Economy

Lebanon needs PM to rein in Hizbullah: experts

By Nohad Topalian in Beirut

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Lebanese men watch Hizbullah Hassan Nasrallah during a televised speech, at a coffee shop in the southern suburbs of Beirut, on August 30th. [Anwar Amro/AFP]

In order for Lebanon to pull itself out of its current crisis and put itself back on the path to economic stability, it will be necessary for Prime Minister designate Saad al-Hariri to rein in Hizbullah, experts said.

The control the Iran-backed party exerts over the Lebanese government's decision-making process is holding the country back, they said, and may yet cost it vital financial support from the International Monetary Fund (IMF).

As the largest voting bloc in the IMF, the US holds effective veto power.

Lebanon's request for financial aid comes as its economy is heading for a 25% contraction. It also comes at a time when the US is actively seeking to weaken Hizbullah's financial channels and crack down on money laundering.

As part of its crackdown on Hizbullah, the US Treasury on October 22nd sanctioned Central Council members Nabil Qaouk and Hassan al-Baghdadi.

"The Central Council is responsible for identifying and electing the group's highest decision-making body, the Shura Council, which formulates policy and asserts control over all aspects of Hizbullah's activities," it said.

This includes the party's military activities.

The international community is well aware that Hizbullah "controls the government's decision-making process", said economist Violette Ghazal al-Balaa.

The party prevents the formation of any government without its approval, and also controls the judiciary decision-making process, she told Al-Mashareq.

Hizbullah's participation in "corrupt activities, contrary to its slogans that claim it is fighting it, is keeping the economy in a state of perpetual crisis", she said.

The US, EU and Gulf states have designated Hizbullah a terrorist group, and US sanctions have targeted the party's financial channels.

Hizbullah puts aid in jeopardy

Lebanon's announcement that it will be defaulting on the payments of its debts in March shook confidence in its performance, al-Balaa said, and caused credit rating agencies to reduce its sovereign rating.

The country now needs more than $30 billion to compensate for its financial losses, she added, noting that this "will not come from outside the IMF".

Lebanon's recovery "will not be achieved as long as Hizbullah continues its role as Iran's most prominent military and security arm and [continues] to work toward achieving [Iran's] political and economic project in the region", she said.

Through Hizbullah, Iran and its Islamic Revolutionary Guard Corps (IRGC) have transformed Beirut into a major centre for their leadership and operations, political writer Sam Menassa told Al-Mashareq.

The party's political and military control "will keep the US from providing any serious assistance to save Lebanon", he said. "It will also prevent any international body and the IMF from providing any assistance".

"It is possible that compromises might be made to allow the passage of humanitarian aid and certain economic aid to allow Lebanon to survive but not recover, in order [for Hizbullah] to maintain the status quo," Menassa said.

Lebanon will not be abandoned

The US "will prevent the IMF or any other party from providing assistance to Lebanon to revive its economy as long as the state and its levers of power are controlled by Hizbullah", said researcher and political activist Luqman Salim.

The party has torpedoed Lebanon's talks with the IMF, he told Al-Mashareq.

But Lebanon "will not be left as prey to Hizbullah, as evidenced by the US pressures, sanctions and restrictions imposed on its financial networks", he said.

He pointed to the ongoing US support for the Lebanese army.

At the same time, Salim said, Iran's regional project is collapsing, which will clearly impact Hizbullah's ability to function.

Iran no longer has the money to spend on its proxies, he said, which will force it to "extend itself as far as its resources would allow and pull the rug from under [Hizbullah] little by little".

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