Jana al-Issa | Ali Darwish | Hussam al-Mahmoud

Over the past 13 years during the Syrian revolution, the features of the Syrian economy have changed due to the political climate and the military-security approach of the regime in dealing with the revolution. This was accompanied by the decline of the local currency, a sharp increase in prices not matching the low level of monthly salaries, and the collapse of the economic sector with the closure of thousands of establishments and factories in both the public and private sectors.

Changes in the political climate and the general situation in the country were accompanied by changes brought about by the Syrian regime itself by replacing individuals who were at the forefront of the economic scene in Syria. Some names and figures disappeared from the scene, replaced by new ones whose activities served the regime, thus dominating the economic scene functionally.

Since the beginning of this year, several prominent names in the economic front, which the Syrian regime had pushed forward in the past years, have disappeared for various reasons.

The latest to disappear was the Syrian businessman Baraa Qaterji, one of the most prominent warlords, who was reportedly killed in an Israeli airstrike near the Syrian-Lebanese border targeting his car on July 15th. Israel did not confirm this, and no official investigation has yet provided real information about the manner of Qaterji’s death.

At the beginning of this year, many media sources reported that the regime arrested Syrian businessman Khodr Taher (Abu Ali Khodr), who was directly linked to the presidential palace. Additionally, news circulated about the severe poisoning of Bashar al-Assad’s economic advisor Yassar Ibrahim with a chemical substance that caused the failure of most of his internal organs.

The Syrian Presidency officially announced that Asma al-Assad would be absent from direct work and participation in events and activities as part of her treatment plan after announcing her leukemia diagnosis at the end of May last year.

With the death of Bashar al-Assad’s media advisor, Luna al-Shibl, on July 5th, four people have now been absent from Asma al-Assad’s “secret economic council”: Asma, Luna, Khodr Taher, and Yassar Ibrahim.

Enab Baladi discusses in this report the changes that have occurred in Syria’s economic front and the beneficiaries of these changes. It also consults experts and economic analysts about the potential impacts and repercussions amidst the changes that have replaced a long-standing front in Syria’s economy.

New players collapse after old ones are removed

How did the main players change?

“Marginal figures from both economic and social sectors, who have managed to amass enormous wealth by exploiting the war and its consequences,” is how a study published by the Harmoon Center for Contemporary Studies in 2022 described the new economic class that gradually replaced the old elite, which had traditionally been seen as irreplaceable. This old elite included figures such as Rami Makhlouf and Mohammad Hamsho.

The study indicated that the transformation of the Syrian economy into a war economy that works to secure economic resources to ensure the continuity of violence and reliance on exploitative activities instead of production pushed some members of the old elite to withdraw from the economic scene, either due to political stance or to protect their wealth and assets from financial deterioration and external sanctions.

With the escalation of sanctions imposed on known economic figures, there arose a need for unknown tools and fronts as a means of circumventing the sanctions to supply the regime with essential goods and financial flows, especially oil and wheat. These roles and functions later expanded.

The study divided the new wealthy into three groups: the first group is a mixed category of war profiteers who came from fighters and group leaders, and local brokers; the second group consists of war profiteers who entered the business world through commercial activities but financially supported militias or established militias theoretically under their control.

The third group included the Assad family’s fronts, featuring names that suddenly emerged in the Syrian economic scene with a magnitude inconsistent with their previous economic activity or financial history. They took up key economic positions and activities traditionally managed by Rami Makhlouf, who was considered the family’s partner and custodian of its business before new figures took the helm.

The removal of Rami Makhlouf from the economic scene and Asma al-Assad’s rising prominence in this realm sent a message to the old economic elite that full compliance and vacating the scene for the new faces were mandatory. As a result, the old elite was left to face total elimination, the confiscation of their properties, or stepping aside and showing deference to be allowed back and continue.

Figures out of the economic stage

Baraa Qaterji

Mohammad Baraa Ahmed Rushdi Qaterji, known as Baraa Qaterji, is a businessman and chairman of the Qaterji Group. Born in Raqqa in 1976 to a family originally from the town of al-Bab in eastern Aleppo, he is the brother of businessman and member of parliament Hussam Qaterji.

