Economist: Syrian Economic Outlook for 2008-09
Posted by Joshua on Saturday, January 5th, 2008
SYRIA COUNTRY VIEW: OUTLOOK FOR 2008-09
THE ECONOMIST INTELLIGENCE UNIT
EIU ViewsWire 01 Jan 2008
* The president, Bashar al-Assad, is expected to remain in power in 2008-09. He will continue to rely on the strength and loyalty of the security services, which will keep opposition forces weak and ineffective.
* Mr Assad will devote considerable effort to ending Syria's political isolation, but it is questionable whether he is willing to make any concessions on Syria's strategic alliance with Iran or its desire to influence events in Lebanon.
* Economic policy in 2008-09 will focus on the need to diversify the economy and on encouraging investment, but structural fiscal reform will be constrained by the fear of alienating public opinion.
* Syrian oil output is expected to fall markedly over the outlook period, which will reduce export volumes and government spending (which is heavily dependent on the level of oil revenue) and thereby curb economic growth.
* The Syrian pound will appreciate against the US dollar in 2008 (largely because of dollar weakness) but will depreciate in 2009 owing to concerns about export competitiveness.
* The trade account will fall into deficit in 2009, as the negative impact of falling oil production and exports is compounded by a modest decline in global oil prices.
DOMESTIC POLITICS: Power remains firmly in the hands of the president, who is supported by key elements in the security services and by the ruling Baath party. There appears little prospect that any serious challenge to Mr Assad's regime will emerge in the outlook period. Since assuming power following the death of his father in 2000, Mr Assad has stepped up repression of local opposition groups and activists, and has appointed his own close allies to key posts. This has increased his control, albeit at the cost of narrowing his power base. Importantly, the core of the elite is drawn from Mr Assad's minority Alawi sect, and is acutely conscious that to move against him would risk endangering the Alawi hold on power.
INTERNATIONAL RELATIONS: Although Mr Assad may have secured his domestic position, he faces a number of challenges in the international arena (which will have a profound bearing on his popularity at home). Efforts to emerge from international isolation have been ongoing for much of the year, but in November, Syria received recognition from both Europe (in particular, France) and Arab countries. The new French president, Nicolas Sarkozy, opened channels of dialogue, culminating in a large, high-profile team of diplomats being sent to the capital, Damascus. The diplomatic initiative was ostensibly aimed at reaching an accommodation between pro- and anti-Syrian forces in Lebanon, but was probably also part of Mr Sarkozy's wider ambitions to create a "Mediterranean union", involving Europe and the southern and eastern littoral states. From the Syrian perspective, it seemed to confirm that Syria had the right to be consulted about the next Lebanese president.
POLICY TRENDS: The soaring cost of the fuel subsidy bill, which is placing an unsustainable burden on the fiscal account, has led to heated economic debate between the government's more reformist, technocratic elements, led by the deputy prime minister for economic affairs, Abdullah al-Dardari, and the more conservative Baath party members. Mr Dardari is pushing for structural fiscal reform, including cuts in fuel subsidies and the introduction of a value-added tax (VAT). However, some Baath party members oppose these reforms, in part because of concern about their negative impact on disposable incomes. As a result, the proposed introduction of VAT has now been delayed until 2009. Fuel subsidy cuts also appear to be on hold. Indeed, in late November the Ministry of Petroleum issued a tender invitation for the development of a smartcard system to administer fuel rationing. The Economist Intelligence Unit expects any cuts in fuel price subsidies to be piecemeal and to be offset by compensatory payments to low-income families.
INTERNATIONAL ASSUMPTIONS: We forecast that world GDP growth will average 4.6% in 2008-09 (at purchasing powerparity exchange rates), down from an estimated 5.1% in 2007, largely as a result of a sharp slowdown in the US economy in 2008. International oil prices are expected to remain high, however, as buoyant demand in emerging markets offsets any slowdown in OECD oil demand. The benchmark dated Brent Blend is expected to rise to an average of US$78/barrel in 2008, before easing slightly to US$72/b in 2009, but risks are weighted on the upside.
ECONOMIC GROWTH: The Syrian economy is expected to grow steadily over the outlook period, at an annual average rate of 4.5%, as falling oil production is offset by persistent expansion in the services sector, boosted by solid growth in tourism and demand for goods and services, in part from the large Iraqi refugee population. Our growth forecast is also underpinned by the expected recovery in the agricultural sector (after drought conditions in parts of the country depressed growth in 2007).
