26 May 2020
Import restrictions augur procurement challenges for Syria response
In Depth Analysis
On 17 May, the Syrian Ministry of Economy and Foreign Trade announced a list of 67 articles that will be prohibited for import under the terms of a new import substitution program, according to the Syrian Arab News Agency. Among affected goods are various pharmaceuticals, medical devices, foodstuffs, agricultural products, spare automotive parts, and broad swathes of imported manufactures. The measure is unlikely to rehabilitate Syrian manufacturing, yet it may have a significant impact on the national economy and the Syria response. In total, the order reportedly bans the import of goods that amount to an estimated 50 percent of all imports by value. Syrian state media describe the new import ban as part of an investment-support program to reinvigorate Syria’s foundering manufacturing sector. The order complements Legislative Decree No. 10, issued on 13 May, which suspends import tariffs on a narrow subset of manufacturing inputs for a period of one year, beginning on 1 June. Ostensibly, the goal of both measures is to boost local manufacturing to capture revenue domestically and reduce Syria’s reliance on foreign imports. However, this strategy emerges at a time in which Syrian state finances are particularly dismal, and it is likely that the maneuver is actually a protectionist response to safeguard against the further shrinking of foreign currency reserves held by the Central Bank of Syria.
This pivot is not without risk. Although boosting local manufacturing will shield foreign capital reserves, introducing tariff relief will also reduce Government of Syria revenues. Additionally, Syria’s own manufacturing capacity will also be put to the test. The industrial sector has been almost entirely incapacitated by the conflict, with the manufacturing hub of Syria, Aleppo, being among the communities most broadly affected by the conflict. Meanwhile, essential service shortfalls and infrastructural ruin continue to hobble industrial functionality. In many cases, no domestic producers currently exist to fill gaps that will be created by the proposed import ban. Of note, previous incentives to Syria’s manufacturing sector have been largely unsuccessful, in no small part due to the unwillingness or inability of manufacturers to convert vague promises of activity into much-needed outputs, due to the extremely challenging business environment in Syria. As a result of these factors, the probable endpoint of the Government’s maneuver is a reduction in the quality and availability of goods in Syria.
The decision’s impact on donor-funded programming in Syria may be equally considerable. If specific humanitarian exemptions are not carved out, the order has the potential to force implementers to procure project materials locally. The volatile economic conditions in Syria can make local procurement especially problematic, primarily because funds enter Government of Syria areas at the so-called preferential rate of 700 SYP/USD. This rate is indeed preferable to the official fixed exchange rate of 434 SYP/USD as set by the Central Bank of Syria. However, the rate is a far cry from the actual parallel market rate of approximately 1,700 SYP/USD. In effect, the process of entering money into Syria at the preferential rate automatically shaves off more than half the purchasing power of project funds. The impact of this effect is variable. Price fixing has slightly blunted the impact of currency depreciation on some domestic produce, but few goods sourced within Syria have resilient or entirely localized value chains. Relatively speaking, imports have witnessed the largest shift in prices, and for many types of goods, the expenses associated with local procurement will continue to rise. In the long term, local vendors may struggle to procure project inputs within the Syrian market at all. Ultimately, it may be possible for aid activities to advocate for import exemptions, yet this will not be a magic bullet solution either. Authorizations are likely to be complex and capricious. Procurement in Lebanon, Syria’s erstwhile gateway to the global economy, will also be constrained, due to Lebanon’s own financial collapse.
Whole of Syria Review
1. Security Council vote to renew cross-border resolution 2165 nears
Various Locations: On 13 May, the Joint Syria-Russian Center for the Return of Refugees issued a statement rejecting the WHO’s 30 April request to reopen the Ya’robiyah crossing in northeast Syria. The center grounded its opposition to the crossing on the spurious grounds that it is a conduit abused by gun and drug runners, as well as Kurdish combatants. The Self Administration rejected these claims and stressed that Ya’robiyeh would be used exclusively for humanitarian aid. Relatedly, on 19 May, Under-Secretary-General for Humanitarian Affairs and Emergency Relief Coordinator Mark Lowcock called upon the Security Council to vote to allow cross-border humanitarian aid convoys to enter northeast Syria under Security Council Resolution 2165, which was reauthorized until 10 July, as a result of a six-month stopgap measure passed earlier this year. Lowcock highlighted the dire need to maintain cross-border access and called attention to the potential need to scale-up aid delivery in northeast Syria in particular, in response to the shortage of medical supplies and deterioration of economic conditions, both of which have been accelerated by the COVID-19 pandemic.
