The Trump administration re-designating Houthis as a foreign terrorist organization (FTO) would be part of a package that also includes other military and political pressure points, according to a senior expert the Gulf and Yemen
April Longley Alley, a senior expert the Gulf and Yemen, at the U.S. Institute of Peace, wrote that the FTO” if implemented” will have serious financial implications for the Houthi rebels, who might not be seriously impacted by the travel bans or asset freezes, but it would squeezes the larger economy, limiting the resources available to them and limiting access to international financing.
Longley expected the full impact of the FTO designation would be on the population in Houthi rebels controlled areas, as well as the unintended effects on the economy in Yemeni government areas.It would also makes implementation of the U.N.-backed roadmap agreement, at least as it was originally conceptualized, virtually impossible.
She added that the January 22 Executive Order has sent a clear message to the Houthis that this administration is different and will take a tougher approach, creating optimism on the side of the Internationally Recognized Government of Yemeni, which has welcomed an FTO and is hoping that it is the beginning a package of support from the U.S. to push back against the Houthis financially and militarily — although it is unclear if this package is coming.
In short, Longley wrote, the FTO will shake up the status quo in Yemen. But who will benefit and who will lose overtime is an open question intertwined with multiple variables, including but not limited to the ability of the U.S. to coordinate a larger package of deterrence and incentives with regional and domestic allies.