalition strike reportedly destroyed the Aqd Asfara bridge between Hodeidah and Sana’a. The campaign also poses a direct risk to industrial infrastructure. In September, an air strike destroyed a cement factory in Hajjah province. Since many companies have withdrawn their operations, the damage to infrastructure will require mass investment even to reach pre-conflict levels, presenting a lasting obstacle to recovery and a major challenge for companies trying to move goods around the country.