Cross-border response: Russian ‘nyet’ likely as all eyes are on NES
Russia scored a major tactical success in New York by shuttering the Ya’robiyeh crossing and paring back the scope of the 2165 authorization earlier this year (see: Syria Update 11-17 December 2019). Despite international lobbying, it is unlikely that Russia will walk back its victory and allow Ya’robiyeh access to be reauthorized, given that it serves Self Administration areas where U.S. forces are the dominant international actor and a chief impediment preventing the area’s amalgamation with Damascus, under Russian stewardship. Within the international Syria response, some have pinned hopes for a temporary renewal of the Ya’robiyeh authorization on the health needs that have been highlighted by COVID-19. This prospect remains dubious. Practically speaking, for UN agencies, there is likely no viable alternative for reaching northeast Syria, except through Damascus. The most frequently suggested alternative is to open a crossing at Tell Abiad, located within the Peace Spring area controlled by Turkey. Not only would this crossing legitimize Turkey’s military operations in the area, it is unlikely that aid would trickle down to Self Administration-controlled territories beyond the frontier of Peace Spring areas. In light of these limiting factors, technical rollover that preserves access to northwest Syria may be a best-case outcome that acknowledges the practical limitations of international lobbying. This is particularly true given the fragility of the ceasefire agreement in Idleb. Due to the high levels of destruction in Idleb, access will be more important than ever — and doubly so if fighting does break out once again.
2. IDPs return to northwest frontline communities
Idleb Governorate: On 18 May, the Response Coordination Group reported that an estimated 271,356 IDPs have returned to communities in rural Aleppo and Idleb since the northwest ceasefire went into effect on 5 March. However, local sources expressed doubt that returns had actually taken place on this scale, although they did indicate that a large number of IDPs have indeed returned to areas along the M4 and the M5 highways, to include Atareb in western rural Aleppo, Ariha, various communities in the Ghab plain, and Jabal Al Zawiyah in southern rural Idleb. According to the most current available data compiled by UN and local implementing partners, as of 17 April, approximately 106,085 individuals returned to their home communities in the area, with a further 20,256 serially displaced individuals returning to their previous places of displacement. Accordingly, 55 percent of the returnees were motivated by the improved security situation. However, they also note that 48 percent of IDPs who arrived at their former places of displacement were pushed to do so due to concerns related to COVID-19.
Under the sword of Damocles
Any enthusiasm over the returns is blunted by the fact that over the long term, security in the frontline communities of northwest Syria is liable to deteriorate. The 5 March ceasefire agreement has already shown cracks (see: Syria Update 18 May). Moreover, returns are also likely motivated in no small part by the overcrowding and high rental prices present in communities of refuge in northern Idleb, Euphrates Shield areas, and Afrin. On the other side of the equation, the IDPs are returning to communities that have been pulverized by Russian and Government of Syria aerial bombardment and shelling since spring 2019. As such, shelter conditions are bleak, while infrastructure and basic service functionality — including medical facilities — have been devastated. In the long term, humanitarian access remains uncertain, and the international community will have to find an accommodation regarding re-authorization of the cross-border access resolution.
3. Suspected Israeli Airstrikes in Aleppo
Aleppo: On 16 May, a suspected Israeli airstrike in Aleppo targeted Iranian forces and Iran-backed militias, killing seven fighters, according to local media reports. Although no actor has publicly claimed responsibility for the incident, local sources indicate that following intense explosions at an artillery base on the southwest outskirts of Aleppo city, rumors circulated that Israel had carried out an attack targeting combatants linked to Iran, including high-ranking officers. Of note, the incident follows a period of rising aerial attacks by Israel in Syria, amid widely reported claims that intensifying pressure is forcing Iranian forces to reposition or withdraw from Syria. The most notable proponent of this view is outgoing Israeli Defense Minister Naftali Bennett, who recently enunciated an Israeli policy priority aiming to expel Iranian forces from Syria (see: Syria Update 4 May).
Iran bet the farm on Bashar. Now it’s calling in debts.
