Enab Baladi – Hani Karazi

For years, Russia has sought to intervene in various sectors in Syria, including the agricultural and industrial sectors, either through its investments in the country or by providing financial support to the Syrian regime’s government to revive its industrial and agricultural reality. The latest of these efforts includes supporting food industries by funding a project run by the United Nations Industrial Development Organization (UNIDO).

Experts say Russia aims to turn Syria into a hub for exporting its agricultural products via warm waters to the world, motivating it to invest in this sector.

Promoting its support for the agricultural sector also serves to improve its image in front of the local populace, which is showing discontent over Russia’s lack of assistance in Syria’s stifling economic crisis.

Since 2012, former Syrian Minister of Agriculture Riyad Hijab has spoken about cooperation with Russia in the agricultural sector.

Initially, Russian investment in the agricultural sector involved cloud seeding projects and building dams to irrigate agricultural lands, as well as exporting crops such as barley, soymeal, and yellow corn to the Syrian regime.

Grain sector

A year after Russia’s intervention in Syria, Moscow began seeking investments in various sectors to cover the cost of its military support for the Assad regime.

In February 2016, the Russian company “Sovokrem” decided to build four grain mills in Homs province at a cost of 70 million euros, with the Syrian government to cover the construction costs.

Before 2011, Syria was the region’s breadbasket, producing more grains than it consumed. However, since the war began, it has increasingly relied on imported wheat, with 70% of Syrian wheat fields located in the northeastern region, outside regime control.

Russia exploited the regime’s need for wheat by signing several contracts to export hundreds of thousands of tons to Syria, aiming to earn foreign currency from these exports.

In September 2017, former Syrian Minister of Internal Trade Abdullah al-Gharbi told Reuters that Syria had signed an agreement to buy three million tons of wheat from its ally Russia over three years.

Mahdi al-Dali, Director General of the Syrian Export Promotion and Local Production Support Authority, announced in 2017 that the Syrian government would pay 60% of the value of the Russian wheat deal in cash and cover the remaining 40% by exporting agricultural products such as citrus fruits, textiles, and detergents to Russia.

Russian investment did not cease; on July 7th, Sami Halil, Director of the General Organization for Grain in Syria, announced a joint plan between the Syrian regime and Russia to restore and rebuild many destroyed mills and silos in Syria.

This plan includes transferring the necessary Russian technology for operating and production lines in Syrian silos and mills. Under this plan, the Talkalakh mill in rural Homs, rebuilt by Russia, was scheduled to become operational last August. It is one of the largest mills in Syria, producing about 600 tons of flour daily in its trial phase.

According to the Director of the General Organization for Grain, this plan aims to increase flour production to meet the country’s needs and reduce transportation and shipping costs between provinces.

Dr. Firas Shaabo, a financial and banking sciences expert, told Enab Baladi that Russia’s desire to invest in the milling and silo sector stems from its future intention to establish a launch pad in Syria for exporting wheat via the warm waters of the Mediterranean Sea and creating another transit point for Russian products toward Europe or Africa through Syrian lands.

Economist Younis al-Kareem told Enab Baladi that Russia aimed to achieve three goals by exporting wheat to the Syrian regime: first, to earn foreign currency by forcing the regime to pay for wheat shipments in cash, not on credit; second, to secure food supplies to prevent the regime’s structure from weakening and avoid international intervention that could harm Russian interests; and third, to study and develop agricultural chains and conduct experiments. Russia previously provided agricultural seedlings that caused wheat rust, essentially turning Syrian agricultural lands into a field for its experiments, according to al-Kareem.

Phosphate: A Russian target

Russian investment in the agricultural sector in Syria also extended to controlling phosphate fields. Russian companies took over phosphate fields and the fertilizer plant in Homs after the Syrian Parliament ratified, on February 6, 2019, a law for an investment project between the General Organization for Chemical Industries and the Russian company STG Engineering to invest in the General Fertilizer Company plant in Homs.

Since the contract was signed, there have been concerns that Russian companies’ control over the fertilizer sector could lead to the reduction of subsidies for agricultural fertilizers, thus increasing their prices due to the possibility of the Russian company exporting them. The contract allows exports only “if the local market’s needs are met.”

A report titled “Europe Buys Blood-Stained Phosphate from Syria,” released in June 2022 by a team of investigative journalists led by Lighthouse Reports and the Organized Crime and Corruption Reporting Project (OCCRP), revealed that phosphate worth millions of dollars had been exported from Syria by a Russian company subject to EU and US sanctions, which had managed to reach European fertilizer markets since 2018.

