The Houthi's are forcing commercial shipping to go via the Cape of Good Hope instead of the Suez Canal. Why hasn't anyone stopped them?
With the war in Gaza going on the media is intensely focused on the eastern Mediterranean and the risk of the conflict broadening to include Lebanon. The more interesting issue is the potential escalation around the Gulf of Aden. The Houthi’s are firing rockets and disturbing shipping in solidarity with Palestine, but it probably will not put Israel off from pursuing its war. The real risk of escalation for the Houthi’s is dragging in the American navy to the area to protect shipping lanes. As of yet though, that has not happened. Why is that?
With president Biden fighting inflation in order to increase his (in my view slim) chance of winning the 2024 American presidential election it makes sense to keep shipping lanes safe. After all, going from Europe to Asia and vice versa is much faster through the Suez Canal, which takes a ship by the Houthi’s in Yemen, than going around the Cape of Good Hope. If ships are forced to take the long way round that makes the trip markedly slower and thus more expensive. That expense is going to be passed on to the consumer, and the Western consumer is not likely to be patient with the central banks given just how fast and intense the recent interest rate hikes have been.
At the same time, there is a lot of talk about a potential war over Taiwan; especially so now that the pro-independence William Lai Ching-te won the Taiwanese election. Any war or standoff over Taiwan would feature the American navy prominently, as the island is quite far from the closest US military base. The Houthi attacks presents an excellent opportunity for deterrence. The US can show just how powerful its navy is while also doing China and the American consumer the favour of preventing price hikes due to increased shipping costs.
So why has the US failed to act decisively so far? My best guess is that Biden is so afraid of getting into another war in the Middle East that he has been unwilling to send enough ships to deter the attacks. I find it strange that China has not sent ships either, a situation like this would seem like a great expression of great power rivalry. Both sides want to win the prestige of being the powerful and benevolent state which fixed the Houthi shipping disruption with its powerful navy. I wonder if the sinking of the Moskva by the Ukrainians has scared both China and the US into thinking that their floating fortresses might be vulnerable to a group like the Houthis.
I would expect the shipping lanes to be secured eventually, give it a few weeks at most before someone, though probably the US, steps up to the task. After all, what is the point of a blue water navy if you do not use it to secure your interests? The delay to me indicates that the great powers are hesitant rather than assertive and while that is a problem for the shipping industry, it probably reduces the risk of escalation, in the Gulf of Aden and elsewhere.
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I've always been interested in politics, economics, and the interplay between. The blog is a place for me to explore different ideas and concepts relating to economics or politics, be that national or international. The goal for the blog is to make you think; to provide new perspectives.
Written by Karl Johansson
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