Analytics
EUREN Brief 16
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Economic reconstruction in Syria — an area for EU-Russia selective engagement?

Nine years of war have devastated large parts of Syria and displaced more than 11 million people inside and outside the country; another 11 million people are in need of humanitarian aid. Reconstruction has already begun, but in a fragmented and uncoordinated way that caters more to the interests of the parties involved in the armed confrontations than to the needs of the population affected by the conflict. In this EUREN Brief, Muriel Asseburg argues that the EU needs to depart from its current Syria strategy and engage in a more sustainable way of alleviating the misery and allow for the creation of livelihoods in Syria. It should also spell out its "more for more" approach if it wants to contribute to a political opening, reforms, and sustainable stabilisation in the long run. In his response, EUREN member Alexander Aksenenok claims that Russia needs a more holistic approach towards Syria, combining military means with economic recovery and political reform. By adjusting their respective policies, both sides could create more space for selective engagement on post-conflict reconstruction in Syria.

Muriel Asseburg:
The EU needs to adapt its Syria strategy *

Armed confrontations in Syria are not over yet. Five global and regional powers (Iran, Israel, Russia, Turkey and the US) maintain a military presence in the country. And yet, the civil war has long since turned in favour of the regime. Reconstruction has already begun – albeit not as a countrywide, centrally planned, controlled and internationally financed programme, as the standard approach of international financial institutions would prescribe. Instead, players with different and partly contradictory interests – above all, the Syrian leadership, Russia, Turkey and Iran – have been implementing separate, specific projects, mainly at a local level. These projects have one thing in common: they are hardly geared towards the needs of the population affected by the conflict.

The leadership in Damascus prioritises the consolidation of its authority above everything else. It uses reconstruction to entrench the population exchanges carried out in the course of the war through flight, forced displacement and so-called reconciliation agreements. Moreover, economic reconstruction provides Damascus with an opportunity to reward the loyalty of old and new elites with lucrative investment opportunities and compensate the regime's international supporters – above all, Russia and Iran – via access to Syria's resources. At the same time, structural reforms are no more on the agenda than transitional justice or reconciliation. On the contrary, grave human rights violations continue.

On the one hand, Damascus has created the legal basis for reconstruction and carried out widespread expropriations of land and property without proper levels of transparency and compensation. It has prevented internally displaced people (IDP) and refugees from returning to areas considered to be strategic. And it has torn down whole neighbourhoods to create space for lucrative investment projects.

Muriel Asseburg : Reconstruction has already begun – albeit not as a countrywide, centrally planned, controlled and internationally financed programme, as the standard approach of international financial institutions would prescribe. Instead, players with different and partly contradictory interests – above all, the Syrian leadership, Russia, Turkey and Iran – have been implementing separate, specific projects, mainly at a local level. These projects have one thing in common: they are hardly geared towards the needs of the population affected by the conflict
Alexander Aksenenok : None of Damascus's allies has the capacity to meet the enormous challenge of post-war economic reconstruction in Syria, even if China, India and some European countries chipped in. Even if the reconstruction was politically possible, the most urgent priority today is to satisfy the population's everyday needs in terms of food, medicine, electricity, fuel and sanitary supplies, and to prevent living standards from deteriorating further

On the other hand, it has set a framework for humanitarian help, which gives the regime a monopoly on decision-making – at least in the areas it controls – as to who is allowed to provide international aid where and who will benefit from it. It has thus made sure that emergency aid is not distributed according to humanitarian principles but is based on the regime's interests instead. As a consequence, people living in areas formerly held by the rebels, who suffer from the greatest war damage, are particularly disadvantaged.

The Syrian leadership has made it clear that it will accept foreign involvement in economic reconstruction only from friendly countries that grant their support unconditionally. Yet, Damascus's friends, Russia and Iran, are neither in a position nor willing to provide funds for comprehensive, countrywide reconstruction. Other potential supporters have so far either categorically rejected involvement (the US), been hesitant (the Arab Gulf states), merely positioned themselves for future involvement (China) or been focused exclusively on the areas they occupy (Turkey). The economic effects of the COVID-19 pandemic, especially the sharp fall in global oil prices, are likely to further reduce available resources, particularly from the Gulf States.

