An­a­lysts dif­fer on how US sanc­tions on Iran in­flu­ence Le­banon’s econ­omy

Global Times US Edition - - ASIANREVIEW - The ar­ti­cle is from the Xinhua News Agency. opin­ion@glob­al­times.com.cn

With the US reim­posed sanc­tions on Iran’s oil, trans­porta­tion and bank­ing sec­tors, Le­banese an­a­lysts ex­pressed on Tues­day di­ver­gent views on how the sanc­tions would in­flu­ence Hezbol­lah and the Le­banese econ­omy.

“I do not think that these sanc­tions will have a ma­jor im­pact on Hezbol­lah or the Le­banese econ­omy,” Hi­lal Kashan, chair of the Po­lit­i­cal Stud­ies De­part­ment at the Amer­i­can Uni­ver­sity of Beirut, told Xinhua.

Khashan said that Hezbol­lah does not rely on Ira­nian fi­nan­cial as­sis­tance as it used to in the past.

The US Un­der Sec­re­tary for Ter­ror­ism and Fi­nan­cial In­tel­li­gence, Si­gal Man­delker, an­nounced a few months ago that Iran pro­vides up­wards of $700 mil­lion a year to Hezbol­lah.

Khashan be­lieves that Hezbol­lah still gets some of its funds from Iran but it suc­ceeded dur­ing the past years in iden­ti­fy­ing its own sources of fund­ing.

He ex­plained that there are many com­pa­nies in Le­banon and abroad owned by Hezbol­lah but op­er­at­ing un­der in­de­pen­dent names. Khashan also noted that Hezbol­lah mem­bers use cash with­out bank ac­counts.

Ac­cord­ing to Kashan, US sanc­tions against Iran will not have any im­pact on the Le­banese econ­omy.

“The Amer­i­cans un­der­stand very well that the Le­banese gov­ern­ment is help­less and that Hezbol­lah is stronger than the na­tional army. They are well aware that Hezbol­lah can over­throw the cab­i­net. So it does not make sense for them to jeop­ar­dize the en­tirety of Le­banon for Hezbol­lah,” he said.

Khashan does not think that Iran will be crip­pled be­cause of these sanc­tions.

“The sanc­tions on Iran will gravely im­pact the Ira­nian econ­omy but I do not think this will crip­ple Iran,” he said, adding that the US has ex­empted eight coun­tries from the sanc­tions, some of which are ma­jor oil im­porters of Iran.

Le­banese Po­lit­i­cal An­a­lyst Walid Mubarak re­it­er­ated Kashan’s views by say­ing that Iran can ma­neu­ver around these sanc­tions be­cause it has a past ex­pe­ri­ence on how to deal with them.

Ac­cord­ing to Mubarak, Hezbol­lah has been deal­ing with such sanc­tions for a very long time as well.

“The po­lit­i­cal party re­lies on cash while avoid­ing to deal with the Le­banese bank­ing sys­tem,” he said.

How­ever, Mubarak said that Hezbol­lah may be im­pacted in an in­di­rect way.

“Its sup­port base could be af­fected be­cause the US is putting sanc­tions on com­pa­nies and in­di­vid­u­als that are in sup­port of Hezbol­lah, which will im­pact the Le­banese econ­omy,” he added.

He ex­plained that in­di­vid­u­als and com­pa­nies deal­ing with Hezbol­lah will have their funds frozen in banks.

“It will cre­ate a psy­cho­log­i­cal en­vi­ron­ment which could lead to lack of con­fi­dence in Le­banese bank­ing sys­tem and pos­si­ble cap­i­tal out­flows,” he said.

An­other im­pact, ac­cord­ing to Mubarak, could be on the so­cial ser­vices of­fered by Hezbol­lah such as hos­pi­tal­iza­tion and the com­pen­sa­tions paid for fam­i­lies of the mar­tyrs.

Sami Nader, di­rec­tor of Le­vant In­sti­tute for Strate­gic Af­fairs in Le­banon, said that Hezbol­lah’s sup­port base will be im­pacted by the new sanc­tions.

“The sanc­tions are say­ing that no one can deal with a com­pany deal­ing with Iran. This is how they broad­ened the scopes of the sanc­tions,” he said, adding that any sup­plier of a com­pany that sup­ports Hezbol­lah will be hit this time.

Nader be­lieves that the new sanc­tions will in­crease the level of eco­nomic risks in Le­banon. “Le­banon needs to send pos­i­tive sig­nals to the in­ter­na­tional com­mu­nity that re­forms will be im­ple­mented and in­vest­ments as well as tourists will re­turn to the coun­try,” he said.

He added that these sanc­tions are go­ing in the op­po­site di­rec­tion by re­duc­ing the level of trust in the Le­banese econ­omy.

“We al­ready have very high in­ter­est rates be­cause of the mon­e­tary sit­u­a­tion we are go­ing through, which is a di­rect con­se­quence of our fi­nan­cial dis­tress and eco­nomic down­turn,” he said.

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