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Lebanese Shia will rely on Hezbollah parallel economy

Wednesday, January 6, 2021

Significance

This promptly followed reports of a large explosion at a Hezbollah-linked fuel depot on a smuggling route across the Lebanon-Syria border, possibly targeted by Israeli planes.

Impacts

  • Further French diplomatic intervention this month and the advent of US President Joe Biden could resolve the government formation crisis.
  • There is little prospect of a genuinely reformist government that could implement real change and bring in large-scale aid.
  • Once COVID-19 rules are lifted, recent student protests could spread and reinvigorate national demonstrations driven by rising hardship.
  • US re-engagement with Iran could allow the latter to transfer more funds for Hezbollah to build its parallel economy.
  • Lebanese living abroad will play an increasing role in funding key NGO food assistance programmes, as local leaders’ finances run short.

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