Hussam al-Mahmoud | Jana al-Issa

The visit of Iranian President Ibrahim Raisi to Damascus on May 3 carried a high-level political and economic dimension, as it was the first in nearly 13 years, despite the two visits that Bashar al-Assad made to Tehran during the Syrian revolution.

The visit coincided with changes in the political scene and was rich in economic agreements that dealt with various axes; some indicated an Iranian expansion of a horizontal nature, such as the desire to acquire land areas in exchange for unpaid debts.

In this file, Enab Baladi tries to shed light on the value of the visit and the dimensions it carried, especially economically, with the assistance of interested experts and researchers. It also discusses the feasibility of the “Land-for-debt” plan implementation and the beneficiaries of this implementation if it takes place.

Critical timing

The visit of the Iranian president came in light of the intense Arab movements led by more than one Arab country, such as Saudi Arabia and Jordan, to bring the head of the Syrian regime, Bashar al-Assad, closer to the Arab world. These steps culminated in the regime’s return to the Arab League on May 7, leading to al-Assad’s participation in the Arab summit on May 19, at an official invitation from Riyadh.

The course of Arab relations and the talk of withdrawing al-Assad from the “Iranian fold” over the years were met with a political step that was manifested in the resumption of relations between Saudi Arabia and Iran after a political rupture that lasted for about six years.

However, the new relations between the two “arch-rivals” did not remove Syria from the framework of Arab discussions regarding its relationship with Iran. Arab officials considered, during a ministerial meeting that took place in Jeddah on April 15, that the Arab re-acceptance of the Syrian regime, in light of the existing Iranian influence in Syria, would reward Tehran, according to The Financial Times.

Bashar al-Assad receives Iranian President Ibrahim Raisi and the accompanying delegation on his visit to Syria – May 3, 2023 (Syrian Presidency)

The Iranian visit, which was talked about being postponed months ago, came after al-Assad visited Russia in mid-March.

Al-Assad’s fifth visit to Russia had a different political rhythm, as it lasted for three days, and began with an official reception, and included, in addition to a meeting with the Russian President, Vladimir Putin, interviews with Russian media, through which al-Assad praised the relationship between Damascus and Tehran, and welcomed the new Saudi-Iranian relations, stressing at the same time that the Arab states have not been calling for him to move away from Iran for years.

Emphasizing the depth of the relationship, al-Assad said during his reception of his Iranian guest, “When an unjust war was waged against Iran in 1980 for eight years (referring to Iran’s war with Iraq with Gulf and Arab support), Syria did not hesitate to stand by Iran despite the threats and temptations at that time,” pointing out that Iran responded in kind when the “war” was launched on Syria, and even made sacrifices, according to al-Assad.

Bilal al-Salaimah, a researcher in political relations, explained to Enab Baladi that Raisi’s visit to Syria was needed at the time, and it carries messages to all Arab countries and parties that are betting that normalization with the Syrian regime would reduce Iranian influence.

The visit of the Iranian president revealed the weakness of the claim on which some Arab countries base their promotion of normalization with the existing regime, which is to stand with Damascus in order to break Iranian influence and give the regime greater freedom of movement that could reduce Tehran’s influence in Syria in the long run.

“The Iranian president’s message is that Iran is still there, continuing and working to consolidate its influence,” al-Salaimah added.

Jusoor Center for Studies said that Raisi’s visit is an appropriate opportunity to support the hardline regime in dealing with the new solution initiatives. Politically, the regime works to impose national principles on any constitutional contents and makes them a condition for resuming the work of the Constitutional Committee, and is keen to evade UN Resolution 2254, and militarily it requires a complete Turkish withdrawal from the Syrian lands, and lifting the support for the opposition factions.

There was no actual political value or feasibility for Raisi’s visit to Damascus in light of the regime’s international isolation, which undermines any efforts to transform the influence achieved by Iran into real gains, but it came with a partial decline in isolation, according to the Jusoor Center.

The head of the Syrian regime Bashar al-Assad receives the Iranian president Ibrahim Raisi in Damascus – May 3, 2023 (Syrian Presidency)

Debt on list

On April 25, the Syrian-Iranian Economic Committee met with the participation of the Minister of Economy in the government of the regime, Mohammad Samer al-Khalil, the Iranian Minister of Roads and City Construction, Mehrdad Bazar Bash, and representatives from both sides in the sectors of economy, trade, housing, oil, industry, electricity, transportation, and insurance.

At the time, the Iranian minister confirmed the formation of eight specialized committees, the first concerned with banking, financial affairs, and insurance, which discussed exchanging or directly transferring funds between the two countries to confront the sanctions and get out of the banking crisis.

The second committee is concerned with investment affairs, discussing electricity issues, focusing on priorities in the Iranian credit line and the field of energy production in Iran, while the third is concerned with the oil file to study issues, including the export of petrochemicals and investment in various fields.

