Eighth Gate

Syria Clenches Its Fist

2009-08-28T18:09:00.002-04:00

Assad to Obama: Thanks but no thanks.
Foreign Policy.com
BY ANDREW J. TABLER
AUGUST 28, 2009

Early last week, nearly seven months to the day after the Barack Obama administration took office and began its careful, critical engagement with the regime of Syrian President Bashar al-Assad, rumors swirled in Washington and the Middle East that the White House was preparing to turn a new page with Damascus. The first test of this new relationship would be over the issue that caused the breakdown in U.S.-Syrian relations more than six years ago: the flow of jihadi militants from Syria to Iraq.
The Obama administration's outreach to Syria had been clear and forthright. It included six high-level visits by U.S. officials to Syria, Washington's announcement that it would return an ambassador to Damascus, a reported letter from President Obama to President Assad, and the facilitation of export licenses for aircraft parts waived under U.S. sanctions against Syria. A Centcom-led delegation visited Damascus two weeks ago and concluded a tentative agreement with Syria on a technical assessment of Iraqi-Syrian border posts. Iraqi Prime Minister Nouri al-Maliki, miffed at being left out of these promising talks, visited Damascus last week to seal the tripartite deal. The string of blasts that greeted him upon his return on Aug. 19 -- the bloodiest in more than 18 months and now claimed by an al Qaeda affiliate -- has led Baghdad to demand that Syria expel Iraqi Baathists and jihadi militants from its soil and recall its ambassador. Damascus responded in kind, effectively blowing up Washington's initiative on the launchpad.
Until last week, talks over Iraq-related regional security issues appeared to be a glimmer of hope in an otherwise bleak U.S.-Syrian engagement process. Washington has quietly asked Damascus over the last seven months to use its influence to promote reconciliation between Fatah and Hamas. Following the most recent visit to Damascus by U.S. Mideast envoy George Mitchell, Syria, along with Turkey and Egypt, pressed Hamas to allow Fatah members in Gaza to attend their party's conference earlier this month -- an important first step in forming a united Palestinian position. It didn't happen.
Damascus instead took credit for an alternative "breakthrough" -- Hamas' recent announcement that it would accept and respect the 1967 border between Israel and the Palestinians in return for Israel's conceding Palestinians the right of return and allowing the establishment of a Palestinian capital in East Jerusalem. Unfortunately, this position falls dramatically short of the conditions of the "quartet" (comprising the United States, Russia, the European Union, and the United Nations): that parties to the peace process recognize Israel without preconditions, abide by previous agreements between Israel and the Palestinian Authority, and renounce violence as a means of achieving goals. On peace talks with Israel, Damascus continues to demand that Israel commit to withdrawing from the Golan Heights to the line of June 4, 1967, and resume Turkish-sponsored indirect talks from where they left off last December. Israel, which favors direct negotiations without preconditions under U.S. auspices, has refused.
French efforts last year to coax Damascus to open an embassy in Beirut and appoint an ambassador there led many to speculate that Damascus was willing to turn a new page with its western neighbor, Lebanon. But Syria's ambassador to Beirut spends most of his time in Damascus, and statements on Lebanon are put forward by pro-Syrian Lebanese politicians such as Wiam Wahhab who, due to his role in helping Damascus call the shots in Lebanon prior to Syria's 2005 withdrawal, has earned a reputation as one of Syria's last unquestioning proxies in Lebanon. Following the defeat of Syria's allies in Lebanon's June 7 elections (despite intensive Syrian efforts to swing the poll Syria's way), Damascus and its allies have stymied the formation of a government by the pro-independence March 14 block. Meanwhile, an interview Aug. 25 in the Lebanese daily An-Nahar with a senior U.S. official made apparent Washington's frustration with Syria, most notably its smuggling to Hezbollah of increasingly advanced weaponry across the Lebanese-Syrian border, which Damascus still refuses to demarcate despite promising to do so.
Concerning relations with Iran, on Aug. 19 (the same day as the Iraqi attacks) Assad said during his fifth state visit to Tehran that the June re-election of Iranian President Mahmoud Ahmadinejad -- the controversy surrounding which he attributed to "foreign intervention" -- meant that "Iran and Syria must continue the regional policy as in the past." The visit, combined with recent reports of a crash in northern Syria of a short-range missile developed by Syria, Iran, and North Korea, as well as the Assad regime's continued refusal to answer the International Atomic Energy Agency's questions about uranium particles found at not one but two Syrian nuclear sites, shows Damascus remains firmly ensconced in the Iranian-led "resistance axis." As for human rights and domestic reforms, not only is the regime rounding up dissidents as usual, but it is now going after its lawyers and the president of the Syrian Human Rights Organization as well. Damascus clearly feels that it has been let off the hook.
Washington intended the Centcom-led mission as the first step on a long road to reconciliation with Damascus, with the potential for even higher-level engagement by U.S. officials. But last week's battery of negotiations and bombings, as well as the charge of diplomatic distrust it generated, shows just how explosive and uncertain engaging Damascus over Iraqi border security really is. The only way to truly "solve" this issue would be for Damascus to publicly disavow the al Qaeda facilitators within its country and expel the Iraqi Baathists who support them from its soil. Last week's deadly blasts in Iraq clearly show Damascus is unwilling to take such a step.
This is because the actual problem of fighters entering Iraq has less to do with security arrangements along the border and more to do with the Faustian bargain Syria's minority Alawite-dominated regime cut with Sunni-based al Qaeda fighters who regard their hosts as apostates. This agreement, forged during the height of Assad's Cold War with the George W. Bush administration, underlies the al Qaeda facilitators and the "rat lines" of jihadi fighters they operate in and out of Iraq. Syria is unwilling to cut them off over fears of risking domestic attacks. In short, Damascus wants high-level U.S. engagement without making hard sacrifices.
During the 1970s and 1990s, when the United States tried ultimately unsuccessful policies of "constructive engagement" with Damascus, Washington would have allowed Syria to skirt the issue and quietly deal with the issue from "behind the scenes." But last week's blasts and other jihadi attacks originating out of Syria this year show that giving Damascus a pass on the issue allows the Assad regime to keep its hand on the foreign-fighter tap. This leaves the strategic initiative in Damascus' hands to use as leverage as the United States withdraws from Iraq. U.S. support for its Iraqi allies to roll back the fighters are likely to remain Washington's safest bet.
With Syrian-Israeli peace negotiations stalled, the easiest issues to benchmark and verify concern Lebanon, where U.S. officials are still trying to promote the country's sovereignty and independence. The formation of a government, the delineation of the Syrian-Lebanese border, and shutting down the Syrian-dominated PFLP-GC bases are three urgent issues that require U.S.-Syrian cooperation. All three are more useful barometers for gauging Syrian intentions than the Assad regime's murky relationship with al Qaeda and former Iraqi Baathists, as the former can be more easily benchmarked and verified. And most importantly for Washington and Damascus, progress on all three is more likely to lead to tangible improvements in U.S.-Syrian relations in the year to come.

Andrew J. Tabler is a Soref fellow in the Program on Arab Politics at the Washington Institute for Near East Policy.

Rule of Law Is Key to Future Israel-Syria Peacemaking

2009-06-12T08:24:00.001-04:00

PolicyWatch #1533
By Andrew J. Tabler
June 11, 2009

Beginning on June 12, U.S. Middle East envoy George Mitchell will make his long anticipated first trip to Damascus. During the two-day visit, Mitchell will focus on reinvigorating Israeli-Syrian peace negotiations and cajoling Damascus to engineer a Fatah-Hamas reconciliation. According to media reports, he will also roll out a roadmap for improved relations between Washington and Damascus. Although it is unclear if U.S. peacemaking can succeed, Syria's current fiscal crisis, combined with questions over its nuclear activities and recent twists in the investigation of former Lebanese prime minister Rafiq Hariri's assassination, may provide a rare opportunity for Washington. A focus on rule of law -- a necessary prerequisite for potential U.S. future investment -- could help the United States tame some of the al-Asad regime's excesses in the short term while building a foundation for cooperation in the long term.

Background

Although relaunching peace talks between Israel and Syria might seem easier than those between Israel and the Palestinians, the deep-seated relationship between Syria's longstanding state of war with Israel and the al-Asad regime's thirty-nine-year grip on power complicates matters. Following independence in 1946, Syria was one of the world's most unstable countries, suffering countless coup d'etats. So when Alawite officers loyal to the Baath Party seized power in a military coup in March 1963, they declared a state of emergency to stabilize Syria's domestic scene. This allowed the junta to arrest individuals and hold them indefinitely without charge, putting Syria on the road to becoming one of the Arab world's most repressive countries.

After consolidating power over Baathist opponents in November 1970, the late president Hafiz al-Asad built his regime by placing minority Alawites, Druze, Christians, and Shiites in key positions in the armed forces, security services, and bureaucracy. With the advent of the region's 1973 war, al-Asad quickly switched his justification for the emergency law to the state of war with Israel. The regime also used the threat of war as an excuse to delay passing and implementing legal reforms to accommodate economic, social, and political change in Syria. To clear new endeavors with the regime, citizens were forced to bribe the minority networks that dominate Syria's security services and bureaucracy. This corruption quickly became the mortar that held Syria's minority-led regime together.

Following al-Asad's death in June 2000, his son and successor, Bashar, issued hundreds of pieces of legislation in the name of reform. Unfortunately, however, most of it was simply grafted onto existing laws or never followed up by executive instructions. The regime also ignored reform of Syria's antiquated court system (despite extensive help from the French government), leaving interpretation of the law up to the minority-dominated bureaucracy. Not surprisingly, regime corruption skyrocketed. Over the last five years, Syria has slipped from 66 to 147 on Transparency International's Corruption Perception Index, placing it among the world's top thirty most corrupt countries. According to the World Bank's Investment Climate Assessment, corruption is one of the primary reasons why Syria now has one of the Arab world's poorest investment environments. The countries most willing to invest in this murky climate are Syria's political allies, Qatar and the Islamic Republic of Iran. Last year, the latter claimed it extended $3.5 billion in "technical assistance" to Damascus.

The Regime's Predicament

The good news for U.S. peacemakers is that the al-Asad regime is facing a trilogy of daunting challenges, largely of its own making, and is seeking Western help through talks with Israel.

Finance. For two decades, the al-Asad regime has relied on oil proceeds to finance annual budgets. Production, however, has declined 30 percent in the last five years and domestic demand has increased sharply. In 2006, Damascus announced it had become a net oil importer, nearly five years ahead of analysts' expectations. The Syrian regime insists it has arrested the production decline through new oil discoveries and enhanced recovery from existing wells. But those projects have largely boosted production of heavy oil, which sells for considerably less on the international market than does Syria's standard light sweet crude. As a result, Syria's budget deficit this year is expected to reach $5.2 billion, accounting for approximately 10 percent of GDP and a quarter of Syria's estimated $20 billion hard currency reserves.

This crisis coincides with the flooding of the Syrian job market with record numbers of youth born during the 1980s and 1990s, when Syria was among the fastest growing populations in the world. Unable to invest enough of its own money to create jobs for Syria's demographic wave, the Syrian regime is now actively seeking foreign direct investment (FDI). Due to rampant corruption, however, official FDI inflows in 2008 were only around $1.1 billion. While such amounts are a substantial increase over just a few years ago, Syria is still one of the lowest FDI recipients in the Arab world.

Nuclear activities. During a visit to Syria in June 2008, International Atomic Energy Agency (IAEA) inspectors found traces of uranium and graphite at al-Kibar, the site in eastern Syria bombed by Israel in September 2007 that U.S. officials now believe was a clandestine nuclear reactor. Last week, the IAEA reported that it also found uranium particles "not included in Syria's inventory of declared material" at the country's IAEA-declared research reactor. If Damascus continues to refuse IAEA follow-up inspections, the nuclear watchdog could demand a "special inspection" of the sites, which if refused could lead the IAEA Board of Governors to refer Syria to the UN Security Council for further action, potentially including the use of force under Chapter VII of the UN Charter.

Lebanon. The recently established international tribunal investigating the assassination of former Lebanese prime minister Rafiq Hariri is preparing indictments. Should Syrians be indicted or called to testify and Damascus refuses the tribunal's requests, the matter is likely to be referred to the Security Council. If the tribunal fingers Syria's Lebanese ally Hizballah (as reported in a recent article by Der Spiegel), pressure would mount on Damascus to break ranks with the group -- a choice that would enhance prospects for peace with Israel.

Utilizing U.S. Economic Leverage

Syria's problematic finances and its potential confrontations with the IAEA and the Hariri tribunal provide Washington with leverage that it can incorporate into its diplomacy with Syria to break the status quo. Exploiting pressure from the IAEA and the Hariri tribunal should be easy for Washington, since the pressure is coming from international institutions with established mandates. Utilizing U.S. economic leverage will be trickier, however. The United States has substantial "negative pressures" it can employ from the recently renewed Syrian Accountability and Lebanese Sovereignty Restoration Act (SALSA) and a series of executive and Treasury Department orders targeting Syrian individuals and banks. In terms of positive inducements or "rewards" in the event of peace, however, it is doubtful the United States can entice substantial foreign investment in Syria without addressing the country's worsening corruption problems. On a political level, should Syria conclude a peace treaty with Israel and implement reforms that would facilitate large flows of FDI, the minority networks in the security services and the bureaucracy stand to lose the most. Given Iran and Hizballah's close relationship with Syria's security establishment, the discontent of these networks could be exploited by Tehran to derail implementation of a future peace.

Damascus has thus far refused to address its support for terrorist organizations or domestic issues -- most notably human rights -- in its early dialogue with the Obama administration. No doubt terrorism will be on the agenda if the United States mediates Israeli-Syrian peace talks. But rather than dumping domestic issues -- a common practice in the past -- Washington should add rule of law to its list of priority issues for dialogue with Syria. By encouraging Damascus to promote rule of law, it could help tame the human rights and corruption excesses of the minority system. In the long term, greater rule of law could provide a foundation for future economic and political cooperation between Damascus and Washington in the event of peace. Damascus needs to understand that unlike its current friends in Tehran, the United States needs a strong legal framework for its investments to take root and deliver the peace dividend Damascus hopes for.

Andrew J. Tabler is the Soref fellow at The Washington Institute.