He, along with his brothers Hussam and Mohammad Agha, formed an armed militia known as the Qaterji Group, which is based in Aleppo governorate and took part in the siege of Aleppo city at the end of 2016.

Baraa has been US sanctioned since 2018 due to his relationship with the regime and “business dealings” with the Islamic State group and arms smuggling from Iraq.

He rose to economic prominence alongside his brothers during the Syrian revolution, becoming one of the most notable economic figures in Syria, particularly in Aleppo. Known for his close ties to Bashar al-Assad, he was a member of the Constitutional Committee formed under UN supervision in 2019.

He was reportedly killed on July 15th in an airstrike, said to be Israeli, targeting his car near the Syrian-Lebanese border. Israel did not claim responsibility for the operation. Senior officials of the Syrian regime participated in offering condolences to his family.

Luna al-Shibl

A member of the “secret economic council” run by Asma al-Assad, Luna al-Shibl was the special advisor to the Syrian regime leader, Bashar al-Assad.

Al-Shibl was a prominent figure within the Syrian regime and was previously sanctioned by the US Department of the Treasury along with other military and party figures affiliated with the Syrian regime.

She died on July 5th following a car accident that left her in the intensive care unit for three days. Despite her official obituary by the Syrian Presidency, the Syrian regime ignored her funeral in terms of media coverage and condolences.

Asma al-Assad

The wife of the Syrian regime leader, Bashar al-Assad, Asma al-Assad has controlled the economic scene in Syria for years through the “secret economic council” she managed.

In recent years, those close to her have established companies in Syria, some of which are fake, and have taken control over several key sectors.

The United States has imposed sanctions on Asma al-Assad for “obstructing efforts to reach a political solution to end the Syrian conflict and leading efforts to help the regime entrench its economic and political power, including through the use of so-called charities and civil society organizations.”

On March 21st, it was announced that she had been diagnosed with acute myeloid leukemia. A few days later, she gave a video message before starting her treatment – the last time she appeared publicly and in the media, after the announcement mandated health isolation.

Yassar Ibrahim

Yassar Ibrahim serves as the assistant to the President of the Republic. He is closely linked economically to Asma al-Assad and is a member of the “secret economic council.” He is also on the US sanctions list.

Ibrahim is a director, partner, and founder of several companies, including Al-Burj for Investment, Ziyara for Tourism, You Tell, Al-Ahd for Trade and Investment, Al-Markazia for Cement Industry, and Bazaar.

Local media reported last May that he had been severely poisoned with a chemical substance.

Abu Ali Khodr

Businessman Khodr Ali Taher is originally from Tartus. His influence increased during the years of the Syrian revolution, and the regime allowed him to manage checkpoints that cut through the country and to exclusively import items like mobile phones and handle their customs clearance.

Khodr has influence in security branches like Branch 215 of Military Intelligence, as well as control over border crossing points between Syria and Lebanon.

He owns the Ella Tourism Company, Emmatel Communications Company, and a major share of Al-Yasmeen Contracting Company and approximately two-thirds of the Syrian Company for Hotel Management.

According to the local Al-Iqtisadi website, Khodr participates in founding and managing more than ten companies operating in various fields, including contracting, hotels, security, metals, trade, dairy, and cheese.

The regime placed him under house arrest in April 2022 following news of his attempted escape from Syria with his money, thereby completely removing him from the economic scene.

Who benefits?

The removal of Asmaa and Yassar Ibrahim and Abu Ali Khodr, the suspicious death of Luna al-Shibl, and finally the killing of Baraa Qaterji have raised many questions about who benefits from these actions and who is behind these movements.

Despite the lack of definitive evidence regarding the removal or disappearance of these names, it happened in a relatively sequential manner, especially since Asmaa, Yassar, Khodr, and al-Shibl represent an economic bloc alleged to be connected to Russia, while Qaterji is on the side of Russia’s competitor on the Syrian ground, Iran.

