If You Build, They Will Come

The U.S. Department of the Treasury has designated Hezbollah’s construction arm, Jihad al Binaa, as a terrorist organization. What difference does this make?

Not looking good

It is always tempting to dismiss Treasury department bans as nothing more than symbolic gestures. Fine, you might think, Hezbollah will just switch American made Caterpillar trucks for European made JCB ones. What’s the big deal? it’s America’s loss.

In reality, though, the ban is aimed at Iran.

The story goes back to when Jihad Al Binaa began reconstruction work immediately after the July war. The group’s no-nonsense dynamism and efficiency impressed international development funds who turned a blind eye to the Hezbollah connection and poured money onto their projects.

With a belief that Hezbollah was a “grassroots Lebanese movement” that could get the job done, the funds simply stepped over Lebanese official channels, rightly perceived to be corrupt and inefficient.

This was a win-win situation for Tehran which, as Jihad Al Binaa’s main funder, was happy someone else was footing the bill while still getting the popularity boost for itself.

By stepping in, the Americans have decided to tighten the bolts on Iran.

By clearly marking Jihad Al Binaa as a terrorist organization, the Americans hope to achieve two objectives: First, they would squeeze Iran financially in a time of falling oil prices, and second, they would boost the Lebanese government’s official construction works. As Stuart Levey, the Treasury’s Under Secretary for Terrorism and Financial Intelligence puts it:

“At the same time that we are targeting Hizballah’s construction company, the U.S. Government is also working to ensure that legitimate reconstruction efforts, led by the Lebanese Government, succeed,”

The real immediate losers would be the Lebanese “consumers” of construction who could lose the help of a highly subsidized and motivated organization.