Why Mitchell Bypassed Damascus

2009-04-30T09:53:00.002-04:00

PolicyWatch #1506
Will Mitchell's Trip Bypass Damascus?
By Andrew J. Tabler
April 13, 2009
U.S. special envoy to the Middle East George Mitchell is scheduled to visit Israel, the Palestinian territories, Egypt, the Persian Gulf, and North Africa this week. Conspicuously absent from his itinerary is Damascus. Despite a Syrian public relations campaign designed to exploit Washington's opening gestures with Syria as a major policy change, the exclusion of Damascus from the envoy's agenda demonstrates that the Obama administration continues to pursue cautious and critical engagement with the regime of Syrian president Bashar al-Asad.
The Syrian-U.S. Expectations Gap
Following the November 2006 Iraq Study Group's recommendation to engage Syria and Iran, the Asad regime hired a British public relations firm to develop a strategy targeting the international community. In January 2007 Abdulsalam Haykal -- a businessman close to the Syrian regime -- and Syrian historian and political commentator Sami Moubayed launched Forward Magazine (Syria), a monthly English-language glossy periodical that, according to its website, looks at "the bright side of things." The magazine featured a number of articles by or interviews with Syrian ambassador to the United States Imad Moustapha that were intensely critical of U.S. Syria policy.
In the wake of U.S. speaker of the House Nancy Pelosi's April 2007 visit to Damascus, a stark gap in expectations emerged between Damascus and Washington. The Asad regime demanded talks on "the horizon of issues" and a "package deal" on "comprehensive peace" that would solve some bilateral issues at the expense of others. In Washington, however, policymakers sought progress on all issues, most notably Syria's support for terrorism, efforts to undermine Lebanon's sovereignty, an investigation into the murder of former Lebanese premier Rafik al-Hariri, and increasing evidence of extensive Syrian facilitation of foreign fighters into Iraq. Many also doubted that the Bush administration or its successor would conduct immediate high-profile engagement with Damascus, pointing to the poor track record of U.S. officials engaging Asad and Damascus's new and unexpected maximalist demands for engagement.
Moubayed was soon tapped by the regime to serve on the "U.S.-Syria Working Group" -- a "Track Two" dialogue between Syrians and Americans organized by the U.S.-based Search for Common Ground. After Syria announced in May 2008 that it was involved in indirect peace talks with Israel, Moubayed and two other Syrians visited Washington the following July to exchange views with a number of policy think tanks and former U.S. officials with the goal of narrowing the gap between the two positions.
Not only did Syria's expectations remain unrealistically high, but it was clear Damascus anticipated an early visit from the next U.S. president as well. Two days following Barack Obama's election, Moubayed penned the article "Abu Hussein's Invitation to Damascus," which outlined ten things Obama must do by inauguration for Syria to receive him "as a guest of honor in Damascus, the way it did with Jimmy Carter and Bill Clinton." Some of the Syrian points, including appointing a U.S. ambassador to Damascus, helping Syria deal with Iraqi refugees in Syria, and sponsoring Syria's indirect peace talks with Israel, were well known to U.S. officials. Unexpected, however, were further demands that Washington lift U.S. sanctions on Syria, recognize "that no problems can be solved in the Middle East without Syria," and "help Syria combat Islamic fundamentalism." While Moubayed later insisted his article only reflected his own views, journalists and analysts widely regarded them as reflecting those of the Syrian regime.
No Grand Gestures
Following Obama's inauguration on January 20, Syria's public relations campaign stalled. In addition to existing concerns with Damascus, U.S. officials were particularly concerned by Syria's refusal to comply with International Atomic Energy Agency (IAEA) requests for further inspections at al-Kibar -- the clandestine nuclear facility destroyed by Israel in September 2007, where IAEA inspectors found traces of uranium and graphite. So instead of the kind of grand gesture Syria wanted, Secretary of State Hillary Clinton dispatched Assistant Secretary of State for Near East Affairs Jeffrey Feltman on February 26 for talks with Moustapha. In the meeting, Feltman raised the issues of Syria's "support to terrorist groups and networks, acquisition of nuclear and nonconventional weaponry, interference in Lebanon, and worsening human rights situation."
Regime spokesmen immediately attacked Feltman for using the "language of the neocons." Following the meeting, however, both sides labeled the talks "constructive," leading to another round of discussions in Damascus on March 7 between Feltman and National Security Council Middle East director Daniel Shapiro and Syrian foreign minister Walid Mouallem. Following the talks, Feltman announced that both sides had found "a lot of common ground" and that instead of setting "benchmarks" for Damascus, each side was watching the future "choices" of the other.
Two days later, Asad stepped into the fray. In the ensuing twenty-three days, he gave six interviews to international media. But rather than dealing with the issues discussed during Feltman and Shapiro's visit, Asad targeted Israel, offering it only a cold peace, blaming outgoing Israeli prime minister Ehud Olmert for the failure of recent indirect Syrian-Israeli negotiations, and refusing to talk about cutting ties with Hizballah, Hamas, and Tehran. In another interview, Asad implied he had been asked to mediate between Washington and Tehran. Then, in his first-ever email interview with an American journalist, Asad told the New Yorker's Sy Hersh that he not only sought U.S. mediation with Israel, he also wanted direct contact with President Obama.
In the latest installment of the campaign, Moustapha told the Washington Times editorial board on April 7 that the United States had signaled a sea change in its relations with Syria, claiming that relations with Washington are suddenly so amicable that U.S. officials said, "We will never ask you to kick [Hamas politburo leader] Khaled Meshaal out of Damascus." He also predicted that Mitchell would soon visit the Syrian capital.
Washington's Cautious and Critical Approach
Contrary to Moustapha's predictions, no such policy shift has taken place. Instead, Washington continues to utilize a step-by-step pragmatic approach to engaging Damascus. Unlike most other countries on the U.S. State Sponsors of Terrorism list, the United States and Syria have diplomatic relations and functioning embassies. Following the Feltman-Shapiro meeting, Washington is now watching Damascus's choices on the issues discussed. Thus far there has been some diplomatic motion on Lebanon and Iraq. On March 24, Syria officially appointed its first-ever ambassador to Lebanon (who has yet to be posted). Syria's foreign minister, Mouallem, visited Baghdad the following day for talks on border security and committed Syria to "whatever help is necessary" for a successful withdrawal of U.S. forces from Iraq. Washington is now waiting for Syria to follow through on both commitments. On the ground in Damascus, Syria has allowed the reopening of the American Language Center, an English-language institute affiliated with the embassy that was closed along with the embassy's cultural center and the American school following the October 29 U.S. raid on terrorist bases near the eastern Syrian town of al-Soukkariya.
In other areas of U.S. concern, however, progress has yet to be made. Syria continues to refuse IAEA requests for further inspections or to talk about its worsening human rights situation. Finally, Damascus has yet to evince its much-trumpeted ability to rein in weapons smuggling by Hamas or to bring the group into a Palestinian unity government with Fatah.
Dilemmas Reveal Intentions
With Damascus unfortunately more interested in public relations than in addressing outstanding bilateral issues, Washington's step-by-step approach seems set to continue. In the short term, a key test to see if Syria is capable of cooperating with Washington will be Lebanon's June 7 parliamentary elections, which U.S. policymakers are watching closely to see if the poll will take place without Syrian interference or assassinations. Concerning Iraq, Washington is waiting to determine whether Syria can follow through on its promises to stop the flow of jihadi fighters across its borders.
In the long term, however, Washington's biggest challenge will be to devise a strategy that puts the Syrian regime into policy dilemmas that will reveal whether it will eventually conclude and implement a peace treaty with Israel and realign itself away from Iran. By making clear agreements with the United States and implementing them, Asad has the opportunity to rebuild trust with Washington. Only when this is accomplished will grand presidential gestures to Damascus become a viable option in Washington's competitive policy environment.
Andrew J. Tabler, cofounder and former editor-in-chief of Syria Today, is a Soref fellow at The Washington Institute.

Talking to Syria: An Important Test for Damascus

2009-03-07T07:35:00.002-05:00

Talking to Syria: An Important Test for Damascus
NYTimes.com, March 4, 2009

By Andrew J. Tabler

The New York Times convened an online panel of five Middle East experts to discuss the Obama adminstration's recent decision to send two diplomats to begin "preliminary conversations" with the Syrian government. The following is a contribution by Washington Institute Soref fellow Andrew J. Tabler, the co-founder and former editor of Syria Today. Read the entire discussion on the Times's website.

Secretary of State Hillary Rodham Clinton's decision to dispatch two senior officials to Syria is an important early test to see if engagement will lead Damascus to re-evaluate its policies at home and abroad.

Washington's list of grievances with the Syrian government has never been longer, including its support for Hezbollah, Hamas and jihadis entering Iraq, its efforts to undermine Lebanon's sovereignty and its poor human rights record. Making matters worse, a report last week by the International Atomic Energy Agency all but confirmed suspicions by American officials that a site in eastern Syria bombed by Israel in September 2007 was part of a clandestine nuclear program.

Dispatching Jeffrey Feltman, the acting assistant secretary of state for Near Eastern affairs, sends a signal to the Syrian leadership that discussions will be about the hard issues that divide the two countries. Mr. Feltman is a former United States ambassador to Lebanon whose support for that country's anti-Syrian March 14th alliance -- which leads the current government in Beirut -- openly angered Damascus. In sending Daniel Shapiro, the Middle East chief on the National Security Council and an adviser to the Obama campaign, Washington is showing Damascus that President Obama is listening.

The risks of engagement with Syria are all too apparent to United States officials, as the poor track record of American officials visiting Damascus shows. Its position on Hamas, Hezbollah and jihadi fighters are a tough sell. On the one hand Syrian government officials claim to have influence over these groups, but when confronted they often say the groups are outside their control.

But there are opportunities. Syria's economy is being hit hard by the global economic crisis, declining oil production and a third straight year of drought that has left the government there in a vulnerable position. This explains why more and more Syrian officials are now demanding that Washington lift its sanctions on Syria.

Frank talk combined with "smart sanctions" and political pressure from the Hariri Tribunal, along with the nuclear issue, could spin Damascus out of Tehran's orbit. And this "strategic realignment" is necessary for a significant improvement in relations with Washington -- and a peace treaty with Israel.

Global Economic Crisis Boosts Utility of US Sanctions on Syria

2009-03-01T07:22:00.002-05:00

PolicyWatch #1482

Global Economic Crisis Boosts Utility of U.S. Sanctions on Syria

By Andrew J. Tabler
February 26, 2009

On February 9, the Syrian minister of transportation announced that Washington had granted a license allowing Syria to purchase spare parts for two Boeing 747s that have been grounded for years. The announcement touched off intense speculation that the Obama administration would lift U.S. sanctions against Syria that have been in place since 2004. Even as Washington appears to be softening its stance with an eye toward engaging Damascus, sanctions remain an important tool to ensure that engagement achieves U.S. policy goals. Rather than dropping sanctions, Washington should recalibrate them to leverage the economic pressure on Damascus that has been exacerbated by the global economic crisis.
Syria's Economic Woes

Despite U.S. sanctions, the Syrian economy has performed relatively well in recent years. Fueled by high oil prices and increased investment from the Gulf, Syria has posted an average annual economic growth rate of about 5 percent over the past five years. There are, however, big problems: oil production -- proceeds from which account for 27 percent of state revenues -- is declining by about 9 percent per year. And Syrian industry -- accounting for 28 percent of the gross domestic product (GDP) -- is struggling to compete under a flood of imports resulting from Arab and Turkish free trade agreements. Likewise, unemployment hovers around 9 percent, and a record three-year drought has devastated the Syrian agricultural sector (23 percent of GDP).

Since the global economic crisis hit, Syria's economic situation has worsened. The collapse in oil prices forced the state to revise its budget oil price downward to $51 for light crude and $42 for heavy, resulting in a record budget deficit of $4.8 billion, or roughly 10 percent of its GDP. Syria is a net importer of oil, however, and the state earns revenue from exports while the cost of importing petroleum products (largely fuel oil) is borne by consumers. In the past, the government subsidized petroleum products, but it raised prices in 2008 to a point where the government now earns revenue from domestic fuel oil sales. Therefore, a reduction in oil prices still reduces government revenue. With Syrian crude averaging $38 and $32 for light and heavy respectively, the Economist Intelligence Unit now estimates the budget deficit will swell to $5.2 billion.

Although the state usually makes up for budget shortfalls by slashing investment spending -- a line item that accounts for 40 percent of the 2009 budget -- this tactic will be more difficult now. Syrians born in the 1980s and early 1990s, when the country was among the top twenty fastest growing populations in the world, are now flooding the job market. According to Syrian deputy prime minister for economic affairs Abdullah Dardari, Syria will need $14 billion of investment over the next two years to meet the 6-7 percent economic growth targets required to create enough jobs for the growing workforce.

A recent Syrian Economy Ministry report quoted by news agency AFP stated that the crisis would result in an estimated 30 percent drop in foreign investment, which totaled $875 million in 2007. The report also estimated that expatriate remittances, which amounted to $850 million last year, would fall while prices would rise. Last year, the International Monetary Fund estimated Syrian inflation at a record 15 percent, up from 5 percent in 2007.

Impact of Sanctions

The bad economic news explains Damascus's recent shift in focus from the need for Washington to mediate peace talks to a demand for Washington to drop U.S. sanctions. In an interview with Reuters news service this month, Dardari said that "to have normal relations between Syria and the United States, sanctions should be lifted. . . . This is going to be a very important part of any dialogue. . . ." His statements echo those of Sami Moubayed, a member of the U.S.-Syria Working Group (whose Syrian members were handpicked by the Bashar al-Asad regime to participate in Track II dialogue) who first linked lifting U.S. sanctions to dialogue with Syria just two days after the election of Barack Obama.

These statements represent a reversal of the regime's standard rhetoric on sanctions. When the Syrian Accountability and Lebanese Sovereignty Restoration Act (SALSA) was implemented in May 2004, Damascus bragged that the sanctions would have little effect due to historically small amounts of bilateral trade. Many Syria observers questioned the utility of U.S. sanctions over the last few years, as spiraling food commodity and oil prices drove the dollar amounts (but not volumes) of U.S.-Syrian trade to all-time highs.

But there is ample evidence that U.S. sanctions on Damascus are having an increasing impact. SALSA, which bans all U.S. exports to Syria (except food and medicine), has hit Syrian aviation particularly hard. State-owned Syrian Air could not obtain parts for its fleet of American-made Boeing jets or purchase new aircraft from Europe's Airbus, which uses substantial U.S. content in its planes. SALSA also complicated Syrian oil and gas production by denying companies operating in Syria the necessary U.S. technology to increase diminishing Syrian crude output. Indeed, in the summer of 2007, Damascus blamed electricity blackouts on the "knock-on effect" of U.S. sanctions; companies specializing in major high-tech projects shunned operations in Syria for fear of running afoul of U.S. law. (The only legal exceptions to the sanctions were "export licenses" for U.S. goods for certain humanitarian purposes to promote the exchange of information and to help maintain aviation safety. It was under this provision that a license was issued to repair the two Syrian Air 747s last week.)

At the same time, U.S. actions targeting the state-owned Commercial Bank of Syria (CBS) have exacerbated Damascus's financial woes by making it more difficult to repatriate critical oil revenues. The U.S. Department of Treasury's March 2006 designation of CBS -- the depository for the lion's share of Syria's estimated $18-20 billion in foreign currency reserves -- as a "primary money-laundering concern" under the USA Patriot Act led all U.S. and a number of European banks to close their correspondent accounts. In anticipation of the move, Damascus switched state foreign currency transactions from dollars to euros, and since oil, the regime's lifeline, is denominated in dollars, the switch complicates the regime's ability to fund itself. In addition, the designation scared businessmen away from the CBS and toward the country's new private-sector banks, which operate under less regime control, effectively reducing the amount of cash the regime could access.

Executive orders freezing the U.S. assets of Syrian officials have likewise made global banks and investors wary of doing business with Syrian officials and regime businessmen. Last May, two American executives of Gulfsands Petroleum -- a company contracted to boost Syrian crude output -- resigned, and the company moved its headquarters from the United States to London after one of the company's partners, business tycoon and President al-Asad's cousin Rami Makhlouf, was targeted by an Executive Order focusing on public corruption in Syria. Later, Washington successfully pressured the Turkish mobile provider Turkcell to put off its bid to buy Syriatel, another Makhlouf-owned business. The U.S. designation was hailed by Syria's business community, which views Makhlouf, according to a new International Crisis Group report, as "a symbol of crony capitalism, resented by many colleagues for having bullied them into forced partnerships or out of lucrative deals."

Smart Sanctions Key to Success

As the fiscal crisis unfolds in Syria, existing U.S. sanctions could have a powerful negative impact on the Syrian economy, prompting Damascus to reevaluate its policies -- on U.S. designated terrorist groups (Hamas, Islamic Jihad, and Hizballah), Lebanon, Iraq, and weapons of mass destruction -- to obtain relief. This kind of policy review could form the core of future Syrian-U.S. dialogue. To ensure U.S. leverage, Washington should recalibrate sanctions based on a clear understanding of Syria's fiscal problems and changing socioeconomic trends, rather than lift sanctions as Damascus suggests. The resulting "smart sanctions" should be a key element of a comprehensive U.S. strategy to put Damascus into dilemmas in which its choices will clearly signal whether Syria intends to continue fanning the flames of regional militancy or to play a productive role in reinvigorated regional peacemaking.

If these targeted sanctions are effective, Damascus will be forced to choose between continuing its policies and suffering the economic consequences, or concluding clear agreements with Washington to change its policies and gain American assistance to put Syria on the road to prosperity. U.S. sanctions contain sticks and carrots to lead Damascus down this path. In the weeks and months ahead, the challenge before the Obama administration will be to assess which sanctions have been most effective, and to link -- via a process of benchmarking -- the removal of sanctions to discernible and irreversible changes in Syrian policy.

Andrew J. Tabler is a Soref fellow in the Program on Arab Politics at The Washington Institute, where he focuses on how to engage Syria in a way that best advances U.S. interests.

