Iran wants return on investments from Syria, well... just like Russia

Tehran’s military engagement in and economic assistance to Syria provokes significant angry responses from ordinary Iranians.
Sunday 25/02/2018
A 2010 file photo shows Iranian Supreme Leader Ayatollah Ali Khamenei (R) talking with Syrian President Bashar Assad in Tehran, Iran.	(AFP)
Transactional mood. A 2010 file photo shows Iranian Supreme Leader Ayatollah Ali Khamenei (R) talking with Syrian President Bashar Assad in Tehran, Iran. (AFP)

Iran has invested significant blood, treasure and political capital in the survival of Bashar Assad’s regime in Syria and yet it finds itself struggling with competitors such as Russia, China and Turkey when it comes to Syria’s post-war reconstruction.

Tehran’s military engagement in and economic assistance to Syria provokes significant angry responses from ordinary Iranians. They want living standards to improve in Iran rather than for public funds to be used to support the country’s regional allies. Increasingly, commanders of the Islamic Revolutionary Guard Corps (IRGC) also express anger at Iran’s meagre return on its investment in Syria.

The latest display of IRGC unhappiness was from Major-General Rahim Safavi, senior military adviser to Iranian Supreme Leader Ali Khamenei. Addressing the “Syria Crisis: The Latest Field and Political Developments” seminar, Safavi compared Russian and Iranian gains in that country. “The Russians signed a 49-year contract with Syria,” Safavi said, referring to the January 18 agreement between the two countries. “They got a military base, as well as economic and political privileges.”

However, in an oblique complaint about Iran’s poor gains, Safavi went on to say: “In my opinion, Iran, too, can have long-term political and economic contracts with Syria and return on its investments. Right now, Iran is exporting from Syria’s phosphate mines.”

He did not mention that Iran’s export of Syrian phosphate is in return for oil exports to Syria. He also did not publicly say that Russia’s economic privileges in Syria are a great impediment to Iranian companies, including those owned by the IRGC.

In a much more blunt analysis, the Farsi news website Baztab warned against the Syria-Russia agreement. The website, which is known to be close to former IRGC commander Mohsen Rezaei, said the Damascus-Moscow deal means “Iran and Iranian companies are almost sidelined from reconstruction and investment in this country… Should Iran desire to participate in Syria’s reconstruction, it must negotiate with Russia!”

The new realisation comes after a long period of daydreaming at the IRGC’s Khatam al-Anbia Construction Headquarters. In December, Iran’s largest contracting company declared its readiness to engage in the rebuilding of Syria. Khatam al-Anbia chief Ebad-Allah Abdollahi said the company was ready to rebuild roads, ports, petroleum facilities and electrical plants, establish factories and automobile assembly plants and develop new infrastructure for the war-torn country.

The scope of Russia’s ambitions in Syria makes it hard to see Iran’s plans coming to pass, however, unless IRGC companies operate as subcontractors to the Russian-Syrian consortium responsible for post-war reconstruction.

Iran’s exports to Syria face obstacles, too. In November, Hossein Selahvarzi, deputy leader of Iran’s Chamber of Commerce, complained that the Syrian government had imposed “certain restrictions on export of Iranian products to Syria, which, in reality, prevent us from exporting our goods.” He added that Syrian consumers appeared to prefer Turkish products smuggled into the Syrian market to Iranian exports.

Sharpening economic rivalry between Tehran and Moscow over Syria widens the gap between the two capitals. It also imposes new strains on the tactical alliance between Iran and Russia.

While Russia cements its position as the central player in Syria, Iran watches helplessly as the blood, treasure and political capital it invested goes to waste. Worse still, so long as the regime in Tehran dismisses the chance of a more pragmatic policy towards the United States and Israel, there is not much it can do to increase the return on its investments in Syria.

3