A 'Hezbollah discount' partitions Lebanon's economy

The militant group offers a supermarket rewards card to tighten its grip over impoverished Lebanese

Hezbollah has started importing and stockpiling scarce goods, which it then distributes to supporters. Reuters

In a country where more than 50 per cent of people live below the poverty line, even a small increase in the price of basic goods can hit a family hard. Lebanon is one such country, but the scale of its economic meltdown over the past 18 months has been so severe that inflation has been devastating. A litre of milk in 2019 could be bought for 3,000 Lebanese pounds. Today, the price is 10,000.

Not so for the select few who have been offered the Al Sajjad card, a ticket to access a chain of supermarkets operated by the militant political party Hezbollah. Al Nour supermarkets, as the chain is known, offer card holders discounts of up to 70 per cent (capped at 300,000 Lebanese pounds) on a range of food and household products, most of which are imported from Iran, Iraq and Syria.

Iftar is getting increasingly expensive for Lebanese citizens. AFP

'Resistance economies' make leaders feel heroic, but the majority suffer

Hezbollah opened the shops to impoverished families living in areas under its political control late last year, ostensibly to help shield them from the economic crisis. But there is crisis response, and then there is crisis exploitation.

Lebanon's tragic decline has already hollowed out practically every aspect of its once-functioning state. Its citizens watch on as protests erupt over food, fuel and medicine shortages. Its economy, healthcare system and security are on the brink. No proposal from the international community seems enough to jolt its leaders into action.

There is, of course, a pressing need to supply essential services and goods. No one can blame those who are offered the Al Sajjad card for using it. But for Hezbollah's leaders and foreign backers, Iran chief among them, the establishment of special supermarkets is not strictly about helping their supporters. Those who have not been vetted by Hezbollah representatives are barred from entering the shops, and the group is suspected of having imported the goods sold there without paying customs duties.

The unthinkable has happened to the Lebanese state in recent years. A once cosmopolitan country is now struggling on every front, fights outside its bakeries as citizens tussle for bread have become a regular occurence. Its reputation as the Middle East's banking centre has been dashed, replaced by the financial shame of having a defunct central bank and little hard currency. Today, Lebanon's economy is widely viewed as one of the region's most dysfunctional.

Hezbollah's domestic reach has often been described as a state within a state, or at the very least, an aspiring one. The country's current crisis further pushes aspiration into reality. As decline and corruption continue to spread into Lebanese politics, a larger share of the people who Hezbollah claims to represent might view the group as their only hope. As Hezbollah's support programmes become more effective than central government's practically nonexistent response, the group is all the more likely to supplant the state not only militarily and politically, but also economically.

Hezbollah officials have said little publicly about their selective economic assistance programmes, other than boasting of their ability to bolster an "economy of resistance" against Western powers. So-called "resistance economies" might make their leaders feel invincible, but the vast majority of people always suffer.

This is not a basis for the systemic reform that Lebanon needs to rebuild. The risk of partisan fracturing is existential for the country. Recent history shows us how dangerous that route is. Without a cohesive central government, however bad it may be performing, there will be no overarching political system to change for the better. And Hezbollah could finally have its state, while the Lebanese who are excluded from it will suffer even more.