The Race for the Reconstruction of Syria

The old town of Homs, Syria, 2018 (Photo: AP)

From the beginning, the war in Syria has been a “domestic” problem for Turkey – albeit not entirely so.

For the West, it has been an opportunity to hurt a Russian ally, but it has failed, thus allowing Syria to become one of the areas for the strategic expansion of Shi’ite Iran. Giving ground to the enemy is a fundamental strategic mistake.

Incidentally, it seems that global strategy is a lost memory for the West – more or less like political economy is completely forgotten, faced with market fluctuations and stock exchange algorithms.

On the one hand, at the beginning of the Syrian crisis, Erdogan aroused the pride of his nationalist voters while, on the other, he justified the increase in domestic prices and inflation with the vast Turkish operation in Syria.

Two propaganda solutions for the same problem – the Turkish hegemony in Central Asia.

Obviously, the primary goal of Turkey, led by the AKP – a party born of an old Muslim Brotherhood network, was to enter Syria to eliminate Assad’s Baathist power, with a view to replacing it with a clearly pro-Turkish regime.

To this end, Turkey accepted the presence of “terrorists” and the Turkish military support for the Syrian jihad, and even the hidden support for the so-called “Caliphate,” with a view to stopping the expansion of Syrian-Iraqi Kurds and their connection – also at a territorial level – to the Anatolian Kurds.

That was the aim of Operation Olive Branch that the Turkish Armed Forces carried out in early 2018.

In that case, it was a matter of blocking the Kurdish administration of Afrin to prevent the Kurdish YPG from creating its own strategic and territorial continuity in Northern Syria, up to coming into contact with the Anatolian Kurds.

The Turkish forces also moved many Turks to the area.

Currently, Turkey has three goals: the agreement with Russia for the future of Syria; the maintenance of Iran’s neutrality in Syria and in the rest of the region, and even the internal stability of Bashar al-Assad’s regime.

Erdogan would also like to have good relations with the United States, which is acting in Syria with ideas that are still very vague.

Unfortunately, this currently holds true for many strategic players in Syria.

After eight years of war, the World Bank has calculated that only material damage to houses and infrastructure is worth no less than 197 billion US dollars.

A quarter of all Syrian houses has been destroyed, but it is estimated that the cost for returning to the status quo ante ranges between 300-400 billion dollars. The most pessimistic ones estimate it at 450 billion US dollars.

We believe that currently, the real cost is equal to 400 billion dollars. Assad’s Syrian forces and Syria’s inhabitants keep on discovering unknown disasters.

Considering the amount of money needed, the only two external supporters of Assad’s regime, namely Russia and Iran, are not in a position to contribute to the Syrian reconstruction.

Furthermore, the USA and the EU are not interested in funding Syria’s return to pre-conflict economic conditions, unless there is a “political transition,” i.e., unless Bashar al-Assad leaves power.

The problem is that he has won with the help of Russia and Iran, while the West – with its infinite coalition – has lost. Who can send away who?

Indeed, the US and European economic sanctions against Syria have become stricter in early 2019, and the country has a population of 13 million inhabitants, who urgently need support, aid, medicine, and food.

This is the greatest humanitarian crisis since the Second World War, but both the USA and Germany, in particular, are only interested in ousting the “tyrant” Assad – possibly for recreating the jihadist void that Syria has just overcome and that the West would not know how to manage, regardless its being for or against.

Eighty percent of those who need serious hospital care cannot be treated. There is a lack of doctors, drugs, and hospitals. However, the US sanctions impose a block on all exports to Syria or on any financial transactions involving Syrian entities. The sanctions also concern drugs and medical technologies, as well as all electrical, electronic, industrial and oil components. Even the simplest electrical devices and their spare parts are affected by sanctions.

Given the new EU political configuration, however, Syria may receive some abstract political support, but certainly not tangible aid.

Here we can think of the Assembly of Hungarian nobles, to whom Marie Therese of Austria asked to support her war against Frederick II of Prussia who had invaded Silesia. “We will give our lives for the Queen, but not the oats for horses.”

China could certainly be a solution to this problem.

To date, China has not shown particular interest in the matter, but it anyway participated in the meeting between 70 countries and international institutions, held in April 2017 for the reconstruction of Syria.

However, China has not provided direct support to the “tyrant” Assad, who anyway rescued his people and the West itself from the “sword-jihad” which, from Syria, would spread everywhere in the Middle East and probably to Eastern Europe as well.

Meanwhile, between 2018 and 2019, China has already granted 2 billion to be invested in the Syrian industry. For 2019 and beyond, there are additional 23 billion granted by China through the Cooperation Forum between China and the Arab States.

Obviously, China does not want to be involved in the Middle East chaos. It has no interest in it.

Syria, however, plays a significant role in the Belt and Road Initiative (BRI).

Tripoli in Lebanon has already been planned to be a BRI Special Economic Zone, considering that the Lebanese Tripoli port will be the basis for BRI transport to the whole East-Mediterranean region.

In order to revitalize this port, China plans to build the Tripoli-Homs railway. In October 2018, China already donated as many as 800 electricity generators to the city of Latakia, another fundamental Syrian port.

Back in 2017, China hosted the “First Trade Fair on Syrian Reconstruction Projects,” with the two aforementioned billion for Syrian companies and, above all, the tangible aid for the reconstruction of over 150 Syrian companies.

China is interested in the local Syrian companies that deal with steel and energy. Moreover, the China National Petroleum Corporation is already present in the shareholding structure of two of the largest Syrian oil companies, namely the Syrian Petroleum Company and Al Furat Petroleum.

There is also a Chinese project for technological and training support to the Syrian Armed Forces.

Furthermore, there is the Chinese automotive sector – a market that China shares with Iran.

