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Center of the American Experiment Issues Commentary: Minnesota Highest Graduation Rate Paired With Lowest Proficiency
GOLDEN VALLEY, Minnesota, April 4 -- The Center of the American Experiment, a civic and educational organization that says it creates and advocates policies, issued the following commentary on April 3, 2026, by policy fellow Catrin Wigfall:
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Minnesota highest graduation rate paired with lowest proficiency
The Minnesota Department of Education recently announced that the class of 2025 set a new record for high school graduation rates.
At 84.9 percent, the four-year graduation rate is up from last year's rate of 84.2 percent.
"This is a moment worth celebrating," said Gov. Tim Walz. "Decades
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GOLDEN VALLEY, Minnesota, April 4 -- The Center of the American Experiment, a civic and educational organization that says it creates and advocates policies, issued the following commentary on April 3, 2026, by policy fellow Catrin Wigfall:
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Minnesota highest graduation rate paired with lowest proficiency
The Minnesota Department of Education recently announced that the class of 2025 set a new record for high school graduation rates.
At 84.9 percent, the four-year graduation rate is up from last year's rate of 84.2 percent.
"This is a moment worth celebrating," said Gov. Tim Walz. "Decadesin the classroom have helped inform many of the goals I've set and the policies we've passed over the last seven years to support our students, teachers, and parents. Every student who receives that diploma is better equipped to navigate the challenges of landing a job, pursuing higher education, and building a future they feel excited about."
But there is another side to the story that continues to be left out, as was the case last year when graduation percentages were also a record high.
Even as graduation rates climb, academic performance is moving in the opposite direction. In math and reading, Minnesota high school students are performing at the lowest levels ever recorded for a graduating class.
It's a tale of two stats: a record-high graduation rate paired with declining academic readiness.
Minnesota High School Proficiency & Four-Year Graduation Rate
[View chart in the link at bottom.]
Because high school students take the reading Minnesota Comprehensive Assessment (MCA) in 10th grade and the math MCA in 11th grade, we don't have a perfect measure of what they know at graduation. But the available data paints a clear picture. As 11th graders, just 34.7 percent of the class of 2025 met grade-level standards in math. As 10th graders, only 51.5 percent were proficient in reading. Both figures represent record lows for a graduating cohort.
The declining proficiency isn't limited to the overall student population. Student subgroup data shows similar trends, even as rising graduation rates across demographics receive more attention.
Minnesota High School Proficiency & Four-Year Graduation Rate by Student Groups
[View chart in the link at bottom.]
Minnesota requires high school students to complete all state academic standards and a minimum number of course credits in order to graduate, but there is no state-mandated minimum GPA requirement. And unlike in the past, students no longer have to pass a high school exit exam. In 2013, the DFL-controlled legislature eliminated the Graduation Required Assessment for Diploma (GRAD), removing a statewide standard for demonstrating basic competency in reading and math in order to receive a high school diploma.
Since then, the gap between graduation rates and academic performance has become harder to ignore.
ACT results tell a similar story. Scores in English, math, science, and overall composite averages for Minnesota's class of 2025 remain at record lows. Only 39 percent of exam-takers met at least three of the four college-readiness benchmarks. Perhaps more concerning is that 36 percent -- an increase from 2024 -- met zero of the benchmarks.
According to ACT, students who meet the college readiness benchmarks "have a roughly 50 [percent] chance of earning a B or better in the corresponding first-year college courses and a roughly 75 [percent] chance of earning a C or better."
"ACT data from prior graduating classes shows that 84 [percent] of students who have met all four benchmarks graduate with postsecondary degrees within six years. Only 38 [percent] of students who meet zero benchmarks and 56 [percent] of students meeting one benchmark graduate in that time."
State data reinforces the connection. Minnesota's own assessment materials acknowledge a strong relationship between MCA performance and college entrance exam results.
At the same time, research from ACT shows that grade inflation continues to drive high school grades up, making student GPAs less predictive of student success in college. In contrast, ACT composite scores "continue to be a reliable predictor of students' early success in college," according to the report.
