Hezbollah weakened but financially resilient a year after Israel war

The killing of its longtime leader Hassan Nasrallah in an Israeli strike on September 27 last year left the Shiite group reeling, yet it has maintained cohesion under his successor, Naim Qassem.

As the group faces mounting pressure to disarm, the United States has also sought to cripple its finances.

US envoy Tom Barrack said Hezbollah has been receiving "$60 million a month" since a November ceasefire.

AFP spoke to several Hezbollah members and beneficiaries of its services, all of whom said the organisation was meeting its financial commitments. They requested anonymity given the sensitivity of the subject.

Fighters still receive monthly cash salaries of $500 to $700 -- well above Lebanon's minimum wage of $312.

Families of Hezbollah "martyrs" continue to receive stipends covering rent and other essentials, while the group's vast network of schools, hospitals and charities makes it "one of the largest employers in Lebanon", according to researcher and Hezbollah expert Joseph Daher.

Hezbollah is "definitely under political and economic pressure", Daher said, though it is difficult to assess the depth of the impact.
Reconstruction and surveillance
A Hezbollah source said that since the ceasefire the group has provided about one billion dollars to 50,000 families affected by the latest war.

AFP could not independently verify the figures.

Unlike after the 2006 war, when Hezbollah spearheaded rebuilding in the south, current leader Qassem has insisted the state should fund post-war reconstruction, which has yet to begin.

Since the formation of a new Western-backed government this year, and Hezbollah's slip in political dominance, Beirut has tightened scrutiny of the group's financial dealings.

The December fall of longtime Syrian ally Bashar al-Assad also disrupted supply routes and cash flows from Iran.

Authorities have stepped up monitoring of money entering Lebanon, especially from Iran, and the central bank has banned all dealings with Al-Qard al-Hassan, a Hezbollah-linked financial institution.

Israel bombed the firm's branches during two months of all-out war last year that devastated Hezbollah strongholds across Lebanon's south, east and in Beirut's southern suburbs.

A client of the firm, which offers credit in exchange for gold deposits and has been a lifeline to members of Hezbollah's Shiite Muslim community, said "fear took over" about losing her gold collateral during the crackdown.

But she was able to recover it after repaying her loan.
Cash flow
Experts say Hezbollah relies on a web of companies and businessmen, as well as bundles of banknotes flowing in from abroad.

Lebanon suspended flights from Iran in February, cutting off one route.

A security source also reported tighter searches of passengers arriving from Iraq and other countries serving as conduits for Hezbollah.

The United States accuses Hezbollah of raising funds through global businesses, drug trafficking and even "blood diamonds" from Africa.

Western and Gulf states also allege it profits from the captagon trade -- an accusation the group denies.

"The international community has realised that Hezbollah thrives in a weak, unstable, cash-based economy," Sami Zoughaib, a researcher at the Policy Initiative, a Beirut-based think tank, told AFP.

Cash has been king in Lebanon since the economic collapse began in 2019.

Daher said the group still receives income via companies registered in Iraq and Lebanon, and affiliated businessmen operating elsewhere.

In a report this year, Canada said Hezbollah was thought to be using businesses, crypto currencies, bank transfers and charitable funds to receive "outgoing Canadian funds".

According to Daher, the ouster of Assad in neighbouring Syria has been "the biggest blow" to the group's finances so far.

Cash and weapons used to flow easily across the porous Lebanon-Syria border, while Hezbollah also made money from smuggling goods, he said.

Syria's new Islamist authorities, distrustful of Iran and sharply opposed to Hezbollah, have cracked down on such activities.