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Hizbullah's New Strategy to Survive Lebanon's Financial Crisis
(Washington Institute for Near East Policy) Hanin Ghaddar - Unemployment in Lebanon has hit 40%, the lira has slumped by 60%, and the country may not be able to pay a $1.2 billion debt in Eurobonds this month. Hizbullah has been taking advantage of the economic crisis to promote Iranian products in Lebanon, which are brought in tax free and are therefore very cheap. After the group launched its campaign to boycott American products last month, many of its social media outlets started promoting Iranian goods as replacements. Tehran has been flooding the Lebanese market with products for years. Between 2017 and 2019, for example, Iranian steel imports to Lebanon reportedly jumped from $13,000 to $1.4 million. To maintain the flow of Iranian goods, Hizbullah recently increased its smuggling operations. When Lebanese banks began limiting the withdrawal of U.S. dollars in October, many depositors decided to take out as many dollars as they could in cash. An estimated $5 billion has been withdrawn in the past four months. Hizbullah is trying to benefit from this unofficial public cash reserve, encouraging people to use Hizbullah financial institutions - especially al-Qard al-Hassan, that has become the default bank replacement for the Shia constituency. The writer is a visiting fellow at The Washington Institute.