The attack evinces Israel’s commitment to its pressure campaign against Iran in Syria. However, early claims regarding the campaign’s notional efficacy in driving Iranian forces to reposition or withdraw from Syria are likely wishful thinking. No doubt, the pace of Israeli attacks in Syria is increasing, and these sorties are likely to continue throughout Syrian territory. Yet as we have noted, the ultimate effectiveness of this bombardment is in doubt. The most important factor in this respect is the depth of Iran’s commitment to Syria. To that end, a more nuanced understanding of Iran’s Syria file is needed. Frequently, analysts have focused on Iran’s military and strategic interests in Syria, which are viewed as a pillar of Iran’s strategy for a regional arc of influence. However, base economic considerations are frequently overlooked and are likely equally important. On 20 May, a member of the Iranian parliament estimated that Iran has spent between $20 billion and $30 billion in total support to Syria throughout the conflict. Iran “must get this money back from Syria,” the parliamentarian stated. Iran has gambled big in Syria. Retaining a firm presence in the country may now be a requirement to see that investment mature. The award of oil exploration rights in Syria’s Block 12 earlier this month suggests Iran is already feeling the pressure to cash in (see: Syria Update 11 May).
4. Government deployments in Dar’a trigger fears of a new offensive
Dar’a governorate: The continued deployment of Government of Syria military reinforcements to Dar’a has kindled popular fear over the possibility of a military-led crackdown in the governorate. According to local sources, as of 13 May, the Government of Syria sent military reinforcement to Yadoudah, Tafas, Dar’a Al-Mahata, and areas located between Da’el and Ataman. Recent reports indicated that Government of Syria forces deployed in Dar’a Al-Mahata, namely the 4th Division and 313th Division, have imposed extreme securitization measures in the area, clamping down on mobility and looting and seizing houses. As a result of the conditions, local sources indicated that during a meeting with Dar’a central committee on 16 May, Russian representatives pledged they would prevent military escalation in the area and rein in recent military deployments. However, at the time of writing, the recently deployed Government of Syria forces have yet to withdraw from Dar’a governorate. In fact, shortly after the Russian guarantees were made, the Government of Syria contravened that intention and undermined the Russian pledge. On 18 May, representatives from the Dar’a Central Committee met with Director of State Security General Housam Louka and 4th Division Major General Ali Mahmoud, during which the officials signaled they had no intention to withdraw their forces from the area. Local reports indicated that Government of Syria representatives justified their deployments due to the need to fight ISIS sleeper cells, and further proposed that armed opposition groups participate in the campaign or accede to the Government’s plans.
Russian mediation put to the test
The recent deployments laid to rest local hopes that Russian guarantees would prevent a Government of Syria military offensive in Dar’a. Despite Russian mediation, credible threats of an imminent military flare-up in southern Syria persist. This surfaces two important conclusions. First, the return of localized securitization measures add to the balance of fragile post-reconciliation conditions. All together, these factors risk tipping Dar’a governorate over the edge and triggering violence on a wider scale. Second, the conditions evince the fact that real limitations constrain the efficacy of Russian mediation in Syria. This is due to a combination of local contextual factors, the contested relationships among local interlocutors, and the Russians’ own limited purchase over Damascus. As a result, Russia’s role in the governorate and reconciled areas more generally has repeatedly fallen short of guaranteeing security. This should serve as an important reminder to the international community, which frequently views Russia’s presence in Syria as a potential deus ex machina and the key to restoring calm on the ground. In the general sense, Russian mediation is not by itself effective to this end, in no small part due to the perfidy of the Government of Syria. In the specific case of Dar’a, the outbreak of localized armed conflict remains possible, particularly as service shortfalls and mobility restrictions add to pre-existing tensions.
5. Makhlouf saga continues as Government crackdown widens
Damascus: Tensions building between Syrian President Bashar Al-Assad and his cousin, the fabulously wealthy business tycoon Rami Makhlouf, continues to grow as state regulators clamp down on Makhlouf’s assets and isolate his businesses. On 18 May, Syrian Prime Minister Imad Khamis issued a decision banning Makhlouf from contracting with any public institution for a period of five years. This decision followed the Ministry of Finance’s decision to freeze the assets of Makhlouf and his family, pending the massive payment of back taxes reportedly owed by Syriatel, the nation’s premier telecommunications firm, of which Makhlouf is the primary shareholder. On 20 May, the Damascus Securities Exchange announced a freeze on Makhlouf’s shares in all companies, including 12 out of 14 of Syria’s private sector banks. Relatedly, on the same date, media sources also indicated that the Government of Syria Directorate of Internal Trade and Consumer protection closed down a storage facility belong to the bottling concern Joud Company for Soft Drinks, which is owned by Mohamad Al-Joud, a prominent businessman and a partner of Makhlouf.