While rising high school graduation rates are a positive goal, it is equally important that a diploma reflects genuine academic readiness and that its value is not compromised in the pursuit of these higher numbers. A false sense of achievement not only undermines the credibility of the high school credential but also places unfair burdens on students who believe they are prepared only to find out too late that they aren't, putting at risk their future success in college, the workforce, or daily life.
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Catrin Wigfall is a Policy Fellow at Center of the American Experiment.
catrin.wigfall@americanexperiment.org
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Original text here: https://www.americanexperiment.org/minnesota-highest-graduation-rate-paired-with-lowest-proficiency/
[Category: ThinkTank]
March Job Gains Mask a Volatile Labor Market as Iran War Chaos Mounts
WASHINGTON, April 3 [Category: ThinkTank] -- Groundwork Collaborative, a think tank and progressive advocacy group, posted the following news release:
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March Job Gains Mask a Volatile Labor Market as Iran War Chaos Mounts
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After February's losses, March gains do little to reverse a slowing and unstable labor market
Today's jobs report shows the labor market added 178,000 jobs in March, and February's losses significantly revised down, revealing a decrease of 133,000 jobs. The unemployment rate remained mostly unchanged at 4.3%, with unemployment at its weakest pace since 2020. As hiring
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WASHINGTON, April 3 [Category: ThinkTank] -- Groundwork Collaborative, a think tank and progressive advocacy group, posted the following news release:
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March Job Gains Mask a Volatile Labor Market as Iran War Chaos Mounts
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After February's losses, March gains do little to reverse a slowing and unstable labor market
Today's jobs report shows the labor market added 178,000 jobs in March, and February's losses significantly revised down, revealing a decrease of 133,000 jobs. The unemployment rate remained mostly unchanged at 4.3%, with unemployment at its weakest pace since 2020. As hiringstalls, the share of workers who say it's harder to find jobs has increased sharply, and the number of workers who have given up on the labor market entirely increased by 40% in the last month alone. Paychecks are stalling as prices rise from Trump's war with Iran and continued uncertainty over his tariffs, squeezing Americans from all sides.
Groundwork's Chief Economist Breyon Williams released the following statement:
"Beyond today's headline bounce, the labor market continues to deteriorate under Trump's economic mismanagement: hiring has ground to a halt, paychecks are shrinking, and workers are giving up on finding a job altogether. A single month of modest gains can't reverse the damage that the president has inflicted on working families."
BACKGROUND
* The March jobs report confirms a volatile labor market, as workers are at the whim of the president's chaos. Job growth remains inconsistent, with modest gains following sharp losses in February. This extends a stop-and-start pattern with gains one month followed by losses the next that has persisted since last June.
* In the first quarter of this year, just 68,000 jobs have been added per month on average. This represents one of the weakest first quarters of job growth outside of a recession since 2003.
* The headline number overstates the health of the labor market as half of job gains were in the health care sector and driven by physicians returning from strike activity, a one-time bounce.
* The share of consumers who say jobs are currently hard to get rose to 21.5% in March, the highest in more than five years, according to The Conference Board. The share expecting fewer jobs in the next six months also climbed, and the number of consumers expecting a recession in the next 12 months is up.
* Hiring has slowed to its weakest pace since 2020 as job openings vanish, leaving jobless workers out to dry. The number of marginally attached workers increased by 20% and discouraged workers by 40% in a single month.
* The latest Job Openings and Labor Turnover Survey (JOLTS) data show the hiring rate fell to 3.1% in February. Job openings dropped to 6.9 million from 7.2 million the month before.
* As the job market slumps, it's taking workers longer to find a job: the average duration of unemployment spells is nearly four months and has increased by nearly 19% over the past year.
* For workers just entering the labor market, finding work is even more challenging: Entry-level job postings have dried up, leaving a generation of young workers locked out of careers before they can start.
* Paychecks are stalling as inflation heats up. Average weekly earnings ticked slightly down in March as hourly earnings were roughly flat but hours declined. Shrinking paychecks will make the price hikes caused by Trump's war on Iran even more painful for families who are already struggling to keep up.
