Gulf crackdown on Hezbollah may endanger Lebanon cash flow July 24, 2013 12:34 AM By Donna Abu-Nasr, Dana El Baltaji Bloomberg Plans by Gulf countries to crack down on Hezbollah may pose a bigger threat to Lebanon’s fragile public finances than to the Shiite militant group. Officials from the Gulf Cooperation Council, which includes Saudi Arabia and the United Arab Emirates, met this month to coordinate action against Hezbollah supporters in the region, after labeling it a terrorist group last month, a move matched by the European Union Monday. The Shiite Hezbollah and the mostly Sunni GCC are on opposite sides of the Syrian civil war, with the Lebanese group fighting alongside President Bashar Assad while Gulf countries finance his opponents. The oil-rich GCC employs millions of Arabs from poorer countries, including Lebanese Shiites who may find it harder to get visas or renew residency permits under the proposed curbs. That would cut off some of the remittances that help Lebanon finance one of the world’s biggest debt burdens and keep its currency stable. “Lebanon does depend on a free flow of people and capital and if this is a seriously applied restriction, then it’s bound to have some sort of effect,” said David Butter, Middle East analyst and associate fellow at foreign policy research group Chatham House in London. There are about 500,000 Lebanese in the Gulf. The money they send home, according to Raza Agha, London-based chief Middle East and Africa economist at VTB Capital Plc, has accounted for about 60 percent of remittances flowing to the country in the recent past. That’s about $4.6 billion, according to World Bank data, or more than a tenth of the nation’s $43.8 billion gross domestic product. The GCC hasn’t said what concrete steps it will take against Hezbollah, which together with allies dominates Lebanon’s caretaker government. Read more: dailystar.lb/Business/Lebanon/2013/Jul-24/224801-gulf-crackdown-on-hezbollah-may-endanger-lebanon-cash-flow.ashx#ixzz2ZwNerHMr
Posted on: Wed, 24 Jul 2013 06:10:03 +0000
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