IAEA report on Syria raises more questions on Al-Kibar site

2008-11-19T14:20:00.005-05:00

A leaked version of the IAEA's report on Syria appeared on the ISIS site today. While it doesn't say conclusively that Syria was building a reactor, it doesn't look good.
Three issues immediately stand out:

First is paragraph 12. "Analysis of the environmental samples taken from the Dair Alzour site carried out by a number of the Agency’s Network of Analytical Laboratories revealed a significant number of natural uranium particles. The analysis of these particles indicates that the uranium is anthropogenic, i.e. that the material was produced as a result of chemical processing. As indicated above, Syria stated that the only explanation for these particles was that they were contained in the missiles used to destroy the building."

This basically says that the uranium traces found at the site are not depleted uranium, ultra-hard metal sometimes used in munitions. If true, this would serious undermine Syria's recent claim that the particles were from Israeli bombs dropped at the Al-Kibar site. The paragraph also suggests that the anthropogenic uranium found at the site could have been nuclear fuel to be loaded into the Korean-designed reactor the US and Israel allege was at the site. If true, this suggests the reactor was closer to being operational than previously thought.

Second is the previous paragraph, 11: "As part of its assessment, the Agency has conducted an evaluation of the water pumping infrastructure observed by it during the June 2008 visit to Dair Alzour. The results of that evaluation indicate that the pumping capacity is adequate for a reactor of the size referred to in the allegation (25 MWth). During its visit to the site, the Agency observed sufficient electrical capacity to operate the pumping system."

If true, this seems to contradict statements by Syrian officials that the site could not have been a reactor due to the absence of power lines or water cooling pipes.

Last, and most obviously, Paragraph 10 states pretty clearly that the structure resembles a reactor: "Its containment structure appears to have been similar in dimension and layout to that required for a biological shield for nuclear reactors, and the overall size of the building was sufficient to house the equipment needed for a nuclear reactor of the type alleged." the report also says construction on the building began in spring-summer 2001, during Washington's policy of "constructive engagement" with Syria - long before the US invasion of Iraq.

The IAEA is requesting Syria's cooperation in investigating its findings. It will be interesting to see how the Syrian government responds to the report ahead of the IAEA's board of governors meeting next week.

Report: IAEA finds traces of uranium at suspected Syrian nuclear site

2008-11-10T14:25:00.002-05:00

By Reuters

United Nations investigators have found traces of uranium at a Syrian site Washington says was a secret nuclear reactor, nearly completed before Israel bombed the target last year, diplomats said on Monday.

They went on to say that the uranium contamination turned up in some environmental swipe samples UN inspectors took at the site during a visit last June. They said the finding was not enough to draw conclusions but raised concerns requiring further clarification.

The International Atomic Energy Agency had no immediate comment. But word of the finding leaked hours after IAEA officials confirmed Director Mohamed ElBaradei was preparing a formal written report on Syria for the first time.

Moreover, Syria has been made an official agenda item at the year-end Nov. 27-28 meeting of the UN watchdog's 35-nation board of governors, unlike previously when IAEA officials said initial inquiries were inconclusive.

Syria denies U.S. allegations that it was building a reactor with North Korean expertise designed to produce plutonium, the main atomic bomb ingredient reprocessed from spent uranium fuel, in violation of the Non-Proliferation Treaty.

Syria has argued that the unverified U.S. intelligence was fabricated.

ElBaradei told an IAEA board meeting in September that preliminary findings from test samples taken by inspectors granted a visit in June to the desert location hit by Israel bore no traces of atomic activity.

Diplomats accredited to the Vienna-based nuclear watchdog said a wider range of samples had now been analyzed by its sleuths and some had traces of a certain uranium compound.

"It isn't enough to conclude or prove what the Syrians were doing but the IAEA has concluded this requires further investigation," said one diplomat accredited to the IAEA.

"It was a man-made component, not natural [ore]. There is no sign there was already nuclear fuel or [production] activity there," another diplomat told Reuters.

This diplomat noted that such traces could have been carried to the site inadvertently on the clothes of scientists or workers or on equipment brought in from elsewhere.

That could echo a key, past finding made in the IAEA's long-running investigation of Iran's secretive nuclear program.

Diplomats close to the IAEA have said Syria has ignored agency requests to check three military sites for equipment or other evidence possibly linked to the alleged reactor site.

"The agency clearly thinks it has something significant enough to report to put Syria on the [nuclear safeguards] agenda right after North Korea and Iran," said a senior diplomat with ties to the Vienna-based UN watchdog.

"It's been made clear to us that the samples raise further questions," said a fourth diplomat, who, like others, asked for anonymity in exchange for discussing confidential information.

The IAEA has been probing Syria since May, shortly after Washington turned over intelligence about the site - but only months after an Israel Air Force strike flattened it and Syria swept it clean.

ElBaradei deplored the delay in intelligence-sharing and a U.S. failure to alert the IAEA before the bombing, saying this would make it very difficult for the world's NPT guardian agency to establish the facts "because the corpse is gone."

Damascus' ten demands to receive Obama

2008-11-06T12:18:00.007-05:00

Syria's state-run newspaper "Al-Thawra" ran an article today saying that Syria "extends its hand" to President-elect Barak Obama. Meanwhile, Editor-in-Chief of the pro regime monthly Forward Magazine, Sami Moubayed, who also serves as a member of the US-Syria Working Group, has outlined ten things that the new president must do in order for Damascus to be "willing to open its arms" and receive him in Damascus.

If this is what Damascus is truly thinking (which it might to an extent), it indicates that engagement with Syria could be far more difficult than many analysts predict. The long list of demands outlined in the article are particularly ironic, given president-elect Obama's open willingness to engage Syria and Iran. The timing of the list's release - a mere two days following Obama's election - seems odd as well.

According to Moubayed, Syria can "use its weight in the region to moderate the behavior of non-state players like Hezbollah in Lebanon and Hamas in Palestine, and find solutions for the US standoff with Iran over its nuclear program."

In return, "What the Syrians are expecting 11 weeks from now when Obama is sworn in as president is the following:

Appointment of a US ambassador to Syria. The post has been vacant since Margaret Scooby was withdrawn when relations plummeted over Lebanon in 2005. This would be accompanied by greater room to maneuver for Syria's ambassador to the US, Imad Mustapha, who has been spurned by the Bush administration because of his criticism of how Bush treated Syria.

An end to the anti-Syrian rhetoric coming out of the White House and State Department since 2003. That would automatically reduce the anti-Syrian sentiment in the US media.

Recognition of Syria's cooperation on border security with Iraq.

Cooperation with Syria to deal with the 1.5 million Iraqi refugees in Syria.

Lifting - in due course - of the sanctions that were imposed on Damascus and abolishment of the Syrian Accountability Act.

Willingness to sponsor Syria's indirect peace talks with Israel, currently on hold in Turkey. That is something Bush curtly refused to do since the talks started in April 2008, claiming that Syria was more interested in a peace process than a peace treaty. Syria is sincere and the new White House must acknowledge that to deliver peaceful results in the Middle East. American guarantees and willingness to serve as an honest broker could make the talks successful, the Syrians believe, transforming them from indirect to direct negotiations. Syria is determined to regain the occupied Golan Heights (taken by Israel during the Arab-Israeli war of 1967) and Obama must help Syria achieve that if he is sincere about change in the region.

Recognizing that no problems can be solved in the Middle East without Syria with regard to the Palestinians, Iraqis and Lebanese. Bush launched his famous "roadmap" for peace between Israel and Palestine, but bypassed the Syrians. If another roadmap were to be launched, Syria would have to be included.

Help Syria combat Islamic fundamentalism that has been flowing into its territory from north Lebanon and Iraq. The deadly September 27 attack in Damascus - which left nearly 40 Syrians dead and injured - should have been a wake-up call for the Americans that unless cooperation is forthcoming from the US, Syria might become a battleground for extremists, as in the 1980s. Intelligence cooperation and technical assistance with the Americans is needed to curb and combat this Islamic threat.

An apology, compensation and explanation for the air raid on Syria that left eight Syrian civilians dead in October 2008.

Help normalize relations between Syria and America on a people-to-people level, which have been strained since Bush came to power in 2001. That would include giving visas to Syrians wanting to study or work in the US.

Controvery over American school and cultural center in Damascus is nothing new

2008-10-29T12:00:00.004-04:00

Syria’s ordered closure of the Damascus Community School (a.k.a. the “American School) and the American Cultural Center in Damascus is only the latest episode in a bizarre campaign by the Syrian government against US interests in Syria over the last two years.

In the summer of 2007 – following high profile visits by Democratic legislators to Damascus that spring and meetings between Sec of State Rice and her counterpart, Walid Mouallem – the Syrian embassy in Washington ironically denied visas to American teachers employed at the DCS. The school was only able to open after the foreign ministry in Damascus intervened to issue the visas following extensive lobbying by US Charge d’affaires Michael Corbin.

Then last summer, as relations seemed to be improving following the Doha Agreement in Lebanon and the launch of indirect peace talks between Syria and Israel, the Syrian Ministry of Education suddenly refused to accredit DCS – a school that has existed in Syria for decades. Its student body includes the sons and daughters of diplomats, oil executives (from Shell and Total), and others.

The cultural center's reported closure (diplomats in Damascus tell me its still operating) not only hinders recently enlivened US public diplomacy out of the facility, but also effectively shuts down US educational outreach in the country. In November 2006, the Syrian government closed the offices of Amideast, an American NGO headed by former US Ambassador to Syria Ted Kattouf that has offered SAT and other standardized testing services in Syria since 1974. The Syrian government declined to give a reason for shutting Amideast's doors.

After a few months testing services were moved into the American Cultural Center in Damascus, allowing educational services to resume. If the center is closed, students will once again have to go to Lebanon or Jordan to take their entrance exams.

In the weeks leading up to the raid, two US Fulbright students were abruptly deported from Syria without a clear reason, other than that their visas could not be extended for "Security reasons."

What’s mind-boggling about the closures is that they actually hit Americans who are actively working to engage Syria the hardest. According to reports, the State Department (which operates the embassy in Damascus) is reconsidering its Syria policy. The closures are certainly not going to help the case for engagement with Damascus no matter who wins on November 4.

US raid on Syria highlights foreign fighter issue

2008-10-27T07:16:00.002-04:00

Yesterday’s raid by US special forces on the Al Sukariyya Farm near the Syrian border city of Abu Kamal highlights a long-festering issue between the US and Syria – the flow of “foreign fighters” from Syria to Iraq.

The raid, and its timing, are interesting for several reasons. First, it’s the first such attack (at least released to the public) by US forces on Syrian soil. A similar raid occurred on June 18, 2003, when a US task force attacked a convoy of SUV’s believed to be carrying senior Iraqi Ba’athists 25 miles inside Syrian territory. That raid was carried out under the rules of “hot pursuit,” which allows security officials to cross international boundaries to apprehend criminals.

Second, the raid raises questions about recent Syrian claims that Damascus has changed course on Iraqi border security. A group of Syrian academics in good favor with the Syrian regime (whose activities are often referred to as “track 1.5 talks” in Damascus) visiting Washington last July claimed Syria had shifted its policy and now secured the border “to the best of our abilities.” One delegation member, apparently trying to put to rest doubts on this subject, said Syria now has “its own interest to play a stabilizing role” and that Syria had done a “very good job” on policing the border. They claimed that “several US field commanders” at the border had even shared such kudos with Syrian officials.

Such claims – which are hard to verify – come in sharp contrast to official military statements before and after yesterday’s raid. A US military official – who declined to give his name due to the political sensitivity of cross border raids, told AP that the US was “now taking matters into its own hands” and that of all efforts to shut down the ‘rat lines’ of fighters into Iraq, “the one piece of the puzzle we have not been showing success on is the nexus in Syria.” This was supported by statements last Thursday by U.S. Maj General John Kelly who said that Syria’s border was “uncontrolled by their side” and was a “different story” from the security situation on Iraq’s borders with Saudi Arabia and Jordan, which apparently have been tightened substantially.

US military officials (including Gen Petraeus) admit that the flow of foreign fighters has declined substantially (now estimated at about 20 per month), but it remains unclear how much of this is due to US and Iraqi efforts and how much is attributable to a genuine change in Syria’s efforts at “border security.”

Third, the raid comes as the US is negotiating its Status of Forces Agreement (SOFA) with Iraq that would allow US forces to stay in Iraq and carry out operations from there following there. As Katherine Zoepf points out in today’s New York Times, Syria and Iran strenuously oppose the SOFA “because of concerns that the United States might use Iraqi territory to carry out attacks on them.” Zoepf also mentions that another sensitive issue, Iraq’s oil and gas law, had been sent to parliament after being held up for over a year and a half.

Finally, the raid is the latest example of the capacities of the US military’s increasingly sophisticated intel and analysis of foreign fighter flows. Over the last few months the Combating Terrorism Center (CTC) at West Point has released some very interesting reports analyzing foreign fighter flows across the Syrian frontier into Iraq. The most recent report, Bombers, Bank Accounts and Bleedout: Al-Qaeda’s Road in and Out of Iraq, analyzes al Qaeda in Iraq (AQI’s) operations from spring 2006 to the summer of 2007 – around the time when the Bush Administration’s “surge” and “sahwa” (Awakening) campaigns were implemented. Their work is based on the “Sinjar Records” – documents coalition forces in Iraq seized during a raid on a suspected al-Qaeda safe house in Sinjar, a western Iraqi town ten miles east of the Syrian frontier. It’s a fantastic read.

Particularly interesting for Syria and Lebanon watchers, the latest report warns that “There is a strong risk of blowback from Iraq. Relatively small numbers of Jihadis will “bleedout” to fight elsewhere, but they will likely be very dangerous individuals.” This could shed light on some of the possible perpetrators behind the recent car bombing near a Syrian military facility outside Damascus. But the report indicates that the threat generated by these fighters goes beyond Syria’s borders as well:

‘The Iraq war has increased Jihadi radicalization in the Muslim world and the number of Al-Qaeda recruits. Foreign fighters in Iraq have also acquired a number of useful skills that can be used in future terrorist operations, including massive use of suicide tactics, organizational skills, propaganda, covert communication, and innovative improvised explosive device (IED) tactics. Some AQI fighters that have already trickled out of Iraq have bolstered violent movements in Saudi Arabia and Lebanon. This trend will likely continue. Although the threat to Europe and North America is real—French officials have tracked 24 fighters from France that have traveled to Iraq—fighters are most likely to join established Jihadi groups in areas of weak government control, such as Afghanistan, Pakistan, Somalia, Yemen, and Lebanon.”

Car Bomb Latest in String of Bizarre Attacks

2008-09-27T13:18:00.004-04:00

Today's car bomb near a "security installation" in Damascus has Syrians scratching their heads. The bomb, which Syrian authorities put at 200kg, was detonated near a major intersection on the way to the Shiite Sayyida Zeinab Shrine on the outskirts of the Syrian capital. Journalist friends covering the story said the bomb detonated before it reached the security compound, indicating the explosives might have gone off prematurely.

The bomb comes only days after President Assad ordered Syrian forces to mass on Lebanon's northern border in what most believe is an attempt to confront passage of hard line Sunni Islamists who have been in skirmishes in northern Lebanon with Alawites, the sect of Shiite sect of Islam from which the Syrian leadership hails.

The blast was the latest in a string of attacks in Syria, a country whose government prides itself on maintaining a tight grip on security. In February, Hezbollah operative Imad Mughniyya was killed in a massive car bomb in Damascus near a number of the country's security headquarters. In August, General Mohammed Sulieman was killed in Tartous in what the Syrian state has described as "an assassination".

Earlier high profile attacks included the September 2006 attack on the US embassy in Damascus and the September 2004 car bomb in the Sheikh Saad area of Damascus that killed an member of the Palestinian group Hamas.

But there have been a number of lesser profile attacks as well. In December 2005, security forces attacked a “takfiri cell” – a group that unilaterally declares other Muslims apostates. Members of such groups have been known to inflict their punishment by, among other things, strapping on explosive belts and walking into western hotels in the region. While the attack got some play in the Syrian media, the well-connected al Hayat journalist Ibrahim Hamidi told me privately at the time that the attack was the first instance the authorities used helicopters against civilians in Syria since the state’s bombardment of Hama in 1982. In his subsequent article on the incident in January 2006, Hamidi cited “informed sources” who said that when the security forces surrounded the cell’s hideout, its members refused to give up prior to the government’s air raid. They also accused the security forces of being “infidels.”

