Russia Accumulates “Odious Debts” in Syria

Russia Accumulates “Odious Debts” in Syria

Enab Baladi Enab Baladi
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The Russian greed for the Syrian economy started to appear publicly two years after the announcement of its military intervention, September 2015, to support the Syrian regime and its president Bashar al-Assad and to prevent its collapse.

 Although the military intervention aims to strengthen Russia’s expansionist capacity in the Mediterranean Sea, through maintaining the military bases in Syria and establishing other bases under the pretext of the protection of the Syrian regime, which it considers legitimate, and the pretext of fighting against terrorism, mainly ISIS, Russia is looking in reality for an economically higher price, according to what the economic researcher Munaf Quman claimed to Enab Baladi. This price was recognized through the signature of long-term agreements in vital fields, such as oil and gas, in addition to its monopoly on the importation of strategic material (wheat) to Syria.

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All these agreements have put Syria’s wealth under Russian control for many coming years whether the current regime will remain or will be ousted. This may deprive Syrians of their wealth and of managing their resources in the future.

Economic Relations Initiated by the Father and Reinforced by the Son

The economic relations between Damascus and Moscow are not the result of the Syrian revolution, but rather date back to the Soviet Union. In addition, former President Hafez al-Assad worked on reinforcing the economic relations between the two countries. An agreement was signed consequently in 1993 between the Syrian and Russian governments regarding trade and economic cooperation.

After the accession of al-Assad Jr. to power in 2000, he worked on reinforcing trade and economic relations between the two countries. In 2005, he signed around 43 agreements in different fields, including industry, trade, defense, health, energy and irrigation.

During his visit to Kremlin in 2005, Russia canceled 73 per cent of Syrian debts, approximately $ 9.8 billion out of a $ 13.4 billion total debt, in return for al-Assad’s approval of turning the Tartus base into a fixed military base for Russian ships, according to the economic researcher Quman.

Russian Domination over the Syrian Economy

After the outbreak of the Syrian revolution, al-Assad’s regime tried to drag Moscow into the Syrian swamp by luring it with the economic advantages it could gain from supporting it. At first, they signed the Amrit Contract in 2013, a huge agreement with a Russian company and the first of its kind, for the exploration of oil and gas in the Syrian territorial waters.

The contract includes exploration operations, funded by Russia, in 2190 square kilometers for 25 years, at a cost of $ 100 million. If oil or gas is discovered in commercial quantities, Moscow will recover the costs from the production, according to what Ali Abbas, the Director-General of the General Petroleum Corporation of the Syrian regime, said to AFP in 2013.

After the military intervention, Russia’s domination over the Syrian regime started to appear publicly through the signature of several agreements in various fields in 2016, two of them worth 600 and 250 million Euros, to repair the infrastructures that were destroyed as a result of the “conflict,” in addition to the construction of power stations and grain silos. As a result, “the Syrian market became open to Russian companies which would come, join and play an important role in the reconstruction of and investment in Syria,” according to the Syrian President Bashar al-Assad’s claims in an interview with the Russian News Agency Sputnik in April.

The most recent agreement is what the Russian electronic network “Fontanka” revealed on June 29 about a memorandum of cooperation signed by the Russian company “Europolis” and the Syrian Ministry of Oil and Mineral Resources earlier this year. The agreement stipulates that the company should be committed to “liberate and protect areas of oil wells and facilities” in return for getting a quarter of the oil production.

Early in June, a Russian company, owned by the billionaire Gennady Timchenko, started carrying out maintenance operations in the largest phosphate mines in Syria which are located in the area of Khunayfis near the city of Palmyra, according to a report published by Russia Today (RT) website on June 27.

RT’s report confirmed that al-Assad signed an agreement on April 23 between the General Organization for Geology and Mineral Resources of Syria and “STNG Logistic,” a subsidiary of Stroytransgas and which Timchenko owns 31 per cent of, in order to carry out the necessary maintenance operations in the mines and to provide protection, production and transport services to “Selatata” exportation port in Lebanon.

Devastating Effects of the Contracts

The researcher Munaf Quman said that the contracts and agreements between Russia and Syria will have devastating effects on the Syrian economy in the long term. It will hold back the economy and the future Syrian government and prevent them from taking any developmental steps that would liberate the national decision and the exploitation of Syria’s natural resources. He confirmed also that “any developmental process would face a Russian and Iranian wall (Tehran has also signed several agreements with the Syrian regime) which would oppose this process, so they will impose their own agenda, mostly for the benefit of the two countries more than the benefits Syria and the Syrian citizen.”

Quman stressed the severeness of the contracts related to the investment of oil ports and the right to the exploration and extraction of oil, gas and phosphate, because they will be stolen for the benefit of Russia and Iran. In addition, the two countries will “suck the resources” without taking into account any national interests of the Syrian people. Russian companies might sell oil, gas and phosphate that are extracted from the Syrian territories at high prices, and this will cause negative effects on the government and the citizen in terms of costs and internal prices.

Considering them as “Odious Debts” might be the Way out

The agreements, which are considered to be unfair to the Syrian people, as many think, are legally binding and enforceable since the two sides are members of United Nations organizations. However, in a previous interview with Enab Baladi, the Minister of Services in the Syrian Interim Government pertaining to the Syrian opposition, Abdullah Razzouk, pointed out that these agreements are legally null because of the absence of a legitimate government that is elected and selected by the entire Syrian people, and that when things will return to the normal and when the Syrian people will select the ruler, all agreements with Iran and other countries, who take advantage of killing Syrian people, will be reconsidered.

However, Quman considered that the agreements have reached the Syrian territory in a purely legal manner and that Russia will no longer care whether the Syrian regime remained or not. There is no international force that can oblige Russia to move from its place because its agreements are signed with the government of the Syrian regime, which still enjoys international legitimacy and still occupies a place in the UN Security Council, in addition to the fact that its embassies are still working around the world and its signature on documents and contracts is legally enforceable.

Quman pointed to the possibility of alleviating the impact of these contracts and keeping pace with the Russians and Iranians, by finding a specific mechanism that does not harm the Syrian economy and citizens in the future. This depends on the form of the future political transition and on the party which will write the Syrian constitution and the mechanism of forming the parliament as well as the political system that will prevail in the country.

According to Quman, in case of the establishment of a parliament, a constitution and a national political system that reflects the Syrian people’s desires and independence, the contracts that are signed by the Syrian regime with Russia and Iran could be canceled, on the grounds that they are “odious debts” that are used against the will of the Syrian people and affect indeed their interests.

Odious Debts

The term “odious debts” appeared first in 1927 when it was used by the former Russian minister and professor of law in Paris Alexander Nahum Sack.

According to Sack’s law, “any tyrannical regime obtained a loan, which was not intended to meet the needs and interests of the country but rather to strengthen this authoritarian regime and to suppress the people who fight against this tyranny, this debt is considered odious. It is not enforceable to the country and rather belongs to the authoritarian regime as it is a personal debt and therefore it is cancelled when the regime is ousted.”

The law indicates that a government can relinquish the obligations of its predecessor, since such debt does not meet one of the conditions that determine the legality of the debts which stipulates that the amounts borrowed in the name of the country must be used to meet its needs and interests.

Accordingly, “odious debts” are debts that meet the following three conditions simultaneously: absence of consent if the loan is granted against the will of the people, absence of public interest if the funds are spent contrary to the interests of the people and the creditors’ awareness of the borrowers’ bad intentions.

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