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Iran Seems To Have Brilliantly Collapsed The Saudi Economy… By Doing Nothing

Saudi Arabia began its relentless bombardment of Yemen in March of 2015 at the request of Yemen’s ousted president Abdu Rabbu Mansour Hadi, who had gone into hiding. The Saudi-led coalition, supported heavily by the U.S. and the U.K., has reportedly killed thousands of civilians and displaced over one million more.

The target of Saudi Arabia’s brutal aerial campaign (when it isn’t targeting civilians) is the Houthi rebels, who fight alongside Yemen’s former leader, Ali Abdullah Saleh, who lost power in 2012. Saleh retains the loyalty of much of Yemen’s armed forces, which gives the uprising a somewhat organic component. For example, hundreds of thousands of Saleh supporters rallied in Yemen’s capital, Sana’a, just days ago.

Well over two years since the commencement of the Saudi-led campaign, Saudi Arabia is far from achieving a military victory. As Bloomberg noted at the beginning of the year:

“Saudi Arabia has better weapons than its enemies in Yemen, no surprise in a war that pits one of the richest Arab countries against the poorest. And still the Saudis are struggling to impose their will.” [emphasis added]

And what is the cost of this intervention for the oil-rich Kingdom?


“The war is costing them financially, at a time that they need to focus funding on restructuring and diversification of their economy,” said James Dorsey, a Saudi specialist and senior fellow in international studies at Nanyang Technological University in Singapore, according to Bloomberg.

Al-Monitor explained further at the beginning of last year:

“Since leading a war, especially one with little prospect of ending, comes with huge costs, Saudi Arabia recorded the highest budget deficit since the post-Gulf War period at nearly $100 billion (15% of GDP) in 2015, and projected its highest budgeted-for deficit yet for 2016 (13.5% of GDP).”

At the beginning of the conflict, Reuters estimated the war would cost Saudi Arabia approximately $175 million per month. In reality, by the end of the first year of the war, the Kingdom had to increase its defense spending by $5.3 billion to keep up with the war. At the end of 2016, Saudi Arabia then had to announce a projected increase of 6.7 percent in defense spending for 2017, bringing its total budget to around $50.8 billion USD.

While the U.S. and the U.K. are more than happy to provide a never-ending supply of arms to Saudi Arabia to commit its mass criminal behavior, Saudi Arabia is struggling to afford them. As Brookings Institute explained:

“Moreover, it’s unlikely that the Saudis could pay for a $110 billion deal any longer, due to low oil prices and the two-plus years old war in Yemen. President Obama sold the kingdom $112 billion in weapons over eight years, most of which was a single, huge deal in 2012 negotiated by then-Secretary of Defense Bob Gates. To get that deal through Congressional approval, Gates also negotiated a deal with Israel to compensate the Israelis and preserve their qualitative edge over their Arab neighbors. With the fall in oil prices, the Saudis have struggled to meet their payments since.” [emphasis added]

Not surprisingly, leaked emails show that Saudi Arabia’s Crown Prince, Mohammed Bin Salman, already wants out of the conflict entirely even though he has been identified as its main instigator.

But what prompted the Kingdom of Saudi Arabia’s decision to sacrifice so much money and civilian life in the first place?

Iran. Saudi Arabia views the Houthi movement as an Iranian proxy and is desperate to prevent an Iranian ally from setting up shop directly on its border.

The problem for Saudi Arabia is that Iran’s involvement in Yemen has been greatly exaggerated. Following a flurry of misinformation on this topic, the Washington Post admitted last year:

“Yet as [the author] argued in a recent article in the May 2016 issue of International Affairs, the Chatham House journal, Tehran’s support for the Houthis is limited, and its influence in Yemen is marginal. It is simply inaccurate to claim that the Houthis are Iranian proxies.” [emphasis added]

This was further confirmed by U.N. experts in January of this year who warned primarily about Saudi Arabia’s criminal behavior before stating:

The panel has not seen sufficient evidence to confirm any direct large-scale supply of arms from the Government of the Islamic Republic of Iran, although there are indicators that anti-tank guided weapons being supplied to the Houthi or Saleh forces are of Iranian manufacture.” [emphasis added]

The weapons that are of Iranian manufacture appear to be entering Yemen via Somalia, but this is hardly substantive proof of large-scale Iranian involvement.

Even reports that attempt to demonstrate Iran’s “crucial support” for the Houthi rebels explicitly state that the specific allegations against Iran cannot be verified. This is not in anyway an attempt to absolve Iran – it is a simple question of evidence. Where is the evidence of large-scale Iranian involvement in Yemen, and where is it coming from?

Compared to Saudi Arabia’s defense spending, Iran’s military budget has been consistently very low (barely $15 billion USD). According to the U.S. Defense Department’s annual review of Iran:

“Iran’s military doctrine is defensive. It is designed to deter an attack, survive an initial strike, retaliate against an aggressor, and force a diplomatic solution to hostilities while avoiding any concessions that challenge its core interests.”

Whether done intentionally or not as an overall strategy for Yemen, Iran merely had to appear as if it was supporting the Houthi rebels by meeting with their leadership and providing diplomatic support. This, in turn, unnerved Saudi Arabia and lured them into a conflict that seems to have no end in sight (think back to America’s covert strategy for collapsing the Soviet Empire by luring its military into Afghanistan into an almost decade-long war in the 1980s). Even if Iran did want to supply the Houthis with weaponry, no one seems able to explain how it is that Iran can get its weapons past the Saudi-enforced blockade.

In reality, Iran has spent very little money on this conflict, and it has not invested its own military personnel. Saudi Arabia, on the other hand, has committed (and lost) troops and is arguably looking at a potential economic crash.

Darius Shahtahmasebi
Darius Shahtahmasebi is a New Zealand-based legal and political analyst, currently specializing in immigration, refugee and humanitarian law. Contact Darius: Support Darius' work on Patreon:

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