In May 2005, the Syrian authorities announced that it had broken up a “terrorist cell” in the Damascus neighborhood of Daf al-Shawq. As Syrian TV showed footage of the cell’s arms depot, the state announced that the cell was but part of a larger organization, the Munazama Jund al-Sham l’wahda wa jihad (The Soldiers of Damascus Organization for Unity and Jihad). Subsequent reports indicated that the group was well organized, and was distributing propaganda throughout Syria. According to Hamidi’s analysis of the group’s pamphlets, the group seeks to a “establish an ‘Islamic Emirate’ or ‘caliphate’ in Syria, Jordan, Lebanon and Iraq.”

In April 2004, Syrian authorities foiled an attack on an abandoned UN building in Mezzeh, a modern district of Damascus. According to Hamidi's report, three of the four assailants had gone to Iraq to fight US forces in the days before Saddam’s fall. Many observers (including myself) and diplomats doubted the authenticity of the attacks, since they came while Washington was making a decision in how to apply the Syrian Accountability and Lebanese Sovereignty Restoration Act (SALSA), which was signed into law in December 2003 but had a six-month window of implementation.

Difficult decisions loom for Syria's Assad

2008-09-08T10:22:00.002-04:00

Probably one of the most balanced assessments out there of the tough choices now before the Syrian leadership.

Mon Sep 8, 2008
By Khaled Yacoub Oweis - Analysis

DAMASCUS (Reuters) - After basking in international limelight, Syrian President Bashar al-Assad faces difficult decisions that could change the political landscape of the Middle East.

Peace talks with Israel and cooperation on Lebanon have helped bring the once international outcast in from the cold, culminating in a visit last week by French President Nicolas Sarkozy, the first Western head of government to visit Syria since the 2005 killing of Lebanese statesman Rafik al-Hariri.

But Assad, shaped by his late father's lifetime of struggle with Israel, is facing pressure to change old alliances with Iran and militant groups, and take specific action on Lebanon to dispel the impression that Syria still refuses to accept the sovereignty of its smaller neighbor.

Sources familiar with Sarkozy's visit told Reuters that Syria has asked France for help on stalled peace talks with Israel. A round that Assad termed crucial was postponed several times after the resignation of an Israeli negotiator.

"Assad wants to keep talking with Israel without committing to anything. It is understandable since Israel has also not given him anything," one diplomat in the Syrian capital said.

"But Syria cannot keep on dancing with everybody without kissing anyone. Assad has shown no signs of burning bridges with Iran. Hamas is an easier card to play," he added.

Syria and Israel announced the talks in May, months after Israeli planes raided a target in eastern Syria. Washington, Israel's chief ally, said the site was a nuclear reactor.

Four rounds of indirect talks so far have centered on the fate of the Golan Heights. Israel captured the fertile plateau from Syria in the 1967 Middle East war.

Damascus demands the return of all the Golan. Israel, in turn, wants Syria to scale back ties with Iran and cut links to the Palestinian Hamas and Lebanon's Hezbollah, which could mean expelling the Hamas leadership from Damascus and cutting an alleged supply line to the Lebanese Shi'ite group from Syria.

Hamas has denied an Arab press report that its exiled leader Khaled Meshaal was moving to Sudan, but the group stands to lose politically if a peace deal is signed between Israel and Syria.

Turkey, which is acting as a mediator, said the Syrian-Israeli talks should resume later this month. Israel has not confirmed this and diplomats in Damascus doubted they would be held so soon with Israel facing political uncertainty over the resignation of Prime Minister Ehud Olmert.

Syria favors moving to direct talks only after a new U.S. administration comes to office. Assad said an American role was necessary but Turkey will continue to be a main mediator.

"BEHAVIOUR PROBLEM"

Careful to keep lines open to Iran, Assad agreed to Sarkozy's request to try and help ease the confrontation between Tehran and the West over its nuclear program. But Syria is itself under investigation by the International Atomic Energy Agency over the site raided by Israel last year.

Assad has also visited Russia to discuss arms purchases, which angered Israel, and he kept contact with U.S. foes in Iraq which added to tension with Washington and London.

And Syria's proposed economic association agreement with the European Union faces opposition from Britain if Damascus does not cut its alleged support to infiltrators into Iraq. The agreement needs approval of all European Union members to pass.

"Syria is still seen as having a behavior problem, and a new U.S. administration will not change this. One way of doing so is to deliver on (opening) embassies with Lebanon, start physical work on the demarcation of the border and stop backing insurgents in Iraq," another diplomat said.

Assad recently agreed to open diplomatic relations with Beirut and border demarcation, but these issues are mired in committees. Sarkozy made it clear that French rapprochement would not last without specific Syrian action.

Leading Syrian journalist Thabet Salem said the lure of returning the Golan and the economic benefits of peace -- Syria's economy has woefully underperformed for decades -- would drive Syrian rulers to change their external posture.

"Syria always puts its interests first," Salem said. "The issue is not whether Syria can disengage from Iran, Hezbollah or Hamas but if Israel does not give back the Golan and the talks fail. We're then back to point zero."

(Editing by Dominic Evans)

Running in place at the "Dialogue for Stability"

2008-09-05T08:37:00.004-04:00

There was a lot of motion in Damascus this week for French President Nicolas Sarkozy's visit to Damascus, the first by a Western head of state since the February 2005 assassination of former Lebanese Premier Rafik al-Hariri. French flags were flying high in the streets of the Syrian capital as Sarkozy met with French citizens in Syria, opened a school, and enjoyed a bit of Damascus' recently upgraded hospitality.

But there wasn't much action, as uncertainties concerning the outcome of elections in Israel and the United States overshadowed the summit. In a press conference Wednesday evening broadcast live on Syrian terrestrial TV, Assad emphasized that the issues discussed with Sarkozy thus far were the four rounds of indirect peace talks between Syria and Israel in Turkey, Iran's nuclear issue, and economic relations between Syria and France. The first two issues, Assad said, would be addressed by the quartet talks involving himself, Sarkozy, Turkish PM Erdogan, and the Emir of Qatar scheduled for the next day.

When it was Sarkozy's turn to speak, he took a more serious tone. He spelled out in detail his path to better ties with Syria. He added that he wanted to build relations "one step at a time" towards a relationship of "trust." He added that Assad had "announced some decisions and he respected the decisions he made" - a reference to Damascus' agreement to establish formal diplomatic relations with Lebanon and Assad's recent hosting of Lebanese President Michel Sulieman. "This is how we are building this new relationship between the two countries - to understand each other, not to bargain, and to build confidence."

He added that France believed Iran "should not acquire nuclear weapons" but had the right to obtain nuclear energy for civilian purposes. He added that he was also there to discuss economic cooperation with Syria as well. Last, but not least, he said that he discussed with Assad the issue of human rights and freedom of expression, which, Sarkozy said was "a gain and not a negative point in the struggle against fundamentalism and extremism." He added that he was very happy about the recent release of two Syrian political prisoners.

When the two leaders resurfaced the following day at press conference following the quartet meeting, dubbed "Dialogue for Stability" (which was written in four languages on a banner behind the four leaders), it was clear not much had been accomplished. Assad announced that Syria had handed over to Israel a six point peace proposal that would serve as the basis of possible direct peace talks, but was not specific on what those items included. He added that the next round of talks, originally scheduled for next week, would have to be postponed, following the September 17 leadership election in Israel's Kadima Party. Assad also ruled out direct talks with Israel until after the outcome of the US presidential election scheduled for November 4. Assad concluded by saying a new cold war in the region could be much worse than the last, and that some "bright spots" were needed - a clear reference to recent developments in Lebanon.

Sarkozy said that France and Washington didn't share the same analysis of ties with Damascus, and that France would play a role in future peace talks.

Erdogan assured the audience that talks would go on later this month in Istanbul.

And last but not least, the Emir of Qatar stated that he opposed pushing the gulf states into conflict with Iran.

Best coverage of the event goes to Zeina Karam of AP and Ibrahim Hamidi of Al Hayat, who is back on the job.

Report: Hamas leader Meshal 'leaves Syria for Sudan'

2008-09-02T05:10:00.002-04:00

Diplomatic wheels on Syria seem to be turning silently once again. The Kuwaiti Newspaper al Rai reports that Syria has asked Hamas political leader Khaled Meshal to leave Damascus for Sudan. The report, which comes only a day before Nicolas Sarkozy arrives in Damascus, is the latest sign that direct negotiations between Israel and Syria could occur in the near future.

This report, if true, has deep implications not only for Israel-Syria talks, but prospects for US-Syrian relations as well, which are at their lowest point in nearly 40 years.

Note: I'm writing a book at the moment, so my posts have been intermittent. My apologies! I'm heading to Syria to cover Sarkozy's visit tomorrow morning.

Last update - 12:09 02/09/2008

Hamas leader Meshal 'leaves Syria for Sudan'

By Haaretz Service

Kuwaiti newspaper Al Rai reported Tuesday that Hamas political leader Khaled Meshal has left Damascus to live in Sudan at Syria's request, in a move stemming from Syria's desire to advance indirect peace talks with Israel.

The paper quoted Palestinian sources stating that the move was part of a secret deal between Meshal and the Syrian authorities. Meshal has been based in Damascus since his expulsion from Jordan some ten years ago.

Israeli sources believe that the move indeed signals a serious desire on Syria's part to advance the negotiations.

It’s official: Gen. Mohammed Suleiman is dead. Now comes the hard part…

2008-08-06T12:45:00.005-04:00

Syria’s confirmation of Brigadier General Mohammed Sulieman’s death today has fueled the fire of speculation as to what it all might mean.

It is nearly impossible to determine who is responsible for Sulieman’s reported assassination by sniper fire at his villa along the Syrian coast. In the absence of hard facts (often a cornerstone of reporting in Syria), research and media outfits focused on Syria are spinning different theories based on their reading of the current Syrian political context and snippets known of Sulieman’s background. I’m starting to form my own theory as well, based on my trip last week to Damascus, which was abuzz of talk of indirect peace talks with Israel and Bashar's shake-up of the country’s security chiefs.

One line of speculation comes from the “Debka File” – an information source close to former members of Israel’s intelligence service – which claimed that Sulieman was Bashar’s liaison with North Korea, Iran, and Hezbollah, and had been questioned by the IAEA’s Olli Heinonen on his recent visit to Syria. While the report did not say why Sulieman might have been killed, it claimed the assassination was not related to the 2005 assassination of Former Lebanese Prime Minister Rafik al Hariri.

Another comes from Saudi-owned media, most notably the London-based Arabic daily Asharq al Awsat. It reported on August 3 that Souliman was President Assad’s “right hand in the armed forces and he knows everything… He has all the files; security, financial and [army] reform" files. It added that Sulieman was summoned for questioning by UN investigator Detlev Mehlis’ first investigation into Hariri’s murder. I didn’t find his name among the six Syrians Mehlis questioned in Vienna in 2005, so perhaps this is why this fact dropped out of the newspaper’s story the following day. This report warned Syria watchers to wait for a few days to see what shakes out.

The third line of speculation, and the one that seems to make the most sense based on my trip to Damascus last week, attributes the assassination to an internal power struggle closely linked to the regional crossroads Syria now finds itself (it’s best summed up by Nicholas Blanford’s piece today in the Times). It explains the assassination as payback for Bashar by Assef Shawkat, Syria's Military Intelligence chief and Bashar's brother-in-law, following the Feb 13. assassination of Hezbollah operative Imad Mughniyyah by a car bomb near the headquarters of Syria's security agencies. Following the assassination, there were reports that Bashar stripped Shawkat of his powers and placed him under house arrest.

I don't usually give much credence to such rumors (after all, how could you verify them?). But what I did find interesting was how Mughniyyah’s assassination functioned in Western policy circles this spring. The assassination was a major bit of evidence used by US, European and Israeli policy wonks to prove that Syria is not comfortable with its “one-sided” relationship with Iran and ready to “deal.” There have been lots of "real" signs this spring that Syria was distancing itself from Iran, as I outlined in my op-ed piece last week. This has been “confirmed” by a number of intellectuals close to the regime as well, most notably Samir Al-Taqi and Sami Moubayad (both of whom were part of the “unofficial” Syrian delegation to Washington).

I've still skeptical of Syria’s willingness to break away from Iran, and even more its ability to do so. But my trip to Damascus last week opened my mind to the possibility. When I asked my contacts why Assad would change his security chiefs now, most said it was clear that Syria was soon approaching a crossroads in its regional relations. Indirect negotiations with Israel is something you can probably sell to Tehran as a “tactic” to buy time for Iran’s nuclear program. But direct negotiations with Israel is something else. It would be hard for Damascus to reconcile those talks while its signing military and security agreements with Tehran - especially with the folks benefiting most from those agreements.

More tomorrow…

Syrians See an Economic Side to Peace

2008-07-30T01:08:00.001-04:00

July 29, 2008
New York Times

By NAWARA MAHFOUD and ROBERT F. WORTH
DAMASCUS, Syria — Like most Syrians, Samer Zayat has no love for Israel. He was a little uneasy when Syria announced in late May that it was holding indirect talks on a peace settlement with its old nemesis.

Yet Mr. Zayat, a 35-year-old television cinematographer, says he views a peace deal with Israel as necessary and inevitable — not just for political reasons, but because Syria’s vulnerable economy needs all the help it can get.

“We are tired, the country is suffocating,” he said, as he played backgammon with a friend at a cafe here, the sweet smell of apple-flavored tobacco drifting around him. “We have suffered a long time from the political boycott and the sanctions.”

That sentiment is echoed by many others. Prices soared here after the Syrian government cut fuel subsidies in May, deepening the gulf between rich and poor in this nominally socialist state. It had little choice. The oil reserves Syria has relied on for so long are rapidly disappearing. The hefty budget surpluses of a decade ago have turned into multibillion-dollar deficits. A country that could once afford to be serenely indifferent to Western sanctions is now being forced to liberalize and open its economy.

None of this has changed Syria’s conviction that any peace agreement must include the return of the Golan Heights, the area captured by Israel in 1967. But a profoundly uncertain economic future has created additional incentives for peace, which could help lure foreign investment by ending Syria’s pariah status in the West.

A settlement with Israel “would lift a huge weight from our shoulders,” said Ghimar Deeb, a Syrian lawyer and economist who works with the United Nations here. It would lead to the lifting of sanctions, which would give Syria access to new investment, high-tech supplies and training opportunities, he said.

“Poverty is increasing, inequality is increasing, and I believe the street is frustrated,” Mr. Deeb said. “They need peace with all our neighbors.”

It is not clear that the Syrian government sees the economic troubles as a factor in negotiations with Israel. Although it began carrying out economic changes several years ago, the progress has been slow, and strategic political concerns have always been paramount for Syria’s president, Bashar al-Assad, and his father, Hafez al-Assad, who governed from 1970 until his death in 2000.

It is also far from clear that the talks will succeed. Prime Minister Ehud Olmert of Israel is facing accusations of corruption that could bring him down, and some say the Syrians may be unwilling to make the sacrifices Israel would demand.

This month, Mr. Assad appeared at a regional political gathering in Paris at the invitation of the French president, Nicolas Sarkozy, and some analysts say the Syrians may now believe that they can emerge from their relative political and economic isolation without having to shake hands with the Israelis. This is despite the fact that the Bush administration, which accuses Syria of supporting terrorism, has recently added sanctions on the government and its business associates.

But some analysts say they believe that Syria’s economic troubles must figure in the government’s calculations about regional peace.

“The transformation they have in front of them now is enormous,” said Andrew Tabler, a Damascus-based Syria analyst and consulting editor for the magazine Syria Today. “They must move from a state funded by oil revenues to one funded by taxation, and that has to play some role in their thinking.”

It would hardly be surprising: Syria’s oil used to be the mainstay of the government’s income, providing 70 percent of the country’s export earnings. Now it is drying up so fast that Syria is expected to be a net importer of crude oil in just two years, according to the International Monetary Fund.

Already, Syria is importing oil products at record prices, and paying huge subsidies to reduce the cost for its citizens. That is why Syria finally started cutting its ruinous subsidies over the past year, causing prices to rise and resulting in a domino effect on food prices.

Two bad harvests in Syria’s wheat-growing region have added to the problem. In May the government increased public sector salaries and pensions, which had averaged $130 a month for two million recipients, by 25 percent, putting another burden on the budget.

