Amer Hosni Lutfi

Following the dismissal of Mr. al-Reddawi, President Assad nominated Mr. Amer Hosni Lutfi to head the planning commission. Mr. Lutfi had been serving as the Minister of the Economy and Trade. This move will be seen as a promotion for Mr. Lutfi, a Christian from Homs, who taught at Aleppo University after earning his Ph.D. in economic analysis from Université Libre de Bruxelles, Belgium.

Ms Lamia Aasi will now head the Ministry of the Economy and Trade (Mr. Lutfi’s old job). She has been serving as the Syrian Ambassador to Malaysia since 2004. Between 2002 and 2004, she was the deputy finance minister. Her appointment takes the number of women in the government to three. Lamia Murii Assi was born on December 27, 1955, holds a BA in Commerce from the University of Damascus and an MBA from the Higher Institute for Business Administration in 2005.

Addendum: Ayman Abdalnour takes exception to our argument that Assi was chosen by Hussein. He asserts that it is not true. Read his All4Syria article about the recent job shuffles.

This latest reshuffle means that Mr. Dardari now has to work closely with Mr. Lutfi on the new 5-year plan over the next few months. The new head of the SPC is no stranger to the process and his economic views are known to represent those to the left of Mr. Dardari. [Thanks to Ehsani for help with this information]

The economic team has been reshuffled with the exception of the Ministry of Finance led by Muhammad Hussein, who comes out of these changes stronger. If we are to read the tea leaves, and admittedly it is early to do so, we conclude that Ms. Aasi is a Hussein pick. She served as deputy finance minister immediately after Muhammad Hussein took charge of the finance ministry at the end of 2001; she reported to Hussein prior to her becoming ambassador. Hussein is related, although distantly and through marriage, to the first family, has a PhD from a Romanian university, and serves as head of Economic Affairs at the Baath Party. He has been on the ascendancy for some time. Dardari’s authority, as the “free trader” in Syria’s economic team, has been embattled since he became deputy prime ministery.

How will Amer Hosni Lutfi change the mix? It is said that he is a member of the Baath party, unlike Dardari. He will undoubtedly be more polite to Dardari than was Reddawi, but he will be unable to help Dardari fight his battles for opening up the economy, even if he were inclined to do so.

Another factor that I take into consideration in judging the question of whether Syria will gamble on a policy of free trade and more rapid economic opening is foreign policy.

If Syria opens up and allows foreign banks and investors to pour money into the country, it will make itself vulnerable to economic sanctions in the future.  Should the US increase sanctions on Syria, as it did in 2004 and 2005, causing foreign money to be withdrawn from Syria, the economy would suffer a bad hangover. Public disapproval would spike.  In short, if Syria wants to move quickly with liberalization, it must be prepared to give up “resistance” to Israel and give up hope of getting back the Golan.

I do not believe that Syria is willing to give up the Golan.

This means it must up the ante on resistance to counter Israel’s growing power. In light of Israel’s refusal to give back the Golan or enter serious peace negotiations predicated on the return of Syria’s occupied territory, Damascus cannot stand by with crossed arms; it must respond. Israel has improved its military and diplomatic position dramatically in the last decade. The bombing of Syria’s nuclear plant, the bombing of Hamas, and the bombing of Hizbullah have all strengthened Israel. Egypt, Saudi Arabia, and Jordan have moved closer to Israel and further from Syria. Israel’s success during the Bush years and ability to turn back Obama’s peace overtures and to frustrate his request for a settlement freeze at the same time as it has successfully petitioned the US for more and better arms is testament to its growing military and diplomatic strength and hammer lock on US foreign policy.

If Syria does not wish to abandon the Golan, it must strengthen resistance and correct the balance of power. It must strengthen Hizbullah, by giving it better and more sophisticated arms. It must hope that Iran gets out of its present pickle and continues to grow economically and militarily. Turkey must continue to shift toward Syria and Iran, and away from Israel and the US. Syria must improve relations with Iraq. Iraq needs to rebuild and join a Syria-Turkey-Iranian norther alliance. All these things need to happen if Syria is to increase its stature and muscle in the region to the point that Israel would reconsider its intransigence on the Golan. I do not know if Syria can be successful in such a policy, but it must follow this path, if it wants the Golan.