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Original text here: https://groundworkcollaborative.org/news/march-job-gains-mask-a-volatile-labor-market-as-iran-war-chaos-mounts/
Ifo Institute: Business Climate in Germany's Chemical Industry Deteriorates Significantly
MUNICH, Germany, April 3 -- ifo Institute issued the following news release on April 2, 2026:
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Business Climate in Germany's Chemical Industry Deteriorates Significantly
The business climate in Germany's chemical industry deteriorated significantly in March. The ifo Institute index fell to -25.0 points, down from -16.7 points* in February. At -31.9 points, companies assessed their current business situation as considerably worse than in February, when the figure stood at -21.2 points*. Expectations were also considerably gloomier and dropped from -12.1* to -17.9 points. "The consequences
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MUNICH, Germany, April 3 -- ifo Institute issued the following news release on April 2, 2026:
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Business Climate in Germany's Chemical Industry Deteriorates Significantly
The business climate in Germany's chemical industry deteriorated significantly in March. The ifo Institute index fell to -25.0 points, down from -16.7 points* in February. At -31.9 points, companies assessed their current business situation as considerably worse than in February, when the figure stood at -21.2 points*. Expectations were also considerably gloomier and dropped from -12.1* to -17.9 points. "The consequencesof the military hostilities in the Middle East are hitting the already struggling chemical industry with full force," says ifo industry expert Anna Wolf.
The chemical industry was already suffering before the Iran war from a distinct lack of orders, which worsened further in March. Added to that now is the sharp rise in costs for crude oil, raw materials, and energy. To absorb this cost pressure, companies are planning significantly higher prices. At the same time, employment expectations also reached an all-time low of -32.1 points. "Companies can scarcely influence the difficult conditions, so the only room for maneuver they have left is to cut jobs," says Wolf.
*Seasonally adjusted
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More Information
Survey (https://www.ifo.de/en/facts/2026-04-02/business-climate-germanys-chemical-industry-deteriorates-significantly)
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Original text here: https://www.ifo.de/en/press-release/2026-04-02/business-climate-germanys-chemical-industry-deteriorates-significantly
[Category: ThinkTank]
Crucial Homelessness Accountability Bill Headed to Georgia Governor
PHOENIX, Arizona, April 3 [Category: ThinkTank] -- The Goldwater Institute posted the following news:
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Crucial Homelessness Accountability Bill Headed to Georgia Governor
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This week, Georgia lawmakers voted to hold local governments accountable when their officials allow homelessness to grow unchecked and harm neighborhoods. HB 295, championed by state Rep. Houston Gaines and state Sen. Clint Dixon, empowers property owners to seek compensation when local governments have a policy, pattern or practice of failing to enforce laws related to homelessness and allowing public nuisances to
... Show Full Article
PHOENIX, Arizona, April 3 [Category: ThinkTank] -- The Goldwater Institute posted the following news:
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Crucial Homelessness Accountability Bill Headed to Georgia Governor
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This week, Georgia lawmakers voted to hold local governments accountable when their officials allow homelessness to grow unchecked and harm neighborhoods. HB 295, championed by state Rep. Houston Gaines and state Sen. Clint Dixon, empowers property owners to seek compensation when local governments have a policy, pattern or practice of failing to enforce laws related to homelessness and allowing public nuisances topersist unabated.
Specifically, the legislation allows property owners to file claims when property values decrease and when owners incur reasonable mitigation expenses due to the local government's failure to enforce laws related to illegal camping, panhandling, loitering, drug activity, and public intoxication.
Across the country, Americans are increasingly confronting the real-world consequences of government inaction on homelessness and public safety. Local governments often allow encampments and related crime to fester and too many communities are forced to bear the financial costs of policies that tolerate lawlessness rather than uphold the rule of law. The status quo is unacceptable. HB 295 stands for the simple premise that when government fails to perform its basic duties, citizens should not be left holding the bag. Georgia lawmakers deserve praise for upholding this principle and protecting the property rights and safety of their constituents.