The government has revised the tax system, which was inefficient and ignored in the days when oil filled the government’s financial needs. Rates have been lowered but collections have increased substantially, said Hussein Khaddour, a Damascus lawyer and the president of the Syrian chapter of Junior Chamber International, a business group.

Other efforts have been made to create a more business-friendly environment, including revised laws on intellectual property. Some of the new entrepreneurial activity is visible to any visitor to Syria, though mostly on the high end: dozens of restaurants and boutique hotels have opened in the capital over the past two years.

“In the past 18 months, there has been a much faster liberalization,” said Abdul-Salam Haykal, who leads the Syrian Young Entrepreneurs Association. “People are realizing that the government is not the only provider for them anymore.”

That new activity, Mr. Haykal adds, is creating a new incentive and constituency for a real result to the talks with Israel.

“I think the biggest driver for peace is all this new business development,” he said.

Still, even congenital optimists like Mr. Haykal concede that serious challenges remain. Some investors say they are concerned about a lack of the rule of law and widespread corruption. Plenty of Syrians see any economic consideration as far less important than the need to confront Israel, widely viewed as an imperialist and predatory state.

Even Mr. Zayat, the cinematographer, said he would find it “very hard to accept” seeing an Israeli flag flying in Syria, and he believed that many other Syrians felt the same way.

But he added: “If peace is not achieved, then the possibility of war will always be open and that terrifies me. I fear for the future of my children and my family.”

The US can help tackle Syrian corruption

2008-07-29T01:09:00.001-04:00

The US can help tackle Syrian corruption
Commentary by Andrew J. Tabler
The Daily Star

Today Syria is held out as Iran's "Airstrip One" in the Arab world - an Orwellian island Tehran uses to project its power to Israel's borders and the shores of the Mediterranean. Indeed, Iranian-Syrian relations seem closer than ever - including a newly signed military cooperation agreement. Ties between Damascus and Tehran have deepened over the last two years in the face of US and Western isolation, turning their support for Hizbullah, Hamas and Islamic Jihad into an "axis of resistance" against Israel and the United States

But the recent announcement of indirect talks between Israel and Syria was but the latest sign that Damascus' ties with Tehran - like its ties with all countries - remain ambiguous. A critical way to roll back Iranian influence in Damascus and make a possible Syria-Israel deal worth the paper it's printed on is to recalibrate American policy to address the heart of the Assad regime's economic problems: corruption.

Signs emanating from the Iranian-Syrian alliance this year have been increasingly bizarre - especially when Western and Arab isolation of Syria intensified over Damascus' reticence to help end the presidential gridlock in Lebanon. On February 12, the senior Hizbullah operative Imad Mughniyeh was assassinated in Damascus - a mere stone's throw away from the headquarters of Syria's security services in a country that often claims to be the Arab world's safest. Surprisingly, Damascus branded as "baseless" Tehran's announcement a few days later of a joint Iranian-Syrian investigation, despite Iranian Foreign Minister Manouchehr Mottaki's visit to Damascus the day after the murder. Then a high-profile Iranian project to replace Damascus' aging public bus fleet with Iranian vehicles was mysteriously cancelled and awarded to a Chinese company.

Today, two high-profile Iranian-Syrian joint ventures to assemble automobiles in Syria - the first in the country's history - are barely scraping by due to Syrian government foot dragging on promises to cut tariffs on the plants' imported components. This is particularly odd as the Syrian state owns a 35 percent stake in one of the projects. Even more ambiguous are statistics recently released by Syria's State Investment office which put direct Iranian investment in Syria at $544 million, a mere 8 percent of Arab investment in Syria - a far cry from Iranian reports last year (also citing Syrian government statistics) that estimated Iranian investment at 66 percent of Arab investment in the country.

What can the US do to entice Damascus to keep Tehran at arm's length? Smarten-up its Syria policy. For 40 years, US policy in Syria has focused almost exclusively on Syria's behavior in the region and ignored the regime's looming economic problems. The Assad regime's historic lifeline - oil production - is rapidly running dry. Damascus announced last year it had become a net importer of oil - four years earlier than analysts predicted. In May, the state was forced to slash oil product subsidies, which will make up the lion's share of Syria's estimated 2008 record budget deficit of $3.77 billion.

The only way out of Damascus' looming fiscal crisis is to deepen market reforms and attract international investment. However, rampant corruption continues to hamstring the legal reforms that international businesses need to see before investing on a large scale. A sign that the regime is deeply worried about corruption as well came last February when the state-owned Al-Thawra newspaper published an unprecedented poll in which 99.6 percent of Syrians surveyed accused the state's courts, municipalities and police of corruption.

Iran, which suffers from many of the same problems as Syria, recently announced that it was increasing the value of its hitherto unknown "technical services" to Syria from $1 billion to $3.5 billion. Unfortunately for Syria's leadership, such assistance is a poisoned chalice that is only likely to satisfy the corruption that undermines the market reforms necessary to stave off the regime's eventual economic collapse.

Washington's recent seizure of the assets of senior Syrian officials in the US, as well as the decades-old European Union and United Nations assistance programs in Syria, have yet to entice the regime to clean up its stables. The US, which has no economic assistance programs in Syria, should prepare to step in in the event of a Syria-Israel deal as an outside and experienced player to help promote the rule of law in Syria. This would help Syria attract much-needed foreign investment, integrate it into the global economy, reduce unemployment and earn the US points with the Syrian people. To lay the groundwork and compete with Iran in Syria ahead of a possible Syria-Israel deal, the US should also recalibrate trade sanctions on Syria to help its companies that shun corruption and business with Iran to more easily do business with America.

Understanding an Arab country's economic woes and their impact on policy should be old hat for Washington. A key reason why Egyptian President Anwar Sadat attacked Israel in 1973 and then sued for peace five years later was that decades of war and domestic authoritarian rule had put Egypt on its back economically. The US understood this and manipulated the situation to its advantage when it brought about a breakthrough in Middle East peacemaking at Camp David in 1979. The US and its allies should plan to do the same with Syria in the years to come.

Andrew Tabler is consultant editor of Syria Today magazine and a former fellow of the Washington-based Institute of Current World Affairs. He is author of the recent Stanley Foundation report: "The High Road to Damascus: Engage Syria's Private Sector." He wrote this commentary for THE DAILY STAR.

Red lines that cannot be crossed

2008-07-27T13:14:00.003-04:00

A story summing up the quiet crackdown on freedom of expression and the press in Syria over the last few months.

Red lines that cannot be crossed
Jul 24th 2008 | DAMASCUS
From The Economist print edition

The authorities don’t want you to read or see too much
FOR “defaming and insulting the administrative bodies of the state”, the president of the Syrian Centre for Media and Freedom of Expression, Mazen Darwish, was recently sentenced to a salutary ten days in jail. His real crime was to report on riots in an industrial town near Damascus, Syria’s capital. Reporters Without Borders, a Paris-based lobby, said his case brought the number of journalists and “cyber dissidents” imprisoned in Syria to seven.

Mr Darwish may have got off lightly. In May Tareq Bayassi, aged 24, was jailed for three years for publishing “false news” on the internet after being detained without trial for almost a year. “The real reason for the sentence,” says another lobby, the online Committee to Protect Bloggers, “was his having posted an article on the shortcomings of the Syrian secret service.”

For several years Syria has been an enemy of the internet. The security services keep opposition figures and even ordinary bloggers under surveillance. The main internet service-provider bans 100-plus websites. Most sites carping at President Bashar Assad’s government are silenced, as are many Kurdish and Islamist sites. A yellow screen flashes up with the words “Access Denied”.

Even popular social networking sites such as Facebook and YouTube were banned last year without explanation. They may be available at some of Syria’s many internet cafés, but the secret services are scrutinising them ever more closely. Surfing aficionados still manage to get access to the sites by using proxy addresses, but this can be tediously slow.

The latest casualties include the Arabic version of the reference site Wikipedia and Israel’s most liberal newspaper, Haaretz. “There’s not much logic about it,” said a Western telecoms engineer working in Syria, who had tried to reach the Logitech computer-hardware site without success. Hotmail has at times also been banned, though Yahoo! Mail has been untouched. The worldwide bookseller Amazon.com is blocked, yet—bizarrely—the company’s British website is open. Meanwhile, Syria’s government has signed a contract with a Chinese company to provide another 33,000 sought-after broadband lines.

Amid the confusion of what is banned or what is not, the cyber-sands often shift. A magazine in Damascus recently withdrew a story about the opposition and reprinted an altered issue after officials objected. “We thought it was quite favourable to the government as it was saying how weak and fragmented the opposition is,” says the editor. “It just shows how the red lines move.”

But in some areas there are signs of a tentative relaxation. The government has licensed several private radio stations, such as Mix FM, with its “Proud 2B Syrian” slogan. Amid an eclectic mix of Western rock, hip-hop and dance music, young, English-speaking presenters host live phone-ins of mostly idle chit-chat. Other talk shows have begun to tackle more delicate topics, such as the unpopular relocation of Damascus’s main bus station. That, so far, is about as daring as you can get.

News roundup: Signs of Mideast Shift

2008-07-19T02:13:00.007-04:00

NEWS ANALYSIS
Talks Signal Mideast Shift
By MICHAEL SLACKMAN
BEIRUT, Lebanon — After years of escalating tensions and bloodshed, the talk in the Middle East is suddenly about talking. The shift is still relatively subtle, but hints of a new approach in the waning months of the Bush administration are fueling hopes of at least short-term stability for the first time since the invasion of Iraq in 2003.
Much is happening, adding up not to any great diplomatic breakthrough, but to a distinct change in direction. Syria is being welcomed out of isolation by Europe and is holding indirect talks with Israel. Lebanon has formed a new government. Israel has cut deals with Hamas (a cease-fire) and Hezbollah (a prisoner exchange).
On Wednesday, the United States agreed to send a high-ranking diplomat to attend talks with Iran over its nuclear program, and was considering establishing a diplomatic presence in Tehran for the first time since the 1979 revolution and hostage crisis.
“The overall picture is moving in the direction of cooling the political atmosphere,” said Muhammad al-Rumaihi, a former government adviser in Kuwait and the editor of Awan, an independent daily newspaper there.
Many underlying problems, including the Palestinian-Israeli conflict, are not on the verge of resolution. Afghanistan has recently seen a sharp spike in violence. In the Middle East, optimism can fill the void left by even a temporary lull in violence, like the recent — and still fragile — stability gains in Iraq. Nevertheless, not long ago, the fear was that Lebanon would descend into civil war and that either Israel or the United States, or both, would attack Iran. That seems less likely at the moment.
The United States, Israel and some of their European allies have begun to recognize that their policy of trying to defeat their enemies by isolating and vilifying them has failed.
The West’s opponents — Iran, Syria, Hezbollah and Hamas — also appear to recognize that the cost of ratcheting up tensions may be too high. Syria and Iran are suffering serious economic problems and could benefit from better relations with the United States and Europe. “We are seeing the outlines of a general thaw in the region,” said Osama Safa, director of the Lebanese Center for Policy Studies in Beirut.
This is not necessarily good news for Washington’s traditional Arab allies, including Egypt and Saudi Arabia. Leaders there were content to have the United States keep pressure on Iran, Hezbollah and Hamas, which threaten their own power.
But it represents a pragmatic recognition among Western nations, analysts said, that those deemed rogues in the West have often generated popular support in the region. Hamas, Hezbollah and Egypt’s Muslim Brotherhood have repeatedly shown nimble political instincts that have allowed them to exploit democratic openings urged by Washington to enhance their influence.
There is also recognition that the players who can deliver in hot spots like Iraq, Lebanon and Gaza are the same ones that Washington had shunned — Syria, Iran, Hezbollah and Hamas.
“You may have to deal with governments on political issues, but when it comes to security, they have to deal with nonstate actors like Hezbollah and Hamas,” Mr. Safa said.
Simon Karam, a former Lebanese ambassador to Washington, said Hezbollah and Hamas also seemed to have followed the path taken by Yasir Arafat and his Palestine Liberation Organization, which was also condemned as a terrorist group before it found its place at the negotiating table.
“I witnessed a similar process with regard to P.L.O., Fatah and Arafat,” Mr. Karam said. “Both Americans and Israelis are more inclined to accept the status quo.”
Not long ago, for example, when Fatah leaders negotiated a cease-fire with Israel, it was Hamas that had to be pressed to abide by the truce. Now Hamas, having negotiated a cease-fire with Israel in Gaza, has tried to rein in groups like Islamic Jihad.
The United States and Israel may have failed to dislodge Hamas from Gaza, weaken Hezbollah in Lebanon, stop Iran’s nuclear program or force any pronounced change of behavior in Syria. Yet, each of those players has now seen it is in its interests to deal, too. The process of talks confers on them new diplomatic and political status, but maintaining that status requires some moderation in their policies.
The emerging phase in Middle Eastern dynamics was on display on Wednesday. Emotions ran high when Israel and Hezbollah completed the deal to trade five Lebanese prisoners for two coffins with the remains of the Israeli soldiers captured two years ago. It was a clear Hezbollah victory, yet it was also seen in Lebanon as a deal to reduce the chances of a fresh cross-border conflict, analysts said.
On the same day, the United States announced that it would send William J. Burns, the under secretary for political affairs at the State Department, to attend talks with Iran over its nuclear program. The White House said there would be no negotiating. But that did little to mask the new approach, and was undermined by the talk of establishing limited diplomatic ties with Tehran.
“The presence of the representative is a move towards calm between Iran and the United States, especially within the Iraqi context,” said Mr. Rumaihi, the former Kuwaiti government adviser. “The Iraqi scene is also witnessing a political cooling through the announcement made by the Emirates, Bahrain and finally Kuwait about sending ambassadors to Iraq.”
Events in this part of the world can change quickly. Lebanon could erupt next spring, when parliamentary elections are scheduled. If diplomatic overtures to Iran fail to dissuade it from pursuing what the West fears is a nuclear weapons program, military options could again take center stage.
Some analysts suspect that Israel and the United States may be trying to placate their other enemies in advance of a military strike on Iran that they consider all but inevitable. But these days, for everyone who sees diplomacy as a cover for military action, someone else sees saber rattling as a cover for compromise.
“The Arab side is unable to grasp the speed with which the change is happening,” said Salama Ahmed Salama, a daily columnist in Al Ahram, Egypt’s largest state-controlled newspaper. “Newspapers in Egypt and Saudi are all talking about the coming war between the United States and Israel on the one hand and Iran on the other. They can’t understand that a compromise can happen at any time.”
Mona el-Naggar contributed reporting from Cairo.

Report: U.S. to station diplomats in Iran for first time since 1979

By Barak Ravid, Haaretz Correspondent, and The Associated Press

The United States intends to station diplomats in Iran for the first time since the 1979 Islamic Revolution which saw a severence of ties between the two countries, The Guardian reported on Thursday.

The move would be a step in the direction of setting up a full embassy in Iran, a dramatic political shift for the Bush administration, which has spent the last few years guiding international pressure on Tehran over its contentious nuclear program.

The Guardian report comes a day after the U.S. announced plans to send a senior envoy to meet with a senior Iranian representative to discuss Iran's nuclear program, an announcement met with concern in Israel.

"There is a bad feeling in Israel and dissatisfaction with the U.S. move," Israel told senior Washington officials, according to a source in Jerusalem. "There can be no concession on the demand to end uranium enrichment as a precondition to negotiating with Iran," Israel added.

UN Security Council members, Germany and the European Union have been holding regular meetings with Iranian representatives, and U.S. Under Secretary of State William Burns, considered No. 3 in the State Department, will be participating for the first time.

The U.S. informed Israel of its plans to send Burns to the talks, emphasizing that this is a one-time meeting and not a change in policy.

The source said the Americans considered the talks "feelers" to test whether it should be speaking with Iran.

The U.S. also claims it is sending an envoy to the talks because it "doesn't trust" the reports from EU foreign policy chief Javier Solana, the liaison with the Iranians. The Americans said Solana "pulls the wool over our eyes," according to the source in Jerusalem.

Israel emphasized to the U.S. that "there is great importance in maintaining the international demand to suspend uranium enrichment, as mandated by the UN resolution, as a precondition to entering negotiations with Iran. We believe there can be no concession on this demand," the source said. The Americans responded that "the condition remains."

Iranian FM in Syria for talks with Assad
Iran's foreign minister arrived in Damascus on Thursday for talks with Syrian President Bashar al-Assad that will likely cover Tehran's disputed nuclear program.

