Hezbollah shifted position regarding aid from the International Monetary Fund in March. The powerful Lebanese group that previously strongly opposed IMF help said in mid-March that it may accept it after all.
“We will not accept submitting to (imperialist) tools … meaning we do not accept submitting to the International Monetary Fund to manage the crisis,” Hezbollah Deputy Secretary General Sheikh Naim Qassem had said in late February.
This statement came after the idea of foreign aid was proposed by the Lebanese government, as Lebanon struggles with its worst economic crisis in its history made even worse by the coronavirus, with the Lebanese currency losing more than half its value against the dollar in three months and the employment rates hitting rock bottom, coupled with a crisis in the banking sector that includes capital control rules that hinders holders from withdrawing money in dollars. On March 12, for the first time in six decades, Iran requested a loan from the IMF to fight a hard-hitting coronavirus outbreak.
Just one day after the Iranian request, Hezbollah leader Hassan Nasrallah said in a televised address that the group could accept IMF funding but under “reasonable conditions.”
Bassam, a 30-year-old electrical and computer engineer in Beirut who asked that only his first name to be used, told Al-Monitor that he identifies as secular but also as a Hezbollah supporter. Though he doesn’t advocate the party’s ideology, Bassam thinks its presence is necessary to protect the country from Israel’s ambition to occupy it.
Asked wether Hezbollah was disregarding its own ideology by agreeing to Western help, Bassam said, “Hezbollah put its ideology aside long ago, since their initial goal was achieving an Islamic republic and that this is out of question now, or else me and other secular people like me wouldn’t have supported them.”
“Though I am not a fan of the IMF because it imposes austerity measures that would affect normal citizens like myself, I believe [Hezbollah] when they say they won’t accept any conditions that would harm Lebanon’s sovereignty.”
On April 30, the Lebanese government endorsed a long awaited rescue plan to pull Lebanon out of economic collapse based largely on foreign injections of dollars, with $10 billion from the IMF in addition to $11 billion previously pledged by international donors at the CEDRE conference in Paris on conditions of financial reforms — which didn’t take place yet.
This time there should be a strong political will to be able to overcome a rhetoric of years of political corruption by some of the same politicians governing Lebanon’s 1989 civil war. Otherwise the IMF will not invest in Lebanon. Some say Hezbollah’s presence stands in the way of Beirut’s aid request to the IMF. The negotiations started on May 13 via video conference with both sides communicating positively about the outcome of the initial discussions.
“We are comfortable with the atmosphere of these initial discussions, and we expect that the upcoming discussions will be equally constructive,” said Finance Minister Ghazi Wazni in a statement.
IMF spokesman Gary Rice also said in a statement that he characterizes the talks as constructive and that the IMF staff is trying to better understand the authorities’ plans. “The government's economic plan represents a good starting point on the ongoing discussions,” Rice added.
Sami Nader, director of the Levant Institution for Strategic Affairs, told Al-Monitor that Hezbollah must reconsider its external roles and focus on Lebanon if the party wants to give the Lebanese government any chance of getting aid from the IMF.
“The IMF would ask the Lebanese government to control its borders including land borders, maritime borders, the harbors and the airport. This would certainly affect Hezbollah’s ongoing behavior,” said Nader. Diesel smuggling has recently made headlines as the country attempts to crack down on illicit cross-border movements.
“Similar to funding programs with other countries, the Lebanese government will have to stop subsidizing fuel and wheat, especially when a portion of it is being smuggled to Syria, as we are finding out,” Nader added.
The news of the smuggling operations between Lebanon and Syria has overshadowed news of the economic crisis facing Lebanon amid IMF negotiations. Two trucks carrying camouflaged tanks filled with about 22,000 liters of diesel were seized on May 11 heading to the northern Syrian border area. George Brax, a member of the Syndicate of Owners of Petrol Stations in Lebanon, said in a press statement that the value of the smuggled hydrocarbons is at least over $400 million annually and that the figure could be much higher.
Smuggling has increased on the Lebanese-Syrian border since the start of the Syrian war in 2011 as Syrian traders strove to access dollars after the depreciation of the Syrian pound and find an alternative market for Syrian products after the sanctions imposed on their country. The director of the Lebanese General Security, Maj. Gen. Abbas Ibrahim, visited Syria on May 19 to discuss border security with Syrian officials. “My visit to Syria is like all visits, and we hope that it will bear fruit and you will see the closing of the crossings file,” Ibrahim said, according to Al Modon newspaper.
Amid talks with the IMF, to which the United States is the largest contributor, Ziad Aswad, a parliamentarian and member of The Free Patriotic Movement — an ally of Hezbollah led by president Michel Aoun — said at a TV interview, “The Americans are giving Lebanon a choice: either carry weapons or live in hunger.”
The Arab Weekly newspaper reported on May 19 that Hezbollah, which provides social welfare for its supporters, is under enormous pressure from a large number of poor supporters who are affected by increasing unemployment. The newspaper says a former Shiite minister stated that wealthy diaspora members, especially those in West Africa who have placed large deposits to Lebanese banks, now stand to lose big in the banking crisis.
In his speech on Al-Quds Day on May 22, Nasrallah warned his supporters not to submit to the Israeli-American efforts to blame Hezbollah for Lebanon’s economic conditions.
In a May 8 press conference addressing corruption, parliament member Hassan Fadlallah said, “I refuse to defame anyone, however we have given the names responsible for corruption to the judiciary authorities and they are the ones who decide who is corrupt and who is not.”