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Syria’s Reconstruction Scramble (Part II)

Translation- Aleppo
Syrian construction workers rebuild a damaged store in Khan al-Wazir market in Aleppo’s old city. Photo AFP

By: Muriel Asseburg and Khaled Yacoub Oweis

Pay-up Time for the Regime

Even though the Assad regime by no means controlled the entirety of Syria’s territory, it sensed the winds in its favor. It sought to employ reconstruction to placate its constituencies and compensate for the thousands who had died fighting for Assad. At the opening of the Damascus International Trade Fair in August 2017, an Assad aide said Syria had “made a U-turn” and was on the path of rebuilding. The regime portrayed reconstruction as a done deal and announced that no contracts would go to countries that had supported what it regards as terrorism.

Domestically, the authorities indicated that the rebuilding effort would reward mainly Assad’s loyalists; it was not an attempt to mitigate the grievances that had fueled the revolt by addressing issues related to institutional legitimacy and capacity, justice, and political and social inclusion. At an official rally in November 2017 – held to mark the coup that brought Hafez al-Assad to power more than four decades earlier – a senior Baath Party operative boasted that Syria would be “built with the hands of its honorable sons.” The rally was held in Homs, from which the regime and Iran-backed militias had displaced hundreds of thousands of mainly Sunni inhabitants as they crushed the rebellion there. Of the 8 billion Syrian pounds ($15.5 million) that the government announced in July 2017 would be allocated to projects in Homs governorate, most of it went to Alawite and Christian communities as opposed to Sunni areas destroyed by regime bombing. So far, the regime has, at least on paper, awarded projects to its cronies and struck initial agreements with Iran and Russia. The deals range from residential towers and a shopping center to be built on bulldozed homes in Damascus that had belonged to pro-democracy demonstrators, to a cellphone license and oil refinery in Homs, and energy and mining concessions in eastern Syria. The regime apparently hopes to play the external powers against each other in the hopes that they will cough up the cash for hardcore infrastructure projects requiring long-term investment.

International Blueprints

As the civil war in Syria was seen as coming to an end, UN agencies, development organizations, and international finance institutions have drawn up a wealth of reconstruction blueprints for the country. According to UN estimates, reconstruction would cost at least $250 billion.

Governance Issues

What unites most of these plans, however, is that they deal with reconstruction mostly as if it were a technical issue, whereas not much attention is being paid to the kind of governance system under which it is supposed to take place. Rather, a competent central authority oriented toward the public good – able and willing to engage in an equitable restoration of human capital and the social fabric – is just assumed. Also, these plans do not detail how a competitive business environment would be instilled – under the same regime that deprived most Syrians of equal opportunity for decades.

With the courts and bureaucracy beholden to the kleptocracy, foreign companies have barely been able to operate in Syria or to win or execute major contracts without partnering with the ruling elites or their agents. If anyone who is not in league with the regime comes close to winning a tender, rules are arbitrarily changed and they are disqualified. Cartels and rackets run by the top tiers of the security apparatus abound. The judiciary and regulatory bodies are massively rigged.

Ministries and the central bank act as private instruments for the Makhloufs, who are Assad’s cousins on his mother’s side. The Makhloufs and two other branches of the Assad family have the public tenders and procurement system locked up between them.


Translation- Rami Makhluf
Syrian businessman Rami Makhluf. Photo AFP

What is more, most of these plans assume that Syria would work as a unitary state and do not account for the fragmentation that has resulted from the civil war. The fluidity of local dynamics, the emergence of new power brokers, and militia rule are all ignored. Among the forces that emerged during the civil war is a new breed of crony capitalists, shaping the business environment and poised to obstruct – together with more established regime business figures – any reconstruction that is not in their favor. Also linked to the war economy are jihadists and other militia seeking to maximize their returns. In regime areas, organized crime and gang violence linked to various pro-Assad militia have spiked. Loyalists have targeted other loyalists in their quest for loot while cutting off roads and imposing tolls.