Manouchehr Mottaki said on arrival Thursday that he'll discuss the latest Mideast developments with Assad.

But the two are also expected to discuss a request by the French president that Assad help persuade Tehran to cooperate with the international community over its nuclear ambitions.

French President Nicolas Sarkozy met Assad at a Euro-Med summit last weekend in Paris. Assad promised to relay the request from France to Tehran.

Syria and Iran are close allies, but Assad has expressed doubt that his intervention can help in a fierce standoff between Iran and the West.

Iran and U.S. Signaling Chance of Deal
By Glenn Kessler_Washington Post Staff Writer_Thursday, July 17, 2008; A16

President Bush's decision to shift policy and send a senior U.S. envoy to nuclear talks with Iran this weekend was made after increasing signs that Iran was open to possible negotiations and that international sanctions were having an impact on the Islamic republic, U.S. officials said yesterday.
Secretary of State Condoleezza Rice pushed for the move in a meeting on Monday of Bush's top aides, and Bush's support suggests he increasingly is determined to put aside a possible military strike in an effort to reach a deal to end Iran's nuclear program in his final six months in office. In recent weeks, the White House already has approved a sweetened package of incentives to Iran that included a pledge to refrain from the use of force, supported a European gambit to begin preliminary talks with Iran and sent clear signals to Israel not to consider acting against Iran on its own.
For more than two years, the Bush administration has had the same bottom line: Iran must suspend its enrichment of uranium -- a route to a nuclear weapon -- before serious talks can begin. U.S. officials insisted yesterday that such a demand, also shared by European allies, had not changed, but the diplomatic lines have become sufficiently hazy that if negotiations start in earnest, Iran will also be able to claim a diplomatic victory.
Iran last week sent its own mixed signals, test-firing long-range missiles in the Persian Gulf while appearing conciliatory on possible negotiations.
With negotiations now a real possibility, the Bush administration, which had largely subcontracted the nuclear diplomacy with Iran to its European partners, also appears intent on making sure that Iran hears its voice directly, rather than having it filtered by other interlocutors. The international coalition seeking talks with Iran -- Britain, France, Germany, Russia, China and the United States -- is an unwieldy group with different interests and expectations in negotiations, and so U.S. officials wanted to ensure that the preliminary talks did not veer off course and lose sight of the suspension demand.
The chief negotiator is E.U. foreign policy chief Javier Solana. When he delivered the revised package of incentives to Iran last month, he was accompanied by senior foreign policy officials of the other five countries, but not the United States. Now, Undersecretary of State William J. Burns, the State Department's third-ranking official, will join the group meeting with Saeed Jalili, Iran's nuclear negotiator, in Geneva.
"The substance remains the same, but this is a new tactic," said White House spokeswoman Dana Perino. She added: "What this does show is how serious we are when we say that we want to try to solve this diplomatically."
Bush accepted Rice's recommendation at the closely held meeting, which also included Vice President Cheney, national security adviser Stephen J. Hadley, White House chief of staff Joshua B. Bolten and Burns. The move infuriated the administration's conservative critics, who said it was yet another sign the White House has lost its moorings.
"This is a complete capitulation on the whole idea of suspending enrichment," said former U.N. ambassador John R. Bolton. "Just when the administration has no more U-turns to pull, it does another."
But former State Department counselor Philip D. Zelikow said the decision is a natural evolution. "For some time, we and our allies have been reflecting on ways to reinforce that basic approach while taking away some of the more superficial complaints about it. This move does that. But the substantive position remains unchanged," he said.
U.S. officials said they felt comfortable making this shift because there are increasing signs that sanctions are beginning to harm Tehran, such as the decision last week by France energy giant Total SA to abandon plans to develop a liquefied natural gas project in Iran.
At the same time, however, the administration has sufficiently moderated its own position on how to proceed with talks.
In 2006, the initial package of incentives offered by the six countries included only a vague reference to Iran's security concerns because the Bush administration insisted that section of the offer be largely gutted. The new package, by contrast, offers to negotiate extensive security commitments, including supporting Iran in "playing an important and constructive role in international affairs."
The administration has also supported Solana's concept of a "freeze for a freeze," a six-week interim period for preliminary talks that blurs the lines between suspension and discussion. Under Solana's plan, talks could begin as long as the allies halt efforts to increase sanctions and Iran does not expand its nuclear program. Then formal negotiations would begin as soon as Iran suspended enrichment.
Thus, Iran could say it only suspended its program in the midst of talks, while the United States could say talks did not begin until nuclear activities were suspended -- allowing both sides to save face.
Iran insists that its nuclear program is aimed at generating electricity, not weapons, and thus far its official response has disappointed U.S. and European officials.
Iranian Foreign Minister Manouchehr Mottaki, in a three-page letter responding to the June offer made public this week by a French magazine, did not directly address the demand to suspend enrichment.
Instead, he called for a comprehensive dialogue, saying, "The time for negotiating from the condescending position of inequality has come to an end."

July 16, 2008
OP-ED COLUMNIST
So Popular and So Spineless
By THOMAS L. FRIEDMAN
Much ink has been spilled lately decrying the decline in American popularity around the world under President Bush. Polls tell us how China is now more popular in Asia than America and how few Europeans say they identify with the United States. I am sure there is truth to these polls. We should have done better in Iraq. An America that presides over Abu Ghraib, torture and Guantánamo Bay deserves a thumbs-down.
But America is not and never has been just about those things, which is why I also find some of these poll results self-indulgent, knee-jerk and borderline silly. Friday’s vote at the U.N. on Zimbabwe reminded me why.
Maybe Asians, Europeans, Latin Americans and Africans don’t like a world of too much American power — “Mr. Big” got a little too big for them. But how would they like a world of too little American power? With America’s overextended military and overextended banks, that is the world into which we may be heading.
Welcome to a world of too much Russian and Chinese power.
I am neither a Russia-basher nor a China-basher. But there was something truly filthy about Russia’s and China’s vetoes of the American-led U.N. Security Council effort to impose targeted sanctions on Robert Mugabe’s ruling clique in Zimbabwe.
The U.S. put forward a simple Security Council resolution, calling for an arms embargo on Zimbabwe, the appointment of a U.N. mediator, plus travel and financial restrictions on the dictator Mugabe and 13 top military and government officials for stealing the Zimbabwe election and essentially mugging an entire country in broad daylight.
In the first round of Zimbabwe’s elections, on March 29, the opposition leader, Morgan Tsvangirai, won nearly 48 percent of the vote compared with 42 percent for Mugabe. This prompted Mugabe and his henchmen to begin a campaign of killing and intimidation against Tsvangirai supporters that eventually forced the opposition to pull out of the second-round runoff vote just to stay alive.
Even before the runoff, Mugabe declared that he would disregard the results if his ZANU-PF party lost. Or as he put it: “We are not going to give up our country because of a mere X” on some paper ballot.
And so, of course, Mugabe “won” in one of the most blatantly stolen elections ever — in a country already mired in misrule, unemployment, hunger and inflation. Some 25 percent of Zimbabwe’s people have now taken refuge in neighboring states. (I have close friends from Zimbabwe, and one of my daughters worked there in an H.I.V.-AIDS community center in January.) The Associated Press reported in May from Zimbabwe “that annual inflation rose this month to 1,063,572 percent, based on prices of a basket of basic foodstuffs.” Zimbabwe’s currency has become so devalued, the A.P. explained, that “a loaf of bread now costs what 12 new cars did a decade ago.”
No matter. Vitaly Churkin, Russia’s U.N. ambassador, argued that the targeted sanctions that the U.S. and others wanted to impose on Mugabe’s clique exceeded the Security Council’s mandate. “We believe such practices to be illegitimate and dangerous,” he said, describing the resolution as one more obvious “attempt to take the Council beyond its charter prerogatives.” Veto!
Mugabe’s campaign of murder and intimidation didn’t strike Churkin as “illegitimate and dangerous” — only the U.N. resolution to bring a halt to it was “illegitimate and dangerous.” Shameful. Meanwhile, China is hosting the Olympics, a celebration of the human spirit, while defending Mugabe’s right to crush his own people’s spirit.
But when it comes to pure, rancid moral corruption, no one can top South Africa’s president, Thabo Mbeki, and his stooge at the U.N., Dumisani Kumalo. They have done everything they can to prevent any meaningful U.N. pressure on the Mugabe dictatorship.
As The Times reported, America’s U.N. ambassador, Zalmay Khalilzad, “accused South Africa of protecting the ‘horrible regime in Zimbabwe,’ ” calling this particularly disturbing given that it was precisely international economic sanctions that brought down South Africa’s apartheid government, which had long oppressed that country’s blacks.
So let us now coin the Mbeki Rule: When whites persecute blacks, no amount of U.N. sanctions is too much. And when blacks persecute blacks, any amount of U.N. sanctions is too much.
Which brings me back to America. Perfect we are not, but America still has some moral backbone. There are travesties we will not tolerate. The U.N. vote on Zimbabwe demonstrates that this is not true for these “popular” countries — called Russia or China or South Africa — that have no problem siding with a man who is pulverizing his own people.
So, yes, we’re not so popular in Europe and Asia anymore. I guess they would prefer a world in which America was weaker, where leaders with the values of Vladimir Putin and Thabo Mbeki had a greater say, and where the desperate voices for change in Zimbabwe would, well, just shut up.

Press Roundup on Assad's Paris visit

2008-07-16T02:03:00.003-04:00

With expectations of a diplomatic breakthrough running high following Syrian President Bashar al Assad’s state visit to Paris, Andrew Butters hits the nail on the head with this part of his dispatch from Damascus.

“The Assad regime only wants a package deal, a grand bargain between Syria and Iran on the one hand, and America and Israel on the other, that would settle the cold war for the Middle East. This means that the United States would have to give up once and for all its project for a "new" Middle East, and its penchant for regime change. That might happen on its own in November if Barack Obama becomes president. But a package deal would also have to solve the Iranian nuclear issue, map out the future of post-American Iraq, solve the Syrian-Israeli conflict, the Lebanese-Israeli conflict, and the Palestinian-Israeli conflict all in one go. Would any American president, or any world leader, be able to pull that off in two years?”

Beirut cool on Syria embrace
Nicholas Blanford, Foreign Correspondent

BEIRUT // Lebanon has generally welcomed the announcement that Beirut and Damascus will establish formal diplomatic relations for the first time, but many Lebanese yesterday remained sceptical that any raproachment will change the way Syria deals with its tiny neighbour.__The announcement by Lebanon’s President, Elia Suleiman, and his Syrian counterpart, Bashar al Assad, after a landmark meeting on the sidelines of the Mediterranean summit in Paris on Sunday was greeted with scepticism that it will make any difference and questioning by others as to why two “sisterly” countries need diplomatic relations at all.
“It is not true that confidence has been established with the declaration of intentions to set up diplomatic ties,” said Fares Soaid, co-ordinator for the anti-Syrian March 14 parliamentary bloc. He said “correcting relations with Syria requires more than just setting up diplomatic ties”.__Walid Muallem, the Syrian foreign minister, is expected in Beirut soon to formally hand over an invitation to Michel Suleiman, the Lebanese president, to visit Damascus, an act that will help further cement the spirit of rapprochement between the two countries after years of tension.
But an exchange of embassies still leaves numerous other outstanding issues to be resolved. __The most pressing demand of anti-Syrian Lebanese politicians is the demarcation of Lebanon’s border with Syria. __The border was drawn up by French military geographers in 1920 and generally follows the peaks of the Anti-Lebanon mountain chain. But its path has never been clearly marked on the ground with border pillars, giving rise to numerous local disputes between Syrian and Lebanese landowners.
A report put out by an anti-Syrian advocacy group last year claimed that Syria still occupies at least 460sqkm of Lebanese territory along the border.__The remote border also is home to Hizbollah training areas and several bases belonging to pro-Damascus Palestinian groups. It is regarded as a major conduit for the flow of weapons and militants into Lebanon. __The United Nations has repeatedly called for the demarcation of the border, principally because it will help resolve the sovereignty of the Israeli-occupied Shebaa Farms, which lies along Lebanon’s south-east border with the Syrian Golan Heights.
Syria has said it is willing to demarcate the border, but insists that the process begin in the north near the Mediterranean coast, leaving the Shebaa Farms district until last.__A summit of French, Syrian, Lebanese and Qatari leaders in Paris on Saturday side-stepped the subject of border demarcation, apparently unwilling to dampen the glow of the announcement over a diplomatic exchange between Beirut and Damascus.
“This is a very big issue. The thing that holds the Syrian regime politically to Lebanon is the border issue because it involves Shebaa and thus the conflict with Israel,” said Andrew Tabler, a Beirut-based political analyst focusing on Syria.__The promised diplomatic exchange is a “step in the right direction”, Mr Tabler said, “but until the border issue is resolved, it will be hard to move on fully”.
Indeed, some analysts suspect that Syria’s agreeing to a diplomatic exchange with Lebanon is more related to currying favour with France and Europe and deflecting potential threats to the regime rather than changing the way it traditionally exerts influence in Lebanon.__Walid Jumblatt, leader of Lebanon’s Druze and a harsh critic of the Syrian regime, warned that diplomatic ties can not come at the expense of the international tribunal being established to judge the accused killers of Rafik Hariri, a former Lebanese prime minister who was assassinated in Feb 2005. Syria is the chief suspect in the killing, although Damascus has denied involvement.“Normal relations between Lebanon and Syria can be established after the truth is revealed,” Mr Jumblatt said, referring to Hariri’s murder.
The tribunal has yet to begin operating, although the United Nations authorised its establishment more than a year ago. Some anti-Syrian Lebanese suspect that the tribunal is being used by the West as a bargaining chip, allowing it to be dropped or weakened if Syria moderates some of its regional stances.__Lebanon and Syria have never exchanged embassies even though both countries gained independence from France in the 1940s.
Syria traditionally has had difficulty in recognising Lebanon’s independence, believing that Lebanon is an integral part of the Syrian “motherland”. That view hardened with the rise to power in 1963 of the Baath Party, which proposes a Greater Syria that includes Lebanon as well as Israel, Jordan, Iraq, Kuwait and Cyprus. __Syria continues to exert strong influence in Lebanon through its extensive network of allies, ranging from traditional political bosses to powerful parties such as Hizbollah. But some in Lebanon believe that formal diplomatic ties are unnecessary between two nations so closely related.
“Is it not silly to have diplomatic relations between Lebanon and Syria?” said Sheikh Ahmad Qabalan, the Shiite mufti. “Since when do brothers need mediation to deal with each other? And who said that relatives need diplomatic relations?”_

With whom will Syria make peace?
By Haaretz Editorial

The peace between Israel and Syria has in the past few days seemed closer and farther away than at any other time. Each side has passed messages to the other that bear witness to the seriousness of their intentions, the teams have been in contact for several months through Turkish mediation, and in Paris this week, Syrian and Lebanese journalists spoke with Israeli journalists almost without any interference. At the same time, Ehud Olmert was striving for personal contact with Bashar Assad, but to no avail - because the Syrian president considers Olmert a weak prime minister, and he does not sell his gestures on the cheap.

The Paris summit convened by the French president this week perhaps did not strengthen the Olmert government, but it definitely allowed the Syrian president to enter Europe by the front door. That is what Assad said in an interview with the French newspaper Le Figaro, and it seems that his assessment was not incorrect.

The isolated Assad arrived in Paris like a hero, even though he had not changed anything substantive in his diplomatic conduct. The disdainful attitude shown by Israel with regard to Assad's leadership ability, at the inspiration of the Americans, apparently came to an end, along with the conclusion of George W. Bush's term.

Assad demonstrated control of the situation, and with perfect timing brought about the establishment of a unity government in Lebanon a few days before he was invited to attend the Bastille Day military parade. In the eyes of the Europeans, he is perceived today as a leader who can mediate between them and Iran, who can make decisions and put them into effect. The aim is to get him to lead Syria in a direction that fits both his own interests and those of the West.

Syria's serious attitude toward peace talks with Israel found expression in Paris this week in Assad's public declarations of peace, in the indirect talks that are continuing through Turkey, and in the fact that the Israeli attack on nuclear facilities in Syria and the assassination of Imad Mughniyah did not make Assad change direction. Syria has apparently decided that it is in its interest to join the West, and peace talks with Israel are one of many means of doing so.

