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Thursday, August 11, 2011

Efforts to halt Syrian crackdown focus on crippling economic sanctions


Turkish foreign minister Ahmet Davutoglu meets Syrian President Bashar al Assad (Hakan Goktepe, Turkish Foreign Ministry/Reuters)
By James M. Dorsey

A day of failed diplomatic flurry in the Damascus is focusing efforts on strangling the regime of Syrian president Bashar al Assad economically despite Turkish Prime Minister Recep Tayyip Erdogan’s bid to give the failure of diplomacy a glossy facade.

While Mr. Erdogan took credit for an alleged withdrawal of the Syrian military from Hama, the country’s fourth largest city and a symbol of resistance to the Assad family’s 41-year iron grip on Syria. Mr. Assad’s forces attacked villages along the Turkish border, maintained its attack on Deir El-Zour in the oil- and gas producing eastern region and turned their guns again on Homs.

The inability of envoys of Turkey, Syria’s most important friend besides Iran, as well as India, Brazil and South Africa to persuade Mr. Assad to halt his failed five month-old crackdown on anti-government protesters and embrace political and economic reform reduces diplomatic efforts to end the crisis to acts of symbolism at best.

Expectations that US President Barak Obama will call Thursday for the first time for Mr. Assad to leave office will only reinforce the conclusion that diplomacy is not producing results. With most governments as well as the Syrian opposition ruling out the option of military intervention, Mr. Assad’s international and domestic opponents are looking at cutting off one of his vital economic lifelines: oil exports.

The Obama administration, in a first targeting of the Syrian oil sector, which accounts for up to a third of the country’s revenues, on Wednesday tightened sanctions on Syria’s biggest bank, the state-owned the Commercial Bank of Syria, that handles much of the country’s oil receipts. The move is designed to set the stage for Europe, the major buyer of Syrian oil, to follow suit.

European members of the United Nations Security Council – France, Britain, Germany and Portugal, warned Syria that it could face UN sanctions if it failed to heed the Council’s call for an end to the violence that has already cost some 2,000 lives. The warning seems more bluff than real with Russia, China, Brazil, India and South Africa still opposed to UN sanctions. But it does leave open the likelihood that the EU will act unilaterally.

The new US sanctions on the bank make it more difficult for Europeans to do business with it. They tighten sanctions originally imposed in 2004 in an attempt to halt alleged money-laundering through the bank and prevent it from helping circumvent sanctions imposed on Iran as well as providing financial services to Syrian and North Korean institutions suspected of involvement in the proliferation of weapons of mass destruction.

In a further bid to target Mr. Assad’s closest associates, the Obama administration also sanctioned Syriatel, the country’s largest mobile phone operator that is owned by influential businessman Rami Makhluf, a cousin of Mr. Assad. Mr. Makhlouf is on a list of 34 people that includes the Syrian president and his closest associates on whom the US and the EU slapped sanctions earlier this year.

The sanctioning of Syriatel is part of an effort to support a burgeoning campaign by the Syrian opposition to boycott products made or imported by companies owned by Mr. Assad’s associates. It is designed to persuade Syrians to switch their mobile telephone subscriptions to MTN, a South African-owned operator, and the country’s only other provider.

Opposition forces have publicly identified scores of companies owned by Mr. Assad’s family and associates, including the son of former defense minister Mustafa Tlass, former air force intelligence chief Habib Al-Houli and Majd Suleiman, a Lebanese newspaper proprietor.

A Syrian opposition Facebook page describes Nutella, a hazelnut and chocolate spread, as a product made for killing not eating because it is imported into Syria by the family of Habib Betinjaneh, a supporter of the Syrian president, who is a major distributor of foodstuffs and a member of the board of one of the country’s largest insurance companies.

The boycott campaign hopes to encourage not only the West but also Arab nations, among whom first and foremost the oil-rich Gulf states, to hit the Assad regime where it hurts most. Opposition spokesmen have called for a freeze on Syrian assets abroad and the cancellation of trade agreements and foreign funded projects.

That call, they hope, will resonate following the condemnation earlier this week of Mr. Assad’s crackdown by the Saudi-led Gulf Cooperation Council (GCC) and the withdrawal from Damascus of the ambassadors of Saudi Arabia, Kuwait, Bahrain and Qatar. The Gulf states fund scores of agricultural, industrial and commercial projects in Syria and have extended it significant loans.

Concerted international targeting of Syria’s economy coupled with an effective domestic consumers’ boycott would significantly increase pressure of the country’s business community to withdraw its support of Mr. Assad. The business community together with the Christian minority and the Alawites, the sect to which Mr. Assad belongs, are the key remaining civilian pillars of the president’s support base alongside the military and the security forces.

Mr. Assad’s rejection of every effort to help him out of the cul de sac he has boxed himself into with his crackdown that has failed to break protesters’ resolve and resilience leaves an essentially powerless international community with few options. Economic pressure is its best and perhaps only option.

Nonetheless, in the absence of a military option, sanctions will have to be coupled with the maintenance of some sort of dialogue with the Assad regime. If dialogue has any chance of success, despite its failure so far, it will have to be conducted with discretion rather than in public.

That is a tough requirement in which even Syria’s staunchest allies such as Turkey and Russia find it increasingly difficult to remain silent about the regime’s continued violence. It may however be the only way to engineer a way out of the crisis that would allow Mr. Assad to save some degree of face and at the same time respond to protesters’ demands for far-reaching change.

James M. Dorsey is a senior fellow at Nanyang Technological University's S. Rajaratnam School of International Studies and the author of the blog, The Turbulent World of Middle East Soccer. 

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