Tag: Geopolitics

Introduction

Syria’s territories are controlled by a variety of actors – Al Assad’s regime (with Russia and Iran as its supporters); Kurdish dominated self-administration (with a small number of US troops supporting them); Turkey and its affiliated militias; and the Syrian Salvation Government affiliated to the Hay’at Tahrir al-Sham (HTS), a former al-Qaida offshoot.

Fragmentation of the state’s territories, as the state lost control of its territories, resulted in the emergence of a network of localised war economies with numerous local and foreign actors being involved. War economies emerged in territories held by Assad’s regime as well as those under the control of various other opposition parties, characterised by an increase in smuggling of goods (among which essential goods, crude oil and arms were popular), extortion, rent seeking for essential services, and taxation of goods at checkpoints established by the warring parties, including local warlords, opposition armed groups or regime’s militias. The Syrian Arab army is also reported to have engaged in rent seeking behaviour through the establishment in recaptured territories (Hinnebusch, 2020).

Another area of priority for armed opposition groups is the border crossings with Turkey whose access they have sought to control. The Ahrar-Al Sham group, established control over the Bab al-Hawa crossing between 2015-16, and earned around $5 million per month. Armed opposition groups have been involved in conflict with each other over control for border crossings, particularly conflict between Hay’at Tahrir al-Sham (HTS) and Ahrar al-Sham in 2017 (al-Kattan, 2017).

The Syrian army (that was cross-sectarian) is in crisis of its reducing force size as it is hampered by resistance to conscriptions and many desertions. The Alawite sect was co-opted into the state’s army, political and security apparatus, resulting in tensions along sectarian lines. Another significant development was that those among the pre-war elite who advocated for a political solution based on power sharing were expelled from it, resulting in the contraction of the core to comprise of individuals along sectarian lines. Further, pro-regime militias emerged as pro-government communities were forced to rely on themselves for their defence, leading to a widespread localisation of power to fiefdoms (al-Kattan, 2017).

The political, economic and security dimensions of the conflict which led to the emergence of war economies has been accompanied by shift of composition of the economy marked by the emergence of ‘war commanders’ and a decentralised elite, who capitalised on evading sanctions, served as middlemen between the armed groups of the state and opposition and established monopoly upon the supply of goods and services.

 These developments further led to the emergence of new centres of power which existed alongside the existing regime that consolidated its power by strengthening its relations with the new elite, army and security sector.

The domestic dynamics of the Syrian conflict are closely related to a wider geopolitical struggle among regional and external actors who act as patrons for the domestic actors.

In addition, by portraying itself as a bulwark against radical Islamism and strengthening its relations with influential individuals in minority communities and providing them with disproportionate authority within their societies, the regime’s efforts have redefined existing social hierarchies and co-opted pro-regime minority leaders to power. The regime’s policies, throughout the war, have not only strengthened the neo-patrimonial nature of the State and its relations with its multiple networks but lead to the decentralisation of a system of neo-patrimonialism (Middle East Institute & Etana Syria, 2020).

The domestic dynamics of the Syrian conflict are closely related to a wider geopolitical struggle among regional and external actors who act as patrons for the domestic actors. The Syrian conflict that began as an internal conflict emerged into a proxy conflict where regional struggle for influence played out between the ‘resistance axis’ comprising of Hamas, Hezbollah and Iran, and Sunni dominated ’moderate’ states comprising of Saudi Arabia, Qatar and Turkey. The latter wished replace the Assad regime that was aligned towards the ‘resistance axis.’ Iran considers the Syrian conflict as threat to its survival and its ability to support Hizbollah against Israel.  The rival axes instrumentalised sectarianism as a part of their discourse and in their support for proxies. However, the interests of those within the Sunni camp clashed (with Turkey and Qatar’s support for the Muslim Brotherhood and Saudi Arabia and UAE against the Muslim Brotherhood and its version of political Islam) resulting in division of the Sunni camp further leading to the division of their proxies (Aita, 2020).

