Israel Can Become Key Trade Hub Amid Houthi Threats, Experts Say

Houthi threats to regional trade routes, including recent attacks on Saudi Arabian airports, were discussed by experts at a special panel during the "People of the State" conference. Dr. Guy Laron, a lecturer at the Hebrew University of Jerusalem, Hezi Khalaweya, Chairman of the Israel Ports Company, and Inbal Nissim Lubaton, a Yemen expert from Tel Aviv University, analyzed the impact on international trade and Israel's potential role.

Lubaton explained that the Houthi attacks on Riyadh and Dammam airports are part of their strategy to break what they perceive as a Saudi blockade on Yemen. She described it as a "blockade within a blockade" aimed at pressuring Saudi Arabia.

Khalaweya characterized the current situation as a "global trade war," emphasizing the strategic importance of maritime chokepoints like Bab al-Mandab and the Strait of Hormuz. He noted that the insecurity of sea lanes, exacerbated by Houthi actions, has global economic repercussions, affecting inflation and shipping costs worldwide. Khalaweya stated that the Houthi threat is not just to Eilat but to European trade, as 12% of trade between the East and Europe passes through the Suez Canal.

He highlighted the crisis as an opportunity for Israel to position itself as a crucial node in the India-Middle East-Europe Economic Corridor (IMEC). Khalaweya suggested that Israel could leverage this by upgrading its infrastructure, such as the Jordan River crossing and a planned rail link to Beit She'an, to facilitate cargo transport to Haifa port. He believes an investment of hundreds of millions of shekels could integrate Israel into an "informal IMEC" without needing formal agreements.

Dr. Laron added that the need for a land-based alternative to secure trade between Asia and Europe is growing, especially as the US struggles to guarantee the security of maritime straits. He pointed to President Biden's announcement of the IMEC at the G20 summit as a response to China's Belt and Road Initiative. Laron stated that the Houthi attacks, rather than derailing IMEC, have accelerated its development, making Israel a natural gateway for goods moving towards the Mediterranean.

Khalaweya stressed that Israel's economic resilience and national security are intertwined with its participation in this trade corridor. He advocated for developing a land port near Beit She'an, creating jobs and enhancing Israel's economic independence by reducing reliance on third parties for essential goods. He also noted that while Israel and Jordan have not yet signed the IMEC Memorandum of Understanding, the business case for participation is strong.

Lubaton suggested that addressing the Houthi threat requires a multifaceted approach, considering internal Yemeni dynamics, Saudi-Emirati involvement, and international efforts to secure shipping lanes. She argued that military action alone is insufficient and that a solution must address the internal Yemeni conflict and the broader regional and international implications.