With a shrewd exchange between arable land and technology, Iran has already provided Syria with its mobile telephone network, as well as the management of some phosphate mines.

All Iranian economic operations are made by leaders of the Revolutionary Guard and the Iranian military will probably call upon Chinese companies at the right time.

One option for Assad could be the support – not yet politically mature, but certainly not impossible – of the United Arab Emirates and Saudi Arabia.

The two powers of the Arabian Peninsula are above all interested in limiting the power projection of Turkey and Qatar – the two main supporters of the opposition (and the jihad) against Bashar al-Assad – while they consider Iran’s control over Syria scarcely relevant from the economic viewpoint. At least for the time being.

In late 2018, however, embassies were reopened in Syria, Bahrain and the Emirates.

Furthermore, as can be easily imagined, manpower is lacking throughout Syria. Many people have migrated to Lebanon, Jordan or Europe. Moreover, there is still a shortage of capital, which also leads to manpower shortage.

From this viewpoint, Bashar al-Assad’s regime has developed a model of public-private partnership (PPP), which is almost the sole legal criterion for reconstruction.

Decree No. 19, issued by President Assad in May 2015, lays down that the various administrative units, including governorates and municipalities, can establish their autonomous investment companies.

In January 2016, Assad’s government enacted the Law on Public-Private Partnerships, which allows private companies to manage and develop all the public assets they hold or control.

For example, the Governor of Damascus is the President of the company that is investing in the real estate sector of Basateem al-Razi, a district of the Syrian capital city.

Obviously, the recourse to private individuals is not enough. The PPP systems are based mainly on bank loans. Nevertheless, certainly also the banks have not all the capital available for reconstruction at their disposal.

According to the latest calculations, all Syrian banks have a reserve of 1.7 trillion Syrian pounds, equivalent to 3.5 billion US dollars. Hence, the primary role will inevitably be played by donors, particularly foreign ones. Russia, China and Iran are the obvious ones, but there are also North Korea, Brazil and India – and we will soon see them at work.

What about Iran?

Tehran has recently signed a Memorandum of Understanding for the construction of as many as 200,000 houses for civilian use in Damascus.

Considering the US and EU policies, many transactions will be made outside the SWIFT system.

The aforementioned system has two processors – one in the Netherlands and the other one in the USA – that work independently. Often the transactions will not take place in US dollars.

Iran also wants to build a power plant in Latakia, while the Ayatollah regime still supports Bashar al-Assad with as many as 6 billion US dollars per year.

If economic and military support are considered together, some analysts maintain that Iran’s transfers to Syria range between 15 to 20 billion US dollars a year.

Furthermore, if there are credible links between Iran’s investments and Syria’s political attitudes, Iranian money will continue to flow.

The Russian Federation has also carried out a strong lobbying activity for Syrian reconstruction, with a direct intervention by Chief of Staff Gerasimov vis-à-vis the United States.

The response has been almost immediate: the political “transition,” i.e., Assad’s quick leaving the scene, is the prerequisite for funding.

Assad, although having won against the jihad – often organized by Western allies – is now only guilty of having remained in power, instead of leaving Syria in the hands of Islamic terrorists, whom the West claimed it wanted to fight.

It is strange that some worshipers of democracy stoop to this type of blackmail.

After being contacted by Vladimir Putin in August 2018, Chancellor Merkel said she wanted to avoid a “humanitarian disaster” that has already been in place for some time. She also said, however, she didn’t want to participate in a reconstruction process in Syria led – like it or not – by the Syrian winner, namely Bashar al-Assad.

The same was said by the French leaders. Good old days when, in a heavily-indebted Germany, Hjalmar Schacht, known as “Hitler’s banker” – a Jew and a Freemason, but anyway still free – created an investment bank in Munich to help the Middle East and Africa.

Also in August 2018, Russia put new pressure on Saudi Arabia, although the latter has certainly never been friendly to the Alawite and pro-Iranian regime in Syria.

Certainly, even now Saudi Arabia does not want to bear the cost for Syria’s reconstruction.

Obviously, the Saudi regime may see investments in Syria as an antidote to the Iranian presence, although nothing has been decided yet.

Nevertheless, the forces within Mohammed bin Salman’s inner circle are not entirely opposed to a serious and heavy financial operation in Syria to definitively drive Iran away.

A balance of threats and signals could make – possibly with the military protection of Russia, which certainly does not want a Shi’ite hegemony over Syria – part of Saudi funds reach Syria – not exclusive, but also alien to the West, which sees nothing else that the naive escape of the “tyrant.”

The Libyan disaster was not enough for Westerners, who now want the escape of the Alawite and Baathist Syrian leader, although he has won.

What will happen later? Either the jihadist chaos, of which they believe they can take advantage to the detriment of Iran, or the Chinese penetration, which will certainly not be friendly to Western business.

As already seen, the other financial option for Syria is China. However, China will take no real action until the US troops move permanently from the Syrian region to the Far East.

In January 2018, Russia signed a contract enabling its companies in the sector to exclusively exploit oil and gas fields under the direct control of Assad’s forces.

The Syrian oil and gas reserves are, above all, in the northeastern regions, in areas controlled by the Syrian Democratic Forces in the hands of the YPG Kurds.

Other Russian projects are the following: electricity generation in the Homs district; a new railway line connecting Damascus International Airport to the city center and a series of manufacturing industries.

The Russian entrepreneurial zeal has not even failed to upset Iran: Russia has “snatched” from Iran a fifty-year contract for the use of phosphates.

Hence, for the time being, the Russian Federation has won the battle for Syrian reconstruction, but China in not so far behind in the race. Later, if the West remains deaf – and maybe even silly – there will be nothing left for Syria, which will recreate the conditions for a new regional war that the West will certainly lose again.