The global struggle for power between the US and Russia, with the former promoting a liberal world order and advance its hegemonic interests, and the latter interested in increasing its sphere of influence, limiting US intervention while emphasising on state sovereignty. Russian intervention in Syria in support of the Assad regime tilted the power balance in its favour allowing the regime to gain control of its lost territories.

Image Credit: Al Araby

US sought to limit direct intervention in Syria while relying on proxies and financial sanctions (that it pursued along with the EU) to pressurise Assad’s regime to compromise to a solution that would promote its interests. Assad’s regime, due to its connection Iran, Shia militas in Iraq and Hezbollah in Lebanon, was able to manage despite the external pressure it faced. US attention and efforts were diverted to controlling ISIS. In 2019, while US withdrew from Northern Syria due Turkish intervention against the Kurdish forces, it announced it would redeploy its forces to the energy reserves in Deir ez-Zor to prevent Assad’s forces or ISIS from gaining control over them (Hinnebusch, 2020).

The geo-political struggle for influence in the Syrian conflict among regional and global actors, has also transcended into efforts to capitalise on Syria’s post-war reconstruction efforts and business.

With diversion of US efforts towards constraining ISIS, Russian intervention, growing differences between Saudi and Qatar, Saudi and UAE intervention in Yemen, have all resulted in a gradual withdrawal of the GCC, leading to a rise in the role played by Turkey, Iran and Russia. Turkey’s role and interests evolved from installing a Brotherhood government and targeting the regime to controlling the Syrian Kurdish PYD, which it views as a terrorist organisation. The threat of a confrontation with Moscow in Syria allowed it to participate in the Astana Process and a gradual realignment of its policy with that of Russia’s policy. More recently, Turkey and Russia have brokered a ceasefire deal in Idlib.

The geo-political struggle for influence in the Syrian conflict among regional and global actors, has also transcended into efforts to capitalise on Syria’s post-war reconstruction efforts and business.

This paper explores the local, regional and international dimensions of reconstruction and development Syria while analysing the impact the war has had on the political economy of Syria.

Internal dynamics of Syria’s reconstruction

The internal dynamics of Syria’s reconstruction are characterised by conflict among Syrian actors (supported by external actors) for resources and instruments that would lead them to strengthen their control. The regime views reconstruction efforts as a means to consolidate its authority and power over the country.

Image Credit: NYT

While the efforts made by the regime to consolidate its power and authority served its objectives and reduce the costs of governance, they have led to the decentralisation of political and security apparatus at the local levels. In addition, Iran and Russia continue to establish relations based on patronage with several Syrian clients. The integration of Hezbollah, Iraqi Shi’i militias and Iran’s revolutionary guards, have further loosened the control the regime holds over the security apparatus and strengthened sectarianism.

The efforts of Assad’s regime have been directed at satisfying its loyalist elite on whom it is vitally dependent to legitimise its authority and power, and to a lesser extent the public.

The regime sought to prevent local security apparatus from capitalising on their autonomy by incorporating them into the newly established units under centralised defence forces as in the case of the 5^th Army Corps, although this was only partially successful. Russian intervention and participation in the conflict allowed it to establish order in the army.  The paucity of manpower further prevents the regime from extending its authority over the entire country, forcing it to continue to depend on its relations with tribal leaders and local warlords (Hinnebusch, 2020).

The efforts of Assad’s regime have been directed at satisfying its loyalist elite on whom it is vitally dependent to legitimise its authority and power, and to a lesser extent the public. It encouraged its loyalists to participate and reap benefits off the war economies during the war as its authority over its local proxies declined, while the threat of being targeted by the opposition has ensured that the elites remain loyal. With the localisation of war, the regime has strengthened its relations with the elite while consolidating its power by encouraging investment of income and revenues earned through illicit means into the formal economy. The elite, the warlords, who are partners in the conflict are increasingly participating in the formal economy by setting up formal companies and businesses. However, there remains much to be done to fully integrate them into the productive economy, discourage involvement in rent seeking, and to promote the revival of a productive economy (Sinjab, 2017).

