Hezbollah's economy is being squeezed - lowered by the Iran war

Lama Alshehaby/TT

 

Published 20.00

 

Hezbollah supporters wave Hezbollah and Iranian flags during a rally in Lebanon in July. Photo: Mustafa Jamalddine /AP/TT

Iran-backed Hezbollah is facing its biggest economic challenges in years, according to an analysis by the American newspaper The New York Times.

The US war on Iran has had severe consequences for the Lebanese Shiite militia.

Since Israel's offensive against Hezbollah began in March, the militia group's financial resources have been severely affected. Israeli airstrikes have targeted Hezbollah's financial institutions in Lebanon, exchange offices used by Iran to supply the group with money, and gas stations that boost the organization's revenue.

Before the war, Hezbollah's annual budget was estimated at around one billion dollars. Of this, Iran is said to have contributed around 700 million dollars per year, according to the US State Department. But despite increased financial support from Iran during the war, the group cannot cover its war costs, the newspaper writes. 

Lost income

The fall of the Assad regime in Syria was already a severe blow to Hezbollah's economy, which lost important income from, among other things, arms and drug smuggling to Syria, as The Washington Post has reported.

American and Israeli representatives and people with insight into Hezbollah's finances tell The New York Times that Iran has tried to find new ways to finance the organization. For example, Tehran began using Beirut airport to send money to Hezbollah on civilian flights. This prompted the US to put pressure on the Lebanese government to stop all flights from Iran - a measure that is still in effect.

Limited transparency

Iran then turned its attention to Lebanon's central bank, which operates under limited transparency. According to the US Treasury Department, Hezbollah has exploited the bank and the country's largely cash-based economy for money laundering and to bring in funds from Iran.

To circumvent financial pressure, some Hezbollah operatives have resorted to selling gold, according to information provided to The New York Times.