1

Piercing Through Assad’s Reconstruction Mirage in Syria

August 29, 2018 Topic: Security Region: Middle East Blog Brand: Middle East Watch Tags: SyriaAssadIranRegimeMilitary

Piercing Through Assad’s Reconstruction Mirage in Syria

Bashar al-Assad's refugee repatriation plan is a scam.

With Team Assad having also relied on siege and starvation tactics to force residents to flee, many return to find their homes taken over by pro-regime and Iranian settlers. This repopulation plot is particularly pronounced between Damascus and Lebanon, where Iran and its Lebanese branch, Hezbollah, consider this resettlement as payment in part for the military services it rendered. This scheme will likely continue further southwest near Jordan and Israel, now that pro-Assad forces cleared most of those areas. For Iran, the area represents an enticing location to project power. For Bashar, however, this scam lays bare the lie that the homogeneity and “single national hue” he hopes to achieve throughout the country isn’t even Syrian.

Swindling with the New Syrian Elite

Assad employs a variation of the repopulation scam when it’s designed to enrich himself and his cronies or repay Russia. Take the case of Samer Foz, a grain merchant from the Syrian coastal city of Latakia on the Mediterranean—just a half hour drive from the town of Qardaha where Bashar’s father, Hafez, began the family’s dynasty. Foz managed to fly under the radar so he was able to avoid the kind of sanctions that Assad’s old financial cronies faced. This also made him the type of person Bashar needed to rely on to open up a positive financial stream for the regime. In fact, Foz is precisely the kind of businessman Assad hopes to attract from among the millions of Syrians who left during the war—the Syrian commercial elite who can move money and conduct business on behalf of the regime and its supporters.

Foz was able to take advantage during the war and parlay the people’s suffering into a financial empire. As Charles Lister, senior fellow and director of the Extremism and Counterterrorism Program at the Middle East Institute pointed out, “Samer Foz is an asset of the Assad regime, empowered and facilitated by current and “retired” security officials to get around tight foreign sanctions.” Lister explains that he has bankrolled militias in Latakia and is accused of ordering the assassination of a rival in Turkey, while also running a public relations effort in the United States and EU to attract investment.

Having purchased a majority stake in the Four Seasons hotel in Damascus and acquired the nearby and swanky Orient Club, Foz was rewarded with a joint venture with the government to develop none other than Basatin al-Razi in Damascus’ Mezzeh district–—the very place Assad enforced Decree 66 to expel the population that opposed his crackdown.

Sure, the overwhelming demand for development in Syria would be to replace or restore the hundreds of thousands of homes destroyed or damaged throughout Syria but that’s not what they’re planning. Foz acquired the right to construct three luxury towers and five smaller units. The development area is formally known as Marota City but is often called Project 66 after the presidential decree that sealed the fate of its previous inhabitants. As Yazigi explained, “Basatin al-Razi makes little economic sense but could generate huge profits for a few individuals; this is what the government is prioritizing.” And this example represents just a sliver of the reconstruction and investment scams Assad and his new cadre of business elite have in the pipeline.

How America and Allies Can Help

Implementing and institutionalizing these systematic abuses constitutes the new phase of the Syrian conflict for the regime and Bashar al-Assad has a sizable head start. At stake isn’t just Syria’s future but the balance of power in the Middle East as a whole. Today, the region is preciously unbalanced on a precipice and facing the increased ascendency of Iran and Russia. But with a coordinated effort led by the United States and with the help of its allies, the region can turn away from the abyss.

Countering Team Assad’s efforts begins with improving, enforcing and expanding sanctions against the regime to include all of Assad’s new oligarchs. The business elite the regime is trying to lure back to Syria need to know that they will be cut off from financial markets and sanctioned to the fullest extent. Throughout Europe and in the Arabian Gulf, the United States should make crystal clear that pumping money into Syria today means a cash windfall for the Assad regime and its front companies. Those who wish to help must be made aware that their financial investment will not support the Syrian people but will instead further entrench Bashar al-Assad’s political control while enriching his partners and war crimes enablers.

 

Granted, with over half of Syria’s pre-war population forcibly displaced, the urge to alleviate suffering and offer multiple forms of assistance is justifiably intense. That is why the United States should work with its allies to create a vetted group of Syrian businesspeople who can be trusted with financing and allocating reconstruction funds to specific projects. This Syrian business council would be trusted to represent the interests of the Syrian people, above the politics of the regime and opposition. They could serve as a conduit for Saudi Arabia, the Gulf states, Jordan, Turkey, and other stakeholders besides the United States and European Union. Simply put, America and its allies can beat Team Assad at its own game.

To lessen the temptation toward corruption, this business council would need to be a U.S. initiative. Individual Syrians cannot promote or run this show on their own and no single person can be seen as Assad’s alternative for a multitude of reasons. A thoroughly vetted group of Syrians, however, would provide a cleaner channel for outside actors to invest with the assurance that the projects will not be used to benefit Assad and his benefactors. Such an initiative would also need to be publicized so that countries such as Saudi Arabia, the UAE, and others would know that it not only has America and Europe’s blessing but that it requires their financing and other assistance. With such a plan in place, the United States wouldn’t own Syria the way it owned the aftermath of the Iraq war. But it would be able to conduct a financial and diplomatic orchestra without owning all of the instruments.

 

Such an initiative would also give the U.S. leverage far beyond Syria’s refugee and reconstruction issues. For example, since Vladimir Putin has been undermining the Geneva process with his own Astana process, the United States can recapture some needed political and diplomatic influence by merely publicizing that the funds promised and collected would only be distributed after a political solution and power transition process is agreed to, underway and irreversible. Even more, Iran and Russia joined in Assad’s war against the Syrian people with the understanding that those that stood by him militarily would benefit the most financially when it was over. The fact that Bashar won’t be able to deliver on that promise will likely increase the friction and fissures among the members of the pro-Assad axis. Likewise, if Putin hopes to get paid, that pathway will no longer be paved by the constant stream of diplomatic caravans heading to Moscow. Those roads will lead to Washington instead.

For years, Assad’s military backers understood their seat at the negotiating table would be determined by where their forces stood on the battlefield. They continue to act accordingly. By way of contrast, America’s military involvement in Syria has remained focused on eradicating the Islamic State, primarily from the air but with a small and extremely effective military footprint on the ground as well.

Today, U.S. and allied forces—including the predominantly Kurdish Syrian Democratic Forces—are camped out on top of an area rich in oil and natural gas. Assad and Russia view this swath of territory as their future economic lifeblood and as the financial lubricant to grease the wheels for the new regime oligarchs. America’s enduring presence there can prevent the return of that revenue waterfall to Assad. It can also stem the urge among Syria’s Kurds to negotiate their future and the disposition of that territory with Assad and Putin, which is the inevitable result of the widespread belief the U.S. plans to withdraw. Moreover, only America’s enduring presence can ensure “an enduring defeat of ISIS,” as recently outlined by the Trump administration.

With a better understanding of the other side’s motives and America’s newly-defined objectives, it is clear that putting the financial squeeze on Team Assad is crucial while working to develop and provide international investors and aid organizations with effective plans for the repatriations of refugees and Syria’s reconstruction. In doing so, the United States and its allies will finally be able to close one of the darkest chapters in the modern Middle East, while helping to open a new one for all the Syrian people in their natural national hue.