Beyond the family feud, palace intrigue is a distraction
Widely circulating rumors suggest that Asma Al-Assad is the prime mover behind the Al-Assad-Makhlouf family tensions, yet hard evidence of the exact drivers and purpose of the crackdown is in short supply, and numerous rationales may exist simultaneously. For instance, the Telecommunication Regulatory Authority has also exerted pressure on Syriatel’s rival, MTN, thus indicating that the telecommunication network as a whole is an object of interest, irrespective of Makhlouf’s suspected skullduggery. Moreover, a potential restructuring of the telecommunication sector may break existing monopolies and open the door to sectoral concessions to international actors, namely Russia and Iran. Indeed, Iran has been rumored to have an interest in breaking into the telecommunications network in Syria. Alternatively, it is believed that the Government of Syria has long used anti-corruption campaigning as cover for seizing the ill-gotten wealth of actors who have fallen out of favor for any number of reasons. Such money-grabs may be needed to shore up Central Bank of Syria reserves and stabilize state finances (see: Syria Update 6 January)
Ultimately, the Government of Syria’s dramatic targeting of Makhlouf has generated wall-to-wall media coverage, not only in Syria and on Makhlouf’s now-febrile social media pages, but also internationally. The sudden descent of Syrian state apparatuses upon Makhlouf and his business interests will likely send shockwaves through all corners of the Syrian economy, over which Makhlouf has long reigned without apparent challenge. Now, the disgraced tycoon has warned that Syria’s economy may collapse as a result of the crackdown. However, in several important respects, the targeting of Makhlouf is also a distraction. Like a Ramadan television drama, Makhlouf’s fall from grace has played out in slow motion, drawn out over an extended period in which observers beguiled by high drama have been distracted from gnawing hunger, their own protracted deprivation, and the ineptitude of the state.
6. U.S. Congress to weigh cutting Lebanon aid
Lebanon: On 20 May, media sources reported that the U.S. Congress is mooting a bill that would sever U.S. aid to the Lebanese government as long as Hezbollah continues to exercise influence over decision-making processes in the country. Reportedly, the bill takes aim at non-military assistance to the Lebanese state, and it follows repeated attempts in Congress to draw-down support to Lebanese state institutions due to the influence wielded by Hezbollah. For instance, a recent bill sought to limit bilateral military aid unless the Lebanese Armed Forces isolate Hezbollah and enforce UN Resolution 1701, by disarming the group.
Congress to Lebanon: Drop dead?
The bill has little chance of becoming law. However, there are myriad reasons for not dismissing the possibility of its passage. Opposition to Hezbollah is among the few issues on which a deeply divided U.S. Congress is broadly unified. In the unlikely event that the bill does make it out of committee, there is a distinct risk that members of Congress will throw support behind it, for fear of appearing soft on Hezbollah and, by extension, the group’s most important backer, Iran. Timing is also crucial to the potential impact. Presently, Lebanon’s economic collapse and resulting desperation mean the state’s future may well be determined by its ability to secure bilateral support from foreign governments. Hat in hand, Lebanon’s leaders are in a particularly vulnerable position, and may indeed be forced to make heretofore unimaginable political decisions to court funding. Whatever the outcome, any change in Lebanon’s economic and political fortunes abroad will have a deep impact on Syria too. For instance, wheat shipments bound for Syria have reportedly been scuttled due to outpayment restrictions imposed by Lebanese banks, as a result of strict capital controls. The interdependence between Lebanon and Syria highlights the risk for Western policymakers who are seeking to use Lebanon’s current fiscal collapse as a wedge to isolate Hezbollah. When the dust settles, Lebanon’s refusal (or failure) to meet the conditions needed to secure foreign funding would likely set off a chain of events that would almost certainly result in Hezbollah and the Syrian state increasing their influence over Beirut.
The Open Source Annex highlights key media reports, research, and primary documents that are not examined in the Syria Update. For a continuously updated collection of such records, searchable by geography, theme, and conflict actor, and curated to meet the needs of decision-makers, please see COAR’s comprehensive online search platform, Alexandrina, at the link below.
Note: These records are solely the responsibility of their creators. COAR does not necessarily endorse — or confirm — the viewpoints expressed by these sources.
What Does it Say? The article explores the historical tension highlighted by the awkward place religion has occupied in Syian constitutions historically.
Reading Between the Lines: The article is an important reminder that tensions will exist in the Syrian constitutional process not only among supporters of the ruling party and the opposition, but also among those who favor an outsize role for religion, and those who oppose it. Syria’s ruling class has been dominated by the Alawite minority, and the winding down the conflict may require a resilient system that moves beyond sectarianism and favoritism.
