Iranian IRGC and Houthi efforts to establish a stock exchange in Sanaa are primarily designed to control the Yemeni economy, facilitate money laundering operations, and conceal the illicit drug trade, officials and economists said.
Iran’s Securities and Exchange Organisation (SEO) head Majid Eshqi in late June signed an agreement with Hashem Ismail, governor of the Houthi-controlled Central Bank in Sanaa, to establish a stock exchange in Yemen.
Yemeni Minister of Information, Culture and Tourism Muammar al-Eryani warned that this agreement is an attempt by the Iranian IRGC and the regime to tighten its control over state institutions and the private sector in Houthi-controlled areas.
He warned that the stock exchange will be used as a cover for the movement of funds and for the withdrawal of currency and cash reserves looted from Yemen’s state treasury to invest in the Iranian stock exchange.
One of Iran’s main objectives in establishing the stock exchange is to facilitate the transfer of “dirty money” generated from the illicit drug trade it engages in with its allies in the region, said economist Abdul Aziz Thabet.
These funds will then be reintroduced into the economy through the Yemeni private sector, he told Al-Mashareq.
“We will see Iranians and Hezbollah companies buy shares in Yemeni companies, thus increasing Hezbollah’s role and economic control over the private sector,” he said.
“This will adversely impact the entire economic life in both the short and long terms.”
According to economist Faris al-Najjar, the economic and financial environment in Yemen is not conducive to the establishment of a stock exchange.
“The establishment of a stock exchange requires a strong economy,” he explained, noting that “the Yemeni economy is currently fragile, and the private sector is reeling”.
“The Houthis’ aim in establishing the stock exchange in these difficult circumstances is not to establish a real stock market, but rather to create a phony stock market to provide cover for the movement of funds to and from Iran,” he said.