The necessity of “resistance” gives Finance Minister Mohammad Hussein great leverage in arguing that Syria needs to proceed with caution in its effort to liberalize. It cannot throw the doors open before Western banks. It must turn to friendly nations for investment. Syrian economic independence is crucial to its ability to resist Israeli occupation by military means. Western pressure could be devastating if the economy gets drunk on dollars and foreign investment. Syria is not Iran and cannot challenge the West directly. For this reason, I believe President Assad will continue to favor Baathist economics, which preaches fear of the West and capitalism. It is not a blind and irrational fear, as most in the West assume. It is a calculated fear based on long years of bitter experience and witnessing the impotence of the UN to counter the pro-Israeli policies of the West. If Syria wishes to resist Israel and ignore US pressure to fall in line with Israeli policies, it must look askance at those who advocate rapid transformation and lifting of firewalls in front of Western institutions and dependency.

Addendum: Idaf writes:

This is why Syria’s best friends and business partners are Turkey and Iran, and this is why Chinese, Malaysian and Indian companies have better chances in the oil sector in Syria. Russia will always be there too.

In the last weeks, the Syrian president also started expanding ties with South America.

Syria has decided 5 years ago that “The West” is not a sustainable business partners. Business decisions in the west are too dependent on the mid-east politics (which in turn is too dependent on Israeli influence in these countries). Syria’s 3 options were to to choose a defensive approach and close on itself again, become an Arab satellite to the US (just another Saudi or Jordan and give up the Golan) or keep opening up the economy seeking alternative.

If Syria keeps making successful alliances and strategic decisions on business partners, soon the US and Europe will have less and less leverage with Syria, and Syria will have more maneuvering space for ‘resistance’ to get the Golan back. Israel will be well advised to try to get a Golan deal with Syria before the latter becomes more independent (ie. Stronger geopolitically)

Joshua replies to Idaf:

One of the reasons Syria did not sign the EU trade agreement was because of these calculations. Europe punished Syria in 2004-05. It is following Washington’s lead on Iranian sanctions and puts its relations with Israel above those of Syria or Lebanon, as we saw during both Israel’s bombing campaigns against Lebanon and Gaza. The EU followed Washington’s lead, and covered for Israel in the UN Security Council while Jerusalem carried out its objectives.If Syria is to get back the Golan and continue to resist Israeli occupation, as it claims it has a right to do under international law, it needs to substitute European investments with those from friendly nations that are not bound by America’s pro-Israel policy.

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Amer Lutfi, Giath Barakat, Yarub Badr, and Imad Moustapha

Prime Minister Mohammed Naji Otri (L) is accompanied by the Syrian Ambassador to Malaysia Lamia Aasi (R) as Najo Otri arrives at Kuala Lumpur International Airport in Sepang, outside Kuala Lumpur on January 6, 2009.

U.S. official: Arming of Hezbollah could spark Israel-Syria war
By Jack Khoury, Haaretz Correspondent
Tags: Israel news, Syria, Hezbollah

An American source says that Syria allowed Hezbollah operatives to train within its territory in the use of advanced SA2 anti-aircraft missile batteries, the Kuwaiti daily Al Rai reported Sunday.

In an interview, the senior U.S. official warned that if Syria supplies Hezbollah with this type of missile, Israel will bomb Damascus and a war will likely ensue.

According to the official, Israel has warned Syria not to allow the transfer of the SA2 missiles into the hands of Hezbollah, and views the transfer of such missiles as the crossing of a red line.

He added that he did not believe that a war would break out soon, unless one of the sides violated the undeclared agreement not to cross the red lines defined by both sides.

The Second Lebanon War, waged in 2006 between Israel and Hezbollah, turned southern Lebanon into a territory not unlike the Golan Heights, in that it does not enjoy the absence of conflict but rather a fragile cease-fire, the official said.

Since the war ended, the international intelligence community and the United Nations have been closely monitoring the smuggling of weapons from Syria to Hezbollah, but the ongoing smuggling has not yet crossed the so call red lines.

The official added that Israel’s top priority at this point is to prevent Hezbollah from obtaining the SA2 missiles, which are controlled from a remote command center. The official stressed that if Syria turns these weapons over to Hezbollah, Israel will not hesitate to strike Syria, including the capital Damascus.

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