More than at any other time in the past, it seems the ball is in Israel's court - but this court is covered in thick political mud. In actual fact, there is no government right now in Israel. The government in Jerusalem is a transition government with which it is possible to hold talks, but difficult to reach arrangements. The talks with Syria through the offices of the Turks are being conducted by the prime minister's bureau. Yoram Turbowicz and Shalom Turgeman are Olmert's personal confidants, who will be replaced in two months by the personal aides of the next prime minister. This unfortunate fact is also known to the Syrian president.

All one can demand now is that all those who aspire to be elected prime minister of Israel - whether in Kadima, the Labor Party or Likud - should reveal publicly what their current position is on the continuation of talks with Syria. It is worthwhile reminding them that it is forbidden to miss chances for peace, and that the price for peace with Syria is clear.

The price for not having peace with Syria became clear in the Second Lebanon War, and it is likely to become clear in the third and fourth war in the region. An improvement in relations with any of the Arab countries contributes to Israel's security more than any reservoir of weapons that Israel has at its disposal.

FIGHTING WORDS
The War Between the Wars
Who says we can only face our enemies in one place at a time?
By Christopher Hitchens
Posted Monday, July 14, 2008, at 11:07 AM ET

If there is one element of moral and political certainty that cements the liberal consensus more than any other, it is the complacent view that while Iraq is "a war of choice," it is really and only Afghanistan that is a war of necessity. The ritualistic solidity of this view is impressive. It survives all arguments and all evidence. Just in the last month, as the Iraqi-based jihadists began to beat a retreat and even (according to some reports) to attempt to relocate to Afghanistan and Pakistan, it still seemed to many commentators that this proved that no U.S. forces should have been wasted on Iraq in the first place. This simplistic view ignores, at a minimum, the following points:
0. Many of the al-Qaida forces—most notably the horrific but now deceased Abu Musab al-Zarqawi—made their way to Iraq in the first place only after being forcibly evicted from Afghanistan. Thus, if one did not want to be confronting Bin Laden fans in Mesopotamia, it was surely a mistake to invade Afghanistan rather than Iraq.
0. The American presence in Afghanistan is not at all "unilateral"; it meets every liberal criterion of being formally underwritten and endorsed and armed and reinforced by our NATO and U.N. allies. Indeed, the commander of the anti-Taliban forces is usually not even an American. Yet it is in these circumstances that more American casualties—and not just American ones—are being experienced than are being suffered in Iraq. If this is so, the reason cannot simply be that our resources are being deployed elsewhere.
0. Many of the most successful drives against the Taliban have been conducted by American forces redeployed from Iraq, in particular from Anbar province. But these military victories are the result of counterinsurgent tactics and strategies that were learned in Iraq and that have been applied triumphantly in Afghanistan.
In other words, any attempt to play off the two wars against each other is little more than a small-minded and zero-sum exercise. And consider the implications. Most people appear now to believe that it is quite wrong to mention Saddam Hussein even in the same breath as either a) weapons of mass destruction or b) state-sponsored terrorism. I happen to disagree, but just for an experiment, let us imagine that some regime did exist or did arise that posed such a combination of threats. (Actually, so feverish is my imagination that I can even think of one whose name also begins with I.) Would we be bound to say, in public and in advance, that the Western alliance couldn't get around to confronting such a threat until it had Afghanistan well under control? This would be rather like the equivalent fallacy that nothing can be done in the region until there is a settlement of the Israel-Palestine dispute. Not only does this mean that every rogue in the region can reset his timeline until one of the world's oldest and most intractable quarrels is settled, it also means that every rogue has an incentive to make certain that no such settlement can ever occur. (Which is, of course, why Saddam threw, and now the Iranians throw, their support to the suicide-murderers.)
It would also be very nice to accept another soft-centered corollary of the Iraq vs. Afghanistan trade-off and to believe that the problem of Afghanistan is a problem only of the shortage of troops. Strangely, this is not the view of the Afghan government or of any of the NATO forces on the ground. The continued and, indeed, increasing insolence of the Taliban and its al-Qaida allies is the consequence of one thing and one thing only. These theocratic terrorists know that they have a reliable backer in the higher echelons of the Pakistani state and of its military-intelligence complex and that while this relationship persists, they are assured of a hinterland across the border and a regular supply of arms and recruits.
So, the question for Sen. Barack Obama and his glib supporters is this: Would they solve this problem by removing the American forces from Iraq and putting the thereby-enhanced contingent there to patrol a frontier where one of our main "allies" is continually engaged in stabbing them in the back? (At one point last year, Obama himself appeared to accept the illogic of his own position and spoke hotly of the possibility of following the Taliban onto Pakistani soil. We haven't heard much of that lately. Did he mean to say that, come to think of it, we had enough troops to occupy three countries instead of the stipulated and solitary one? Or would he just exchange Iraq for Pakistan? At least we do know for sure that Pakistan has nuclear weapons acquired mainly by piracy and is the host and patron of the Taliban and al-Qaida.)
Another consideration obtrudes itself. If it is true, as yesterday's three-decker front-page headline in the New York Times had it, that "U.S. Considering Stepping Up Pace of Iraq Pullout/ Fall in Violence Cited/ More Troops Could Be Freed for Operations in Afghanistan," then this can only be because al-Qaida in Iraq has been subjected to a battlefield defeat at our hands—a military defeat accompanied by a political humiliation in which its fanatics have been angrily repudiated by the very people they falsely claimed to be fighting for. If we had left Iraq according to the timetable of the anti-war movement, the situation would be the precise reverse: The Iraqi people would now be excruciatingly tyrannized by the gloating sadists of al-Qaida, who could further boast of having inflicted a battlefield defeat on the United States. I dare say the word of that would have spread to Afghanistan fast enough and, indeed, to other places where the enemy operates. Bear this in mind next time you hear any easy talk about "the hunt for the real enemy" or any loose babble that suggests that we can only confront our foes in one place at a time.
Christopher Hitchens is a columnist for Vanity Fair.

Iran calls Syrian-Israeli talks "unaccpetable", EU dangling Association Agreement

2008-07-14T15:49:00.005-04:00

Its not just Lebanese who are complaining about President Assad's coming out of isolation party in Paris. Syria's ally Iran is voicing concern over Assad's remarks in Paris that a peace treaty with Israel would include normalized relations with embassies in each capital.

This all puts the cart before the horse .. Assad has made it clear he will not negotiate with Israel unless US officials from the incoming administration (read post January 2009) are in the room. Even in that event, Assad further qualified his peace overtures by saying negotiations could take from "six months to two years."

The EU's Solana has said that everyone's "behavior" before the end of the year will determine if the long delayed Syria-EU Association Agreement will be ratified by the European legislators, who have delayed voting on the agreement following Rafik Hariri's assassination and Damascus' imprisonment of political dissidents. Merkel, more skeptical, says she wants to see "deeds" and not just words.

Meanwhile... former US Ambassador to Syria Ted Kattouf - who now heads AMIDEAST, whose Damascus offices Syria closed in November 2006 - now advocates talking about "everything" - the "broad horizon of issues" (a.k.a. Grand Bargain) Damascus has spent the last two years asking for behind closed doors.

Iranian official: Talks between Syria and Israel unacceptable
Jul 14, 2008, 10:09 GMT

Riyadh - Iran is unhappy about ongoing indirect talks between Syria and Israel and believes that any ensuing peace agreement would lead to radical changes in Syrian-Iranian relations, an Iranian official said in remarks published Monday.
Hussein Shariatmadari, an advisor to Iran's spiritual leader Ayatollah Ali Khamenei, told the Saudi daily Asharq al-Awsat that Tehran was unhappy that Islamic countries like Syria and Turkey were holding talks with Israel.
'We always say there is no country called Israel in the region. This country is called Palestine. So, it is normal that we reject any negotiations between an Islamic state, like Syria or Turkey, and an illegitimate, non-existent state,' Shariatmadari said.
Negotiations between Israel and Syria are not comparable to the talks that Lebanon's militant group Hezbollah and the Palestinian radical group Hamas are holding with the Israelis over a prisoner exchange and a truce deal in the Gaza Strip.
'Negotiations over prisoner exchange does not mean that Hezbollah recognizes Israel. Hamas too, like Iran and Hezbollah, does not recognize a thing called Israel. A truce agreement is not a recognition of the state of Israel,' the Iranian official said.
Relations between Syria and Iran will be subject to radical changes if Damascus signs a peace agreement with Israel, Shariatmadari said but added that this was his personal view.
'But I think that the signing of such an agreement would be also against the opinion of Iran, the Iranian government and the Iranian people,' he added.
Syrian President Bashar al-Assad has said that Damascus would establish normal relations, including the opening of embassies, if a peace agreement was sealed with Israel.
Al-Assad made his comments on Sunday in Paris where he attended the inauguration of an EU-Mediterranean union that brings together northern and southern countries that ring the sea, including Syria and Israel.
Both countries are currently involved in indirect peace talks brokered by Turkey.

EU says early partnership pact possible with Syria
Sun 13 Jul 2008, 17:20 GMT

By David Brunnstrom
PARIS, July 13 (Reuters) - The European Union could sign a long-stalled partnership pact with Syria this year, EU foreign policy chief Javier Solana said on Sunday at a Paris summit that marked a new detente between Europe and Damascus.
"It will depend very much of the behaviour of everybody from here, let's say until the end of the year," Solana said, hailing the agreement on the exchange of ambassadors as significant.
Asked if it was possible to sign the accord by then, he told reporters: "I don't want to say if it's possible today or tomorrow, but I think it's possible."
German Chancellor Angela Merkel told reporters later she had insisted in a meeting with the Syrian leader "that we (the EU) want to see deeds".
Neither Solana nor Merkel specified what conditions they were putting on further rapprochement but the EU is concerned that it should prevent arm smuggling across its borders to Lebanon's Hezbollah group which is backed by Syria and Iran.
"France is basically saying, 'Let's test this guy'. The hope is that the test will be a positive one," a diplomat said.
However on Saturday Assad played down prospects of any early breakthrough with Israel.
He said he did not expect direct negotiations with Israel for the next six months until U.S. President George W. Bush is out of office because the current administration was not interested in Middle East peace.

France launches Med Union with high hopes
Syrian President Bashar al-Assad was to attend the Paris opening conference with over 40 other leaders including Israeli Prime Minister Ehud Olmert, the first time Israeli and Syrian leaders will have been in the same room. The two countries recently began indirect peace talks with Turkish mediation…..
But the Paris summit, a diplomatic success for French President Nicolas Sarkozy, who holds the EU's rotating presidency, may be richer in symbolism than substance, at least to start with.
France and Egypt will be the first countries to co-chair the new body, but details such as the location and powers of its secretariat remain to be resolved, and the Middle East conflicts that bedevilled past EU-Mediterranean cooperation loom large.
The French leader booked a first success on Saturday when he hosted talks between Assad and Lebanese President Michel Suleiman, who agreed to normalise relations between Damascus and Beirut for the first time since independence in 1943.
"We can say that Lebanon has moved from being a zone of turbulence, a war zone, to a more pacified zone where the Lebanese, and only the Lebanese, have the right to determine their own future," said Assad, long accused by France, the former colonial power, of meddling in Lebanese politics.
Assad has also begun indirect peace talks with Israel via Turkish mediation, but he said he did not expect direct negotiations for the next six months until U.S. President George W. Bush is out of office because the current administration was not interested in Middle East peace.

Assad sees no Israeli peace talks with Bush in office
Sat Jul 12, 2008 7:59pm BST
By Samia Nakhoul
PARIS (Reuters) - Syrian President Bashar al-Assad said U.S. President George W. Bush was not interested in the Middle East peace process and as result he did not expect direct talks with Israel until Bush leaves office next January.
Ending years of isolation from the West, Assad on Saturday met French President Nicolas Sarkozy on the eve of a major EU-Mediterranean summit and signalled his willingness to improve relations with both Syria's neighbours, Israel and Lebanon.
The Syrian president also said he wanted France to play a role in any eventual face-to-face talks with Israel, but added that it was essential for the United States to also be present.
"Quite frankly, this American administration is not interested in the peace process, so the question (of direct talks) won't arise before the arrival of a new American administration," Assad told a news conference.
Syria launched indirect peace talks with Israel this year under Turkish mediation over the return of the Golan Heights captured by Israel in 1967.
The last direct talks between the Israel and Syria under U.S. sponsorship broke down eight years ago and Washington has been reluctant to re-engage with Damascus because of its role in Lebanon and close ties with Iran.
U.S. State Department spokesman Rob McInturff said on Saturday it was not ready to resume full contacts with Syria.
"We, along with the international community, are awaiting a signal that the Syrians are truly ready to renounce their sponsorship of terrorism and do more to end the flow of foreign fighters to Iraq, expel the leadership of Palestinian terrorist groups from Syria and human rights violations," he said.
PARIAH STATE
France had also treated Syria as a virtual pariah state following the assassination of former Lebanese Prime Minister Rafik al-Hariri in 2005, which Paris blamed on Damascus.
Assad has rejected the accusation and relations with France improved this year after Syria helped end a long-running political stalemate in Lebanon by supporting a power-sharing deal among Lebanon's pro-Western and pro-Syrian factions.
Sarkozy said he would visit Damascus in September.
Lebanon's new president, Michel Suleiman, was also in Paris on Saturday and met Assad for the first time. Sarkozy said the two men had agreed to open embassies in each other's country.
"I would like to say, what a historic step forward it is for France that Syrian President Bashar al-Assad is determined to open a diplomatic representation in Lebanon, and that Lebanon should open a diplomatic representation in Syria," he said.
The establishment of embassies would amount to a Syrian recognition of Lebanon's sovereignty.
Syria has long been a dominant player in Lebanon's political and military affairs but the two countries have not exchanged ambassadors since Lebanon's independence in 1943.
Assad said Sarkozy has asked him to use his influence with Iran to help resolve Tehran's nuclear standoff with the West.
"We see the solution as a political one. We cannot consider any solution that is not political because the consequences will be dangerous ..."
"Of course, we will pass on to Iran what has just been said, but we think that to the best of our knowledge, Iran has no intention of trying to obtain nuclear weapons," he said.
The Paris EU-Mediterranean summit has given Assad a chance to regain the international spotlight, but he suggested he would not use Sunday's meeting for an historic first meeting with Israeli Prime Minister Ehud Olmert.

The United States and Syria should talk (about everything)
by Theodore H. Kattouf
10 July 2008

WASHINGTON – The recent compromise on power sharing in Lebanon spares the country further bloodshed, and allows its people to return to a modicum of normalcy. However, the underlying causes of the conflict remain, and Lebanon continues to be an arena where external powers play out their rivalries. Unless and until Syria and the United States reach a grand bargain, the Lebanese will continue to pay the price.

It should now be clear to the most casual observer that Syria's military withdrawal from Lebanon was hardly the end of their influence there. Iran and Syria are in an alliance to thwart US and Israeli objectives in the region whenever and wherever they can. Despite the overwhelming military advantages the United States and Israel enjoy over their adversaries, Iran and Syria have been particularly adept at playing the spoiler through proxies such as Hezbollah, Hamas, Iraqi tribal groups, and Shi'a militias.

Through much of its second term, the administration of US President George W. Bush has been loath to engage in a prolonged and serious dialogue with Syria, instead preferring attempts to isolate and marginalise its leadership. Syrian President Bashar al-Assad, for his part, has borrowed pages from his late father's playbook to demonstrate that there are no lasting solutions to regional problems without Syria. Yet even Turkish-brokered negotiations between Israel and Syria have not enticed the United States away from its policy of ignoring Syria diplomatically while throwing verbal jabs at the regime whenever it can.

The Israelis have been by far more pragmatic in dealing with Syria than has the Bush administration. The current Israeli government and its military/security leadership have concluded that they are 'better off with the devil they know than the devil they don't.' This reasoning helps to explain why Israel went to great lengths in the summer of 2006 to assure Syria that it was not the target of Israel's war with Hezbollah. It also helps to explain the lack of Israeli leaks after the bombing of an alleged nuclear reactor in Syria. Meanwhile, even after the Bush administration tried to discourage indirect Israeli talks with Syria about the Golan, Israel cautiously went ahead.

