Launching the Reconstruction in Syria

Between Illusion and Reality

During the last year, the Syrian regime managed to regain control over most of the Syrian territories that rebelled against it, particularly in the southern region and the hinterland of Damascus (Ghoutas). This gave rise to a general feeling that the battle had been resolved in favor of the regime; and that the next step would be to start the reconstruction process and to normalize the Assad regime’s relations with east and west. Furthermore, this general feeling  prompted many countries wishing to participate in the reconstruction to activate their back channels in order to communicate with the regime.

 

In turn, sensing the effect of victory, the regime launched several reconstruction projects aimed at rebuilding some of the neighborhoods in Damascus and its Ghouta that witnessed a high degree of destruction during the war. This effort on the part of the regime is also motivated by the realization that in order to convert any military victory into a sustainable political success, both domestically and internationally, the regime must achieve three goals: first, normalize its relations with both the neighboring countries and the West; second, start of the reconstruction process and restore services and control to the devastated areas; third, relaunch the Syrian economy.

The Costs of the Reconstruction

Cost estimates of reconstruction in Syria vary according to the calculation methodology. At the end of 2016, the World Bank estimated these costs at $ 450 billion if the war in Syria had stopped in 2017. The WB also predicted that these costs will rise to $780 billion were the war to continue until 2021. In 2018, the Syrian regime estimated the costs of reconstruction at about $400 billion. In both estimates, the costs are equivalent to more than six times the Syrian GDP for 2010.

Financially speaking, there would be two main sources to financing this reconstruction: an external source through aid and loans for the rebuilding of the economic infrastructure; and a structural source through attracting investments and aiming for high growth rates. Concerning any potential aid, it is known that Afghanistan was the country that received the highest level of reconstruction assistance in the world, which amounted to about 8 billion dollars annually. Assuming that Syria would be able to obtain the same level of aid (which is highly unlikely), that these funds would be used efficiently, and that the high levels of corruption have been eliminated (unlikely in the case of the current regime), then the Syrian state would need more than fifty years to cover the costs of reconstruction. As far as attracting foreign investments is concerned, the regime, as well as its allies and cronies, is still subjected to draconian economic sanctions by both the USA and the European union; which would simply deter any large and small investors. Not to mention that the profitability of any investment in Syria today is highly questionable given the lack of security for goods and people, the lack of trustworthy legislative and judicial systems, and the high volatility of the currency. Such an environment will make the cost-benefit analysis of any investment always tipped to the side of the costs and simply not worth the risk. Today, Syria is under the guardianship of several countries, six of which maintain military forces and bases on its territory. The conflicting nature of these countries’ interests in Syria increases the volatility of the economic and security situations, thus making any investment in Syria today a high-risk gamble. Finally, as far as the Syrian market is concerned, for both labor and consumption, 60% of its pre-war, i.e. pre 2010, activities have ceased and a large proportion of its skilled middle class has fled the country. The remaining market will hardly be able to provide neither the necessary skilled labor or the consumers with enough purchasing power given the astronomical 700% inflation compared to 2010.

 

Despite the aforementioned prognoses, the Assad regime sought to launch the Marota City project which aimed to rebuild two destroyed Damascus neighborhoods (namely, the old Mezzeh and parts of the old Kafarsusa areas). The targeted areas are located near one of the most expensive suburbs of Damascus, namely the new Mezzeh, and thus the project should constitute an excellent investment opportunity; that is in comparison to most of the other devastated neighborhoods in Syria which are located in poorer areas. The apparent goal of the project was to launch a reconstruction model that relied on Iranian companies and dispensed with Western funding. However, the project faced several obstacles that ended the experiment before it began. When opening the pre-construction bid for the apartments in the planned luxurious residential towers (a way to raise funds for the project), no units were sold. On one side, foreign investors shied away because of the aforementioned reasons; and on the other hand, the old residents of these neighborhood, the most likely purchasers of the new units given the high sentimental value of an eventual return home, could not afford the prices  of the new apartments. A newly promulgated law, Law no. 10, made it possible for the state to appropriate land where these neighborhoods once stood while offering very little in the way of compensation. The other segments of the Syrian refugees of expatriates who could actually afford these residential units were either not interested in buying property outside their areas of origins, or simply did not want to invest in the Syrian economy under these circumstances. The final blow to the Marota project came when all the persons and companies involved in it were hit with a new wave of sanctions by the European Union in January of this year; exactly because of the dubious practices in land appropriation. 

The Marota project was actually one of several reorganization schemes that the regime has devised over the past few years for the Damascus area. The Assad regime is attempting to impose a demographic change in the Damascus area through preventing the old communities that used to live in the devastated area from ever returning to their old neighborhoods as a retaliation for “their rebelliousness”. Land appropriation was made easy under the pretext of land rezoning and the implementation of new urban plans. However, after excluding the potential domestic investors, the actual implementation of these schemes became completely dependent on the availability of international funding; such funding has now an additional reason why not to invest in Syria, namely partaking in illegal activities that aim to defraud refugees of their property and thus prevent them from returning to their original homes because there will be nothing to return to. Today, any investment in a state-run reconstruction effort in Syria is akin to partaking in a crime; in addition to enabling the restoration of a brutal regime through the revitalization of its corrupt and oppressive institutions after being weakened and depleted during the last eight years.