Georgia's HB 295 echoes the spirit of Arizona's Proposition 312, a groundbreaking measure championed by the Goldwater Institute and approved by voters in 2024. Prop 312 similarly ensures that property owners can obtain relief when cities fail to enforce laws and allow homelessness-related nuisances to take root. The lesson from Arizona is clear: accountability works. When local governments know they can be held financially responsible, they are far more likely to enforce the laws already on the books in a way that respects both public safety and individual rights.
HB 295 brings that same model to Georgia, signaling that policymakers are serious about protecting communities instead of making excuses.
Allowing homeless individuals to live in dangerous encampments, often without access to sanitation, treatment, or services, is not compassionate. Rather, it's neglect and dereliction of duty from local governments. Meanwhile, surrounding communities suffer from increased crime, serious health hazards, and economic decline.
HB 295 does not criminalize homelessness. Instead, it ensures that governments cannot ignore illegal activity and its consequences. It reinforces the principle that laws must be applied evenly and that public officials are accountable to the people they serve.
HB 295 now heads to Gov. Brian Kemp's desk for his signature. The Goldwater Institute appreciates Rep. Gaines for his tireless work to protect property rights and public safety and applauds the Georgia legislature for advancing this crucial reform.
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Original text here: https://www.goldwaterinstitute.org/crucial-homelessness-accountability-bill-headed-to-georgia-governor/
Center for American Progress: Trump Administration Gutted DHS Training Standards, Creating Dangerous Conditions in American Communities
WASHINGTON, April 3 (TNSrep) -- The Center for American Progress issued the following news release on April 2, 2026:
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Trump Administration Gutted DHS Training Standards, Creating Dangerous Conditions in American Communities
The U.S. Department of Homeland Security (DHS) has drastically lowered recruitment, hiring, and training standards for federal immigration agents, prioritizing personnel hiring over public safety and constitutional law.
Following the passage of the One Big Beautiful Bill Act, which allocated $30 billion for U.S. Immigration and Customs Enforcement (ICE) hiring alone,
... Show Full Article
WASHINGTON, April 3 (TNSrep) -- The Center for American Progress issued the following news release on April 2, 2026:
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Trump Administration Gutted DHS Training Standards, Creating Dangerous Conditions in American Communities
The U.S. Department of Homeland Security (DHS) has drastically lowered recruitment, hiring, and training standards for federal immigration agents, prioritizing personnel hiring over public safety and constitutional law.
Following the passage of the One Big Beautiful Bill Act, which allocated $30 billion for U.S. Immigration and Customs Enforcement (ICE) hiring alone,ICE has more than doubled its force from 10,000 to more than 22,000 agents in just six months. However, this rapid expansion has come at a steep cost: DHS has lowered the minimum age for agents to 18, slashed 240 hours from the ICE training program--a 41 percent reduction--and its sloppy vetting processes and recruitment strategies have resulted in the hiring of agents with ties to extremist groups. Officers are also being instructed to enter homes without a warrant in violation of the Constitution. All of this is inconsistent with requirements at nearly every other federal law enforcement agency and many state and local law enforcement agencies, which have higher standards.
A new report (https://www.americanprogress.org/article/4-strategies-to-improve-ice-and-cbp-recruiting-hiring-and-training-using-state-and-local-best-practices/) from the Center for American Progress outlines four evidence-based strategies that Congress and DHS must adopt to restore safety and professionalism:
1. Improve use-of-force training and ensure accountability for violations.
2. Restrict dangerous vehicle pursuits and shootings.
3. Strengthen candidate recruitment, screening, and hiring practices.
4. Restore the age minimum to 21 years old.
"The Trump administration is flooding U.S. streets with woefully unprepared agents who are being taught to bypass the Constitution," said Nick Wilson, senior director for Public Safety at CAP and author of the report. "By gutting the very training that ensures agents can fulfill their roles safely and lawfully, DHS is creating a powder keg in cities across the country. We are seeing the results in real time: more excessive force, dangerous vehicle pursuits, and a total lack of accountability. Congress must step in to provide the oversight necessary to restore law and order."