Both Israel and Syria recently concluded that making these talks known is advantageous to them. In the Israeli case, they can pressure the Palestinians for more concessions by suggesting they have another option for peacemaking. The more strategic reason is of course the hope that Syria can be weaned from its 30-year alliance with a nuclear ambitious Iran. For its part, Syria wants to ensure its relevance and better position itself with the next US administration while the clock runs out on the current one. However, both leaderships know that even if they can agree on the terms of peace, the US government's role is indispensable to concluding, supporting, and enforcing a treaty.

All of this leaves Lebanon in limbo. Hezbollah has demonstrated that there is no combination of other forces in Lebanon that can challenge its military predominance. Hezbollah's leader, Sheikh Nasrallah, has left no doubt that his spiritual guide (Marje) is Iran's supreme leader, Ayatollah Khamenei. As its influence with the group diminishes, Syria can no longer promise to disarm Hezbollah's militia in the context of a peace treaty with Israel and a positive new relationship with the United States. It can, however, shut down the Iranian resupply pipeline to Hezbollah through Syrian territory. Syria could be even more Machiavellian and work with the United States and others to strengthen the more secular elements in Lebanese society in the context of full peace.

The Syrian regime cares first and foremost for its survival. If ushering in a new relationship with the United States and signing a peace treaty with Israel enhances its prospects for longevity, it will go that route—even at the expense of Iran and Hezbollah. If such a deal is not forthcoming, Syria will continue to play the spoiler role to the best of its considerable abilities.

It is therefore important that a new US administration work with Israel and our Arab allies to concoct a strategy that can pry Syria away from Iran. Despite the longevity of their alliance, the two regimes – one secular, the other theocratic – have little philosophically in common other than their shared insecurities concerning Israel and the West.

Thankfully, Syria appears open to a grand bargain, including perhaps one that could stabilise Lebanon without compromising that country's sovereignty, independence and territorial integrity.

###

* Theodore H. Kattouf is a former US ambassador to the United Arab Emirates and Syria. He is currently the president and CEO of AMIDEAST (www.amideast.org), and serves on Search for Common Ground's MidEast Advisory Board. This article was written for the Common Ground News Service (CGNews) and can be accessed at www.commongroundnews.org.

Source: Common Ground News, 10 July 2008, www.commongroundnews.org.
Copyright permission is granted for publication.

France clears Syria of 1983 attack on its troops
Sun Jul 13, 2008 1:55pm EDT
By Francois Murphy
PARIS (Reuters) - Syria was not to blame for a deadly attack on French troops in 1983, a senior French official said on Sunday, hoping to ease tension a day before the Syrian president attends the Bastille Day army parade in Paris.
Instead, the official in President Nicolas Sarkozy's office pinned the blame on Iran and Hezbollah.
Sarkozy's decision to invite Syrian President Bashar al-Assad to the July 14 parade angered some French soldiers and prompted calls for those marching to show their displeasure, possibly by not looking up at the official stand.
Syria had been suspected of involvement in the truck bomb attack 25 years ago on French military headquarters in Lebanon, known as the Drakkar, which killed 58 French troops who were part of an international peacekeeping force.
"Something is being exploited. To say the Drakkar was Syria's responsibility is to make an error of historical fact," the senior official said, speaking on condition of anonymity.
"One may not want Mr Assad to be there, but to say that it is because of the Drakkar affair is simply an error."
Assad and the leaders of about 40 other countries attended the launch of Sarkozy's Mediterranean Union project on Sunday, and all were invited to stay for Monday's annual parade.
"The Drakkar wasn't Syria," the French official said. "The Drakkar was Iran and Hezbollah. Ask anyone who follows this issue -- they'll tell you the same thing."
Minutes before the Drakkar attack, a suicide bomber attacked Beirut airport, killing 241 U.S. servicemen stationed there.
Initial suspicion fell on militants of Hezbollah, then in its infancy, as well as Iran and Syria. All have denied involvement.
Last year, a U.S. court ordered Iran to pay $2.6 billion to families of the victims, saying Tehran was legally responsible for the attacks because it supported Hezbollah. Syria, also a Hezbollah ally, was not named in the case.
U.N. peacekeepers will lead Monday's military parade, followed by regular French troops, who were already unhappy with Sarkozy's reforms designed to streamline the armed forces.
The government aims to cut the number of army personnel by 54,000 to 225,000, including civilians, in an overhaul that has angered many in the ranks who fear it will reduce France's fighting capability.
Asked about the July 14 parade, Defence Minister Herve Morin said last week there was a limit to troops' right to expression.
The march takes place less than two weeks after army chief of staff General Bruno Cuche resigned over an incident in which a soldier fired live ammunition instead of blanks at a public combat demonstration, injuring 17 people.
"The army has all the president's trust and it will be a beautiful display," the senior official told reporters, who will watch Monday's parade closely for signs of protest by soldiers.

Dozens reported killed in Syrian prison riot

2008-07-05T12:11:00.003-04:00

For weeks, the media has focused on Syria's regional policy and international standing, including Syrian-Israeli talks and President Assad's invitation to Paris on July 14 - i.e. the "end" of Syria's isolation. On the home front, however, the Syrian state is cracking down on dissent, enforcing strict media red-lines on articles dealing with the opposition and inspections of the Al-Kibar alleged nuclear site. During the recent IAEA inspection for example, only a handful of foreign or Arab journalists were permitted to enter the country.

Today the Syrian Observatory for Human Rights reported via email that guards at Syria's Saydinya prison have killed dozens of inmates following a riot by Islamist prisoners.

Reports from SOHR and AFP are below.

The Syrian Observatory for Human Rights has been informed through a political prisoners in Sednaya prison, near Damascus, that a mutiny has occurred inside the jail this morning, Saturday, 5/7/2008 carried out by Islamist detainees, dozens of prisoners were died , while another climbed to the roof of the prison for fear of being murdered. The live fire on prisoners is still continuing . the Observatory also received more than a telephone call from relatives of the detainees in the prison of Sidnaya send a distress call via the Syrian Observatory for Human Rights to Syrian President Bashar Assad to intervene to stop the continued killing in prison.
5July2008-07-05

Dozens killed in Syrian prison riot: rights group
7 hours ago
NICOSIA (AFP) — At least 25 inmates were shot dead by Syrian security forces during a riot by political detainees at a prison in mountains outside Damascus on Saturday, a human rights group said.
"Islamist prisoners started a riot inside the prison this morning," the Syrian Observatory for Human Rights said in a statement received in Nicosia, quoting a political prisoner in the Saydnaya jail contacted by mobile phone.
"Shooting is continuing against the prisoners," the London-based group said, adding that a number of inmates had climbed the roof of the military prison north of Damascus to escape the violence.
Helicopters were buzzing the facility near the hilltop village of Saydnaya, about 30 kilometres (19 miles) from the capital.
The Observatory, which is close to the opposition, said initially that the number of dead was 10 but a spokesman later telephoned AFP to say that the toll had risen to 25.
The Observatory said about 400 detained soldiers were being held hostage in the prison as bargaining chips to apply pressure on Syrian authorities.
The group said it was also receiving phone calls from relatives of prisoners asking Syrian President Bashar al-Assad to intervene to stop the clashes in Saydnaya, an ancient town with biblical connections.
There was no immediate comment from the Syrian authorities.
The Saydnaya prison is one of the biggest in Syria and houses mainly Islamist political prisoners.
Syria has launched a crackdown against dissidents in recent months, drawing strong criticism from the West particularly since the arrests are being carried out under emergency laws in force since 1963.
At least 14 signatories of a December petition calling for radical democratic change in Syria have been rounded up, including former MP Riad Seif.
The prison riot comes just a week before Assad is due in Paris to meet French President Nicolas Sarkozy on July 12, signalling a resumption of high-level contacts between Paris and Damascus.
Assad is among about 40 foreign leaders who will be in Paris for a July 13 summit that will see European countries come together with states in the Mediterranean region including Arab nations and Israel to improve cooperation.
Saydnaya prison was built in 1987 to accommodate 5,000 detainees but can take up to 10,000, according to the Syrian Human Rights Committee, another non-governmental organisation.
It says the facility was originally built for common law concicts but also takes in political prisoners.
In 2004, it held several hundred Muslim Brothers as well as leftists, Palestinians, Islamist militants and detained Syrian army soldiers, according to the rights group.
Saydnaya is the site of an Antiochian Orthodox convent dedicated to Mary, the mother of Jesus, which was founded in 547 AD and houses a rare icon of her believed to have been painted by the author of one of the gospels, St Luke.

Syria glitters, but glare hides woes

2008-06-28T21:00:00.003-04:00

A bit heavy on official sources, but nevertheless a very good story from the Chicago Tribune on the problems behind Syria's liberalizing economy.

Diplomatic Wheels on Syria are Turning

2008-06-16T08:14:00.006-04:00

The Israeli press published a series of articles over the last few days concerning the departure of two aides to Israeli Prime Minister Olmert, Yoram Turbowicz and Shalom Turgeman to Istanbul for a new round of Syrian-Israel indirect talks under Turkish auspices. I’ve been holding off commenting on the talks, as I was skeptical if motion would lead to action, especially if the opposition and government in Lebanon remained deadlocked over the formation of a government. But with Condoleezza Rice in Beirut today, French Elysee secretary-general Claude Gueant and chief diplomatic aide Jean-David Levitte in Damascus yesterday and Nicolas Sarkozy traveling to Israel next week , it seems like the diplomatic wheels are indeed turning.
What I found interesting was not that mediators were dispatched to Istanbul before movement in Lebanon, but Israel’s degree of seriousness regarding the talks. Haaretz quoted Turgeman saying that he did not believe the talks would be affected by Olmerts latest corruption scandal. This flies in the face of analysts and businesspeople in Damascus who told me that they didn’t expect the Israel and Syria talks to actually yield a deal, given Olmert’s problems at home and small majority.
Many were also skeptical of progress before the US general elections next November, despite the fact that Syrian officials have stated over the last few weeks that they demand US mediation in direct Syrian-Israeli talks. On top of that, a number of people I have spoken to in Damascus recently believe that McCain is likely to win the US presidential elections in November, meaning the prospects for improved US-Syrian relations seem limited. In solving that conundrum, Syria says it wants talks on the “Grand Horizon” of issues – i.e. the “Grand Bargain” some left of center Democratic Party policy folks advocate who could advise Barak Obama. McCain’s website says that he advocates “real pressure” on both Syria and Iran to get them around to Washington’s way of thinking.
Dealing with the rift between Washington and Damascus is going to be difficult. I just finished working as a consultant with International Crisis Group on their upcoming report on US-Syrian relations. While I'm obliged not to talk about the report's findings prior to the report's launch, I think its no secret that past efforts of rapproachement between the two sides (most notably in 1990) takes a lot of behind the scenes diplomacy that seems to now only be taking place.
The folks to watch on getting the US and Syria to the table are Sarkozy and his staff. Yesterday's meeting between Gueant and Levitte followed France's invitation of Bashar al-Assad to the Bastille Day celebrations in France (which one friend told me the Syrian MFA said were on July 16, but anyway...). Sarkozy was just met Bush in Washington. Sarkozy told reporters afterwards that Syria must "distance itself from Iran and its nuclear ambitions." This seems like the Bush Administration's condition for getting involved with Syrian-Israeli talks. What the incoming American Administration's condition will be is anyone's guess.

Treating (Iranian) Industry as a Luxury

2008-05-31T06:48:00.001-04:00

There are strange signs emanating out of the Syrian-Iranian relationship. Here is my article from this month's edition of Syria Today about one example of how Iranian investments are bogged down in Syria - but surviving. It is a follow up of my January 2007 story on the launch of the Iranian-Syrian "Cham Car" project. Since publishing the story, SAIPA confirmed to Syria Today this month it began production of its popular car Saba.

Treating Industry as a Luxury
Andrew Tabler
Syria Today Magazine May 2008

Two Syrian-Iranian car companies are struggling to make a profit as complicated government red tape means they have to pay luxury tax on car components they import.

When Syria’s first domestically assembled automobile, the Cham Car, rolled off an assembly line outside Damascus in January 2007, Syrians hailed the joint venture between Iran’s Khodro and Syria’s public sector General Organisation for Engineering Industries as an example of how their country’s industrial aspirations could be achieved through their government’s deepening relations with Tehran. Outside Syria, journalists and analysts cited the project as yet another sign of an Iranian “takeover” in Damascus that threatened the region’s Arab political order.
While the Syrian-Iranian alliance appears as solid as ever – including Tehran’s announcement last March that it is increasing technical assistance to Syria from USD 1bn to USD 3.5bn – it hasn’t been sturdy enough to cut through the Syrian Government red tape. Cham Car and another new venture, the Syrian-Iranian Vehicle Company (SIVECO), are struggling to turn a profit as the Syrian customs’ authority continues to apply luxury tax on the car components at the port.
“When we started looking at this project in 2001, import tariffs on cars were between 145 and 195 percent,” said Masoud Nazari, resident manager for SAIPA, the Iranian automaker that holds an 88 percent stake in SIVECO. “SAIPA vehicles were number one in sales on the Syrian market between 2003 and 2005. So assembling cars in Syria and getting around the tariffs made great business sense. ”
Then the unexpected happened. On May 7, 2005 – as the world focused on Syria’s withdrawal from Lebanon a few days before – President Assad issued Legislative Decree No. 197 slashing tariffs on automobiles to 40 percent on Completely Built- Up (CBU) Vehicles – industry-speak for assembled vehicles – with engines smaller than 1.6cc and 60 percent with larger motors. Margins in Syria’s automobile market immediately narrowed. Previously expensive European and East Asian models were suddenly more affordable for many Syrians.
Executives from Syria’s two Iranian automotive joint ventures hurriedly calculated the tariffs assessed by Syrian customs on their cars’ various parts and decided to press on. They lobbied the government to pass a special law to support local assembly industries, specifically to cut customs procedures on inputs for Semi-Knocked Down (SKD) car units – or partially assembled automobiles – and exempt them from luxury taxes.

Luxury tax
When President Assad opened the Cham Car plant amidst great fanfare in January 2007, the government issued a decree concerning customs procedures for domestic automotive industries that only standardised customs rates on inputs. Luxury tax would still apply to domestically assembled automobiles, but – in an unexpected twist – domestic producers of automobiles would be required to pay luxury tax on the cars’ components when they entered a Syrian port. As their competitors importing CBVs are only required to pay the luxury tax when buyers purchase cars from showrooms, Cham Car and SIVECO are saddled with around USD 3,000 per unit in luxury tax overhead prior to sale.
The government has yet to amend the law, despite over a year-and-a-half of lobbying by both companies. This has particularly hit SIVECO – a completely private sector venture – hard. While SIVECO’s plant in Hassia industrial city near Homs was opened by President Assad in January 2008, its product, the SAIPA Saba, is only scheduled to hit Syria’s thoroughfares this month. Lack of progress on the issue is particularly surprising given that the Syrian Government owns a 35 percent stake in Cham Car. Both companies’ executives say solving the luxury tax issue soon is key to moving ahead.
“We prefer to be straightforward,” Nazari, whose company plans to produce up to 5,000 units per year, said. “Some of those selling imported cars in Syria under-invoice the sticker price to reduce customs and luxury taxes. Our input and prices are declared to the Syrian Government. Our sales price of SYP 550,000 is one of the cheapest on the Syrian market. Modifying the law to support local industries like ours will help us remain competitive and help the state collect more revenues."
To weather the regulatory limbo, Cham Car keeps its stock to a bare minimum, selling their plant’s 10,000-car annual production almost as soon as they roll off the assembly line. “At SYP 645,000, the cars fly out of the showroom,” Nidal Fallouh, production manager of the General Organisation’s for Engineering Industries and a board member of Cham Car, said. “Solving the issue with the government will help us expand distribution outside major cities.”
Government foot-dragging on dealing with the automobile assembly issue is delaying their Iranian partners’ plans to expand assembly capacity and introduce new product lines. “We have plans to introduce a new Cham Car in the coming months with full options, including Anti-lock Break Systems (ABS), airbags, and a different engine,” Fallouh said. “We might call it the Cham LX.”
To give Cham Car a competitive edge, the company plans to rely more on Syrian inputs. “In the near future, we will open a paint ‘baking’ line, which will allow us to do more finishing in Syria,” Fallouh said. “In the future, we could even expand our assembly lines to produce for other manufacturers.”