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1. Cash Cabal: How Hezbollah Profits from Lebanon's Financial Crisis

Author:
Samara Azzi and Hanin Ghaddar
Publication Date:
06-2023
Content Type:
Policy Brief
Institution:
The Washington Institute for Near East Policy
Abstract:
In March 2020, Lebanon opted for a “hard default” on $32 billion in sovereign debt, allowing the government to avoid negotiating with its Eurobond holders and investors. Beirut thereafter showed little interest in addressing the consequences of default, and the country’s economic meltdown worsened. As usual, the Lebanese people were the casualties, suffering amid what the World Bank has called a “deliberate depression.” This official negligence has cleared the way for a proliferating cash economy—which in turn has spawned a currency exchange scheme involving the central bank, foreign exchange agents, and Lebanese politicians. Hezbollah specifically has profited in areas ranging from real estate to solar energy, pharmaceuticals, and the illicit Captagon trade. In this Policy Note, authors Samara Azzi and Hanin Ghaddar—a venture capitalist and a former Lebanese journalist—skillfully diagram the corrupt status quo and explain why entrenched actors want to avoid systemic change. But as the study makes clear, the future health of the Lebanese economy requires an overhaul, and the international community must now press for deep reforms and personal accountability.
Topic:
Politics, Non State Actors, Financial Crisis, Economy, Hezbollah, and Shia Islam
Political Geography:
Middle East and Lebanon

2. Hezbollahland: Mapping Dahiya and Lebanon's Shia Community

Author:
Hanin Ghaddar
Publication Date:
03-2022
Content Type:
Special Report
Institution:
The Washington Institute for Near East Policy
Abstract:
The southern Beirut suburb encompasses multiple layers of clashing and besieged identities that pose major internal challenges to Hezbollah’s hold over Lebanon. The highway leading south from Beirut’s Rafic Hariri International Airport skirts the Hezbollah stronghold of Dahiya, allowing travelers to feel the group’s power and presence without seeing the surrounding community for what it is—multiple layers of clashing and besieged identities that pose major internal challenges to Hezbollah’s hold over Lebanon. For motorists, the highway barrier blocks any concept of the area’s polarized conditions, from the posh, shop-lined sections where senior Hezbollah officials live to the dark, impoverished warrens postered with fading images of “martyrs.” Drivers also miss the network of Iran-sponsored media channels, military depots, and religious institutions that flourish in the suburb—along with the secret prisons that fortify Hezbollah’s iron grip. In this Policy Focus, richly illustrated with local maps, former Lebanese journalist Hanin Ghaddar reveals the widening gaps between the country’s Shia community and its Hezbollah overlords, especially since mass protests shook the nation in October 2019. This analysis not only corrects past oversimplifications of Lebanese Shia, it also offers a path for policymakers seeking to undermine the militant group and give the fragile country hope for the future.
Topic:
Non State Actors, Hezbollah, and Shia
Political Geography:
Middle East and Lebanon

3. A Strategy to Contain Hezbollah: Ideas and Recommendations

Author:
Hanin Ghaddar
Publication Date:
08-2021
Content Type:
Special Report
Institution:
The Washington Institute for Near East Policy
Abstract:
Since securing a parliamentary majority, the group has consistently prioritized its own interests over those of the Lebanese people through practices such as illicit drug production, sex trafficking, and the buildup of its military arsenal. When Lebanese took to the streets in October 2019 to rail against government corruption, a lack of accountability, and runaway consumer prices, they coalesced around the chant “All of them!”—meaning that every political actor in the country held some blame for the national meltdown. But the slogan glossed over the important fact that one group in particular, Hezbollah, deserved the most blame. Since notching a parliamentary majority in 2018, the Iran-backed military-political organization has consistently prioritized its own interests over those of the Lebanese people through practices such as illicit drug production, sex trafficking, and—of course—the buildup of its military arsenal. In this Policy Note, Hanin Ghaddar, an expert on Lebanon who worked for years as a journalist in the country, explains why Hezbollah poses such a menace and what the international community can do about it. Foremost, she recommends that the United States and its partners intensify pressure on Hezbollah and its Iranian sponsor while simultaneously engaging with a new generation of Lebanese who want to free themselves from the group’s stranglehold.
Topic:
Foreign Policy, Politics, Democracy, Hezbollah, and Shia
Political Geography:
Iran, Middle East, and Lebanon