These names, along with others tied to the regime, emerged after the Syrian revolution, amid economic contraction shifts, international sanctions, and capital flight.

The pressures from these three transformations created “new patterns of elite recruitment and their power, producing new entrepreneurs whose wealth and power are tied to the conflict,” according to a study by the Harmoon Center for Contemporary Studies on the economics of war and peace in Syria (page 10).

The new elite, which emerged post-2011, driven by the regime’s need to circumvent sanctions, worked largely as intermediaries, not heavily involved in big productive activities (although some do contribute to that); rather, they play bigger roles in facilitating trade and payments, according to the Harmoon Center study (page 15).

The change is familiar

Political economy researcher Dr. Yahya al-Sayyid Omar told Enab Baladi that the disappearance of some political, economic, or military figures is a common issue in autocratic systems, especially with the absence of institutional thinking and the control of loyalty to an individual. When one’s loyalty is doubted or one’s benefits decrease, they are either liquidated or marginalized, or it may result from internal factional struggles within the ruling system.

Al-Sayyid Omar believes it is too early to identify who benefits from the latest exclusion and marginalization operations, as it involves understanding the true cause.

So far, the reasons remain unclear, but “most likely, the regime and Russia are the beneficiaries, as it helps in beautifying the regime’s image and preparing for regional and international acceptance,” according to al-Sayyid Omar.

This change of personnel can be explained, according to the researcher al-Sayyid Omar, through several hypotheses:

• The Conflict within the Regime’s Factions: This comes amid the rise of new forces that may not be known yet.
• The Russo-Iranian Struggle in Syria: Within the regime’s government, there are individuals loyal to Russians and others to Iranians, with liquidation and marginalization happening according to this conflict.
• Preparation for Reconciliation: Attempting to remove some figures in preparation for rapprochement with Turkey and the Arab world, and possibly Europe. The regime might be trying to sell the idea that notorious old prominent figures will be sidelined, especially as there is broad political movement to renew relations with the regime, intensified by the appointment of a new Italian ambassador in Damascus.

Italy announced on July 26th of this year the appointment of an ambassador to Damascus, which is the first action following calls from some European countries, including Italy, Austria, Croatia, Cyprus, Czech Republic, Greece, Slovakia, and Slovenia, to reassess relations with Syria and engage with the regime.

These calls included a proposal to establish an EU envoy in Syria who could communicate not only with Syrian actors but also with other regional countries, plus re-engaging with the Syrian regime’s EU ambassador in Brussels.

They also suggested reviewing the impact of the EU sanctions regime on Syria, considering that “over-compliance in the banking system has had unintended negative consequences on the population.”

Political-security exclusion

Researcher at the Omran Center for Strategic Studies Nawar Shaaban told Enab Baladi that during wartime, economic factions are also security factions, with complex security linkages. Those working in the economy during wartime must have a network with other security entities, which would inevitably lead to a clash of security interests among different entities.

He said, “Just removing economic names does not necessarily mean it’s due to economic quarrels alone. Marginalizing, neutralizing, or liquidating certain economic figures always involves security arrangements.”

Due to the current situation of the regime and the expanding influences of Iran and Russia across various security, military, and economic levels, its security authority has diminished, creating opportunities and gaps that lead to security issues, according to Shaaban.

These security issues are utilized by different entities for political, economic, and personal objectives, especially following the disappearance of prominent figures. This will lead to competition among figures, and more significant names are anticipated to be assassinated in the near future, Shaaban adds.

Shaaban confirms that events like these will gradually have political and economic impacts, bringing back some previously marginalized figures or introducing new faces, without building a new network.

Regarding the Russo-Iranian competition, he explains that it’s about filling spaces without direct clash between them, using local tools, maintaining the main common goal of regime continuity for their own purposes, with both sides rushing to fill specific spaces.

Researcher Yahya al-Sayyid Omar, on the other hand, indicates that the economic impact of excluding some figures is not an end in itself.

The reason for excluding these figures is “primarily political, not economic, yet it will have indirect economic reflections,” he notes, including benefiting competitors like those close to Maher al-Assad. In the upcoming period, new economic faces might emerge.