Source: London School of Economics
Date: May 2020
What Does it Say? The Government of Syria deliberately employed agents in and around the As-Sweida governorate to better monitor and contain the outbreak of revolutionary activities in the area.
Reading Between the Lines: As-Sweida is among the areas in which the Government of Syria has historically enjoyed the least influence. Although the area is now under nominal Government authority, it remains restive, thus pointing to the reality that lack of over violence does not equate to control.
Source: Syrian Center for Legal Studies & Research
Date: 15 May 2020
What Does it Say? The article bears down on an inter-armed group relationship that may be the most important — and least understood — in all of northwest Syria: the relationship between HTS and Hurras Al-Deen.
Reading Between the Lines: Although HTS is the lever of Turkey’s influence over radical armed groups in northwest Syria, HTS has not taken concrete steps to eliminate Hurras Al-Deen, despite frequent Russian calls for such groups to be extirpated. In the future, HTS will be forced to walk a fine line between proving its utility to Turkey and risking alienating its own members, who have a high degree of sympathy with Hurras Al-Deen, a group with which it has often made common cause.
Source: The Conflict Archives
Date: 20 May 2020
What Does it Say? Since the beginning of the year, the Government of Syria has recorded more than 50 suicides in its areas of control, with twice as many males committing suicide as females, and 13 people under the age of 18.
Reading Between the Lines: The rate of suicides in Syria could be due to a number of factors, including PTSD and myriad post-conflict stresses. Given the enormous financial pressures facing Syrians, mental health challenges will persist long after conflict conditions stabilize.
Source: Enab Baladi
Date: 20 May 2020
What Does it Say? The multi-author compilation uses multiple angles to address one central question: how political change has been advanced or forestalled by conflict actors in Syria.
Reading Between the Lines: Among the viewpoints expressed in the collection is the role local civil society actors have played in resisting disfavored changes imposed by outside groups, regional actors, and military factions.
Date: 15 May 2020
What Does it Say? The paper explores the relationship between Turkey and opposition groups in northwest Syria, namely the two pillars of the opposition: HTS and Turkish-backed opposition groups.
Reading Between the Lines: The position of HTS has become increasingly untenable, and in the long term some kind of confrontation between HTS and other opposition groups in northwest Syria may be inevitable. What shape that takes remains to be seen.
Source: The Carter Center
Date: 15 May 2020
What Does it Say? The Government of Syria has come under increasing media fire of unpopularity from both internal and external sources.
Reading Between the Lines: Bashar Al-Assad’s popularity may be waning, and it is likely that he has faced threats from Russia, yet all these pressures fall flat in the face of an important reality: there is no unified movement to force Al-Assad out of office. Al-Assad has survived the conflict by dividing enemies and conquering. Those seeking to usher in a post-Al-Assad Syria would do well to heed this lesson.
Source: Syria Direct
Date: 18 May 2020
What Does it Say? Increasingly, Russia has been vying with the United States for dominance in northeast Syria.
Reading Between the Lines: The U.S. retains the upper hand due to its alliance with the SDF, which is arguably the most disciplined, uniform military force in all of Syria, thus giving it a formidable presence on the ground. However, Russia has sought to peel away disaffected locals from Self Administration areas, and the inconstancy of the U.S. political commitment to Syria may increase the likelihood of this possibility.
Source: Omran Studies
Date: 15 May 2020
What Does it Say? Southern Syria has witnessed a large influx of Government of Syria forces due to recurring incidents in the area.
Reading Between the Lines: The Russian brokered agreement in the area has clearly fallen short as the areas of Dar’a, Tafas, and their surroundings, which continue to witness assassinations and clashes. Regionally, Israel and Jordan have thrown quiet support behind efforts to de-escalate, out of concern that a Government of Syria military intervention in the area may come with an influx of Iranian forces.
Date: 19 May 2020
The Wartime and Post-Conflict Syria project (WPCS) is funded by the European Union and implemented through a partnership between the European University Institute (Middle East Directions Programme) and the Center for Operational Analysis and Research (COAR). WPCS will provide operational and strategic analysis to policymakers and programmers concerning prospects, challenges, trends, and policy options with respect to a conflict and post-conflict Syria. WPCS also aims to stimulate new approaches and policy responses to the Syrian conflict through a regular dialogue between researchers, policymakers and donors, and implementers, as well as to build a new network of Syrian researchers that will contribute to research informing international policy and practice related to their country.