EU’s controversial strategy to prevent misuse of Syria reconstruction funds

More effective than sanctioning the regime may be efforts to hurt its allies, including Hezbollah and other Iran-sponsored militias.
Sunday 27/01/2019
A poster of Syrian President Bashar Assad is seen during the opening of a rebuilding exhibition in Damascus, last October. (AP)
In need for rebuilding. A poster of Syrian President Bashar Assad is seen during the opening of a rebuilding exhibition in Damascus, last October. (AP)

The European Union has announced the extension of sanctioning of some people affiliated with the regime of Syrian President Bashar Assad, noting that these “prominent businessmen are making large profits through their ties with the regime and are helping to finance the regime in return” and were “supporting and benefiting from the Assad regime.”

Among the individuals and corporations named were figures and corporations linked to the Marota City development, a government-sponsored enterprise combing luxury residential property with a commercial tilt — the acceptable face of Damascus’s plan for Syria’s reconstruction, which nevertheless exposes a dark side. Many of the regime’s planned prestige developments are on illegally confiscated land.

One named individual is Hussam al-Qatirji, a member of parliament and CEO of the Katerji Group. He was accused of being an agent of the regime’s international deal-making and of profiteering on his own behalf through the sale of oil and wheat.

These examples illustrate various sides of the regime’s intensions, which the European Union understands. The sanctions are intended to combat the Syrian government’s possible misuse of “reconstruction” funds and general impropriety, as well as the laundering of the regime’s reputation, which international financial support could allow.

Syria is certainly in need of rebuilding. Analyst Ryan O’Farrell said physical destruction in Syria was estimated by the United Nations at as much as $120 billion between destroyed and damaged housing, infrastructure and industry, in a country whose pre-war GDP was only $60 billion. Indiscriminate use of heavy weapons left vast urban areas in ruins.

“This concentration and severity of destruction has created huge numbers of internally displaced people, with the World Bank estimating that Syria’s urbanisation rate increased from 55% to 80% over the course of the war, as more and more people move from areas of active fighting to the increasingly limited numbers of urban areas that can still provide basic services,” O’Farrell said.

“Syria’s electrical grid has ceased to function in many parts of the country,” O’Farrell noted, because infrastructure was destroyed, a situation also seen in Syria’s water distribution system.

The country’s industry “has also been tremendously damaged, mostly notably due to fighting, damage and looting in the former industrial hub of Aleppo, whose damages constitute nearly 60% of total urban losses,” he said.

Sanctions ought to prevent the regime from enriching or entrenching itself under the cover of ameliorating these ills but they are not perfect tools. If individual countries previously opposed to the regime negotiate favourable commercial deals, the regime can find alternative routes to enrichment.

The international consensus on freezing out Assad appears to be thawing. The United Arab Emirates has not only reopened its embassy in Damascus but also hosted a private-sector forum in Abu Dhabi seeking to re-establish commercial relations between the two countries.

EU sanctions and EU diplomatic opprobrium ought to be seen in this light and are caveated by the fact that Italy is publicly mulling reopening its embassy in Syria and Britain’s foreign office denied similar rumours not too long ago.

There are reasons to believe the EU sanctions are intended to be taken seriously.

Bente Scheller, director of the Middle East office of the Heinrich Boll Foundation, said: “I think it was a very good signal that the EU sent by announcing these sanctions” so soon after the UAE-Syria forum.

Scheller acknowledged criticisms that suggest that previous sanctions did not deliver any real success but continued that sanctions are the only tool available.

“I have the impression that the regime is really bothered by the sanctions,” he said. “These are well-targeted sanctions, affecting those who are in power — both politicians as well as businessmen close to them.”

More effective than sanctioning the regime, which is experiencing some benefit from its persistence and the legitimacy that its continued survival can be taken to denote, may be efforts to hurt its allies, including Hezbollah and other Iran-sponsored militias.

“Relations [between states] don’t really suffer from human rights abuses,” Scheller said, but “as long as Hezbollah [is] there, I think people might also raise the concern that if money goes to Syria for non-humanitarian purposes it will in some way benefit Hezbollah, which would be very complicated to politically explain. I think that might be a strong hindrance to going back to relations as before.”

Other debates include attempts in Germany notably but also in other EU countries to prosecute individual members of the regime and its apparatus for human rights abuses and war crimes.

Sanctions on the regime’s reconstruction efforts are unlikely to prevent expropriation or to improve conditions inside Syria but European countries can hope that, when enough of them band together to form a united front, the effects are magnified and obvious.

Although Europe has acquiesced to Assad remaining in power, it has not yielded to supporting the Syria he wishes to build in the place of the state his civil war destroyed.

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