EU approach to Syria

The European Union and its member states have made their support for reconstruction efforts in Syria conditional on progress towards a negotiated resolution of the conflict and a political opening in Syria. In the absence of such progress, EU involvement has remained mainly limited to humanitarian aid. According to their own accounts, the EU and its member states are by far the biggest donors in this area. From 2011 until late autumn 2019, they provided over €17bn in humanitarian aid for Syrians inside the country and neighbouring states. Most of this aid is being rolled out locally by UN organisations and international non-governmental organisations as emergency aid to the local populations, refugees and IDP.

The EU and its member states have imposed comprehensive sanctions against the Assad regime and its supporters. They target those who have suppressed the population and used internationally banned weapons – activities that directly benefit the Assad regime – or those who have profited from business dealings violating housing, land and property rights. The European sanctions also aim to isolate the regime internationally and limit its revenues and capacity for repression. In this vein, the Europeans have imposed an arms embargo against Damascus, as well as export restrictions on goods that can be used for repressive actions against the Syrian population. They have also enacted an oil embargo, frozen the assets of Syria's central bank in the EU and banned exports of 'dual use' goods to Syria.

The sanction package also includes far-reaching, sector-related measures that stand in the way of rehabilitation and the reconstruction of war damage. It restricts the financing of infrastructure projects in the oil and electricity sectors and prohibits European Investment Bank (EIB) support for projects in Syria that would benefit the state. It also curtails Syria's finance and banking sector's dealings with Europe, which renders trade with the country difficult.

The EU's approach has not worked

The European approach has not proved effective. First, the EU and its member states have not hitherto been able to exert any tangible influence on local conflict dynamics and the conduct of the Syrian leadership. That is because the Europeans have not had any significant military presence and have refrained from exerting political influence internationally. Moreover, the EU has stuck to an objective that is no longer realistic: political transition in Syria. Admittedly, the EU has softened its rhetoric and no longer speaks explicitly about regime change or the division of power. However, the sanctions regime and the conditionality for reconstruction aid continue to target political transition, i.e. regime change. Also, Brussels has not yet spelt out which kind of behavioural change in Damascus – below the threshold of regime change – would lead to which European concession.

Second, the European approach is problematic in that both the focus on emergency relief and the comprehensive sanctions will not allow the population to be supported effectively. Such support, however, is ever more urgent in the face of the worsening economic crisis and erosion of service provision in Syria. Even before the COVID-19 pandemic hit Syria, some 11 million Syrians (of the 18 million who have remained in the country) were dependent on international humanitarian support, and more than 80 per cent lived under the poverty line. The EU approach could contribute to entrenching a situation in which the Syrian population remains permanently dependent on international aid deliveries.

Third, cracks have been appearing in the joint European approach. Germany, France and Great Britain, in particular, have been sticking to the agreed-upon position. Other EU member states have, in recent years, resumed relations with relevant people in the regime's leadership circle (Italy and Poland) or have vociferously discussed the reopening of their embassies and greater economic involvement in Syria (Italy, Austria, Hungary and Poland). One thing is crystal clear in this context: if EU member states drift apart in their dealings with Damascus, they run the risk of throwing away the little influence they potentially have. Funding for reconstruction, a resumption of diplomatic relations and sanctions relief must all be played jointly if they are to have political weight.

That is why the EU and its member states should revise their approach to Syria, which needs to be more finely tuned to local challenges and current circumstances. It also needs to bring European interests and instruments into line and use the little leverage the EU possesses as effectively as possible.

This would mean, first and foremost, admitting that the Europeans cannot, with their incentives and sanctions, bring about what the Assad regime and his allies have militarily averted: a negotiated settlement to the conflict and a political opening in Damascus. Also, the EU should have no illusions about the Syrian leadership being a reliable partner, whether it be on economic reconstruction, fighting terrorism or the return of refugees. Last but not least, the current severe economic and currency crisis and the erosion of state capacities in Syria must not be mixed up with the imminent collapse of the regime, even less so in favour of a political alternative that would unify and stabilise the country.

