Piercing Through Assad’s Reconstruction Mirage in Syria
Bashar al-Assad's refugee repatriation plan is a scam.
After more than seven years of devastating war, Bashar al-Assad suddenly changed his tune: “We encourage every Syrian to come back to Syria,” the Syrian leader implored during a recent interview with Russian journalists. Less noticed was the degree of his specificity. “So we’ve been encouraging those refugees, many who have their own business, not only refugees in different countries,” to come back to Syria.
Assad may be joining with Russian president Vladimir Putin in calling for Europe to rebuild Syria and facilitate the return of refugees, but he is busy ensuring that it only applies to those who can make money for his regime or those who can provide rewards to his loyalists and outside state-sponsors, such as Iran and Russia.
The once-beleaguered Syrian leader understands that business as usual won’t suffice to replenish the state’s depleted coffers, much less rebuild the country. For starters, too many Syrian businesses and businessmen are under U.S. or EU sanctions. He’d like to rely on public-private partnerships through private investors and local Syrian banks but that presents another problem. Most of the wealthy Syrians left the country during the war and the local banks are in no condition to lend money. As Jihad Yazigi, founder of The Syria Report put it, by June 2017 “the combined assets of Syria’s fourteen private-sector banks stood at $3.5 billion, which is less than a 10th of the assets of a single large bank in Lebanon or Jordan, such as Bank Audi and Arab Bank.”
To work around this problem, Assad is looking to create a new cadre of wealthy associates tied to his regime who can either finance various rebuilding efforts or more importantly, provide a new face to secure international investments for reconstruction projects. Assad is hoping the lure of guaranteed financial returns will entice these wealthy Syrians to set aside past differences, overlook the lack of a political solution to the demands of the war, and join his vision of a new Syria.
So far there are a lot of takers. As Rashad al-Kattan, a political and security risk analyst and fellow at the Centre for Syrian Studies explained, “some Western governments have been visiting Damascus to restart those relations bilaterally outside of the EU framework.” Meanwhile, the EU has said that it wants to contribute to the “stabilization and early recovery of areas where violence has decreased.” That is despite Assad previously playing hard-to-get, telling Belgian media in February 2017 that the EU should have no role in Syria’s reconstruction.
There is little doubt it will require a herculean effort to rebuild the physical structures destroyed during the Syrian war. Take the housing sector, for example, since Bashar suddenly appears eager to welcome home Syrian refugees and ex-patriots: A recent study by the World Bank that focused on ten Syrian cities found that 27 percent of the housing stocks were either destroyed or partially damaged. That number increases to 31 percent in Aleppo, Syria’s second largest city. According to the latest United Nations estimate, the overall damage and destruction caused by the war reaches a whopping $388 billion.
At this time, however, the available evidence suggests that a massive influx of international investment will only line the regime’s pockets with money and provide rewards to Russia and Iran just as all three are strapped for cash and unable to pay for reconstruction. In other words, rather than helping the Syrian people who need the assistance the most, such financing would constitute a pressure release valve from economic sanctions on those whose behavior the United States seeks to influence the most.
Legislating the Theft of Property
Knowing this day would come if he managed to survive, Assad already had a plan in place. In September 2012, Decree 66 became law, allowing the government to “redesign unauthorized or illegal housing areas” and replace them with “modern” real estate projects with quality services. Assad used it to expel the populations of Basatin al-Razi (in the Mezzeh district of Damascus) along with those in and around Daraya, a southwestern suburb of the Syrian capital. The inhabitants of both areas supported the regime’s opposition, whereas similar working and lower middle class populations were left untouched in locations where they supported the regime. The same process is underway in Homs and Aleppo.
New legislation ratified in 2018, such as Law No. 10, provides added teeth to the government’s effort to enforce Decree 66. It does so not only by empowering the regime to designate areas inside Syria for development, but by giving property owners thirty days to seek out a local administrator and file an ownership claim. In most cases, those that own the property have left because of the war and can’t return within a month—and that’s assuming they are even aware their property has been “designated” by the government in the first place and that they had the foresight to flee with their ownership documents in hand.
Given that there are eleven million Syrian refugees living outside the country or internally displaced in what today constitutes the world’s largest forced human displacement crisis since World War II, one can begin to realize the scope of the problem this scheme presents, to say nothing of the fact that the war is still ongoing. The refugees that don’t make it back will simply have their property confiscated, repossessed, or repurposed. Those that do return might be able to claim an insufficient amount of compensation but the regime will take away their land and property just the same.
There are reports in The Guardian and elsewhere of “a systematic torching of Land Registry offices in areas of Syria recaptured on behalf of the regime,” so even if returning refugees manage to make the thirty-day deadline with property ownership papers in hand, they can still be denied. In other cases, the Assad regime presents residents of newly reconquered areas their choice of capitulation. They can either be shipped off to the next inevitable battleground or sign various reconciliation agreements.
Syria’s National Hue According to Assad
In reality, the refugee repatriation scam and reconstruction ruse are part of a system designed to prevent refugees from returning and to enrich and further entrench the Assad regime. And it goes well beyond any single attempt to recoup losses or deliver economic rewards to loyalists. Assad provided a glimpse of the rationale animating this policy: “It’s true that we lost the best of our young men as well as our infrastructure . . . but in return we earned a healthier, more homogeneous society—in a literal sense, and not as flowery words or lip service,” Bashar declared in a speech before the Syrian Foreign Ministry in August 2017. He elaborated further:
This homogeneity is the basis for national unity—homogeneity in beliefs, ideology, traditions, customs, perceptions and outlook, despite the fact that they are diverse and multifaceted. Homogeneity doesn’t mean complete identity, but rather mutual complementation that creates a single national hue. This hue is the basis for national unity that unifies all members of the one homeland.
In this sense, Syrians who are not fully behind the regime are not only preventing the coalescence of a purer national hue; they are considered terrorists. In a recent intelligence officers meeting, the head of Syria’s Air Force Intelligence Directorate, General Jamil Hassan, explained that the regime has prepared a list of three million wanted persons both inside and outside Syria. The leaked details from this meeting were reported by The Syrian Correspondent news site and contained a discussion over the next phase of the conflict. “We will hold accountable anyone involved by word, deed or even silence,” General Hassan said, referring to his claim that 150,000 businessmen are involved in financing terrorism. “We will treat them like sheep; get rid of the damaged ones and leave the good ones. . . . Syria after eight years will not accept the presence of cancer cells in it. Ten million obedient ones are better than 30 million terrorists.”
Yet another step that puts into practice these official sentiments can be seen in southwest Syria. The Lebanese paper, Al-Modon, recently published a copy of the forms the regime forces upon the residents and it goes well beyond declaring one’s oath not to attempt to overthrow the Assad family dynasty. The signatories must agree not to protest outside the elastic confines of the law and refrain from publishing written content that insults the government. Furthermore, they have to disclose the details about their involvement in past protests—including their family members—and provide personal information such as their passport numbers and electronic accounts, which undoubtedly refers to their online social media accounts.
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.
Matthew RJ Brodsky is a senior fellow at the Security Studies Group in Washington, DC. and author of the SSG monograph “The Financial Viability of the Assad Regime in Syria.” He can be followed on Twitter at @RJBrodsky.
Bassam Barabandi is a native of Deir Azzour, Syria, a former Syrian Civil Servant, and cofounder of People Demand Change. He can be followed on Twitter at @BBarabandi.
Image: A Syrian soldier waves a flag during a protest against air strikes in Damascus,Syria April 14,2018.REUTERS/ Omar Sanadiki