Russia and Iran tussle for Syria’s war spoils

For Russia, phosphate, a key ingredient in fertiliser, and other natural resources have proven key focuses.
Saturday 07/09/2019
An employee works inside a factory of Saipa Syria, the Syrian branch of the Iranian car making company, in the industrial city of Hassia in Homs. (Reuters)
Economic encroachment. An employee works inside a factory of Saipa Syria, the Syrian branch of the Iranian car making company, in the industrial city of Hassia in Homs. (Reuters)

TUNIS - Alongside Iran’s and Russia’s campaigns to restore Syrian President Bashar Assad’s monopoly on power has run a parallel campaign carving up much of the country’s resources in anticipation of a postwar peace when trade with Damascus is again possible.

Over the last eight years, much of Syria has been reduced to rubble. Entire cities have been levelled as Damascus and its allies sought to reclaim land from jihadist and rebel forces. Into this vacuum has been flowing a steady stream of currency from Russia and Iran as they seek to consolidate their military gains and reap what they can of Syria’s anticipated peace dividend.

For Russia, phosphate, a key ingredient in fertiliser, and other natural resources have proven key focuses. Iran has concentrated on services and infrastructure. Both countries are positioning themselves against a possible Chinese economic incursion.

Syria has the third-largest phosphate deposits in the world and because of a 50-year monopoly granted the Russian company Stroytransgaz, Russia is well-positioned to benefit.

CRU, a commodity research firm, told the Financial Times that Syria’s phosphate exports would total 460,000 tonnes this year, up from 328,000 tonnes in 2018, though it conceded that this might not include all exports, some of which exit the country through Lebanon.

Syria’s phosphate remains unsanctioned, though providing material support to the Assad regime does, making it hard to pin down exact trade figures.

However, there is friction between Tehran and Moscow. Iran and its proxies were among the first to claim the phosphate-rich fields at Kanifish and Al-Sharqiya near Palmyra in 2017. The following year, concession was granted to Russia, with approximately 30% of the phosphate extracted going to the Syrian state.

In addition, to its gains in phosphate and natural gas concessions, Moscow reportedly lined up advance deals for Russian companies to provide electrical power to the city of Homs, build a rail line from Damascus International Airport to the city centre and construct a variety of industrial plants across the country, all of which are primed to play key roles in Syria’s development.

Though phosphate remains an interest for Tehran, its priorities appear to lie elsewhere. A memorandum of understanding signed by Damascus and Tehran in 2017 covered phosphate exploration and access to the country’s telecommunication market.

After several failed starts, the Syrian government announced in February that the government was working with an Iranian company to establish and operate a mobile telecommunications network in Syria. This is in addition to Iran’s state-funded Al-Alam TV channel, which has been broadcasting from Syria since 2017.

As both countries make inroads into Syrian markets, competition is never far. Russia is reported to have actively blocked Iran from playing a leading role in the reconstruction of southern Damascus in February 2018. However, with war then engulfing much of Syria, commercial rivalries between allies was deemed to be of secondary importance.

“Much of the drive to invest in Syria comes from what both Iran and Russia see as its eventual normalisation,” said Nicholas Heras, a fellow at the Centre for a New American Security. “By that point, both countries will have secured footholds in all the major industries allowing them to profit from any investment.

“Defence is another area of intense interest, between Iran and Russia. Both are positioning themselves to be the principal supplier of military hardware to Syria, long after any kind of peace is secured.”

Russia has provided Damascus with the S-300 missile defence system. Iran is reported to have established missile and weapon development plants across Syria.

“However, textiles, processed foods, even retail have all been subject to Iranian and Russian investment,” Heras said.

The gradual economic encroachment on Syria has been moving in fits and starts since the battle for Aleppo in 2016, he said. Focused on regime-held areas, the commercial interests of the two allies have broadened as more territory has become secure.

“Militarily, both countries have invested heavily in Syria. Now, they’re looking to consolidate their long-term interests there,” Heras said, “They’re perfectly happy for Assad to retain political control, they just need him to safeguard their investments.”

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