One of the major effects of the conflict and its resulting socio-economic and political patterns has been the lawlessness, that serves as a deterrent to socio, economic and political cohesion, further preventing the investments required for reconstruction.

Legislation aimed at Reconstruction

The regime’s economic strategy for reconstruction namely the ‘National Partnership’, enforced in 2016, allows public bodies to form private investment companies while supporting the establishment of private firms.

Image Credit: BBC

Private investors are encouraged to investing in the remaining public property allowing the government to retain its influence on the economic movements. This serves the purpose of attracting new investors to invest in lucrative opportunities while the investments serve to support regime’s prime customers and clients. The legislation also enables them to obtain and secure public sector properties at the cost of the state treasury’s finances, thereby raising a doubt regarding the ability of the ‘new elite’ to alter the nature of the enterprise. Another significant measure taken by the regime as part of its reconstruction repertoire are property and urban reconstruction laws, including the Law 66 of 2012 and Law No 10 of 2018, that expropriate land and property from displaced opposition supporters in substandard living conditions and reallocate them to new upscale housing. This is meant to gather the support of the regime’s loyalists. The regime by creating uncertainty about the security of the property could discourage all investors with the exception of a few capitalists (Daher, 2018).

Despite the fact that restrictions on capital movement makes it very difficult to attract investments into Syria, the Syrian government is implementing policies and schemes to attract financial aid from outside. It intends to tax finance inflows ranging from money sent by expatriates into Syria for humanitarian aid, which must be channelled through NGO’s funded by the regime. It also intends to attract $100 billion worth Syrian currency held outside Syria through tax concessions and by launching the Syrian International Business Association (SIBA) under the auspices of World Bank. Analysts warn about the difficulties associated with investments from other nations. They suspect that given the dispersion of investments, diaspora would find it difficult to compete with loyalists for reconstruction contracts and there may be issues with fraudulent officials and widespread corruption. The assets of those businessmen who left the state have been frozen. Lastly, the US and EU-imposed multilateral sanctions led to Syria being cut off from the international banking system(Aita, 2020).

The Syrian Government has declared that reconstruction contracts will be granted to its supporters and not countries who supported its opposition. It has also offered concessions in order to attract investments from Russia and Iran, but this may jeopardize Syria’s financial independence in the coming years.

Reconstruction of Syria would lead to stronger relations with Iran and Russia followed by simultaneous decline in relations with the West (to whoom it exported a major portion of its oil ) and the Arab Gulf. Previous economic partners may engage in reconstruction in areas where there is negligible regime-control. The reconstruction parameters are bound to affect Syria’s social fabric. The gap between the rich and the poor has widened due to the war economy. The rigged economy will put the interests and benefits of the common people in peril.

Geopolitical Dynamics of Reconstruction

The geopolitical struggle over reconstruction among competing players at the regional level is centred around increasing one’s own influence, either through direct intervention or proxies. Considering that different parts of Syria is under the control of different parties there is every chance that Syrian reconstruction effort may not be an integrated effort across the nation but rather take the form of parallel reconstruction initiatives across the many different areas of Syria.

The global geo-economic factors influence whether resources become available for reconstruction and on what terms. Because the powers that are geopolitically strongest on the ground in Syria (Russia, Iran) are geo-economically weaker than those who lost the geopolitical conflict (US, EU, Gulf), the latter are using the capital that they can withhold and obstruct or seek to leverage their contribution to effect the looming winding down of the military conflict on their terms. They, together with the World Bank, are making their participation conditional on a political settlement. Specifically, this will affect whether the regime will be able to reconstitute authority over the country’s territory and its reconstruction, or will be forced into some sort of power-sharing/territorial confederation or, these failing, reconstruction deepens fragmentation. If the parties do not reach a compromise the outcome could be a frozen conflict consolidated by separate and minimalist reconstruction tracks.