Third Parties’ Motives

International reconstruction blueprints also take for granted cooperation between third countries for the good of Syria. In reality, however, many of the regional and international players see reconstruction as a means to consolidate their presence in Syria in the long term and as a tool to assert their (vital) interests in the broader power struggles of the Middle East. They also tend to focus on their immediate interests, such as quick financial returns or alleviating themselves of Syrian refugees.

The regime reportedly promised at least one Russian company linked to Russian security contractors a quarter of the oil and gas in the fields captured from the IS. Iran has encouraged private investment in real estate in Syria and signed memorandums of understanding for reconstruction in Aleppo as well as the restoration of mobile communications, which would bring in revenues and give them a surveillance edge. Ankara, officially shut out by the regime, has repaired basic infrastructure, schools, and a hospital in the Turkish-controlled enclave of al-Bab. Along with the more crucial absence of airstrikes, the rehabilitation has contributed to the return of some of the population into the small enclave. China has said it would also get involved in reconstruction, but it has not provided any specifics.

The European Union and the United States have invested billions of dollars in humanitarian aid and stabilization in opposition-held areas. The Europeans see their work in Syria as being different to that of the Americans, in that they generally aim at building streamlined institutions across a multitude of regions and support civil society, whereas the United States prefers to work with individual actors to set up and test organizations that would act as a role model to be followed in other areas.

Outlook, Risks, and Dilemmas for the EU

Under various short- to mid-term scenarios, the violence is not expected to halt, and militia rule and the war economy are set to remain entrenched. Still, European policymakers are under pressure to focus on what can be done immediately to help foster a settlement and stabilize the region, not least in view of the urgency they feel due to rising populism in the EU and the pressure to repatriate refugees.

Assad will happily take more freebies from the EU. For the regime, reconstruction is to serve, first and foremost, its own consolidation as well as ensure the permanenceof social and demographic shifts and strengthen the loyalty of its citizens. A view espoused by the Assad regime and echoed in international aid meetings warns that Europe will lose out to Moscow and Tehran unless European nations help in the reconstruction of Syria.

In April 2017, the EU ruled out engaging in reconstruction “until a comprehensive, genuine and inclusive political transition … is firmly under way.” Still, in practice, the European approach has been inconsistent – European countries have financed UN rebuilding programs that work in collaboration with the regime. The programs are ongoing or slated to start in regions where the dust has barely settled on forced population transfers, such as in Homs. No safeguards were devised to ensure the right of return for the original inhabitants, the halt of the falsification of public records, or a reversal of the regime’s confiscation of property in rebel districts it had captured.

Also, the EU has not made the departure of Assad a precondition for engaging in reconstruction efforts. Rather, EU member states’ representatives have increasingly been acknowledging that Bashar al-Assad might well play a role in the transition period, and even beyond. EU member states have been divided between those taking a stance against any cooperation with what they regard as a regime that cannot be reformed, and those willing to placate Assad in the hope of quick stabilization or of opening up a supposedly lucrative reconstruction market to their companies and development agencies. As a consequence, the EU has shied away from spelling out if a genuine transition would be possible if Assad and his immediate entourage were to remain in power.

Box 2: The EU Strategy of April 2017

The EU offers its support to Syria in fields such as security: disarmament, demobilization, and reintegration (DDR), security- sector reform (SSR), international monitoring; governance: constitutional process, elections, institutional reform; and peace-building: dealing with detainees and missing persons, propertydispute resolution, return of refugees/ IDPs,transitional justice, reconciliation.

As a precondition for its engagement in reconstruction efforts and the lifting of sanctions against the regime, its institutions, and its representatives, the EU stipulates the existence of a “genuine and inclusive political transition, negotiated by the Syrian parties in the conflict … under the auspices of the UN Special Envoy.”

EU support will be undertaken “in an incremental way, and only in response to concrete and measurable progress” in this transition. The EU will not engage in early recovery or abilization efforts that “could support social and demographic engineering.” The EU stresses that “special responsibility for the costs of reconstruction should also be taken by those who have fueled the conflict.”

Reconstruction thus poses a dilemma for the EU and its member states, as the chances for any real change to Syria’s authoritarian and repressive system are fading. Indeed, the Russian approach and the emergence of an emboldened Assad regime have complicated the realization of a European strategy on reconstruction (see Box 2).

