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Key Economic Data 
 
  2003 2002 2001 Ranking(2003)
GDP
Millions of US $ 21,517 21,900  19,500 67
         
GNI per capita
 US $ 1,160 1,130     1,040 130
Ranking is given out of 208 nations - (data from the World Bank)

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Update No: 075 - (26/03/10)

Syria: The New Focus of International Diplomacy in the Middle East
As the United States finds it ever more difficult to secure real cooperation, rather than fine words from Israel, Syria will assume greater importance to the West. Five years ago, the Asad regime seemed doomed, facing international isolation in the wake of the murder of Rafiq Hariri and potential internal dissent at the apparent display of weakness resulting from what appeared to be a humiliating withdrawal from Lebanon. A few important figures in the regime collapsed under pressure; Ghazi Kenaan, the interior minister and former head of Syrian military intelligence in Lebanon committed suicide in October 2005 before the release of one of the UN reports on the investigation into the Hariri murder.

The young al-Asad faced pressure from his inner circle to display strength, even as the US increased the ‘Axis of Evil’ rhetoric, effectively replacing Iraq with Syria in the infamous triad of countries that made it up. Now, five years after the Hariri murder, the situation in Syria has turned around. Saad Hariri, son of Rafiq, is the prime minister in Lebanon and he has become, like his father before him, a friend to Syria, having also visited Damascus in 2009. Hezbollah is in the government coalition and it still maintains its independent militia. Syria has also secured close ties to Saudi Arabia and Turkey. More significantly, Syria is becoming an ever more important country for the United States, as it is becoming increasingly clear that the Israeli government of Benjamin Netanyahu is not seriously committed to a two-state solution for the conflict with Palestine. This is weakening the Palestinian National Authority (ANP) and Mahmoud Abbas, the Palestinian party that speaks to the USA, while Hamas gains moral strength winning increasing support in the West Bank and not just in Gaza.

The Hamas and Hezbollah ‘axis’ is becoming stronger – both backed by Iran – and Syria is the only country that can act as a credible intermediary between the West and Hamas, Hezbollah and Iran. US vice-president Joe Biden became a symbol of the United States’ impotence in confronting the Israeli administration, having been rebuffed during a visit to Israel over inflammatory plans to extend Israeli settlements in East Jerusalem, countering Washington’s expectations. This has removed any lingering hope that a deal to secure Israeli-Palestinian peace, could become reality. Prime minister Benjamin Netanyahu has no interest in any two-state solution and the continuous expansion into Palestinian land would make such a possibility all the more difficult even for Netanyahu’s successor, Likud or Labor. President Obama, if he can circumvent the pressure groups in Washington, must pursue the two-state solution independently and for this he will need Syria. Alternatively, in light of Israeli expansion in the West Bank and Jerusalem, there may be more reason to put pressure on Israel to negotiate a return of the Golan. Either way, Syria is becoming a more important partner for the United States in the region.

With the Netanyahu government, the US has fewer margins for diplomatic manoeuvring, and its traditional partners, Egypt and Saudi Arabia are becoming ever more concerned and discouraged by the superpower’s inability to effect any meaningful change in the balance of the region. This situation strengthens the radicals’ hand and Iran’s position, while the US will find it more complicated to disentangle itself from Iraq and to create an anti-Iranian coalition. Syria is the one country that has credible links to the ‘radicals’ and the ‘moderates’, as well as the United States, especially as the big loser in this scenario is the ANP. As the ANP-Saudi-USA group weakens, the Syria-Hezbollah-Hamas-Iran, camp has gained further strength in view of Turkey’s gradual shift toward the latter. The prospects of a new ‘intifada’ in the Palestinian Territories will also serve to further cement Islamic solidarity, weakening the secular movements in Palestine itself and in the traditional powers of Egypt or Saudi Arabia.

The EU has extended Syria the opportunity to sign the EU-Syria Association Agreement (put on hold in 2004, when Syria requested it) to benefit from various trade and cooperation programs. Syria has not yet decided whether to ratify the agreement and it is in no rush to do so. The agreement would ensure a greater share of aid than the EUR 500 million (or its equivalent) that it has received from Europe since 1979.

While Syria needs billions in foreign investment to improve infrastructure and help the country recover from a longstanding drought in the east, the EU, on the other hand, sees Syria as one of the most promising areas for growth in the Near East. The US also sees Syria as a potentially key partner in confronting terrorism and wants to sign security agreements with Syria. Saudi Arabia, for its part has shown interest in extending development loans to Syria. The Saudi Fund for Development signed an agreement with the Syrian ministry of finance to lend USD 140 million to raise output at a power station in Syria; this would be the first such loan of its kind since the Hariri murder, that all but ended Saudi-Syrian relations. Now, Syria is beginning to attract the sort of business interest from the Gulf and Saudi Arabia, previously shown only for Lebanon. A Saudi businessman, Saleh Kamel, organized an investment forum in Damascus in March, and the government of al-Asad, buoyed by diplomatic successes, east and west, is now in a better position to pursue the economic reforms that were launched in 2000, and that were slowed by the Iraq war, the Hariri assassination and the Israeli-Lebanese war of 2006.

Syria’s position in the Middle East can only continue to grow in importance. While President al-Asad stated that his government does not intend to sever ties with Iran after a recent meeting with President Ahmadinejad, it is ever more important for the West to maintain ties with Syria. While, President Obama has appointed a new ambassador to Damascus, the US still maintains some sanctions against Syria, also maintaining it on the list of terror sponsoring states. Under such conditions, even the US State Department understands that Syria is not yet in a position to alter its relationship to Iran. Moreover, Damascus can act as a bridge between Washington and Teheran and with the ever stalling situation in Palestine and Jerusalem, it is all the more important to maintain open channels to those powers that have the potential to further radicalize socio-political movements in an ever more combustible regional context. Keeping Syria close, means that the Western powers will be able to influence Syria’s decisions to supply more sophisticated weapons to Hamas or Hezbollah; weapons, which could be used against Israel. Washington also realizes that Syria is not interested in seeing a radicalized Shiite Iraq on the model of Lebanon, which is closer to what Teheran would like to see. Syria would much rather have a secular state like itself on its doorstep and in this sense, its interests are far closer to those of the United States than they are to Iran.
 

 

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