Syria breaks 12-year economic hiatus with Saudi Arabia

Syria has reached an agreement with Saudi Arabia on the resumption of cooperation interrupted in 2011, with the outbreak of the Syrian civil war, in the field of economy, trade, and investment. The agreement was signed in Riyadh on June 13 on the sidelines of the 10th conference of Arab and Chinese entrepreneurs. This is reported by the Syrian state agency Sana and the Saudi Saudi Gazette.

In March, Damascus and Riyadh agreed to restore diplomatic relations. Later, on May 19, not without the support of the Saudi side, at the summit of the League of Arab States (LAS) in Jeddah, Syria’s membership in the organization, also interrupted 12 years ago, was restored. The United Arab Emirates (UAE) was at the forefront of the process of restoring diplomatic relations with Syria – back in 2018, they resumed the work of the embassy in Damascus. Bahrain and Oman reopened their embassies in Damascus in 2019 and 2020. respectively, and Tunisia on the eve of the meeting of Arab representatives in Jeddah, 13 April. The return of Syria to the Arab League was preceded by the restoration, through the mediation of China, of relations between Saudi Arabia and Iran, one of the key allies of the Syrian government in the civil war and the main regional rival of the Saudis. On June 6, the Iranian embassy opened in Riyadh.

It is obvious that China continues to normalize relations between actors in the Middle East, said Kirill Semenov, an expert at the Russian Council on International Affairs. Beijing is doing this so that the Middle East direction of the Belt and Road becomes safe, then it will be able to use the infrastructure of Syria if it is restored, have unhindered communications with other Arab states, as well as a convenient exit to the Mediterranean. Moreover, according to Semenov, Riyadh itself is also interested in cooperation: it can stimulate Syrian President Bashar al-Assad to strengthen contacts with the Arab world and “softly” move Damascus away from Tehran and Moscow, Semenov believes. Sergey Balmasov, a senior expert at the Middle East Institute, recalls that while neither Iran nor Russia, even together, have sufficient free funds to restore the Syrian economy, the Saudis can do this in conjunction with the Chinese, while Riyadh can neutralize in this way Iranian presence in Syria.

“According to the Arab proverb, he who sows reaps, and the Assad government, having received investments from Riyadh, can begin to build relations with it, while Iranian influence will begin to decline. With such interaction, the Saudis can also cover up the actual failure of a 10-year attempt to overthrow the Syrian leader with their proxies. But it is unlikely that Assad, given the experience of relations with Riyadh, will completely trust him,” Balmasov believes. But if diplomatic Syrian-Saudi relations are de facto restored, then for real economic cooperation, the position of Washington, one of the key military-political partners of Riyadh, is an obstacle. As early as June 17, 2020, the United States, after a six-month delay, began implementing the Caesar Act (the “Syrian Civilian Protection Act”) signed back in December 2019 by President Donald Trump. The document prohibits, under the threat of sanctions, individuals and legal entities to provide “direct and indirect” assistance to the Syrian government, armed groups operating in the country, which, according to the United States, support the Syrian authorities, as well as the authorities of Russia and Iran. The law concerns assistance to Damascus in the oil and gas sector, aviation, defense and construction.

According to Balmasov, the decision to resume not only diplomatic, but also economic relations with Syria is another sign to Riyadh’s Western, American partners that he is not satisfied with dependence on their decisions and policies in the region.

Caesar’s law, if desired, can be circumvented, Semyonov believes: there are loopholes in it, in particular in the area of ​​assistance in eliminating the consequences of the February earthquake that affected northern Syria. Investments in the country can also be promoted through the so-called “early recovery programs” in UN terminology, he says. Another thing is that so far there are no clear criteria for what this may mean in comparison with “reconstruction”, the expert notes. “So can the resumption of the work of water pipes be considered an “early recovery” or is it already the next step? Nevertheless, there is already a theoretical opportunity to invest in Syria – through solving the problems of returning from Lebanon and accommodating 1.5 million Syrian refugees in their homeland, building houses and communications for them – this can be tried to defend as “restoration”, and not as “support for the regime “, – concludes Semenov.