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Books on Syria
REPUBLICAN REFERENCE
Area (sq.km)
185,180
Population
17,585,540
Capital
Damascus
Currency
Syrian pound (SYP)
President
Bashir al-Asad
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Update No: 030 - (02/05/06)
Making Friends
Syria continues to be treated as an enemy by the United States. Speaking to
the press, US secretary of state Donald Rumsfeld reiterated the US position that
Syria supports the insurgents in Iraq - even as in recent months, Syria was
actually commended by US army generals for having been very active in preventing
potential 'terrorists' from entering Iraq. Nevertheless, as noted in last
month's update, there is evidence that the neo-conservative movement has been
losing steam as has the probability that the United States will launch punitive
military action against Syria - distracted as it is by Iran. Some analysts
suggested that Syria was hoping to use Iraq - by facilitating relations with the
Sunnis and the Baathists - as a means of improving relations with the United
States. However, it seemed form the very start that the US was not interested in
good relations with Iraqi Sunnis and former Baathists as the first appointed
'governor' Bremer disbanded the largely Baathist and Sunni dominated leadership
of the armed forces. Syria has been active in improving relations with its
neighbours, including Iraq and Turkey and of course Iran, making it increasingly
difficult for the United States to isolate Syria internationally. Indeed, it
would seem that the United States attempt to isolate Syria has actually prompted
it to establish close relations with its neighbors in a process, which in a
sense is isolating the United States from the region - were it not for its
presence in Iraq.
As Syria and Iran concluded a series of commercial and bilateral agreements last
February, including the expansion of road links between them, both Iran and
Syria need Iraq to be stable. In addition, there is an ambitious gas pipeline
project extending from Egypt to Jordan and Turkey, which could conceivably be
tied to an Iranian or Iraqi pipeline. In short, Syria is becoming a strategic
nexus for the delivery of gas from the Persian Gulf, Egypt and the Middle East
to Europe. While, Turkey and Syria have been improving bilateral relations over
the past 4 years - Turkey is currently Syria's biggest trading partner, an
aspect also fueled by the signing of a free-trade deal between the two countries
- Syria has been very active in securing partners throughout the region. Iraq
has been favorable to the proposed construction of an oil pipeline between Iran
and Syria through its territory. Iran and Syria have already discussed this
possibility during an international oil industry convention 'Syroil'. Syroil
2006 is Syria's fifth oil exhibition and 255 companies from North and South
America, Europe, Africa and Asia were present. Officials from both countries
have conceded that the main obstacle remains instability in Iraq, especially as
the Iraqi oil industry is still facing severe logistical and production
difficulties.
Predictably, Iran, which is becoming the true diplomatic power in the Middle
East, is becoming a very important partner for Syria, as well as Lebanon. Former
president and current chairman of Iran's Expediency Council Hashemi Rafsanjani
expects more cooperation with Syria in Oil and Gas. Rafsanjani visited one of
Syria's most important refineries at Banyas. Syria and Iran indicated their
mutual desire for boosting bilateral ties and cooperation as the Syrian Minister
of Economy and Commerce Amera Lutfi met the Iranian Minister of Housing Affairs
Mohammed Saeed Kia, who heads the Iranian side in the Syrian-Iranian commission
of economic cooperation. The agreements extend beyond oil and pipelines, as the
two ministers discussed means of promoting economic, investment and commercial
relations, contracts to build grain silos and factories for cars and cement. The
Iranian car manufacturing plant operated by Iran-Khodro will soon complete the
first phase of its facility and will be able to start production of some 5,000 'Samand'
models a year. Eventually, the plant will be capable of producing 30,000
automobiles, some of which the company expects to export to neighbouring
countries. The plant offers an opportunity for Iran to portray a different image
of the country as it starts to demonstrate its industrial capabilities.
Currently, Iranian investments in Syria account for US$1.8 billion and are most
prominent in the cement, automobile and refinery industries. Iran expects to
increase its investment in Syria to reach some USD5 billion by 2009. Meanwhile,
Arab Gulf states continue to show interest in Syria. Kuwait is planning to
establish the 'Al-Sham' Bank in Syria with some US$100 million in authorized
capital and US$50 million in paid-up capital. The shares of the bank should be
floated in May in an IPO according to the Kuwaiti newspaper Al-Qabas. While
Syria still does not have a stock exchange, such public offerings are launched
to attract investors. Syrian investors will have the majority stake of 51%,
while the remaining 49% will be held by Kuwait, other Gulf Cooperation Council (GCC)
countries and the Islamic Development Bank. The Syrian government licensed
Al-Sham Bank in accordance with the 2005 decree that allowed the establishment
of Islamic banks in the country, and it will be one of the first private banks
in Syria since the nationalization of banks some forty years ago. In April Syria
also strengthened relations with Tunisia, one of the most developed countries in
the Arab world, and one of the most successful examples of a transition from
state dominated to free market economy in the region.
Meanwhile, Syria is strengthening its ties to the new Hamas led government in
the Palestinian Territories - as has Syria's ally Iran. The strengthening of
such ties is remarkable given the negative reception extended to Hamas even in
other parts of the Arab world. The new Palestinian foreign affairs minister
Mohammed Zahar suffered two diplomatic setbacks in mid-April, as he was denied
the chance to meet the Egyptian foreign affairs minister during a visit to
Cairo, while Jordan cancelled a planned visit to Amman. The cancellation was
attributed to the discovery of a cache of weapons destined for Hamas, which had
allegedly originated in Syria. Zahar met president Asad in Damascus, and Syria
announced it would increase cooperation with the Hamas government, by allowing
entry to Palestinians travellers holding passports issued by the Palestinian
Authority. Syria said it would also allow dozens of Palestinians who recently
fled the violence in Baghdad and ended up stranded on the Jordan-Iraq border,
while also taking steps to ease visits of Palestinians to their families in
Syria.
As for Lebanon, there are also positive developments even as the involvement of
Syrian and Lebanese military intelligence officials is investigated by Serge
Brammertz, the head of the UN investigation into the death of former Prime
Minister Rafiq Hariri. President Bashar al-Asad and vice-president Farouq al-Sharaa
met Brammertz in Damascus, even as the former Syrian Vice President Abdul Halim
Khaddam, who left the government last year and is said to be living in France,
suggested that there was high-level Syrian involvement into the Hariri murder.
However, while the involvement of Syrian and Lebanese intelligence continues to
be proffered by the inquiry, there is still insufficient evidence to verify
this. However, of greater diplomatic significance is the fact that Syria - which
experienced strong tensions in Lebanon just one year ago as Syrian troops
withdrew from that country, said it is ready to demarcate its border with
Lebanon (after Israel leaves from the Shebaa Farms. For his part, Prime Minister
Fouad Siniora told the UN Security Council that Lebanon would ask
Secretary-General Kofi Annan to indicate the steps required by the UN to
recognize Lebanese sovereignty over the territory of the Shebaa Farms. While
Syria and Lebanon are still exchanging accusations, there are signs of a
softening as Siniora is said to be preparing to visit Damascus. Siniora also
publicly defended the legitimacy of the Hizbollah movement (backed by Syria) as
a political force in Lebanon.
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