Read the report: "4 Strategies To Improve ICE and CBP Recruiting, Hiring, and Training Using State and Local Best Practices" (https://www.americanprogress.org/article/4-strategies-to-improve-ice-and-cbp-recruiting-hiring-and-training-using-state-and-local-best-practices/) by Nick Wilson and Allie Preston
Read the fact sheet: "Fact Sheet: Mandating 21st Century Policing Standards for Federal Immigration Enforcement" (https://www.americanprogress.org/article/fact-sheet-mandating-21st-century-policing-standards-for-federal-immigration-enforcement/) by Nick Wilson and Allie Preston
For more information on this topic or to speak with an expert, please contact Rafael Medina at rmedina@americanprogress.org.
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Original text here: https://www.americanprogress.org/press/release-trump-administration-gutted-dhs-training-standards-creating-dangerous-conditions-in-american-communities/
[Category: ThinkTank]
Capital Research Center Posts Commentary: Financialization of College Sports and the Meaning of a College Education
WASHINGTON, April 3 -- The Capital Research Center posted the following commentary on April 2, 2026, by Daniel P. Schmidt, former vice president for program of the Lynde and Harry Bradley Foundation, to the Giving Review:
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The financialization of college sports and the meaning of a college education
The question is not whether student-athletes should benefit from the value they create. It is whether universities can sustain a coherent educational mission while participating in systems increasingly governed by market logic.
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Last weekend, the Illinois Fighting Illini men's basketball
... Show Full Article
WASHINGTON, April 3 -- The Capital Research Center posted the following commentary on April 2, 2026, by Daniel P. Schmidt, former vice president for program of the Lynde and Harry Bradley Foundation, to the Giving Review:
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The financialization of college sports and the meaning of a college education
The question is not whether student-athletes should benefit from the value they create. It is whether universities can sustain a coherent educational mission while participating in systems increasingly governed by market logic.
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Last weekend, the Illinois Fighting Illini men's basketballteam soundly defeated the Iowa Hawkeyes to advance to the 2026 NCAA Final Four and have a shot at becoming national champions. While the Illini have competed in the Final Four six times since 1949, most recently in 2005, they have never captured the title.
The team from America's heartland--which features what many have called the "Balkan Five," including players from Croatia, Montenegro, and Serbia--reflects a broader transformation in college sports: its financialization. Since 2021, and with expansion of it since then, college sports' "Name, Image, and Likeness" (NIL) method of compensating athletes allows colleges to offer what can be really good money and great public exposure from endorsements, sponsorships, and other uses of their personal brand. As well, it provides what can be a much-better pipeline to a professional career--in this case, in the NBA.
That's a new value proposition, and like so many other universities, Illinois has leaned into it aggressively--and in its case, so far successfully, if measured by this year's tournament's on-court performance. Illinois' is not the richest NIL program, but it is among the more adaptive and innovative in how it's used NIL to build a roster. (Compare it to Northwestern's.)
Essentially, NIL has introduced market dynamics into college sports by permitting athletes to be compensated--as professionals are and in some rare cases, at their level--while still competing in college. Its advent has brought a measure of chaos to higher education's Departments of Athletics--but, more important, it has extended well beyond them, landing on the desks of officials in Admissions, Student Life, Development and Advancement, Legal Affairs, Academic Affairs, and ultimately, the Office of the President.
The heart of the matter is bigger than the efficient management of personnel, policies, and finances, however. It raises more-fundamental questions: What is the institution's purpose? Its primary meaning and mission?
Traditionally, that mission has been to provide instruction and related opportunities that develop a mature understanding of what it means to be an educated citizen--someone able to contribute to the well-being of family, friends, and the civic health of the community in which they live.
We have seen that mission diminished, if even only gradually, by the attention paid--at the institutions' own behest--to formulate and then manage its political, economic, and cultural postures in the public arena. Now, further attention is required on their part to respond to popular, policymaking, and philanthropic reactions against these postures and their effects.