Nonetheless, the exclusion “will cause an internal economic void that other parties will strive to benefit from and fill,” according to al-Sayyid Omar. This matter is related to the political and economic balances within the regime, as it’s impossible to grant economic privileges to any party without full trust in their political loyalty.

In general, he adds, several internal parties will aim to benefit from this exclusion to achieve economic gains, most likely being those parties close to Russia.

Upcoming changes

According to an analysis by the Washington Institute about the implications of Luna al-Shibl’s death, this probably signals more changes at this critical juncture, where Arab countries officially re-engage with Damascus, and Washington prepares to renew the Caesar Act sanctions before they expire in December.

These assassinations might aim to ensure internal discipline while Arab, European, and Turkish countries work with the regime “to address a long list of issues.”

Al-Shibl’s death serves as a reminder that “other non-Alawite figures drawn into the Alawite heart of the regime post-2011 are likely to exit the political scene soon, one way or another.”

Continuing the exit of non-Alawite figures, as per the Washington Institute, could increase the share of the Alawite sect within the regime to pre-2011 levels, potentially causing broader unrest in the future.

Easy substitution, The role is more important than the names

The absence of names which the Syrian regime used as economic front faces for years raises questions about the impact of their demise on the front itself or on the new business community that emerged based on the nature of the stage and its impact on the country’s economy.

Attention also turns towards the substitutes for these figures, considering the continued presence of many obscure names that the regime can entirely control and fully pliable to serve its interests.

Economic researcher and advisor at Chatham House, Zaki Mahshi, in an interview with Enab Baladi, asserts that what matters to the Syrian regime in the matter of crony capitalism or the names it uses as fronts for economic activities, is the role these names play rather than the names themselves, except for Asma al-Assad, whose presence in the economic file bears a symbolic concept linked to influence more than being a person with a specific role.

Crony capitalism is a term describing an economy where business success depends on close relationships between business operators and government officials.

It can be characterized by favoritism concerning the legal permits, government grants, special tax breaks, or other forms of state intervention in guiding economic affairs.

It is believed that crony capitalism manifests when political favoritism extends into the business world, where self-serving friendships and family ties between business people and the government affect the economy and society to an extent that corrupts economic and political ideals meant to serve the public.

Mahshi explained that Baraa Qaterji is a clear example of crony capitalism, while Yassar Ibrahim is a facilitator of crony capitalism.

Mahshi opines that people like Luna al-Shibl, Baraa Qaterji, Yassar Ibrahim, and some businessmen working with them are indeed economic faces for crony capitalism, but generally, the regime considers them to have specific roles. Regardless of their names or whether they disappear or stay, replacing and compensating for them in the Syrian reality is very easy, as their job is to serve the regime’s economic priorities.

The relationship between crony capitalism and the regime is a “win-win,” according to the economic researcher Zaki Mahshi, which explains the ease of changing economic front names. Many businessmen who volunteer themselves abound in the current Syrian reality, desiring to prove their loyalty to the regime, wishing for an opportunity to become part of the economic front, as it brings them a very large profit margin and desired influence.

Regarding the impact of these names’ disappearance, the researcher doesn’t believe it would significantly impact the regime’s economic activities or its various economic practices in general. These include drug trafficking, smuggling activities, and other financially direct supporting activities.

Economic researcher Radwan al-Dibs, on the other hand, believes that the removal of these names might fall under the framework of disciplining businessmen close to the regime and bringing them back to “the fold.” This practice happens in both democratic and autocratic systems, with a difference in the methods of removal.

The regime’s desire to get rid of an individual or liquidate their business has various reasons, including knowing more information than they should or possible rebellion against the regime. This is a routine process even in democratic countries, which might use administrative tools such as legal liquidation of personal businesses and activities in various legitimate or illegitimate ways, including dismissal, among others.

Al-Dibs noted that these names disappearing from the economic front form only a quarter or less of the main facade working alongside the regime, not to mention the main figures who do not act as a facade at all. He also pointed out that replacing these names only requires full loyalty to the regime.