INFLATION: We estimate that inflation will have eased in 2007 to an average of 7.4%, down from 10% in 2006. However, holiday-related demand for foodstuffs will have compounded the impact of higher global food costs, and the increase in petrol prices in November will feed through into distribution costs; as a result, we estimate that the end-2007 inflation rate will have risen to 8.9%. Although we expect average inflation to rise to 8.7% in 2008, it will fall over the year as the new exchange-rate regime helps to contain imported inflation and domestic demand pressure ebbs. In 2009 lower global oil and non-oil commodity prices will help to reduce the inflation rate to 5.9%. Moreover, a significant return of Iraqi nationals to Iraq would also lower inflationary demand pressures in 2008-09. However, if the government were to enact more phased cuts in fuel price subsidies in 2008-09, this would lead to a significant upward revision to our inflation forecast.
EXCHANGE RATES: Since the beginning of October 2007 there has been a marked appreciation of the pound against the US dollar, suggesting that the new exchange-rate regime–a peg to a basket of currencies based on the IMF's special drawing rights–has finally been implemented. The currency will not be allowed to float freely, however, with the government continuing to prioritise stability. The regime is well placed to protect the value of the pound, because of the dominant position of the state-owned banks and the control that the Central Bank of Syria retains over foreign-currency transactions, even as some laws are relaxed. Consequently, we forecast that the pound will remain relatively stable in 2008 (partly as a result of dollar weakness), before depreciating modestly in 2009 owing to concerns about the competitiveness of Syria's non-oil exports (and some strengthening of the dollar against the euro).
EXTERNAL SECTOR: We estimate that the value of merchandise exports will have risen in 2007, with strong growth in non-oil exports more than offsetting the decline in the value of oil exports. The estimated fall in oil export revenue is the result of lower Syrian oil production. Non-oil exports are continuing to benefit from the relaxation of foreign-exchange controls, which has led to more exports being officially recorded, and strong regional demand. We have raised our forecast for export earnings in 2008 following an upward revision to our global oil price assumption for that year. The higher price will offset the negative impact of falling oil production, and we expect still strong growth in non-oil export revenue. Import spending growth will also remain strong in 2008-09, partly as a result of the ongoing process of tariff liberalisation. As a result of these trends, the trade account will register a surplus of US$377m (0.8% of GDP) in 2008, slightly larger than in 2007, and a deficit of US$257m (0.5% of GDP) in 2009, as oil production falls and international oil prices ease.
Jan/03/2008
Syria's Deputy Premier Wants Further Relations with Turkey
BBC Monitor: Turkish news agency Anatolia.
Ankara, 3 January: The Syrian deputy prime minister for economic affairs, Abdallah Dardari and an accompanying delegation met officials of Economic Policy Research Foundation of Turkey (TEPAV) in Ankara on Thursday [3 January].
Dardari said there is a common culture and a strong political grounds between Turkey and Syria, and relations between the two countries should be further developed for a much competitive place in global economy in the future.
Dardari also recalled that Turkey and Syria decided to cooperate in energy, natural gas, electricity, oil, transportation, railway, maritime and highway transportation.
He said officials agreed to build an organized industrial zone in Syria in association with Union of Chambers and Commodity Exchanges of Turkey (TOBB).
Dardari noted that Syria will adopt arbitration law and a Turkey-Syria joint arbitration board can be established.
Originally published by Anatolia news agency, Ankara, in English
Damascus (dpa) – Syria and Turkey have decided to form a joint oil exploration and development company bolstering the countries' cooperation in the oil sector, Syrian Oil Minister Sufian al-Alaw said Thursday.
With the project, the two neighboring countries will also cooperate on importing and exporting oil extracts, in addition to setting oil distribution stations in Syria, said al-Alaw, currently part of a high-profile economic delegation visiting Turkey.
According to the Syrian Arab News Agency, the countries had also discussed the possibility of importing natural gas from nearby Azerbaijan and Iran through a Turkish oil company, in addition to connecting Syria to the Turkish natural gas pipeline network. Syria's oil production has experienced a decline in the past few
years, with output falling to 370,000 barrels per day in 2007, from 380,000 barrels previously.
Comments (39)
majedkhaldoun said:
Egypt and KSA told Syria, if there is no president in lebanon,they will not attend the arab summit.