In fact, just as college athletics is now operating more explicitly within a financialized, market-driven framework, philanthropy too has, in some contexts, evolved from an expression of civic trust into a more-strategic, metrics-driven, and at times transactional enterprise.
In the case of higher ed, NIL "calls the question" about purpose and mission and what's happening to them, bringing attention to it from those who probably wouldn't otherwise care so much. In the cases of both higher ed and philanthropy, the logic of the market--valuation, return, competition for scarce resources--may be beginning to shape decisions that were once guided more fully by educational or civic purposes. The question is not whether such forces can be managed, but whether they subtly reorder priorities over time.
Tax-incentivized philanthropic support from private foundations and donations from individuals play an important role in sustaining higher-ed teaching and research, student life, facilities, and athletics. According to the Council for Advancement and Support of Education, total philanthropic giving to colleges and universities reached $61.5 billion in fiscal-year 2024. Foundations contributed roughly one-third of that total, or about $20 billion.
Approximately 43.6% of foundation funding supported research, 28.1% supported academic divisions, and 12.8% supported athletics in FY2024. About 42.5% of foundation support originated from personal and family foundations. Donor-advised funds accounted for $6.5 billion in 2024 giving.
Over time, and with the development of common-sense solutions by those in positions of responsibility, it is possible that both higher ed and philanthropy will right themselves. For now, take NIL and its early returns as an opportunity for continued reflection. What begins as a set of pragmatic adjustments can, over time, become a redefinition of purpose, an alteration in underlying meaning and mission.
The question is not whether student-athletes should benefit from the value they create. It is whether universities can sustain a coherent educational mission while participating in systems increasingly governed by market logic. That question sits not only with athletic departments, but with the entire college or university of which they are a part. It also sits with those who support them, who should perhaps also ask it of their own giving institutions and mechanisms.
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Daniel P. Schmidt retired as the vice president for program of The Lynde and Harry Bradley Foundation in Milwaukee in 2017.
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Original text here: https://capitalresearch.org/article/financialization-of-college-sports/
[Category: ThinkTank]
CSIS Issues Commentary: Houthi Threat - Is Trump Underestimating One of Iran's Key Remaining Cards?
WASHINGTON, April 3 -- The Center for Strategic and International Studies issued the following commentary on April 2, 2026, by Will Todman, chief of staff of the Geopolitics and Foreign Policy Department and senior fellow in the Middle East Program:
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The Houthi Threat: Is Trump Underestimating One of Iran's Key Remaining Cards?
On April 1, President Trump announced that the United States' strategic objectives in the war with Iran were "nearing completion." He threatened to send Iran "back to the stone ages" if it did not make a deal within three weeks, and said "we have all the cards, they
... Show Full Article
WASHINGTON, April 3 -- The Center for Strategic and International Studies issued the following commentary on April 2, 2026, by Will Todman, chief of staff of the Geopolitics and Foreign Policy Department and senior fellow in the Middle East Program:
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The Houthi Threat: Is Trump Underestimating One of Iran's Key Remaining Cards?
On April 1, President Trump announced that the United States' strategic objectives in the war with Iran were "nearing completion." He threatened to send Iran "back to the stone ages" if it did not make a deal within three weeks, and said "we have all the cards, theyhave none."
Yet, Iran does have other cards to play. A few days before President Trump's address, the Houthis entered the fray in the Middle East. After months of signaling their readiness to escalate, they launched missiles toward Israel. Iranian officials had warned that their Yemeni proxies would be activated if the United States and Israel escalated further or if Arab Gulf states entered the war. But despite these threats and the Houthis' past willingness to target international shipping, they have not attacked maritime traffic through Bab al-Mandab so far this year.
Following Iran's effective closure of the Strait of Hormuz, Bab al-Mandab is the Middle East's most critical maritime chokepoint. A coordinated or sequential disruption of both straits would constitute an unprecedented shock to global trade and energy markets. The Houthis' reticence suggests either constraint or calculation: They may be weakened after sustained U.S. and Israeli strikes in 2025; they may be holding back due to incentives from an external actor like Saudi Arabia; or they may simply be waiting for a moment of maximum leverage as the conflict evolves.