4. Hezbollah Has a New Strategy to Survive Lebanon’s Financial Crisis

Author:
Hanin Ghaddar
Publication Date:
03-2020
Content Type:
Policy Brief
Institution:
The Washington Institute for Near East Policy
Abstract:
Unless Washington and its allies respond to the protestors’ legitimate demands for reform, the group will survive through measures such as expanding its smuggling activity, promoting its financial institutions, and selectively scapegoating corrupt politicians. When IMF officials visited Lebanon late last month amid its accelerating economic freefall, many wondered whether these developments might alter the behavior of Hezbollah, the designated terrorist group that has a deep financial stake in the country’s public and private sectors. During a previous funding crisis—the increase in U.S. sanctions against the group’s chief underwriter, Iran—the “Party of God” and its foreign sponsors formulated a new strategy to evade these measures and create alternative sources of funding. Such sources allowed Hezbollah to make further inroads into government agencies following the 2018 parliamentary elections. For example, the group’s leaders insisted on controlling the Health Ministry, which commands Lebanon’s fourth-largest budget at $338 million per year; they also gained more access to the Ministry of Public Works and Transport, the Agriculture Ministry, and the Ministry of Energy and Water, whose assistance was used to fund their affiliated projects and businesses. That worked until Lebanon’s own economy began its current nosedive. Unemployment has hit a record high of 40 percent, and the lira has slumped by about 60 percent on the parallel market, hiking inflation. Officially pegged to the dollar, the currency has plummeted 40 percent on the black market as local banks ration dollars necessary for imports of food, medicine, and other essential goods. Meanwhile, Lebanon has one of the highest debt-to-GDP ratios in the world (over 150 percent) and may not be able to pay $1.2 billion in Eurobonds this month. As with the Iran sanctions, however, Hezbollah has a strategy to survive this domestic pressure, at least in the near term.
Topic:
Foreign Policy, Corruption, Debt, Politics, Protests, and Hezbollah
Political Geography:
Middle East, Lebanon, and United States of America

5. A Paris Reset on Hezbollah? Implications for French Interests and Regional Security

Author:
Matthew Levitt
Publication Date:
10-2020
Content Type:
Policy Brief
Institution:
The Washington Institute for Near East Policy
Abstract:
In this study, counterterrorism expert Matthew Levitt explores the history and current status of Hezbollah operations against French interests, and details how a change in Paris's longstanding opposition to designating the group could bolster French efforts to stabilize Lebanon. Lebanon’s corrupt political system needs major reforms, but Hezbollah has indicated, unsurprisingly, that it will reject any changes that diminish its political status. Specifically, the group insisted in late September that it maintain control of key ministries in any future government. This demand cut against the work of French authorities seeking to help stabilize the country following the devastating port blast in early August. In his response, President Emmanuel Macron signaled a break from typical French passivity toward Hezbollah. He denounced the group’s attempts to pose as a legitimate political party while engaging in militant activity independent of the Lebanese state. In this Policy Note, counterterrorism expert Matthew Levitt shares the little-known story of Hezbollah’s targeting of French interests, dating to the early 1980s. He then shows how the group poses a unique and growing set of challenges to France, both at home and abroad, and argues that Paris should reconsider its longtime opposition to designating Hezbollah in its entirety as a terrorist organization. Such a policy change, he contends, would bolster Macron’s efforts to stabilize Lebanon while mitigating threats within French territory.
Topic:
Security, Foreign Policy, Counter-terrorism, and Hezbollah
Political Geography:
Europe, Middle East, France, and Lebanon

6. Green Without Borders: The Operational Benefits of Hezbollah's Environmental NGO

Author:
Matthew Levitt and Samantha Stern
Publication Date:
05-2020
Content Type:
Policy Brief
Institution:
The Washington Institute for Near East Policy
Abstract:
In this illuminating Policy Note -- complete with detailed maps and satellite imagery -- Matthew Levitt and Samantha Stern tell the story of the Lebanese NGO Green Without Borders and explain why the mandate for the UN Interim Force in Lebanon must be reworked. According to its blog, the Lebanese NGO Green Without Borders plants trees, creates public parks, and fights forest fires. But the benignly named outfit also has another mission. Working with Hezbollah's construction arm Jihad al-Binaa and with the militant group's allies inside and outside the government, GWB openly seeks to advance the "southern Green resistance" against Israel. To this end, it provides direct cover for Hezbollah's operational activities, from harassing UN patrols, to carrying out missile attacks on Israel, to obstructing UN cameras at the border with deliberately placed trees. In this illuminating Policy Note -- complete with detailed border maps and satellite imagery -- Matthew Levitt and Samantha Stern tell the story of GWB and explain why the mandate for the UN Interim Force in Lebanon must be reworked after the secretary-general's next report in July. The sovereignty of an economically battered Lebanon and the stability of the wider region depend on a renewed effort to address all facets of Hezbollah aggression.
Topic:
Environment, Non State Actors, Borders, Hezbollah, and NGOs
Political Geography:
Middle East and Lebanon

