Syrian regime promoting “empty” economic agreements with far eastern and western countries
Enab Baladi – Amal Rantisi
Lately, Syrian regime officials have been triumphantly talking about changes in the international political atmosphere, war victories, and Syria’s openness to initiatives to exit the crisis, as mentioned by the Syrian Foreign Minister Faisal Mikdad in a recent interview, attempting to send messages of economic objectives besides political ones.
The regime’s government is currently focusing its attention on the Far East countries of India, Indonesia, and the Philippines. It is also working on strengthening economic relations with South American states like Brazil and Argentina, and Serbia as one of the countries of the European Union (EU).
Some of these countries have supported the regime against the Syrian uprising that started in 2011. This is why the regime viewed them as allies that could enhance economic investments and cooperation with Syria.
The regime’s new allies seemed the perfect replacement to EU countries and the United States (US), which the regime accused on more than one occasion of “adopting a policy of economic terrorism that contributes to the suffering of the Syrian people.”
Excessive media promotion for “empty” discussions
During the past two months, regime officials have conducted meetings with non-Arab allied countries under lots of promotion from Syrian state media.
On 28 September, the Syrian Minister of Oil and Mineral Resources, Bassam Toumeh, met with the Serbian Ambassador in Damascus to discuss the possibility of Serbian companies investing in oil shale for power generation and promoting joint cooperation in the fields of oil, gas, and mineral resources.
For his part, the Serbian Foreign Minister, Nikola Selakovic, emphasized his country’s desire to promote and strengthen bilateral relations with Syria in all areas, including the political and economic ones, the state-run Syrian Arab News Agency (SANA) reported on 7 October.
On 30 September, the Ambassador of Brazil in Damascus, Fábio Vaz Pitaluga, talked about “the need to activate the Syrian-Brazilian Business Council, strengthen relations between the Industry Chamber of Damascus and its countryside and the Arab-Brazilian Chamber of Commerce, and the importance of reviving trade exchange between Syria and Brazil.”
Pitaluga noted his country’s willingness to contribute to Syria’s reconstruction “by identifying the heavy industries needed for the next phase.”
In the same economic context, the regime reached out to countries in the Far East like India to sell Syrian phosphate in exchange for exporting Indian goods to Syria. The regime also discussed the possibility of rehabilitating the Syrian oil sector with the help of Indonesia, as the Chargé d’Affaires of the Syrian Embassy in Jakarta, Abdul Moneim Annan, held discussions with an official from one of the largest companies in the Indonesian oil sector on 24 September.
On the sidelines of the agenda of the United Nations General Assembly (UNGA) in New York on 23 September, Faisal Mikdad discussed with the Vietnamese Foreign Minister, Bui Thanh Son, the development of economic and political relations between the two countries, as Vietnam demonstrated its willingness to participate in the rebuilding and investing in Syria.
On 16 September, flights between Syria and Pakistan were reactivated, helping to enhance industrial, defense, and economic cooperation between the two countries, according to Pakistan’s Ambassador to Syria, Saeed Muhammad Khan.
On 10 September, the Governor of Tartus, Safwan Abu Saada, met with the Chargé d’Affaires of the Embassy of the Philippines in Syria and stated to the pro-government local newspaper al-Watan, “We discussed with the Philippine Embassy means of maritime cooperation in all fields, and they showed readiness to cooperate.”
The part-time affiliate professor at the European University Institute in Florence-Italy and researcher in the “Wartime and Post-Conflict in Syria,” project, Dr. Joseph Daher, told Enab Baladi that the above-mentioned meetings held by the Syrian regime are often “empty” and merely aim to cause a media stir.
Daher added that there are significant obstacles and reasons preventing Syria from attracting heavy foreign investments, including economic sanctions, the lack of political and economic stability, the depreciation of the Syrian pound, and infrastructure problems caused by war-related destruction.
According to Daher, these countries would fail to make quick profits and returns in Syria in the near future, especially with their limited potentials.
These reasons combined indicate that the meetings are nothing but a political game by the regime, Daher said.
The Syrian economic researcher, Adham Qudaimati, told Enab Baladi that the Syrian regime works on creating and promoting such events to convince the Syrian people, who are mostly below the poverty line, that they are not alone.
Qudaimati added that the implementation of economic agreements adopted by the regime with foreign countries, except those involving Russia or Iran directly or indirectly, remains “stalled” because the US and the EU will not allow these deals to come into force so easily.
