Economic Chaos in Iran Threatens Financing for Hezbollah

On Monday, the Iranian rial fell ten percent in value against the dollar to a new record black market low, following the EU's decision to boycott Iranian crude (see: http://www.emirates247.com/news/world/iran-s-rial-drops-10-pct-as-eu-bans-oil-imports-2012-01-23-1.439067). As I have noted in prior blog entries, the swift decline in the rial will soon bite into Tehran's ability to finance its terror proxies, Hezbollah in Lebanon and Islamic Jihad in Gaza, which depend upon dollars from Iran for recruitment, training, the purchase of arms, and the funding of social services.

According to Lebanon's Daily Star (http://www.dailystar.com.lb/News/Politics/2011/Oct-12/151111-iran-cutting-financial-aid-to-hezbollah-report.ashx#axzz1kN16ADqW), Iran already began to cut aid to Hezbollah this past October:

"Iran is to cut its financial support for Hezbollah, the Kuwaiti newspaper al-Qabas reported Wednesday.

Citing well-informed Gulf sources, al-Qabas said Iran has informed Hezbollah that it will not be able to continue providing annual financial backing for the party.

The sources said Iran provides Hezbollah with roughly $350 million annually. The funds are earmarked for Hezbollah members’ salaries, families of martyrs and projects in Beirut’s southern suburbs, south Lebanon and the Bekaa Valley.

The sources cited two reasons for the reduction of financial support: Tehran’s cash aid to the Syrian regime as it confronts protesters, and the suffering of Iran’s economy as a result of global sanctions."

It remains to be seen if Hezbollah can maintain control in Lebanon without this funding.