Further, regional and global actors that have not participated in the conflict happen to be economically stronger and have the means to mobilise resources. Their support and resources to fund the reconstruction and development of Syria remain contingent on the ability of Assad’s regime to fulfil their conditions of a political settlement.

Russia’s Reconstruction Support

Russia’s role in Syria’s reconstruction have been driven by the benefits a stable Syria could provide it. It has provided Assad’s regime with support in economic and military terms and settled Syria’s debt. Russia also seeks to renew and recoup its pre-war investments in infrastructure and energy sector, and establish new contracts in geo-strategic areas. Assad’s regime has been granted a preferential role in redevelopment of its energy and infrastructure sectors. The state of the Russian economy has made lesser resources available for investment. The risk of investing in Syria due to the political and security climate and the threat of being targeted by US sanctions have led to minimal investment into Syria. The entities that have invested are operated/owned by oligarchs close to Putin, and those under sanctions, for instance, Gennady Tim-Chenko’s construction company (Van Veen, 2020).

Russia has realised that it lacks the resources to actively finance Syria’s reconstruction effort and instead focussed its efforts on building the state institutions necessary to provide adequate security infrastructure, which is an important pre-condition for any reconstruction effort.

Russia has realised that it lacks the resources to actively finance Syria’s reconstruction effort and instead focussed its efforts on building the state institutions necessary to provide adequate security infrastructure, which is an important pre-condition for any reconstruction effort. Simultaneously it tried to seek support from the European Union and international organisations to create the necessary infrastructure required to facilitate the return of refugees based out of Europe while ensuring the attainment of a political settlement that helps Bashar Al Assad to stay in power (Daher, 2018).

Image Credit: NYT

Russia has also worked with the Assad regime to implement policies aimed at the return of refugees thereby addressing some of the requirements and requests of the European Union. However, Bashar Al Assad has so far only paid lip service to such requests.  For instance a law intended to promote reconstruction projects has been amended under Russian pressure but without any major changes to its provisions and was used to expropriate the property of Syrians who fled abroad.

Iran’s Role

Iran has provided Assad’s regime around $16billion worth of financial aid since 2012.It has provided an additional $3.5 million in 2013 which was further extended by $1 billion in 2015 and $6.4 billion and $700million to pro-Iran militias in Syria.   It has expressed its interests in participating in the reconstruction of Syria. Iranian entities were awarded numerous contracts worth millions of dollars to initiate redevelopment of the electricity infrastructure by the central government as well as local governments but are yet to be implemented. The Iranian Revolutionary Guards, who have considerable experience in participating in the reconstruction of Iran after the Iran-Iraq war and own vast construction companies in Iran, have entered into agreements in the sectors of mining and communications. While Iran has stated it would offer $1 billion for reconstruction, the amount it pledged is a minuscule amount of the total funds required. Iran’s participation in Syria’s reconstruction is also likely to be limited due to the impact of US sanctions on its own economy(Van Veen, 2020).

Diminished role of US, EU and Arab States

As for regime controlled parts of Syria, Washington moved to block reconstruction funding in these areas. US pundits argued that the regime would inevitably be empowered by reconstruction and should not be rewarded for its brutal repression of the uprising; anti-regime interest groups moved not only to preclude US funding but also to erect obstacles to others participating in reconstruction. In April 2018 the US Congress passed the No Assistance for Assad Act (NAAA) which was designed to prevent any drift from humanitarian assistance to reconstruction stabilization, and according to Faysal Itani, had the effect of ‘killing any World Bank dreams to get funding to operate in Syria’. Indeed, the US has a long history of directing the flow of world financial capital via sanctions, conditionality, etc. for its geopolitical purposes; in Syria, it seeks to manipulate money (geo-economics) to obtain what it could not achieve via geopolitics: specifically, keeping Syria a failed state that would make it a resource-draining burden for Russia and its allies.

