What next if the US labels Yemen rebels ‘terrorists’?

DUBAI— Washington plans to designate Yemen's Iran-aligned Houthi rebels as "terrorists", but experts warn outgoing President Donald Trump's move could backfire — with Yemeni civilians bearing the consequences.

The Houthis, who have held the capital Sanaa and much of the north since June 2014 with battlefield grit and backing from Tehran, are already internationally isolated on the political and economic fronts.

What will result from the US move to hold them accountable for "terrorist acts"?

How did they react? 

The Houthis, who are from Yemen's Zaidi Shiite minority, quickly condemned the designation but added that they "don't care" about it.

It will go into force on January 19, a day before the inauguration of President-elect Joe Biden, unless Congress blocks it.

Biden's aides had hoped to push for an end to Yemen's devastating six-year war, which the UN says has caused the world's worst humanitarian crisis.

The designation will mean any entity could face prosecution for dealings with the Houthi authorities — including by paying health workers or providing food aid or fuel.

Aid groups have warned against the blacklisting, saying they have no option, but to deal with northern Yemen's de facto government.

Washington has said it will seek to mitigate the impact of the terror designation, but has yet to publish its plans.

Aid groups note that a similar designation of the Al Shabab group in Somalia had unintended negative consequences.

What will the impact be? 

With medicines, food and sanitation in desperately short supply, the region under Houthi control was already particularly vulnerable to external sanctions.

"It will complicate money transfers to Yemen, and this is the people's main lifeline," said Maged Al Madhaji of the Sanaa Centre for Strategic Studies.

Many Yemenis depend on remittances from relatives abroad.

Elisabeth Kendall, an Oxford University researcher, said the listing will "inevitably affect" the flow of aid into the country and warned that the impact could be "catastrophic".

"It is in the Houthi-controlled territories that the threat of famine and need for aid is most acute," she said.

The battle-scarred economy's few remaining sources of hard currency could also be at risk.

Peter Salisbury, Yemen analyst at the International Crisis Group, said the designation will "likely badly damage" inbound trade and aid.

The crisis is "more or less unprecedented in scale", he said.

Who will benefit? 

Saudi Arabia, which leads the military coalition supporting the Yemeni government against the Houthis, welcomed the decision.

Madhaji said the designation could benefit the kingdom as "it can be used politically to put pressure on the Houthis and weaken them".

But he also warned that it could hamper UN-led efforts to reach a comprehensive peace, pushing the rebels to "become more radical" and less cooperative with mediation efforts.

Kendall warned the Tehran could be the beneficiary.

"On the surface, it may look like a win for the Saudi-led coalition and Yemen's internationally-recognised government... but in many ways, it could actually play into Iran's hands," she said.

By prolonging the war, it could push the rebels "further into Iran's orbit", she added.

Who is the biggest loser? 

Analysts are unanimous that Yemen's 29 million people, two-thirds of whom are dependent on some form of aid for survival, will suffer the most from the move.

Madhaji noted the Houthis would lose out, with no hope of attaining international recognition, but said Yemenis would ultimately pay the price.

"The designation could have a wide-ranging impact that will affect a country that is already exhausted," said Madhaji, warning of a "fatal impact" to Yemen's moribund economy.

Kendall agreed.

"The biggest losers, as ever, will be the Yemeni people themselves," she said.