PREVIEW
Egypt’s battered forex earnings face a fresh squeeze as rebels tighten their grip on the Bab el Mandeb chokepoint – Djibouti braces for a refugee surge
The fall of Mocha and Mayyun Island to Houthi forces on 10 September has handed the rebel movement effective control of Yemen's entire Red Sea coastline and, with it, leverage over the Bab el Mandeb strait, through which about 12% of world trade passes. Facing deepening financial pressure, Cairo is under fresh pressure to intervene.
Djibouti has logged over 2,000 arrivals a day from Yemen the International Organization for Migration said on 13 September. President Issayas Afewerki’s government in Eritrea which is just 20 kilometres across the strait may calculate that it’s a time to maximise its geographical advantage.
The multiple wars in the Gulf have further weakened Egypt’s economy, which relies on Suez Canal tolls as a main source of foreign currency. Egypt lost some US$7 billion between 2023 and 2024, equivalent to around 60% of the Suez Canal’s revenues. Exports to the United Arab Emirates, one of Egypt’s largest markets, have also been hit (AC Vol 67 No 6, A vulnerable recovery under pressure).
This latest escalation may prompt Egypt to reconsider its tactics. Despite its heavy economic losses, Cairo has refused to intervene militarily since the Gulf intervention in Yemen in 2015.
The Houthis’ presence just 20km from the African coast poses another regional security risk. The group’s leaders have previously said they would attack United States interests or other international military forces in Djibouti, Eritrea or Somalia (Dispatches 21/5/24, US military influence faces growing pressure).
For Djibouti and Eritrea, meanwhile, it offers diplomatic opportunities. Djibouti has already carved a role as a military and intelligence base for most of the world’s military powers: China, France, Germany, Italy, Japan, Russia, Spain, Turkey, Saudi Arabia and the United States.
Djibouti’s President Ishmaël Omar Guelleh has exploited sharpening geopolitical rivalries in the region to hike fees for basing rents and other services. The presence of so many international bases in Djibouti gives the Guelleh regime a security blanket but also makes it a compelling target for insurgent forces.
Eritrea’s diplomatic ambiguity and location, just across the Bab el Mandeb strait, means Issayas will be weighing several options. It is being quietly courted by the US which has just dropped sanctions against the Asmara, arguing they were no longer relevant.
Issayas has cultivated close ties with Moscow: in March 2022, Eritrea was the only African state at the UN General Assembly to vote in favour of Russia’s full-scale invasion of Ukraine. Asmara has also hosted foreign security operatives from disparate governments including Iran and the Houthis.
But more recently it has joined an ad hoc coalition (led by Saudi Arabia and Egypt, as well as Djibouti and Somalia) to face down Ethiopia and the United Arab Emirates for their backing the Rapid Support Forces militia in Sudan’s civil war. At the least, Issayas may flex more diplomatic muscle, and perhaps secure some backing against any Ethiopian push for a base on Eritrea’s Red Sea coastline.
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