The fourth committee is concerned with the transportation file, the issues of the railway corridor, increasing the trips between the two countries, assisting the Syrian fleet, providing manpower, and inaugurating the port of Hamidiyeh and the maritime lines organized between the two countries.

As for the fifth committee, it is concerned with commercial and industrial affairs, building industrial cities, and the financing law that impedes some activities, while the sixth committee is related to agricultural affairs beyond the borders, as there was earlier a discussion about giving five thousand hectares of Syrian agricultural land to be cultivated by the Iranian side, and in the event of approval expertise will be transferred from Iran to Syria, according to Minister Bazar Bash.

The seventh committee focuses on tourism affairs, including religious tourism, with a goal of 50,000 Iranian visitors entering Syria, at a rate of approximately 1,000 visitors per week.

Land for debt

The eighth committee of the economic committees is concerned with following up on debts and dues in order to conduct an accurate investigation of the size of the debts after previous agreements related to giving lands as an alternative to these debts.

The Iranian minister, Bazar Bash, indicated that the Iranian side “feels the circumstances of Syria, but there are some laws in Iran whose questions must be answered,” according to the Iranian minister’s statement to the Syrian pro-regime al-Watan newspaper.

Among the economic proposals produced by the Economic Committee meetings is the establishment of a joint bank between Iran and Syria and dealing in the national currency of each party.

According to a study by the Syrian Dialogue Center, Iran has taken a series of steps to dominate the economy in Syria, with varying success and failure. It came in the sectors of animal husbandry, agriculture, and agricultural trade, in addition to seizing agrarian lands.

It also included underground wealth and extractive industries and attempts to control phosphates, oil and gas fields, and petroleum refining, which were met with a prominent Russian presence and a strong competitor in general and in these areas.

In light of the talk about debts to Iran with the Syrian regime of about $50 billion, according to the Iran International website, which claimed to have obtained a leaked document from the Iranian Foreign Ministry saying that Iran had asked al-Assad to give lands to Iran as an alternative to money as a way to pay.

Iyad al-Hamid, a researcher in the Syrian Legal Development Program, told Enab Baladi that there are few options available to Iran to recover its money from the regime in light of Russia’s domination of the main sources of wealth in Syria.

According to the researcher, Syria’s exhausted economy does not provide attractive investment opportunities, and in light of al-Assad’s intransigence and his rejection of the political process, there is no reconstruction process, and sanctions are still imposed, which means that owning land and real estate remains the best available option for Iranians.

In response to a question about a possible Arab role in the process of Arab investment and economic activities in Syria after returning to the Arab League, the Assistant Secretary-General of the Arab League, Hossam Zaki, affirmed on May 12 that the Arabs did not intend to oppose the US sanctions against the regime or to deal with them as if they don’t exist. “Nobody wants to venture in this direction,” he said.

For his part, al-Hamid said to Enab Baladi that Iran follows an unconventional policy in spreading its influence. Despite the importance of official direct channels with the regime, Tehran seeks to establish a structure parallel to the state in all countries where it dominates the decisions of their capitals, which allows it continuous influence that goes beyond political settlements, and land acquisition is part of this policy.

The researcher believes that the Syrian regime may not reject such a settlement as long as it is still confined to areas that do not threaten it completely, given that it always maintains a margin for maneuver.

During his meeting with the Iranian Minister of Roads and City Construction, Mehrdad Bazar Bash, on April 27, al-Assad considered that translating the depth of the political relationship with Iran into an economically similar situation is necessary, indicating that the two governments must continue to work on it to strengthen it and increase its growth.

The researcher on Iranian affairs, Mustafa al-Nuaimi, considered that the visit of the Iranian president to Damascus comes as a continuation of the Saudi-Iranian agreement to resume their relations and that the nature of the accompanying delegation suggests that the visit seeks military and political gains, not only economic ones, as it was portrayed.

The Iranians are interested in any agreement concluded in the current or future stage, and they have the decisive decisions in those files, he added.

The researcher indicated that Iran is aware of the inability of the Syrian regime to pay its debts, and at the same time, monitors the Arab efforts to combat drugs and links them to mutual steps to rapprochement with the regime, which makes Iran search for alternatives that allow it to overcome the debt crisis by obtaining something like outposts that eliminate the possibility of its expulsion from Syria without making gains or for a cheap price.

Agreements may not enter into force

The signing of agreements in various sectors between Iran and the Syrian regime is not new, as it was preceded by other agreements that did not enter into force and remained a dead letter.

The previous agreements did not differ much from those signed by al-Assad recently, many of which were not implemented on the ground, except that the last one was signed by the Iranian president in Damascus for the first time since 2011.

Over the past years, Iran has won many investment contracts in various sectors, such as communications, health, education, energy, banking, construction, agriculture, livestock, and electricity.

According to a study issued by the Syrian Dialogue Center in March 2022, Iran’s achievements in the Syrian economy are represented by lines of credit and loans more than trade.

