By Elio Azar
On August 17, the Syrian Government held its first Damascus International Fair since the outbreak of the Syrian Civil War in March 2011. In the midst of a continuing, if waning, civil conflict, the fair brought many an awkward investor to an otherwise fortress-nation, in a bid to rebuild the country’s heavily-damaged infrastructure. In October 2010, even before the conflict’s sudden outbreak, the World Bank published its annual Doing Business report, ranking Syria 144th in “ease of doing business”, behind a crippled Iran (129th), with Syria flaunting the highest property transfer tax at 28%, and with 55 steps to enforce a contract, it ranked 176th in contract-enforcement.
Calculation Wars, the Cost of Conflict
The cost of post-conflict reconstruction for Syria has received many quotations, with vastly disparate numbers on either side. The Syrian Economic Task Force is a business-oriented civilian group which has tasked itself with absorbing the economic burden of a post-Assad Syria through a “Marshall Plan for Syria”, as it hopes to create a “Syrian Reconstruction National Fund”. It estimated Syrian economic losses at 50 billion dollars, while quoting costs of reconstruction in the range of 60-200 Billion USD.
In a working paper published by the IMF in June 2016, the Bretton-Woods institution estimated reconstruction costs at 100-200 billion USD, while also acknowledging a UNESCWA estimate of 180-200 billion USD. That same year Assad had estimated reconstruction costs at 200 billion USD in an interview with Russian journalists reported by his government’s Syrian Arab News Agency.
Plowing for China’s Harvest
Nevertheless, for all their agreement on the costs of reconstruction, it appears Mr. Assad will be turning to less-conventional partners for reconstruction contracts, namely: Russia, China, and Iran, as new developments suggest he will remain in power. With sanctions against Assad’s government still in place, it is difficult to imagine any US or EU-sponsored reconstruction loans, namely through the World Bank which Assad’s allies have long considered a puppet of the US and EU. Besides, Western-imposed sanctions have all the more pushed the Syrian government to partner with friendlier emerging economies, namely China.
Indeed, refusal to work with the West has been no shy inclination of the Syrian government, as it has not only made public statements promising contracts strictly to loyal allies, but has as well condemned strikes by the “illegal” US-led coalition in a June 2017 letter to the United Nations Secretary General and United Nations Security Council. The letters echoed a January 2017 statement by the Russian Defense Ministry by accusing the coalition of targeting “Syrian infrastructure, including bridges, oil and gas wells, dams, electricity and water plants, and public and private buildings” while sparing ISIS-held oil facilities. This has in fact been framed as an intent by the US-coalition to raise reconstruction costs in order to score bigger contracts in a post-war nation, as best worded by a spokesperson for the Russian Defense Ministry:
"I would like to remind that all major wars of the latest decades, unleashed by the US on the pretext of fakes, in Yugoslavia, Iraq, Afghanistan and Libya, all of them were accompanied and ended by the destruction of the countries' economic infrastructure by the US Air Force. And it is hardly a coincidence that companies close to the CIA and the Pentagon always were the first to offer their services in rebuilding the major economic facilities."
- Russian Defense Ministry Spokesman Major General Igor Konashenkov in January 2017
Dining Among Equals: Split the Bill?
In October 2016, the world awaited as India planned to propose a reconstruction fund for Syria at the BRICS summit. Nevertheless, with a signal from Moscow, the South-Asian giant kept silent. With a New Development Bank formed since 2014 aimed at overthrowing the World Bank’s monopoly on international development funding, which is in turn monopolized by US voting shares, the quest for Syrian reconstruction might be the BRICS nations’ golden opportunity to prove their worth as global players. Their approach, however, seems ill-coordinated, if not clumsy.
With shares and voting rights distributed equally among the five nations, Brazil, Russia, India, China, and South Africa, have so far mostly used the New Development Bank to focus on projects within BRICS territory, most notably in the realm of renewable energy. Having started out with modest means and modest goals, the bank’s shareholders may be right to dismiss grandiose plans, and with each of these nations in vastly different economic situations, it is difficult to see how equal shares and voting would allow loans of the extravagant amounts required by Syria, and with the concessional terms sought by the Syrian regime.
Finally, as the West loses its grip over the Syrian situation, reconstruction loans and contracts offer themselves to the world’s emerging economies on a silver platter. Their most organized group, the BRICS, has already developed the New Development Bank to prepare for a new role in world affairs, but as the conflict nears its end, the question of who will fund Syria’s reconstruction and how seems to jump across government corridors like a hot potato. To benefit from this milestone opportunity, the BRICS need to reorganize and strengthen their internal cooperation to absorb the pressures that come with world leadership, or in this case, lendingship. Meanwhile, in Trump’s America, the deal-seeking president must choose whether to chase deals with tooth and nail, or to retire into an equally patriotic isolationism.
Elio Azar is a senior Political Science student at the Lebanese American University, where he enjoys a full scholarship. During his years on campus, he has been president of the campus Human Rights Club, and was a trainer in his university's Model UN program which joins over a thousand school-aged children each year to cultivate UN culture within Lebanese society. Elio also attended Harvard WorldMUN in 2015 and later Oxford International MUN 2016 during a semester abroad in Sciences Po-Paris. He has as well worked as a volunteer with the Lebanese Red Cross, which allowed him to interact directly with the lives of Syrian refugee children currently residing in Lebanon. Elio has also worked with the World Bank Group in Lebanon on communications strategy for educational research, and currently interns at the Lebanese Parliament.
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