Iran cuts Syria militia funds as US economic sanctions tighten

Iran has cut funding to militia groups in Syria as its economy continues to suffer from the renewed imposition of US sanctions, after the Trump Administration withdrew from the 2015 nuclear deal.

Armed groups backed by Tehran have reported to be missing paycheques and even financial aid to Iran’s closest Arab ally, the Lebanese Hezbollah group, has dried up in recent months.

“The golden days are gone and will never return,” a fighter with an Iranian-backed militia in Syria who recently lost a third of his salary and other benefits told the New York Times. “Iran doesn’t have enough money to give us.”

“You’re not in Hezbollah for the money,” another anonymous fighter said. “You’re giving your blood, your soul, because you believe, but if your family is in the street, how can you fight?”

In January, Iranian President Hassan Rouhani said that Iran is facing its toughest economic situation in 40 years, and that the United States was squarely to blame. The country has witnessed its currency plummet, prices soar and growth forecasts fall since the US renewed economic sanctions against Tehran last year.

Washington withdrew from the landmark 2015 nuclear deal signed under then President Barak Obama last May, despite protests from the cosignatories Russia, China, Germany, France and the UK. But earlier this week, US Secretary of State Mike Pompeo hailed the pressure on Iran, affirming during a trip to Lebanon that “it’s aimed at cutting off the funding for terrorists, and it’s working.”

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However questions remain as to what extent financial pressure can quash movements that are ideologically and politically driven.

Hezbollah leader Hassan Nasrallah has acknowledged the difficulties faced by Iran’s circumstances, but has called on the movement’s fundraising arm “to provide the opportunity for jihad with money and also to help with this ongoing battle.”

It is also feared that the renewed sanctions could push Iran to build stronger economic ties with neighbouring countries in compensation for the loss.

Iran has deepened cooperation with Iraq; militias that it sponsored are now paid by the Iraqi government, allowing Iran to maintain influence in the country at little cost to itself. Turkey, Italy, Japan, China and India are also exempted from the sanctions, relying on Iran for oil and other regionally integrated trade networks, which provide the country with some possibilities for further development.

However, Tehran focuses on building diplomatic relationships that transcend financial ties, giving the country other avenues of support when the US targets it economically, said Maria Fantappie, senior adviser for Iraq at the International Crisis Group.

“The problem with this administration in the US is that it is all about money and boots on the ground, but that is not how it works in the region,” she said. “It is all about relationships.”

Iran is also keen to invest in the reconstruction of Syria; in January the two countries signed a deal to ease bank transfers to make finance available faster. Tehran has also committed to build a 213 billion-Syrian pound ($412 million), 526 Megawatt power plant at Latakia, and a gas pipeline from Baniyas to fuel it, to be finished in three years. However as sanctions start to bite, its ability to effectively contribute to Syria’s restoration remains uncertain.

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