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Russia sets new tactics to save Syrian economy

Opening a road between al-Hasakah and Ain Issa on 25 May 2020 (Russia Today news agency)

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Enab Baladi- Taim al-Haj

For almost two months, Russia has been trying to find an economic and a commercial way out for the Syrian regime through commercial routes in northeast of Syria.

Moscow is closely monitoring the imminent implementation of the U.S. “Caesar Act”.  This “unwanted guest” by those affected by it, comes in conjunction with the Syrian regime’s economic struggle to save the Syrian Pound, after facing major setbacks following the internal dispute between Bashar al-Assad and his cousin and known businessman Rami Makhlouf. The internal rift inside the regime’s inner circle came after rebuke and criticism by several Russian media outlets on the way al-Assad managed conflicts inside Syria.

On 25 of last May, Russia managed to find a loophole on the international highway “M4”. This facilitated the arrival of commercial trucks and buses from Ain Issa city in the countryside of Raqqa to al-Hasakah governorate following an agreement with the Turkish troops controlling this road on its northern side.

In conjunction with this step, the Russian military police have announced on 30 of last May, opening the road between Aleppo and Raqqa governorates. This was followed by the opening of the river crossing (Albu al-Assi/ Shuaib al-Dhikr) located between the regime held-areas south of Raqqa city and areas under the control of the Kurdish-led Autonomous Administration of North and East Syria (NES). The crossing will be used by Raqqa residents to reach the area north of the Euphrates River as well as the road leading to Aleppo.

Benefits sought

Economic researcher at the “Omran Center for Strategic Studies”, Muhammad al-Abdullah thinks that through reopening the international road “M4”, Moscow seeks to achieve a set of economic and political goals. These goals include paving the way to restore the economic situation in the region where most residents suffer economic hardships, amid high rates of poverty and unemployment. In addition, Moscow is trying to portray itself positively before the region’s inhabitants especially before tribes. This will help Russia strengthen its foothold there in case it gained their support.

Geographically, Moscow wants also to use this step to facilitate the recruitment of fighters. It has been trying to form militias under its supervision in attempt to strangle the presence of the Kurdish Autonomous Administration of North and East Syria (NES) backed by the U.S. and reduce the latter’s control as much as possible on these areas.

Economically and within the frame of its future vision, al-Abdullah thinks that through the international road “M4”, Moscow seeks to expand its scope of influence to reach oil fields through conducting patrols on this road and recruiting local militias to achieve this aim. In the last period, there have been many attempts by Russian patrols to get closer to oil fields, which were confronted by American patrols.  Hence Moscow is trying to rely on local support of residents to achieve this purpose and by fueling local resentment against the presence of American troops in these areas.

According to a graphic analysis published by the “COAR” website, run by a group of specialists and experts who conduct studies on Syria, on a weekly basis, considered  the opening of the “M4” road between al-Hasakah and Ain Issa recently the most significant event of the “pragmatic” political cooperation between “NES” and Syrian regime.

The analysis considered this cooperation an important development at the commercial level considering that “M4” is the main artery for commercial activities, personal mobility and humanitarian aid access to resource-rich and sparsely populated areas in northeast Syria.

One striking aspect of the current cooperation between the “Autonomous Administration” and the regime, is its timing. The cooperation came in conjunction with the Syrian economy’s collapse and the sharp decline in the Syrian Pound, which making these commercial activities of a great importance.

Commercial activity between al-Hasakah and Ain Issa

According to assurances from officials in “Autonomous Administration” and amid the Turkish silence, activities on the international road “M4” have not been resumed yet after a hiatus of seven months, amid an absence of a green light from Turkish troops which monitor the area.

Economic researcher, Muhammad al-Abdallah, thinks that there is a common interest between Ankara and Moscow to revive the commercial activity in the region and reopen the international road “M4”. The southern Turkish governorates are expected to make revenues through exporting their products to markets in the region and Iraqi regions as well under the Russian supervision.

He also talked about these markets’ urgent need for products along with their low productions rates of goods, foodstuff and pharmaceuticals which coincide with hikes in their prices.

Al-Abdullah explained that these economic dealings will satisfy people’s needs and provide them with goods in low prices, especially that the “Autonomous Administration” areas are excluded from the sanctions-imposed by the “Caesar Act.”

According to the analysis provided by “COAR” website, the commercial activity through “M4” in the northeast of Syria focuses these days on the law of supply and demand as well as on relations and ties between the main actors in the region.

The website added that regime-controlled areas import crude fuel from the “Autonomous Administration” held areas on the condition of receiving a portion of its refined products such as diesel.

Meantime, most wheat exports go to the regime areas in exchange for milled flour. While some of it is smuggled to Kurdistan, according to the same website.

The analysis discussed also the long inspection periods on the international road “M4”, which leads to the damaging of certain goods like fruits and vegetables, where these items get offloaded and repackaged on trucks. In addition, the controlling actors on both sides of the crossing point (the regime and the Autonomous Administration) impose fees which effects consumers by increasing the prices these goods and products.

“Caesar Act” accelerates Moscow’s steps

Meantime, the Syrian regime, Russia and Iran are waiting for the American legislation to come into force mid the current month, which will impose additional sanctions on the Syrian regime, its supports and those dealing with it.

The new legislation, known as ” The Caesar Syria Civilian Protection Act “, aims to bring to justice and hold accountable all those responsible for human rights violations. The bill was incorporated in the National Defense Authorization Act for Fiscal Year 2020, to avoid any new obstructions in the Congress after more than five years of drafting.

According to the economic researcher, Moscow is doing its best in the current period to accelerate all procedures which will help resume the economic activity before “the Caesar Act” comes into force, hoping that this will help mitigate the impact of sanctions imposed on the Syrian regime.

Al-abdullah talked about how excluding the “Autonomous Administration” areas from sanction imposed by the “Caesar Act” enabled Moscow, its allies as well as the local economic networks working with the Syrian regime in these regions to circumvent these sanctions from the Iraqi borders into regime areas.

Al-abdullah added that the regime and Moscow count heavily on these networks, which gained expertise in smuggling oil derivatives, wheat and other strategic commodities over the past years, to help mitigate some of the economic pressure on the Syrian regime. The researcher pointed out to a previous implicit cooperation between the regime and the “Autonomous Administration” to supply oil to the former’s areas through these networks.

Moreover, Moscow will rely heavily on the international road “M4” compared to “M5”, which may not fulfill its needs in case the “Caesar Act” came into force to ban all foreign companies and banks from carrying out any transactions with the Syrian regime institutions. Hence, this reliance is based on the idea of mitigating the future impacts of the Caesar act, as al-Abdullah put it.

Would Russia succeed?

Economic researcher Muhammad al-Abdullah thinks that Moscow success to reopen the road connecting Aleppo, Raqqa, al-Hasakah and Ain Issa is conditioned by two main factors. The first is linked to the extent to which it can gain public support in these regions and gain the local community’s trust through reviving the economic situation and securing basic public services in light of the deteriorating economic conditions.

While the second factor has to do with the Americans’ willingness to implement the “Caesar Act” as well as Washington’s ability to make the sought differences through the regime’s political obedience. Meantime, both the regime and Moscow will rely on time, their allies support along with the local economic networks to thwart the impact of the Act. Therefore, Moscow will continue its endeavor to maintain its economic gains inside Syria with an American consent, whether through opening international roads on a small scale or through imposing economic control over all joints of the Syrian economy on a large scale.

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