News Analysis: Analysts differ on how U.S. sanctions on Iran influence Lebanon’s economy

BEIRUT, Nov. 6 (Xinhua) — With the U.S. re-imposed 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 U.S. Under Secretary for Terrorism and Financial Intelligence, Sigal Mandelker, announced a few months ago that Iran provides upwards of 700 U.S. million dollars 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, U.S. 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 U.S. 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 U.S. 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.

However, 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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