The US has used its influence in North-Eastern Syria, to counter efforts by the Assad regime to consolidate its power over Syria which is a precursor to a “nationally integrated” reconstruction. Establishing control over energy reserves is essential for Assad’s regime to pursue its reconstruction efforts successfully. The US, by controlling reserves in the North-East Syria, has been able to deprive Syria’s access to essential resources.

US efforts in reconstruction have been motivated by its interests to deter any reconstruction efforts sponsored by the regime through geo-economics measures such as sanctions, when its geo-political efforts have had limited success in motivating Syria and its allies in pursuing a political solution in line with US policy interests.

The US campaign against ISIS devastated Raqqa but reconstruction there has remained limited to stabilization measures. The Trump administration tried to get the Saudis to assume the burden of reconstruction (asking for $4 billion). The US goal was to start enough reconstruction to deter any move in the area to join regime sponsored reconstruction efforts (Alaaldin et.al., 2018; Burcher, 2018; Harris, 2018; US Congress, 2018;). US efforts at convincing Saudi Arabia to undertake reconstruction efforts have not been successful as the latter offered relatively smaller amount (al-Khateb, 2020).

US efforts in reconstruction have been motivated by its interests to deter any reconstruction efforts sponsored by the regime through geo-economics measures such as sanctions, when its geo-political efforts have had limited success in motivating Syria and its allies in pursuing a political solution in line with US policy interests.  It simultaneously blocked reconstruction funding directed towards territories under the control of the regime. The Caesar Act, now incorporated into the National Defence Act of 2020, targets investment into Syria, through individuals and businesses coming into the ambit of the UN sanctions (Hinnebusch, 2020).

While the EU has provided substantial aid to Syrian refugees in Syria’s neighbouring countries, it has made its aid and participation in reconstruction contingent on efforts to reach a political solution that is in accordance with ‘UNSCR 2254 and the Geneva Communique’

The EU has been affected by the Syrian Conflict due to the influx of refugees and large-scale migration of its citizens to partake in terrorist activities. While the EU has provided substantial aid to Syrian refugees in Syria’s neighbouring countries, it has made its aid and participation in reconstruction contingent on efforts to reach a political solution that is in accordance with ‘UNSCR 2254 and the Geneva Communique’ (Van Veen, 2020).

Russia is making efforts to broker a political settlement of sorts, with Turkey’s support, to convince EU to invest in reconstruction to enable refugees to return. While the EU seems to be relying on the inability of Syria’s allies to support its funding and thus force Assad to agree to the EU’s conditions, the regime does not seem to be interested in accepting EU conditions and give up its power in return for support of its reconstruction. However, individuals EU states have participated in reconstruction efforts in a limited manner in both the regime-held as well as opposition-held areas.

Turkey continues to be one of Syria’s top trading partners. Numerous Syrian businessmen who have been exiled have invested in Turkey, around 26% of foreign investment in Turkey in 2014 originated from Syrian businessmen, particularly in its border regions with Syria. While a number of exiled Syrian businessmen supported the opposition, their investment would be instrumental, if mobilised, in territories held by Turkey and its militias at a time when refugees are returning to the region. While the Syrian government is against the participation of Turkey in the reconstruction of Aleppo, Russia’s efforts in mediation would lead Turkey to participate in the reconstruction process. Turkey has invested significantly in establishing institutions facilitating the governance of areas under its control and also in building economic infrastructure in these areas (Daher, 2018).

While Jordan and Lebanon have expressed interest in participating in the reconstruction of Syria, the resources they can mobilise are limited.  The Gulf countries have, no doubt the resources required for reconstruction, but have made their role in Syria’s reconstruction contingent on withdrawal of Iran and its proxies and in case of some countries, a regime change. The UAE as expressed its interest in participating in Syria’s reconstruction so as to limit Iran’s influence. However, Yazigi (2017) states that reconstruction efforts, in the case of  Lebanon, were contingent on a solution that emphasised upon power-sharing, backed by regional and international actors and substantial financial aid from Saudi Arabia. It is unlikely that either of the two scenarios would play out in the case of Syria.