 

 

The debacle of such a state-run reconstruction shares many similarities with the Iraqi case. The state-run reconstruction in the absence of a political agreement functioning as a social contract is doomed to failure. Such a model creates huge opportunities for the growth of corruption, the weakening of local communities, and deepening of the divisions between them. It also compounds the feelings of resentment among the groups that have not been able to benefit from the reconstruction projects, thus preventing the achievement of a solid social peace and a sustainable economic stability. The alternative model may be to launch reconstruction operations that deal directly with the local levels: local financing of local project while training and employing local labor. The central government could oversee a national reconstruction plan, however the implementation must be under the local governance bodies.

Normalizing Relations with the Syrian Regime

Russia and Iran are now pushing for the reconstruction in Syria in order to reduce the financial burden of their military and political intervention, and in order to increase their ability to convert their military successes into sustainable economic achievements and profitable political hegemony. However, neither Iran nor Russia have the financial capacity to launch the reconstruction. In the Iranian case, it does not have the capacity to launch real reconstruction projects capable of rebuilding entire devastated towns and neighborhoods, especially after the tightening of the US sanctions against its oil exports. It is worth mentioning here that Iran, as part of its political adventures in the region, is preparing to build a southern suburb in Damascus where it will house the members of its multinational militias, that is after having secured Syrian citizenships for them. 

 

Currently, Russia is actively working with some Arab countries willing to participate in the reconstruction in Syria for the purpose of re-normalize relations with the Assad regime. Some of these countries see in cooperating with Damascus an opportunity to create a counter-revolutionary front, build further capabilities to control their populations, and gather winning political cards for their regional competitions by participating in any political effort to resolve the conflict in Syria. These efforts reached a high point with the reopening of the UAE’s embassy in Damascus, the visit by the now deposed President Omar al-Bashir of Sudan to Damascus, and the attempt to bring back Assad to the Arab League as a first step on the road to his international rehabilitation. Recently, the Washington Post in an interview with Anwar Qarqash, the UAE minister of state for foreign affairs, quoted him explaining the reasons for his country's decision to restore diplomatic relations with Damascus: "The Arabs have no influence in Damascus at all. Because we demolished all bridges of communication in 2011, we allowed regional parties such as Turkey and Iran to become decision-makers. This killed the Arab influence inside Syria ». Several European countries, led by Italy, Bulgaria, Austria and Norway, have also increased the back channels activities with the Assad regime in order to find a way out of the EU’s professed moral high-ground of refusing to deal with a war criminal. The French President Emmanuel Macron's statement that "he does not see a legitimate successor to Bashar al-Assad in Syria" was the most explicit and most salient in this context. 

 

However, when some Arab countries sought to return Assad to the Arab League, all the normalization efforts were countered by a strong US rejection that amounted to a clear warning against such openings toward the Damascus regime. As the Washington Post leaked, the Trump administration pressed its Arab allies to renounce the attempts to normalize relations with the Assad regime, warning that any move to participate in the Syrian reconstruction would entail retaliatory US sanctions. According to the same newspaper, Washington wants to pressure Assad into embarking on political reforms. Despite the absence of a clear strategy of the Trump administration to deal with the Syrian file, it is clear that the US seeks to disrupt any solution or a breakthrough in the Syrian issue unless the US is at its helm. Following the warning that the US issued to its allies in Syria, the Syria Democratic Forces,  against the sale of crude oil or the transfer of Iranian oil to the Syrian regime via the Euphrates, it is now certain that the US is serious about its economic embargo of the Syrian regime.

Furthermore, the Public Affairs Office of the US Treasury Department also issued a statement warning against supplying the Syrian regime with fuel, and pointing to the risks associated with facilitating shipments of oil destined for ports owned and operated by the that regime. This warning certainly hastened the deal whereby Russia would lease the port of Tartous, a measure aimed at circumventing the aforementioned embargo.

 

It is likely that the previously described stalemate of the situation in Syria will last for a long time thus depriving the regime and its allies of converting their military victories into sustainable political and economic gains. This will inevitably affect the cohesion of the Syrian regime in light of the economic crisis (lack of fuel and daily necessities) that Syria experiences today. Concerned that the Assad regime will suddenly collapse under pressure, Russia is anxious to take over and directly manage the remaining state structures and its vital installations.

Where is the Syrian Crisis Headed?

The regional and international political climate does not seem to allow the launching of Syrian reconstruction in any near future; especially after the United States has put curtailing Iran's influence in the region at the top of its priorities. Moreover, the political and economic embargo against the Syrian regime will deprive it of any opportunity to attract foreign investments, even the oligarchic type that has personal connections with Assad himself. As for those investment that aim for the long run, they do not see any opportunities in Syria in light of the continuation of the corrupt Assad regime and the absence of any real horizon for political or economic stability in the foreseeable future. In addition, there seems to be no international plan to improve the living conditions within Syria or any international consensus that could constitute the basis for an acceptable political solution. On the contrary, there are many indications of increased levels of violence in the regions of Idlib, western Aleppo, as well as Kurdish controlled areas along the border with Turkey. Furthermore, the ongoing political stalemate is likely to exacerbate the crisis between the different factions within the regime due to the lack of consumer goods and the drying up of revenue sources made possible by the war, such relief aid, financial aid for the opposition factions, and the looting of rebel areas once they surrender.

 

If Iran can reach a new mutual understanding with the Trump administration, the landscape may change completely; but this possibility does not seem possible at the moment. As Russia tightens its control of the remaining Syrian state structures and institutions, it could feel free to dispense with the head of the regime in the foreseeable future. Such a development may create a new dynamics which could open the door for new international consensus capable of ending the gridlock in the Syrian crisis. 


 It was also published on Qantara in June, 2019. Click here