January 5th, 2008, 6:36 pm
Alex said:
Majed,
Unlike the case of the hosts of the last Arab summit in KSA, and the summit in Annapolis, The Damascus summit hosts are not going to do much to satisfy any potential participants. Syria, as you know, always manged without the prestige tools.
Do you (or anyone here) know when was the last time the Arab summit was held in Damascus? or how many times it was held in Damascus since the Arab league was formed over 50 years ago?
It was formed in Cairo in 1945 with six members: Egypt, Iraq, Transjordan (renamed Jordan after 1946), Lebanon, Saudi Arabia, and Syria.
Here is the list of the location of ALL Arab summits the past 62 years:
1. Egypt Cairo: 13-17 Jan. 1964.
2. Egypt Alexandria: 5-11 Sep. 1964.
3. Morocco Casablanca: 13-17 Sep. 1965.
4. Sudan Khartoum: 29 Aug. 1967.
5. Morocco Rabat: 21-23 Dec. 1969.
6. Egypt Cairo (first emergency summit): 21-27 Sep. 1970
7. Algeria Algiers: 26-28 Nov.1973.
8. Morocco Rabat: 29 Oct. 1974.
9. Saudi Arabia Riyadh (2nd emergency summit): 17-28 Oct. 1976.
10. Egypt Cairo: 25-26 Oct. 1976.
11. Iraq Baghdad: 2-5 Nov.1978.
12. Tunisia Tunis: 20-22 Nov. 1979.
13. Jordan Amman: 21-22 Nov. 1980.
14. Morocco Fes: 6-9 Sep. 1982.
15. Morocco Casablanca (3rd emergency summit): 7-9 Sep. 1985
16. Jordan Amman (4th emergency summit): 8-12 Nov. 1987.
17. Algeria Algiers (5th emergency summit): 7-9 Jun. 1988.
18. Morocco Casablanca (6th emergency summit): 23-26 Jun. 1989.
19. Iraq Baghdad (7th emergency summit): 28-30 Mar. 1990.
20. Egypt Cairo (8th emergency summit): 9-10 Aug. 1990
21. Egypt Cairo (9th emergency summit): 22-23 Jun. 1996.
22. Egypt Cairo (10th emergency summit): 21-22 Oct. 2000.
23. Jordan Amman: 27-28 Mar. 2001.
24. Lebanon Beirut: 27-28 Mar. 2002.
25. Egypt Sharm el-Sheikh: 1 Mar. 2003.
26. Tunisia Tunis: 22-23 May. 2004.
27. Algeria Algiers: 22-23 Mar. 2005.
28. Sudan Khartoum: 28-30 Mar. 2006.
29. Saudi Arabia Riyadh: 27-28 Mar. 2007.
January 5th, 2008, 6:50 pm
Alex said:
Our “strikingly attractive” Syrian friend Hind Kabawat is in the Financial Post today! : )
January 5th, 2008, 6:58 pm
offended said:
Alex,
So that means the Arab summit was never held in Damascus before, and Egypt and Saudi Arabia aren’t coming. How brotherly of them!
Anyway, I really wish they come, and I have to disagree with you (a little bit : )) on one thing; I think that Damascus will indeed try to get them to participate. It was always Damascus endeavor to bolster the ‘joint Arab efforts’. If they don’t pacify the demand of a president in Lebanon (which is quite understandable, given the fact that Syria doesn’t really pull all the strings), then they’ll at least use diplomacy and even pep-talk to engage the Saudi and the Egyptian.
Hind is indeed an impressive woman and an achiever. But Alex, where can one see or get involved in these inter-religious dialogues? I’ve been wishing to locate such channels and this seems to be quite interesting. Would really appreciate it if you post links to her forums.
January 5th, 2008, 9:37 pm
majedkhaldoun said:
Alex;
your list shows that this is the first time the summet is going to be held in Syria,there has to be a reason for this.
the economist says that 2009 will be bad year for Syria,economically,and politically,I heared reports that the oil will drop 20% in 2008, if USA start pull out of Iraq in 2008,the dollar will go up, I wonder what Ehsani will say.
I doubt Lebanon will stay without president through 2008, and the tribunal will convene in the end of it.
January 5th, 2008, 9:41 pm
offended said:
Alex,
So that means the Arab summit was never held in Damascus before, and Egypt and Saudi Arabia aren’t coming. How brotherly of them!