China: A Possible Contender?

the Chinese state considers Al Assad’s regime as a bulwark against terrorism and its relations with the regime an asset in combating Uighurs who are participating on the behalf of terrorists.

China has expressed its interest in participating in the reconstruction of Syria to advance its interests through investments in economy and geo-strategic areas such as the maritime sector, and to develop and connect its Belt and Road Initiative in the region. Given China’s interests, size and nature of China’s capital, China becomes a viable partner in the reconstruction of Syria.  China conducted a trade fair in 2018, which was attended by 1,000 Chinese companies and witnessed an investment of $2 billion for the reconstruction and development of Syria’s industrial sector. Private investors have been concerned about the widespread corruption in Syria and the threats of being targeted by US sanctions. Moreover, the Chinese state considers Al Assad’s regime as a bulwark against terrorism and its relations with the regime an asset in combating Uighurs who are participating on the behalf of terrorists.

Conflict Resolution vs Conflict Management

Given that the warring parties consider the conflict to be more-or-less of a zero-sum game, territorial and social fragmentation of Syria, it would be extremely difficult for them to pursue means to resolve the conflict through creating the need for the conflict to be managed and downsized (Dacrema, 2020). The non-recognition of certain non-state actors by the rival sides and questions regarding the participation of non-state actors in negotiations, which would only serve to legitimise them further, complicates the process of negotiating a solution.

Temporary Arrangements

A strategy that would allow for the management of the conflict would be to negotiate temporary agreements and deals. Turkey and Russia have been able to broker temporary ceasefires at multiple instances, throughout the conflict, in the Idlib region. Temporary arrangements would help build confidence among the warring parties in the long run, and reduce the possibility of escalation of war (Dacrema, 2020).

Conclusion

Given that the warring parties prefer a status quo in comparison to the resolution of a conflict and value their geo-political and economic interests, it is highly unlikely that parties would push for resolution of the conflict. In consideration of a political stalemate, reconstruction efforts among the warring parties are likely to take place parallelly, as they have played out with the localisation of the conflict. While resources in the territories held by the regime are being diverted to areas that have remained loyal during the conflict and/or areas of strategic importance with areas formerly occupied by opposition forces receiving relatively lesser attention; territories under Turkish control and those held by the Kurdish forces have witnessed efforts aimed at stabilising the territories.

Russia and EU have the potential and the leverage required to emerge as power brokers in the reconstruction and initiate the process in a manner that promotes social, economic and political cohesion in the long run.

Russia and EU have the potential and the leverage required to emerge as power brokers in the reconstruction and initiate the process in a manner that promotes social, economic and political cohesion in the long run. The likelihood of being able to convince themselves that the possibility of achieving one’s interests alongside the other is a far better option in comparison to its alternative of a failed state, which threats both their interests. However, their ability to convince their allies and their clients (in this instance, Assad regime is Russia’s client) and the mistrust between both the parties as well as between their allies poses a challenge.

Russia’s efforts in brokering a constitutional committee for Syria under the aegis of the UN is an indicator of a compromise. Hinnebusch (2020) suggests that “it is not impossible to move incrementally toward a minimalist sort of political settlement that might acquire enough international legitimacy to open the door to some reconstruction funding.” While the likelihood of this occurrence is difficult amid conflicting interests, it cannot be overruled.

The humanitarian aspects of the conflict and urgent need for reconstruction to alleviate tangible and intangible costs of the conflict have largely been ignored. The warring parties have been preoccupied with advancing and fulfilling their interests at the cost of ordinary Syrians. There is a need for parties to acknowledge and make efforts towards the realisation of the urgency of reconstruction that is vital for securing the social and economic interests of ordinary Syrians. The likelihood of the same, however, is questionable.

References

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Main Image Credit: Palmyra before its destruction by ISIS – www.citymetric.com