In concrete terms, the EU and its member states should contribute to a more sustainable way of alleviating the misery and allow for the creation of livelihoods in Syria. They should, above all, dismantle those sectoral sanctions that prevent rehabilitation and development. They should also, under certain conditions, support the rehabilitation of basic infrastructure in areas that are under regime control and help to improve living conditions via work programmes and local procurement. In addition, they should try to convince the US administration to allow generous humanitarian exemptions from the Caesar sanctions (enacted on 17 June 2020) to make sure that Syrian citizens do not bear the brunt of the US "maximum pressure" campaign.

"More for more"

Sustainable stabilisation in Syria can only be achieved through far-reaching reforms. The EU should spell out its "more for more" approach to show how relations with Damascus could be gradually normalised in return for a political opening and structural reforms.

At the same time, the EU and its member states must refrain from normalisation with the Assad regime's top officials. Rather, they should continue to support NGOs and international mechanisms in the documentation of war crimes, grave human rights violations and the use of internationally banned weapons, and press ahead with establishing the capacities necessary for prosecutions where possible under the principle of universal jurisdiction.

Alexander Aksenenok:
Economic Reconstruction in Syria – a case for selective engagement between the EU and Russia?

The issue of economic reconstruction in war-torn Syria raises crucial questions about the possibility of EU-Russia cooperation in the turbulent international and regional context of the Syrian conflict. Are recent changes in and around Syria favorable or not for such cooperation? Is it enough for the EU to change its Syria strategy or should Russia also critically revise its approach to reconstruction?

Assessing the current situation

The armed confrontation in Syria is not yet over. However, after nine years, the Syrian civil war has ended, at least in its classical form. Most notably, the military infrastructure of Daish has been destroyed. The opposition and moderate rebel groups ultimately chose compliance in the hope of preserving as much as possible of their former authority.

As long as its socio-economic root causes remain unaddressed, the conflict itself will remain unresolved. There can be no sustainable solution unless the mentality that triggered the conflict has been eliminated and practical political solutions are on track. Damascus may control the most populous and politically-significant portions of Syrian territory, but the country remains divided de facto into several geographical spheres of political and military influence. The last contested territories in the North-West (Idlib and its adjacent regions) do not pose a military threat to the regime. Russia and the Syrian government consider them to be a frozen local conflict in the fight against the terrorist threat.

In all three major areas outside government control, the engagement lines are getting more and more impermeable. Any movement across these lines could risk uncontrolled clashes with the major powers involved (Turkey, Russia, the USA or Iran) that would likely require some new political trade-offs or a complex series of partial deals. Therefore, in this precarious equilibrium on the ground, any of the acting players, including Damascus itself, could act as a spoiler and destabilize the situation further.

Muriel Asseburg : The EU and its member states should revise their approach to Syria, which needs to be more finely tuned to local challenges and current circumstances. It also needs to bring European interests and instruments into line and use the little leverage the EU possesses as effectively as possible. This would mean, first and foremost, admitting that the Europeans cannot, with their incentives and sanctions, bring about what the Assad regime and his allies have militarily averted: a negotiated settlement to the conflict and a political opening in Damascus
Alexander Aksenenok : Muriel Asseburg points out that the European strategy in Syria needs to be changed. The same can be said about the Russian approach. For the past two years, Russia has lobbied governments across the world to invest in post-war economic reconstruction in Syria as if it was more interested in this than Damascus itself. When Russia made its advances, it was referring mainly to "reconstruction" in terms of rebuilding the physical infrastructure

Meanwhile, the political process is deadlocked. The "Geneva-2" conception of power sharing or the devolution of power through the establishment of a "transitional governing body" that "would exercise full executive powers" (Action Group for Syria Final Communique of 30.06.2012) was actually refuted by the regime. Instead, there emerged an international consensus emphasizing the need for constitutional reform followed by "free and fair elections under supervision of the United Nations" in accordance with Security Council Resolution 2254, adopted on 18 December 2015. But the initial hope turned into frustration when the Geneva process stalled. It took two years and a lot of effort to form the Constitutional Committee which has only led to more procrastination.