The risk is that the Houthis' restraint proves short-lived. President Trump continues to signal a willingness to escalate further against Iran, deploying thousands more ground forces to the region while continuing to threaten strikes on critical energy infrastructure. If these threats materialize and the Houthis attack Bab al-Mandab in response, it will shake economies across the world.
Bab al-Mandab is a vital artery connecting European and Asian markets and a newly important corridor for Saudi energy exports. At its narrowest, it is an 18-mile-wide maritime chokepoint between Yemen and Djibouti. Before 2023, approximately 9 million barrels of oil per day transited Bab al-Mandab, alongside a substantial share of global container shipping.
The Houthis have demonstrated both a willingness and ability to block this chokepoint before. In response to Israel's invasion of Gaza following the October 7 attacks of 2023, Houthi attacks on commercial shipping caused traffic through Bab al-Mandab to drop sharply. Oil flows declined by over half to roughly 4 million barrels per day. Shipping companies responded to the instability by rerouting vessels around the Cape of Good Hope, extending transit times by weeks and sharply increasing costs for key global supply chains.
Attacks on shipping in Bab al-Mandab would be particularly consequential for Saudi Arabia. The Kingdom has used its East-West pipeline to mitigate the effects of Iran's blockade of the Strait of Hormuz. The pipeline pumps crude oil from Saudi Arabia's eastern coast to the Red Sea port of Yanbu, bypassing the Strait of Hormuz. However, this pipeline has a capacity of approximately 7 million barrels per day and is already operating near its maximum.
A Houthi attack on Bab al-Mandab would wreck Saudi Arabia's mitigation strategy. Not only would Saudi exports from the Red Sea face disruption, but the East-West pipeline itself could become a target for Houthi missile and drone attacks. The downstream effects would be felt most acutely in Asia, which is the destination of 75 percent of oil exports from Saudi Arabia. Higher oil prices would exacerbate inflation, strain public finances, and complicate economic recovery efforts across Asian economies and beyond.
The closure of Bab al-Mandab would have profound implications beyond energy. Egypt is a case in point, even though it has not yet been embroiled in the conflict directly. The Suez Canal is an essential lifeline for Egypt's economy, typically handling around 30 percent of global container traffic and generating billions of dollars in transit fees. In 2023, it generated $9.4 billion in revenue.
Therefore, a sustained disruption to Red Sea shipping would sharply undercut Egypt's foreign reserves. This would come at a particularly precarious moment. The Egyptian pound has depreciated significantly, inflation remains elevated, and the government is struggling to maintain subsidies for fuel and basic goods. Energy shortages have forced the government to implement rationing measures, including banning businesses from operating after 9 p.m. and issuing a partial remote work mandate for public and private sector workers. Rising food prices are hitting the poorest in Egypt hardest, with the cost of basic staples like potatoes and tomatoes increasing by more than 30 percent in just the weeks since the conflict began.
A compounding economic crisis in Egypt could have important spillover effects. Egypt has a population of 117 million and is often described as "too big to fail." Yet, worsening living conditions could fuel unrest, threaten the stability of the regime, and spark waves of outward migration.
Egypt is just one of the many countries around the world that would be plunged into crisis if the Houthis try to block Bab al-Mandab. If faced with an even more serious escalation from the United States, the Iranians could well decide that the Houthis hold the key to their survival. Should Iran choose to play this card, the costs of the war for the global economy will rise considerably, and some governments will have to resort to even more drastic measures to weather the storm.
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Will Todman is the chief of staff of the Geopolitics and Foreign Policy Department and a senior fellow in the Middle East Program at the Center for Strategic and International Studies in Washington, D.C.
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Original text here: https://www.csis.org/analysis/houthi-threat-trump-underestimating-one-irans-key-remaining-cards
[Category: ThinkTank]