Under the auspices of the United Nations

On September 8, the regime’s Ministry of Industry announced the opening of registration for national companies to join a project to revitalize the food industries sector, funded by Russia and implemented by the United Nations Industrial Development Organization (UNIDO).

Syrian Minister of Industry Abdel Qader Jokhdar told Russia’s Sputnik news agency that the project supported by Russia is the first real development project after previous projects focused only on humanitarian needs such as health, food, and education.

The project covers agricultural industries (dairy products, fruits and vegetables, olive oil, cotton and textiles, etc.).

The food industries support project was announced in May 2023, with Russia providing $2.5 million in funding. However, the project did not enter the implementation phase at that time and remained only an announcement.

But last February, Ghazwan al-Masri, Chairman of the Damascus and Rif Dimashq Chamber of Industry Union, said Russia had allocated about $1 million to support the food industries project in regime-controlled areas, contradicting the $2.5 million figure reported by Russian media last year.

Political analyst specializing in Russian affairs, Mahmoud al-Hamza, told Enab Baladi that discussing Russia providing $1 million in financial aid to revive the food industries is laughable. Reviving this war-damaged industry requires billions of dollars to restore it. Even if Russia sent that amount, it would go to the Syria Trust for Development’s account, affiliated with Asma al-Assad, as happened with earthquake aid.

Russian gains

Regarding Russia’s goals in supporting agriculture and food industries in Syria, Ayman al-Dusouki, a political economy and local administration researcher at the Omran Center for Strategic Studies, told Enab Baladi that Russia seeks to achieve several objectives through this support, which are:

• Keeping up with early recovery projects expected to be launched in Syria and promoting its experts and organizations as ready and capable of implementing these projects.
• Employing UN agencies to report and recommend lifting sanctions on Syria, arguing that sanctions are the main obstacle to reviving Syria’s industrial sector, especially since this project is under the United Nations Industrial Development Organization (UNIDO).
• Developing some food industries targeting foreign markets by improving the quality and competitiveness of their products, in an indirect attempt by Russia to support Syria’s collapsing economy. This project also allows Russia to build a network of interests and relationships with the Syrian industrial elite.
• Improving Russia’s image in the pro-regime base, especially given their criticism of Russia’s role and its avoidance of intervening to help solve the economic and living problems in regime areas.

In the same context, political analyst Mahmoud al-Hamza emphasized that the regime’s officials and Russian media reports about Russia providing financial support for the food industry are mere propaganda to show the world that life in Syria has returned to normal and that its industrial wheel is turning.

Al-Hamza added that Russia’s goal in providing financial support is to invest in Syria to solidify its foothold further, awaiting Turkish-Syrian reconciliation, and to create a suitable environment in Syria for attracting Gulf money. Thus, Moscow wants to move ahead of others and control the food industry sector for the future, as the food sector in Syria is “number one” and can generate billions.

Al-Hamza noted that Russia is primarily concerned with serving its own interests. It does not care about reviving the Syrian economy or ensuring food security, nor does it aim to save the economically crippled Assad regime. If Moscow intended to do so, it would have supported the Syrian regime with large quantities of wheat to help lower bread prices.

Market for Russian products

Russian investment in agriculture also involved exporting raw materials and machinery useful for this sector, benefiting Russia financially. Thus, Syria became a market for Russian products.

Syrian Minister of Agriculture Mohammad Hassan Qatna told Sputnik that the Syrian regime provides agricultural machinery, pharmaceutical, and fertilizer supplies from Russia.

Engineer Mohannad al-Asfar, a representative of one of Russia’s companies in Syria, told Sputnik that there is a need to benefit from Russian agricultural machinery, pointing to the importance of importing agricultural tractors from Moscow given the significant increase in difficulties due to the Western economic blockade.

In this context, Younis al-Kareem said that Russia aimed to turn Syria into a marketing center for its products, whether agricultural, petrochemical, or even raw materials. Moscow did not seek to develop industry in Syria but to create similar products to its own, deliver them from Syria to local consumers, or even open new foreign markets, benefiting from the cheap labor in Syria and the facilities provided by the regime.

Al-Kareem added that the Russians’ interest in the food industries sector is an attempt to soften their presence, which has been increasingly under pressure from the pro-regime popular base. Additionally, it’s an attempt by Russia to steal many agricultural experiences and expertise from Syrians to develop their products.

According to official statistics from the regime’s government, 23 public sector companies (government-owned) and more than 60 private companies operate in the food sector, providing about 8% of the active labor force in the country.