Many – though by no means all – policymakers in Europe have come to the conclusion that a political transition that removes President Bashar al-Assad from power is unlikely. Efforts to isolate the Syrian government diplomatically and economically have succeeded in choking Syria's economy and denying Western reconstruction assistance. They have failed, though, to meaningfully alter the Syrian government's behavior. This approach has led to a complete loss of leverage.

This does not mean, however, that the path to peace in Syria is forever blocked. The assessment of the situation on the ground needs to be sober and realistic. There is a number of factors that could stipulate a political, realistic solution, which neither the opposition nor Assad might like.

New challenges and rationales

With these recent developments, Syria has entered a no less critical phase of growing uncertainties and looming threats. The challenges now faced by the country may be even more serious than during the active phase of hostilities. The excessive ambitions of the Syrian leadership are under powerful pressure from both inside and outside the country. At this stage of the conflict, it is the aftershocks of the economy of war, the systemic corruption and highly volatile sociopolitical environment that pose the actual battlefield: the web of old and new problems, amplified by a crippling energy and financial crisis, aggravated by the new US and, to a lesser degree, European sanctions, the still unpredictable effect of the coronavirus pandemic, and increasing tensions among the ruling class, including the Assad family circle.

Muriel Asseburg rightly points out that there is no economic reconstruction process to-date that would correspond to international standards: a country-wide, centrally planned, controlled and internationally financed program. None of Damascus's allies has the capacity to meet the enormous challenge of post-war economic reconstruction in Syria, even if China, India and some European countries chipped in. Even if the reconstruction was politically possible, the most urgent priority today is to satisfy the population's everyday needs in terms of food, medicine, electricity, fuel and sanitary supplies, and to prevent living standards from deteriorating further.

For these purposes, international humanitarian assistance is not enough. There is an acute necessity to provide the financial resources required for this kind of recovery. Investing in Syria should be seen as a global public good given the special status of this conflict on the international agenda. However, economic incentives for Damascus are lacking while the military threat to the regime is eliminated. This approach has led to a complete loss of Western political leverage and made it very complicated to exert a positive influence on the Syrian regime from Russia's side. Putting economic instruments into play instead of maximum pressure could strengthen the position of those in the Syrian government and the army who are in favor of reasonable compromise along the lines of Security Council resolution 2254.

Muriel Asseburg points out that the European strategy in Syria needs to be changed. The same can be said about the Russian approach.

For the past two years, Russia has lobbied governments across the world to invest in post-war economic reconstruction in Syria as if it was more interested in this than Damascus itself. Initially, Russia courted the U.S., surprisingly focusing on the high-level military and bypassing traditional diplomatic channels. After these attempts were refuted, Moscow shifted its focus and made high level appeals to major European and Gulf state leaders, but with the same result.

When Russia made its advances, it was referring mainly to "reconstruction" in terms of rebuilding the physical infrastructure and providing the logistics for the organized return of refugees. However, previous experience of post-conflict reconstruction postulates that to bring a country from war to peace, economic recovery and political reforms should go hand in hand. In Syria, this kind of holistic approach is still lacking.

Russia and the EU: EU shared interests and prospects for cooperation

Policymakers in Russia seem to have started realizing that all these different tracks are connected. In parallel with promoting urgent Russian economic aid, Moscow has increased its efforts to convince the Syrian leadership to support the work of the Constitutional Committee more constructively, create appropriate security conditions and improve the investment climate, as well as start preparatory activities for the forthcoming presidential elections. The appointment of Russia's ambassador to Syria, Alexander Yefimov, as President Putin's special envoy for the development of Russian-Syrian relations can be considered the end of the period of "military diplomacy". The new capacity will raise Yefimov's status and broaden his prerogatives as a coordinator between Russian and Syrian economic operators in Syria, as well as with the presidential palace in Damascus.

