March 6 (Bloomberg) -- In Hezbollah’s Beirut stronghold, shoppers are avoiding Osama Assaf’s cakes.
At least five suicide bombings since the beginning of this year have targeted the militant group for backing Syrian President Bashar al-Assad in the civil war next door. That’s frightening people away from Cremino, the store Assaf runs.
“We’ve lost 40 percent of our business because people are scared of going out,” said Assaf.
Less than 12 months after Hezbollah said it sent fighters to Syria, a stalemate in the war and the spread of violence in Lebanon leave the group mired in an enduring conflict and struggling to protect its supporters at home.
While there’s little evidence so far on the ground, the increase in attacks following Hezbollah’s involvement threatens to erode the group’s domestic support, said Michael Young, the Beirut-based author of “The Ghosts of Martyrs Square: An Eyewitness Account of Lebanon’s Life Struggle.”
“Syria is turning into an open-ended mini-Vietnam for the party,” he said. “The party is now a prisoner of this and it’s a prisoner of its alliance with Bashar.”
As a result, the Iranian-backed militant group that for most of its three-decade existence had built a status as a force dedicated to fighting Israel is having to reconfigure, according to analysts including Hilal Khashan, a political science professor at the American University of Beirut.
Hezbollah has defended its involvement in the war. Its chief, Hassan Nasrallah, said in a speech last month his party is fighting Islamic radicals in Syria to prevent them from turning Lebanon into a jihadist arena.
Israel, which failed to defeat Hezbollah in a month-long war in 2006, is taking advantage of the group’s vulnerability. On Feb. 24, it sent warplanes to bomb Hezbollah’s positions near the Lebanese border with Syria for the first time since the Syrian crisis broke out in 2011.
Hezbollah, whose swift retaliatory rocket attacks were a hallmark of its conflict with Israel, said in a Feb. 26 e-mailed statement it would choose the time and place to respond.
“The Hezbollah that we knew is no longer there,” Khashan said. “Their image is being recast and their transformation from a party that could stand up to Israel into one that is embroiled in sectarian conflicts has begun.”
Assaf’s cake store is in a Shiite Muslim-dominated suburb of Beirut, the capital of a country split roughly equally between Shiites, Sunni Muslims and Christians. Other outlets in the area have piled up sandbags for protection, while Assaf said he’s considering deliveries to make up for some of his loss.
The spillover from the war in Syria had already hit the economy in Lebanon, the most indebted Arab country.
Gross domestic product increased at an annual rate of 1.5 percent in each of the last three years, the slowest pace since 2006 and compared with 7 percent in 2010, according to International Monetary Fund data. The extra yield on Lebanon’s dollar bonds over U.S. Treasuries has jumped more than 100 basis points, or one percentage point, since the beginning of 2011 to 377, according to JPMorgan & Chase Co. The benchmark BLOM Stock Index dropped 17 percent in the same period.
The violence in Syria has also pushed Lebanon deeper into the sectarian conflict, potentially exposing Hezbollah to more threats, said Sahar Atrache, a senior analyst at the Brussels-based International Crisis Group.
Syria’s war has drawn in regional rivals such as Iran and Saudi Arabia, the key backers of Shiite and Sunni forces.
Saudi Arabia in December pledged $3 billion to support Lebanon’s armed forces, a move seen as an attempt to counterbalance the military superiority of Hezbollah, designated as a terrorist organization by the U.S.
Hezbolah’s alliance with Syria started under Bashar’s father, the late President Hafez al-Assad, who in 1976 sent troops to Lebanon during the civil war primarily between pro-Palestinian Muslim militias and Christian forces.
On Feb. 19, two cars packed with 350 pounds (160 kilograms) of explosives blew up near the Iranian cultural office in Beirut, killing at least 10 people and wounding more than 100.
The Abdullah Azzam Brigades, a Sunni militant group linked to al-Qaeda, claimed responsibility in a posting on Twitter and said it would “continue to target Iran and its party in Lebanon” until Hezbollah forces are pulled out of Syria.
Hezbollah’s focus turned mainly to fighting Israel after the Lebanese civil war ended in 1990, building up an arsenal of rockets funneled in through the border with Syria.
For the party, the Assad alliance is valuable enough to outweigh the risks of fighting in his defense, according to Atrache of the International Crisis Group and James Fallon, Dubai-based analyst at consultancy firm Control Risks.
“Hezbollah is certainly starting to feel the ramifications of the Syria conflict at home, but it was probably cognizant of that risk before taking the decision to intervene decisively in support of Assad,” Fallon said.
Criticism of the party’s Syria strategy has also been muted among its Shiite supporters, who benefit from a network of charities providing social aid and affordable health care. They include Jihad Al-Binaa, which was set up in 1988 and offers services ranging from rebuilding homes damaged by Israeli attacks to helping farmers improve productivity.
For now, the party’s strategy of “projecting invincible power has been relatively successful,” said Atrache. “In the longer term, it poses serious challenges to Hezbollah. It fuels the very same danger it is trying to prevent.”
Back in the southern Beirut suburb where Assaf has his cake store, some residents are thinking of relocating away from the explosions, Lebanon’s Daily Star newspaper reported last month. Ahmed Matar, manager of the al-Khalifa restaurant serving shawarma and falafel sandwiches, said takeout deliveries rose about 20 percent since the bombings began.
“Some people are afraid to go out,” Matar said. “They prefer to stay indoors.”
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