Moscow has portrayed its activities as being complementary to the UN Special Envoy’s efforts at achieving a negotiated conflict settlement based on the 2012 Geneva Agreement and UN Security Council Resolution 2254 of December 2015. But the Russian way has actually undermined the approach and list of priorities agreed upon in Resolution 2254, the centerpiece of which was supposed to be a ransitional governing body – comprised of regime and opposition representatives – with full authority. Rather, Russia has sought legitimization of the Assad regime by leading a process of limited reform – including the adoption of a federal constitution, devised in Moscow – through a Conference of the Syrian Peoples or national dialogue conference, followed by elections.

Conclusions and Recommendations

The Russian-dominated conflict-settlement approach and the expected continued presence of Iran-backed militias is unlikely to bring about even a minimum of the security, administrative, and economic reforms that would address Syria’s deep-rooted socio-economic and sectarian imbalances. Reconstruction cannot, as Russia implies, be reduced to the physical reconstruction of infrastructure and economic recovery. Rather, measures to safeguard citizens’ security, establish effective governance, and lay the ground for reconciliation are key for peace- uilding (see Box 3, p. 8).

Under such circumstances, European involvement in reconstruction during the early phases runs the risk of feeding destructive dynamics and foregoing incentives for political settlements. The Europeans should therefore stick to the approach outlined in the April 2017 strategy, and clearly say so. They should also gauge when to throw around their weight and leverage their diplomatic, financial, and technical support so as to achieve conditions under which reconstruction would serve long-term stabilization rather than lead to renewed violent conflict and radicalization.

At a later stage – and because of the sheer amount of investment needed – the regime will not be able to depend only on its allies, as it has boasted. Rather, it might be forced to turn to Western, Gulf, and international sources of financing. That might be the starting point for pushing toward the realization of measures aimed at building credible institutions. One should not exaggerate the chances of success, though: Such a development is by no means guaranteed, as the regime might choose to continue defying European conditionality, even if it comes at the cost of massive North Korean-style human suffering.

Box 3: Long-term Stabilization

Experts widely agree that the following conditions need to be fulfilled to allow for reconstruction that serves peacebuilding:

1. an effective division of power with functioning checks and balances; the establishment of effective economic and administrative oversight bodies.

2. large-scale demilitarization; an end to militia and warlord rule; establishing army and security services loyal to the state and its citizenry, not to the regime; comprehensive disarmament of militias.

3. addressing forced displacement and expropriation of property; allowing for social reconciliation.

4. an inclusive constitutional process in which majority and minority rights are respected; a political climate in which free and fair elections are possible, political rights are guaranteed, and civil society can operate.

In the near future, some of the de-escalation zones could become the settings for larger European efforts at recovery – under the condition that the arrangements stick, which is more likely for some areas (in the south and north of Homs) than for others (Eastern Ghouta and Idlib). The challenge in these zones is that some of the areas are controlled by forces that cannot be partners in reconstruction, such as al-Qaeda linked groups, meaning that support can only be administered through civil society organizations rather than the local councils and the interim government. Also, the rebels are often so fragmented in terms of actual control that no zone-wide de-escalation projects can be administered.

Europeans will therefore have to look for tailor-made approaches, depending on the conditions and partners available in each of the areas. These approaches should focus on humanitarian aid, early recovery, and support for non-violent community-based organizations – not least to counter jihadists’ propaganda and influence – as well as continued support for local overnance, where possible. It is far-fetched to believe that with such kinds of support, one would be able to create “islands of stability,” which could be the basis for nation-wide stabilization. But Europeans should still strive toward helping local civilian and governance structures survive.

Humanitarian aid, the provision of basic services, and support for civil society should also be the focus of European support in the PYD-controlled areas, where repression of opposition forces and independent activists and forced recruitment have become major problems, despite the progressive and inclusive image projected by the PYD.

Last but not least, rather than thinking about sending refugees back to situations where their lives and existence are threatened, Europeans should focus more on building Syria’s human resources in the neighboring countries and among the refugee communities across Europe.

Remark: This article was originally published by in December 2017.

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