However much Russia's role in Syria may have changed over the past years, Moscow cannot, on its own, compel either Assad or Iran to comply fully with Security Council resolution 2254. The Caesar Act Damocles sword makes this task even more problematic. If they want to increase their political leverage, Russia and the EU should take a fresh look at the evolving conflict in Syria. Only jointly can they prevent the new socio-political cataclysms that could reach beyond the regional borders. Moscow needs a certain degree of understanding with the Western partners, notably with the EU, and its major members states, like Germany and France, on three practical issues: sanctions relief, limits to political conditionality and a "more for more" approach. Muriel Asseburg's paper could lay a minimum common ground for launching such a dialogue on Syria.

Muriel Asseburg : Sustainable stabilisation in Syria can only be achieved through far-reaching reforms. The EU should spell out its "more for more" approach to show how relations with Damascus could be gradually normalised in return for a political opening and structural reforms
Alexander Aksenenok : Moscow needs a certain degree of understanding with the Western partners, notably with the EU, and its major members states, like Germany and France, on three practical issues: sanctions relief, limits to political conditionality and a "more for more" approach. Muriel Asseburg's paper could lay a minimum common ground for launching such a dialogue on Syria

The initial aim of EU sanctions against Syria was to generate regime change. When the objective of EU policy shifted to reforms, the sanctions were never adjusted. As a result, the sanctions became counterproductive and disconnected from the policy goals for which they were imposed. Paradoxically, they empowered "the party of war" (a handful of Syrian billionaires and hundreds of warlords). Some decision-makers in the West may consider the near economic collapse of Syria as proof that the sanctions worked, but this claim is dubious considering the price that has already been paid by ordinary Syrians and the risk of completely destabilizing the country for years to come.

For humanitarian reasons, it's time for the EU to suspend its sanctions that are broadly affecting the target nation's health sector. This gesture of compassion would assist the civilian population that is under extreme threat, at least for the duration of the health crisis.

EU sanctions on Syria reconstruction are unlikely to be eased or lifted, however, without the government of Syria accepting some remedial measures. Though the EU has not made the departure of Assad a precondition for engaging in rehabilitation efforts, its political conditionality formula remains too ambiguous to become a positive incentive for Syria. It needs some more precision and sequencing in line with the "more for more" approach.

For its part, Russia should first acknowledge (implicitly) that the conflict resolution in Syria encompasses multiple parallel tracks where the economy cannot be separated from politics, whether someone likes it or not.

Second. This kind of political opening could create an appropriate atmosphere conducive to consultations, specifically on Syria, covering a number of practical issues related to the EU's priorities for engaging with the Syrian government.

Third. If there is a senior-level agreement on the scope of collaboration or actions in parallel, Russia would probe an alternative set of concrete steps (refugee return, CBM, tangible progress towards a political settlement, releasing political prisoners, civilian protection, humanitarian assess etc), which Damascus would be asked to take in return for a package of economic incentives from the EU. Unilaterally, Russia is already doing its best in this regard. Nevertheless, an agreement with the EU could give these efforts added value.


The content of these papers is the sole responsibility of the authors and does not represent the position of individual EUREN members or EUREN as a group.

Alexander Aksenenok
Alexander Aksenenok – Ambassador (ret), PhD in Law (political systems, constitutional developments), RIAC Vice-President. Previous positions: Diplomatic service in the MFA and the Embassies of the USSR and then Russia (1965-2002) in the MENA region and Europe, including Ambassador to Algeria (1991-1995), Special Envoy on the Balkans (1995-1998), Ambassador to Slovakia (1998-2002), Adviser to the Chairmen and Managing Director for the projects in the Middle East, Vnesheconombank (2002-2016). Research interests: International relations with the focus on regional politics, transformations in the Arab world, conflict resolution, global and regional security, nation-building and peacekeeping operations, Islamic studies. Publications: Numerous articles in the journal Russia in global affairs, in the books The Middle East, Arab Awakening and Russia: what is ahead? and New international relations: basic trends and challenges for Russia (Russian edition) as well as various newspapers, including Kommersant, Vedomosty, Nezavisimaya, Gazeta etc.

Despite its geographical location, Russia has always been a European country throughout its history and remains so. A great deal of Russia's vital interests is closely connected with Europe. Whatever the problems the EU is going through, the new generation of Russian people aspire to normalize Russia's relations with Europe as an indispensable condition for its sustained economic development in the secured environment.

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