Syria: fear and loathing in the business community

Seven months after the start of protests, with at least 3000 civilians killed and more than 10 000 arrested, abused and tortured, the largely peaceful uprising against the Syrian regime is hanging in the balance. Although defections from the army are ongoing, there are no signs of a major split underway in the regime. Neither are there any indications that the crackdown by army and security forces will quash the protests.

In the wake of the ouster of Libya’s Muammar Khaddafi, and with Russia and China blocking resolutions against the Syrian regime in the United Nations Security Council, ominous signs are emerging from the cities of al-Rastan and Homs of a population that has concluded that peaceful protests will neither gain support from the international community nor topple the government of Bashar al-Assad. Time is running out to avert a development of the protests into a full-scale sectarian civil war that would also affect Turkey, Iraq, Lebanon, Israel, Jordan and Iran. The question is: what can be done, and who could do it?

The answer is more and broadened sanctions, sanctions that will weaken the support for the Syrian regime and pave the way for a less bloody regime change from within. The EU is Syria’s number one trading partner and second export market after Iraq, accounting for 29% of exports or 3 226 million Euros in 2010. 88,6% of exports has consisted of oil and petroleum products, now targeted by sanctions. As oil accounted for around 25% of the total revenue of the Syrian state, it was a central source of hard currency with which to pay the security forces charged with crushing the opposition. The recently imposed sanctions on delivery of Syrian banknotes printed in the EU will erode the already weakened credibility of banks in Syria, prompting withdrawal and outflow of cash in a society that is largely cash-based.

The U.S sanctions affecting debit and credit cards in Syria further reinforce the economic weakening and isolation of the Syrian regime. These sanctions have mainly weakened the support for the regime within one particularly important group – the Sunni-dominated Syrian business community. By necessity, the business community exists in a state of semi-symbiosis with the regime, army and security services and is a crucial economic benefactor.

In the beginning of the 1970s, the late President Hafez al-Assad forged a close connection between the Alawi-dominated military and security apparatus and the Sunni-dominated business community under the leadership of Badr al-Din al-Shallah, the chairman of the Federation of Syrian Chambers of Commerce. During the uprising of the Muslim Brotherhood in the mid-70s, culminating in the massacre in Hama in 1982, the Syrian business community in Damascus, under the influence of al-Shallah, rallied to the side of President Hafez al-Assad, something that has been credited as one of the major factors that saved the regime.

Today the business community is concentrated in the capital Damascus and the second city of Aleppo, incidentally the two major cities that have seen relatively little of protests. According to EU diplomats in Damascus, some businessmen seem to be genuinely disgusted by the actions of the Syrian regime. Others have been more focused on the risk of being included in the EU sanctions. But Syrian businessmen in contacts with EU diplomats have all voiced grave concern and anger at the Assad regime’s incompetent handling of the crisis and the effects on the economy.

Most recently, in response to the weakened Syrian economy, the Central Bank announced a stop on imports of foreign goods. But sharp price hikes and pressure from the business community forced the Syrian regime to backtrack. Turkey’s Prime Minister Recep Tayyip Erdogan has announced that he will unveil a road map for sanctions against Syria, a country that Turkey in recent years forged close economic ties with. Turkish sanctions would be a devastating blow to Bashar al-Assad’s standing within the Syrian business community and to what is left of the public’s confidence in him and the Syrian economy. But the Turkish position has so far been one of tough talk but little action. Turkey should be encouraged to adopt broad sanctions in line with those adopted by the EU and the USA.

Also, if one wanted to explore additional possibilities of trade sanctions, one would only have to look at the top ten trading partners of Syria to see the possible impact of coordinated sanctions between the EU, Iraq, Saudi Arabia, United Arab Emirates, Turkey, Egypt and South Korea. More and broaden sanctions is the best and, at present, only way forward. To avoid the risk of a devastating civil war with a regional fallout, bilateral sanctions that will further weaken the regime of Bashar al-Assad is the most efficient way to create the preconditions for regime change from within.

About Leif Eriksson

Leif Eriksson has worked in the field of asylum at the Swedish Migration Agency specializing in the Middle East, Schengen and the Dublin Regulation, as Migration Attaché and head of the migration section at the Swedish Embassy in Damascus 2005 - 2008, as a resettlement consultant at the UNHCR branch office in Damascus 2008 - 2009, Consul at the Swedish Consulate General in Jerusalem 2012 - 2013 and associate RSD/RST officer at UNHCR in Beirut 2013 - 2014. He currently lives in Tbilisi, Georgia.
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