On October 21 the IDF called on Lebanese to leave areas close to dozens of Hezbollah-run financial institutions.
Overnight, the IDF then conducted a series of strikes on “dozens of facilities and sites used by the Hezbollah terrorist organization to finance its terrorist activities against the State of Israel,” the army said.
The target of the strikes was the association al-Qard al-Hassan. The IDF says the organization “directly funds Hezbollah’s terror activities, including the purchase of weapons and payments to operatives in Hezbollah’s military wing. The Hezbollah terrorist organization stores billions of dollars in the association’s branches, including money that was directly held under the name of the terrorist organization.”
The strikes on these buildings are designed to show the Shi’ite community in Lebanon that Hezbollah cannot protect funds deposited at its institutions. Al-Qard al-Hassan is one of many Hezbollah-run parallel institutions that basically act as a state within a state in Lebanon.
Hezbollah created this parallel state to insulate itself from sanctions, to expand its grip on Lebanon, and also to hold the Shi’ite minority hostage. Shi’ites form the base of Hezbollah supporters.
They don’t only back Hezbollah. They also back Amal, another powerful group in Lebanon. The head of Amal is the speaker of parliament.
Lebanese politics is sectarian. It is officially sectarian, such that people of various religious groups have to vote within their group. That means that for Shi’ites, the system forces them to be hostage to Hezbollah, in a sense. Hezbollah preys on this.
Hezbollah's financial backbone
For those Shi’ites, the only other choice is basically Amal, and Amal is also allied to Hezbollah. Hezbollah preys on this system by using organizations such as al-Qard al-Hassan. If the people who trusted in Hezbollah institutions see them literally collapse because of IDF bombing, will they walk away from Hezbollah?This is a big question mark.
Bombing banks and eviscerating the wealth of local people could backfire. It could also show that all the state-building Hezbollah has done is now empty, because Hezbollah itself is incapable of “defending” Lebanon.
Hezbollah poses as a “resistance” but it looks increasingly hollow. On the other hand, Hezbollah could now pose as “too big to fail” and demand that the Lebanese state make up for its losses.
Lebanon may now be at a new crossroads. Israel is trying to give the state a chance to reclaim itself from Hezbollah. By weakening the Hezbollah parallel state system, such as al-Qard al-Hassan, the state could swoop in and help the affected locals. The Lebanese state has shown it is not ready or capable of doing this.
Israel has carried out its war on Hezbollah in a series of phases. The first one was what one might call the “phony war” of October 8 to September 17. This was a war where Hezbollah attacked Israel daily but the attacks mostly targeted IDF sites near the border and also Israeli communities on the border. Those communities were evacuated.
Then Hezbollah suffered losses from the pager incident and also the IDF’s strikes on Hezbollah command and control in the last two weeks of September. Hezbollah leader Hassan Nasrallah was killed. The IDF launched Operation Northern Arrows on September 23 with 1,600 airstrikes. Thus began the third phase, the air war that pummeled Hezbollah. On October 1 the ground war began, which could be seen as the fourth phase.
Now the phase of striking Hezbollah institutions has begun. This could cut into Hezbollah’s balance sheet and bankrupt the group. However, Hezbollah doesn’t need that much money to keep functioning. Iran backs Hezbollah with cash from Iran and also cash and oil swaps in Syria that help fund Hezbollah.
It’s plausible Iran’s foreign minister and Iranian officials brought cash for Hezbollah aboard planes flown to Beirut this month. For a million dollars, around 1,000 Hezbollah fighters can be funded for a month. For $50m., 50,000 could be funded. Hezbollah likely can still keep up the fight and some of its men are likely fine with being paid in arrears.
The question then relates to their families and social network. Will supporters of Hezbollah feel the organization has failed them? Will they demand it concede and accept a ceasefire?
Western officials want a ceasefire. But Hezbollah likely won’t agree to UN Resolution 1701 and withdraw from the border. If it won’t withdraw then it must be forced off the high ground it controls near Israel’s border.
The IDF is doing this slowly so far. This war on Hezbollah has lasted almost a month. The 2006 war lasted a month. The question is whether this war will stretch into next year or if the new phase of strikes is a game-changer.