Despite the multiple trade failures, Iran is still seeking to raise the level of trade exchange for many purposes, most notably the recovery of the largest amount of debt, and the importance of this exchange for it as a soft power that it needs to develop long-term influence and economic relations, says the research center.

An expert on Iranian affairs, Nawar Shaaban, said in an interview with Enab Baladi that the Iranian agreements with the Syrian regime, for example, since the beginning of 2022 until now, indicate that many economic or educational agreements or projects related to energy and others, most of which have not yet been implemented.

On the other hand, certain moves took place, such as building a consulate in Aleppo and starting to benefit from Aleppo International Airport and other projects.

According to Shaaban, who works at the Omran Center for Strategic Studies, Iran has implemented a number of small projects, but they have a great impact in different regions, which it chose based on their ability to influence the social incubator, such as the eastern province of Deir Ezzor, for example.

Iran has implemented projects that are of interest to it and that prove its presence in various sectors, such as energy projects and land logistical projects through its control of crossings and air transport through its control of airports.

Regarding the reason why Iran did not start projects related to the agreements, Shaaban believes that Iran’s policy in announcing its projects is a media promotion policy about its ability to implement projects in Syria in various sectors and that it is not affected by Western sanctions on the Syrian regime.

According to a study by the Syrian Dialogue Center, after 2015, Iran sought to establish itself in all the main sectors in Syria, and despite its great efforts in this field, its actual success and level of control differ from one sector to another, amid continuous Iranian attempts to increase concentration in each of them separately.

It is noted that there is a general feature that characterized Iranian economic trends in Syria, which is the success in concluding agreements with the failure to turn them into reality, as a result of three main factors, which are Russian competition, the impact of Western sanctions, and economic weakness in Syria, says the study of the Syrian Dialogue Center.

Signing memorandums of understanding between the Syrian regime and Iran, in the presence of al-Assad and Iranian President Ibrahim Raisi in Damascus – May 3, 2023 (Syrian Presidency)

Tehran after Moscow, Agreements may not be implemented

In mid-March, al-Assad’s visit to Moscow revealed the possibility of future Syrian-Russian agreements, which might lead to greater Russian control in Syria and domination of various sectors, most notably the military and economic ones.

According to al-Assad’s announcement at the time, the expansion of the Russian military presence in Syria, in addition to planning 40 investment projects in various sectors, were the most prominent features of the upcoming agreements that would follow the visit.

The Iranian agreements that Raisi signed with al-Assad in Damascus come more than a month after talking about upcoming Russian agreements, which opened the door to questions about the extent to which the recent Iranian agreements are related to the Iranian-Russian rivalry in Syria.

Anton Mardasov, a non-resident scholar in the Middle East Institute, told Enab Baladi that the agreements that Moscow and Damascus seem to have agreed upon are still under negotiation, according to information he obtained from sources he described as reliable.

The scholar in MEI’s Syria Program added that al-Assad asked the Kremlin for “a crazy amount of a multi-billion dollar loan,” but Moscow has shown its willingness to provide only 10% of the value of the required amount, so it is trying to involve the UAE indirectly, due to its inability to provide this full amount.

The Russian researcher believes that Moscow is still trying to play a greater role in Syria because it feels that it may continue to lose its influence due to the recent decision of the Arab League, which calls for the return of the Syrian regime to its fold.

However, Moscow is now turning a blind eye to all Iranian actions in Syria. On the one hand, it is trying to portray integration with Tehran as part of the anti-US coalition.

On the other hand, the Kremlin is also trying to keep its distance, as Iran seeks to transfer air defense equipment to Syria and increase the number of its military radars, according to what Mardasov believes.

No conflict of interest

What is happening between Tehran and Moscow in Syria cannot be considered a competition but rather a kind of work on different axes, despite the clear desire of both sides to establish their presence in different sectors away from security and the military, according to scholar Nawar Shaaban.

“If there were competition, Iran would take advantage of Russia’s preoccupation with its war against Ukraine, and expand further, despite its efforts in this field that may not be considered intense, and which were far from Russian influence in Syria,” Shaaban says.

The researcher does not see that the recent Iranian agreements carry a negative message to the Russian side. The messages that may reach the Russians may indicate support for Moscow in the stage of reducing its influence in Syria and Tehran’s preservation of Russian interests in this context.

While a study issued by the Syrian Dialogue Center considered that the level of Russian-Iranian competition in Syria is the most important factor affecting the Iranian position within the sectors of the Syrian economy and its future.

The study showed that Russia and Iran are engaged in a competition over influence and the spoils of war in Syria, which is evident from the targeting of the same economic sectors by both sides, instead of coordinating between them in “acquisition.”

The balance of economic control is in favor of Russia, and this was evident in more than one sector. When the Russians intervene, “they have the upper hand,” according to a study by the Syrian Dialogue Center, and vice versa, as the weakness of the Russian economic intervention gives a large margin for the Iranians to intervene and control.