The cargo ship Galaxy Leader, co-owned by an Israeli company, was hijacked by Iran-backed Houthis in the Red Sea on November 20, 2023. Photo: Anadolu
The cargo ship Galaxy Leader, co-owned by an Israeli company, was hijacked by Iran-backed Houthis in the Red Sea on November 20, 2023. Photo: Anadolu
The cargo ship Galaxy Leader, co-owned by an Israeli company, was hijacked by Iran-backed Houthis in the Red Sea on November 20, 2023. Photo: Anadolu
The cargo ship Galaxy Leader, co-owned by an Israeli company, was hijacked by Iran-backed Houthis in the Red Sea on November 20, 2023. Photo: Anadolu

Houthis hit back at UN resolution after major Red Sea attack on US ships


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Yemen's Houthi rebels have warned any US attack on the group will be met with an even greater response, as tensions continued to rise in the Red Sea after the UN adopted a resolution condemning attacks on shipping by the Iran-backed group.

The group's leader Abdel Malek Al Houthi said any US attack would draw a "bigger" response than the recent missile and drone attack on US forces in the Red Sea.

The Houthis will "fight" any direct confrontation, he added.

Earlier on Thursday, the head of the Houthi supreme revolutionary committee, Mohammed Al Houthi, condemned a UN resolution on navigation in the Red Sea, calling it a "political game", and said the US was the country breaking international law.

The UN Security Council on Wednesday adopted Resolution 2722 condemning about 30 attacks on ships in the vital international waterway, demanding an immediate halt to attacks on commercial vessels.

Germany's Kiel Institute for the World Economy (IfW Kiel Institute) said in a report released on Thursday the attacks so far had led to a 1.3 per cent decline in global trade.

The resolution condemned “in the strongest terms” raids in the Red Sea since November 19, “when the Houthis attacked and seized the Galaxy Leader and its crew”, referencing a Japanese-owned, Israel-linked ship with a multinational crew.

Houthi spokesman Mohammed Abdul Salam condemned the Security Council and wrote on X, formerly Twitter: "Resolution 2722 represents a historic disgrace for an international council concerned, as it claims, with protecting international peace and security".

"We know that the world is governed by the law of the jungle, but after Resolution 2722, the UN Security Council is enshrining the law of the jungle and calling it international legitimacy, ignoring humanitarian laws," he said.

He said the Houthis posed no threat to international navigation in the Red Sea and the resolution was the result of "American deception and well-known western lies".

"The UN Security Council must restore its primary function of protecting oppressed peoples," rather than remain "a platform for America and its destructive projects", he said.

In a separate post, Mr Al Houthi said on X that what he called the “Yemeni armed forces” were acting “within the framework of legitimate defence and that any action they face will have a reaction”.

“We call on the Security Council to immediately release 2.3 million people from the Israeli-American siege in Gaza,” he said.

US considers next steps

The White House said on Wednesday attacks by Houthi militants are “escalatory” and that the US will consult with its partners about the next steps if these attacks continue.

Mr Al Houthi's remarks put the group on a potential collision course with the US and allies who are part of a naval task force conducting Operation Prosperity Guardian, formed on December 18 to protect shipping from the Houthis.

On Wednesday, the Houthis launched 18 drones and four missiles at US forces in the Red Sea, all of which were shot down by the US ships and supporting F-18 Super Hornet aircraft, as well as a British warship.

US Secretary of State Antony Blinken on Wednesday said the Houthi attacks could not continue or “there will be consequences”, hinting at a possible US direct attack on Houthi targets in Yemen, which happened briefly in 2016 after a Houthi attack on a US warship.

Western rhetoric has also blamed Iran for funding and arming the Houthis, as well as encouraging their actions.

US ambassador Linda Thomas-Greenfield told the Security Council on Wednesday that “Iran also has a choice: to continue providing or withhold its support for the Houthis, without which the Houthis would struggle to effectively track and strike vessels through the Red Sea and the Gulf of Aden”.

US Secretary of State Antony Blinken talks to Assistant Secretary of State for Near Eastern Affairs Barbara Leaf. second left, and spokesman Matthew Miller, right, aboard a plane after he departed from Manama for Tel Aviv during his week-long trip across the Middle East. AFP
US Secretary of State Antony Blinken talks to Assistant Secretary of State for Near Eastern Affairs Barbara Leaf. second left, and spokesman Matthew Miller, right, aboard a plane after he departed from Manama for Tel Aviv during his week-long trip across the Middle East. AFP

Costs to shipping

The Red Sea carries about 12 per cent of global trade with an estimated value of $1 trillion per year. Around 20,000 ships transit the sea annually, carrying around 500,000 containers of goods per day. That figure is down to around 200,000, Germany's IfW Kiel Institute said.

But the number of ships passing through the waterway has dropped sharply since the Houthis began attacks on what they claimed were ships with links to Israel. In many cases, the vessels had no connection to Israel and the effect on shipping has been immediate.

Maersk, one of the largest global shipping companies, carrying about 15 per cent of shipping container trade, said earlier this month it was suspending travel through the Red Sea.

Insurance costs for shipping have jumped, ship operators are paying private security companies to protect vessels and crews or in many cases, are taking a longer route that avoids the Red Sea altogether, taking a 35-day trip around South Africa's Cape of Good Hope, instead of a 25-day journey through the Red Sea, and Suez Canal.

The Houthis have also attacked US warships, firing anti-ship ballistic missiles, anti-ship cruise missiles and volleys of explosive drones at coalition naval vessels in the Red Sea.

In December, US forces took the first direct action against Houthis since 2016, destroying three of their boats that attacked the Maersk Hangzhou, after the boats also fired on a US helicopter. Ten Houthis were killed, in an incident in which armed guards on the commercial ship clashed with the militias after it was struck with an anti-ship ballistic missile.

The Houthis however, are not backing down.

Mr Al Houthi on Thursday demanded that Israel “immediately stop all attacks that hinder life and its continuity in Gaza and undermine rights, freedoms, and regional peace and security”.

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Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.

Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.

Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.

Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.

“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.

Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.

From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.

Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.

BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.

Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.

Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.

“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.

Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.

“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.

“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”

The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”

Most sought after workplace benefits in the UAE
  • Flexible work arrangements
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  • Insurance coverage for optical, dental, alternative medicine, cancer screening
  • Financial well-being incentives 
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• PayPal is probably the best-known online goods payment method - usually used for eBay purchases -  but can be used to receive funds, providing everyone’s signed up. Costs from 2.9 per cent plus Dh1.2 per transaction.

Updated: January 11, 2024, 4:03 PM