Iran's secret strategy to fund the Houthis through the drug trade
Iran is using pharmaceutical trade as a weapon in the ongoing conflict in Yemen, having turned the export of medicines to Houthi-controlled areas into a covert mechanism for financing the war, enhancing control, and perpetuating chaos. A new report said on Saturday.
The report issued by the Platform for Tracking Organized Crime and Money Laundering in Yemen, which is affiliated with the Center of (P.T.O.C) for Specialized Research and Studies, uncovered the complex network of Iranian financing strategy. This involves systematically replacing well-manufactured and safe medicines with Iranian alternatives by granting exclusive agency rights to companies affiliated with the Houthi militia, turning Tehran's pharmaceutical sector into a lifeline for its Houthi allies. This strategy not only supports the militia, but also undermines Yemen's fragile healthcare system, exacerbating the suffering of the community, especially the vulnerable groups, as Yemen faces a severe health crisis with only 50% of hospitals operating fully or partially.
The report sheds light on Iran's funding goals for the Houthis through the increasing exports of medicines since the outbreak of the war in 2015. Iran's secret strategy aims to enhance the economic position of its proxy militia by providing a stable and secretive financial flow through the export of Iranian medicines, enabling them to expand military operations towards liberated areas and extend their full influence over their controlled areas. Additionally, Tehran seeks to replace trusted medicines with Iranian ones, generating higher profit margins for the Houthi entities.
One of the long-term dangerous goals is to entrench reliance on Iranian pharmaceutical products within the healthcare system in Yemen, ensuring a long-term market for Iranian medicines while limiting the presence and influence of imported and locally manufactured pharmaceutical companies. This creates a controlled medical supply chain that reinforces Iranian influence in the region and monopolizes the pharmaceutical market in Yemen. The report said.
Iran aims to direct the revenues from pharmaceutical trade to finance the war in Yemen, including the purchase of weapons, logistical services, and recruitment, as part of its broader regional strategy to destabilize its opponents and maintain influence in Yemen. Iran has used these tactics and economic tools such as trade, smuggling, and counterfeit goods to fund militias in Lebanon, Iraq, and Syria, where Iran-backed groups like Hezbollah and other organizations have benefited from trade monopolies and smuggling networks. The report added.
Iran integrates Yemeni companies and entities affiliated with the Houthis into a broader network of allied organizations, enhancing coordination and enabling it to exert its influence across the Arabian Peninsula and confront Saudi Arabia, while controlling strategic maritime routes such as the Bab al-Mandab Strait, using Yemen as a proxy battleground to expand its regional influence.
The (P.T.O.C) report focused on the implications of Iran's funding of the Houthi militia through pharmaceutical exports, as this funding mechanism undermines any local, regional, or international efforts to achieve peace and hampers negotiations or settlements.
Regionally, Iran's support for Houthis destabilizes the Gulf, increasing tensions with neighboring countries such as Saudi Arabia and the United Arab Emirates, and disrupts the pharmaceutical market in Yemen by relying on Iranian products, facilitating the spread of counterfeit medicines, and deepening the humanitarian crisis, which is one of the worst humanitarian crises in the world, by depriving vulnerable populations of access to life-saving treatments. The report stated.
The report addressed the risks associated with the financing strategy of the Houthis through pharmaceutical exports, which include the exacerbation of the humanitarian crisis, regional instability, economic collapse, and global security threats.
The report named companies involved in financing the Houthis: "Green Star for Pharmaceutical and Medical Supplies Trading, owned by Ibrahim Ismail Al-Wazir, the Iranian company "Ronak" and its private agencies linked to Mohammed Mahdi Abdullah Al-Sha'er, Taradhi Limited Trading owned by Hamoud Hussein Kharbash and Abdul Khaleq Al-Hamzi, Maginico General Trading, and Al-Faris for Pharmaceuticals.
The report recommended imposing sanctions on the involved entities, enhancing oversight and regulation, and supporting alternative supply chains, emphasizing the importance of raising awareness, promoting peace efforts, ensuring transparency, and increasing pharmaceutical aid.