Investments hampered by sanctions
A study published by the Carter Center in September 2020 said that the majority of current US sanctions on Syria were imposed in two broad phases. The first phase was in the 2000s as a response to Syrian support for terrorism and its activities in Lebanon.
The second phase that started in 2011 and has continued to the present date was a response to the Syrian civil war, according to US policymakers.
As for the EU, it started to impose sanctions on Syria in 2011 and then escalated them in several stages.
“The US imposes both ‘primary’ and ‘secondary’ sanctions on Syria. ‘Primary sanctions’ are sanctions that prohibit business by US citizens and by US companies (with exceptions for certain humanitarian relief work), and which prohibit financial transactions that touch the US financial system and the sale of US-made goods to Syria,” the study mentioned.
“As for the secondary sanctions, the US Congress expanded them in late 2019 by passing the Caesar Syria Civilian Protection Act (Caesar Act) sanctions that seek to prohibit third-country transactions with Syria.”
The Caesar Act stipulates sanctions against all companies, individuals, and states providing military, financial, or technical support to the Syrian regime, including Russia and Iran, and targets those providing reconstruction aid in Syria.
Qudaimati explained to Enab Baladi that sanctions are a major obstacle to foreign countries’ investments in Syria, for the implementation of economic agreements requires free commercial trading movement in both countries, which the regime does not have.
Qudaimati pointed out that some individuals linked to the Syrian regime and listed in the US and EU sanctions will be responsible for implementing these agreements.
Washington’s stand on foreign investments in Syria
The US has shown some flexibility on the Arab Gas Pipeline project to deliver power to Lebanon, based on a proposal from the US Ambassador in Lebanon, Dorothy Shea.
Last August, Shea informed the Lebanese presidency of the US administration’s decision to assist Lebanon in the transportation of Egyptian gas through Syria.
On 8 October, The American Washington Post newspaper cited a senior US administration official saying that “It is still US policy to discourage any country from normalizing relations with Assad.”
The US official commented on Jordan’s leading normalization of al-Assad’s regime by saying, “We did not give Jordan a green light or an orange light. We did not support the call between Abdullah and Assad”.
“We have made clear that sanctions restrictions remain in place, and nothing should come for free,” the official said and then conceded that the Biden administration will no longer actively work to stop countries from engaging with Assad, except when the law specifically requires it, the newspaper said.
Even though the Caesar Act punishes any project for reconstruction or enhancement of production capacity within Syria, we have seen in the Lebanese case that the Americans’ sanctions are enforced according to their wishes and the interests of Washington, the expert in political economics and science, Dr. Joseph Daher told Enab Baladi.
During a confirmation hearing for the appointment of US Assistant Secretary of State for Near Eastern Affairs, Barbara Leaf on 18 September, US Senator Chris Van Hollen asked Leaf about the situation in Lebanon and the energy plan, transporting gas from Egypt and Jordan through Syria to Lebanon, as proposed by the US Ambassador to Lebanon, Dorothy Shea.
The power deal to Lebanon meant an alternative to Hezbollah’s energy supply from Iran, which is sanctioned by the US.
This prompted the US State Department and Treasury to consider certain exemptions to the Caesar Act.
All reconstruction and power production projects in Syria require US approval, Daher said, adding that there is a big chance for Washington to approve similar small projects for its allies in Syria in the future.
According to Daher, energy and reconstruction projects in Syria are viewed in larger contexts, such as negotiations with Iran.
As for the economic researcher, Adham Qudaimati, he said that all these agreements, if implemented, will be under Russian auspices and Russian-American coordination, and they will offer the regime nothing more than what the Russians have already offered it.
Dr. Daher pointed out the political gains the regime will earn from foreign investments in Syria, as they will encourage the normalization process with its government, in addition to several economic benefits, including capital accumulation, foreign currency generation, and job creation.
The impact of foreign investments on Syrian economy
Daher said that foreign investments positively impact the Syrian economy by generating foreign currency and creating jobs.
However, the proposed investments cannot resolve the economic crisis in Syria or bring the majority of Syrians out of the poverty line, as the country’s economy needs strong and large-scale investments to recover, Daher added.
According to the expert, changes must be made within the regime’s political and economic spheres. Currently, only a small segment of Syrians benefit from the regime’s internal policies, including business people and society’s elites and capitalists associated with the regime.
Daher added that Syria needs political and economic changes in the agriculture and industry sectors and needs investments in these fields to provide income for the working class.
The productive industrial and agricultural sectors employ more people than the service sector, which can help bring the majority of Syrians out of the poverty line, Daher said.
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