7. Hezbollah Has Created Parallel Financial and Welfare Systems to Manage the Current Crisis

Author:
Hanin Ghadder
Publication Date:
12-2020
Content Type:
Policy Brief
Institution:
The Washington Institute for Near East Policy
Abstract:
To contain corrupt actors and facilitate reform, the international community must provide alternatives to Hezbollah pharmaceutical and food programs while filling gaps that the group is unable to address. Despite Lebanon’s deteriorating financial and economic situation, the country’s political elite have made clear that they will not implement reforms laid out by the international community as prerequisites for a bailout. In their view, the changes specified by the IMF, the World Bank, and the French-sponsored aid framework CEDRE would mean the eventual collapse of their political class, whose corruption and illegal business dealings are protected and encouraged by Hezbollah. Indeed, the emergence of a more independent secular political class that reflects the October 2019 protests is a serious concern for the militia and its allies in government, so they have chosen to manage the crisis rather than resolve it. Thus far, Hezbollah’s crisis-management efforts have far surpassed those of every other political party, civil society organization, and foreign assistance channel. The group’s military structure, organizational expertise, and access to alternative sources are enabling it to pursue temporary strategies for surviving the current crisis, while also retaining independence from state institutions, preserving a measure of support from its core Shia community, and discouraging Shia from joining any further rounds of public unrest. In the longer term, Hezbollah seems to be hoping that a transformative regional development—perhaps a new U.S.-Iranian nuclear agreement or a favorable U.S.-European partnership on Lebanon—will allow it to resolve its own financial crisis and regain access to hard currency, either from the Iranian regime or through international assistance mechanisms. Yet even if Hezbollah seems fairly well-positioned to weather the storm, the Lebanese people—including the group’s support base—are not. According to a new World Bank report, half the population is living below the poverty line, and more will soon join them if the Central Bank stops subsidizing medicine, fuel, wheat, and other essentials two months from now as projected.
Topic:
Non State Actors, Finance, Economy, Crisis Management, Hezbollah, Welfare, and Militias
Political Geography:
Middle East and Lebanon

8. The Beirut Disaster: Implications for Lebanon and U.S. Policy

Author:
Saleh Machnouk, Hanin Ghaddar, Matthew Levitt, and Charles Thépaut
Publication Date:
08-2020
Content Type:
Policy Brief
Institution:
The Washington Institute for Near East Policy
Abstract:
Four experts discuss the deadly Beirut explosion as it relates to the Lebanese political system, Hezbollah hegemony, and foreign aid. On August 13, The Washington Institute held a virtual Policy Forum with Saleh Machnouk, Hanin Ghaddar, Matthew Levitt, and Charles Thepaut. Machnouk is a columnist at the Lebanese daily an-Nahar and a postdoctoral fellow at the University of Cambridge. Ghaddar is the Institute's Friedmann Fellow and a former journalist with the Lebanese media. Levitt is the Institute’s Fromer-Wexler Fellow, director of its Reinhard Program on Counterterrorism and Intelligence, and creator of its newly released Hezbollah Select Worldwide Activity Interactive Map and Timeline. Thepaut, a French career diplomat, is a resident visiting fellow at the Institute. The following is a rapporteur’s summary of their remarks.
Topic:
Foreign Policy, Foreign Aid, Hezbollah, and Disaster Management
Political Geography:
Middle East, Lebanon, North America, and United States of America

9. Time to Change Course on the UN’s Lebanon Policy

Author:
Assaf Orion
Publication Date:
08-2019
Content Type:
Policy Brief
Institution:
The Washington Institute for Near East Policy
Abstract:
Serious change is required to avoid decisions that accommodate Hezbollah’s ends, ways, and means, and a vital first step is to look at current policy mechanics with a clear eye. With this month marking the thirteenth anniversary of UN Security Council Resolution 1701 and the end of the 2006 Lebanon war, the council will soon hold its yearly debates about renewing the mandate of the UN Interim Force in Lebanon. Contrasting the Secretary General’s latest report on 1701 with thirteen years of lessons learned reveals a clear pattern: the victory of consciously false hopes over hard experience, particularly when viewed from Israel’s perspective. Breaking this pattern will require substantial changes to the force’s size, mission, and conduct.
Topic:
Conflict Prevention, Foreign Policy, United Nations, Governance, and Hezbollah
Political Geography:
Middle East, Lebanon, and United States of America

10. Hiding in Plain Sight: Hezbollah's Campaign Against UNIFIL

Author:
Assaf Orion
Publication Date:
11-2019
Content Type:
Policy Brief
Institution:
The Washington Institute for Near East Policy
Abstract:
The Second Lebanon War, between Israel and Lebanese Hezbollah, ended August 14, 2006. Since that summer, populations on both sides of the Israel-Lebanon border have enjoyed the longest calm in their troubled history, thirteen years and counting. Mandated by United Nations Security Council Resolution 1701, the UN Interim Force in Lebanon (UNIFIL), an entity first established in the late 1970s, was expanded, and its 10,500 peacekeepers are busy and visible. UN reports over the past thirteen years emphasize the general calm. But calm does not mean safe and secure. During the war, Hezbollah launched approximately four thousand rockets out of its arsenal of twelve thousand toward Israel. Since the war, Iran has invested billions of dollars in building its Lebanese proxy military force throughout Lebanon, including in the south.
Topic:
United Nations, Peacekeeping, Conflict, and Hezbollah
Political Geography:
Middle East, Israel, and Lebanon