Anyway, I really wish they come, and I have to disagree with you (a little bit : )) on one thing; I think that Damascus will indeed try to get them to participate. It was always Damascus endeavor to bolster the ‘joint Arab efforts’. If they don’t pacify the demand of a president in Lebanon (which is quite understandable, given the fact that Syria doesn’t really pull all the strings), then they’ll at least use diplomacy and even pep-talk to engage the Saudi and the Egyptian. ….
Hind is indeed an impressive woman and an achiever. But Alex, where can one see or get involved in these inter-religious dialogues? I’ve been wishing to locate such channels and this seems to be quite interesting. Would really appreciate it if you post links to her forums….
January 5th, 2008, 9:41 pm
Honest Patriot said:
Early reports on a possible consensus by the Arab Foreign ministers meeting in Cairo (including Syria) to call for the immediate election of Gen. Suleiman President of Lebanon without preconditions:
A matter-of-fact report from Naharnet is followed by what are claimed to be significant details in Al-Mustaqbal. I don’t see anything reported yet on almanar.com.lb, but Hezbollah representatives had earlier pre-judged any result that includes taking into consideration the participation (and hence opinion) of the Lebanese delegation as irrelevant because they don’t recognize the Lebanese government.
See below:
1) Naharnet –
http://www.naharnet.com/domino/tn/NewsDesk.nsf/0/2062B9118C8AE077C22573C70070EF9C?OpenDocument
Arab League Appeals for ‘Immediate’ Election of Suleiman
Arab League foreign ministers on Saturday welcomed the consensus around army commander Gen. Michel Suleiman as a candidate for the presidency and called for his “immediate” election.
Amr Moussa made the announcement following a consultative meeting of foreign ministers gathering for an extraordinary meeting Sunday of the 22-member pan-Arab called to deal with Lebanon’s political crisis
“The ministers welcome favorably the consensus around Michel Suleiman as a candidate for the presidency and call for his immediate election in accordance with the constitution,” Moussa said.
He said Syria, long seen as a divisive influence on its neighbor, had backed the call. Syria’s Foreign Minister Walid Muallem had attended the consultative meeting.
On Friday the ruling March 14 coalition called on Arab foreign ministers meeting in Cairo on Sunday to protect Lebanon from what it said were Syrian attempts to block the long-overdue election of a new president.
Lebanon has been without a president since the mandate of pro-Syrian Emile Lahoud expired on November 23 amid sharp divisions between the ruling majority and the opposition, which is backed by Syria and Iran.(AFP-Naharnet)
Elections in Beirut’s parliament for a new president have been postponed 11 times, and the legislature is now due to meet again on January 12 to elect a head of state.
Beirut, 05 Jan 08, 23:36
2) Al-mustaqbal
http://www.almustaqbal.com.lb/storiesprintpreview.aspx?storyid=269139
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January 5th, 2008, 11:25 pm
Alex said:
HP
This could be very significant.
I think this is a great way out of the problem.
Basically, the president wins much more power … he has a number of ministers (appointed by him) who will make sure that
1) the majority (Seniora) does not have 2/3 as they wanted and
2) the opposition does not have the 1/3 they wanted
Not what Hizbollah wanted, and not what Hariri wanted … they both do not have enough power to force their agenda on the other side … only the President has that new power which is … a modification to Taif !
The Christians win. The Shiites (Hizbollah) should be able to live with it even though they are not overly empowered through this arrangement (which makes them less perceived as a threat to the M14 group) and Syria gets its favorite man as President (General Sleiman) without worrying about a Seniora government that can be a threat to Syria.
Herald Tribune
And in Arabic the full resolution
And Syria wins. They got their man (Sleiman) to be the most powerful man in Lebanon … they did not disappoint Aoun (they did not sell him easily) and they weakened and constrained the Saudi (Sunni) power in Lebanon … without allowing Hizbollah to grow too powerful.
Isn’t that exactly what Syria wanted in the first place?
On top of that it looks like Syria was flexible.
January 5th, 2008, 11:44 pm
EHSANI2 said:
Alex,
Your analysis is on the mark. This is effectively the virtual undoing of the Taif accord. The power swings back to the Christian President.
Damascus played this chess game superbly. It agreed on the deal without seemingly being pressured by France or the U.S. It showed that it is only its leadership that can swing the vote. Its foreign minister stated that it supports a President for Lebanon “fawran…immediately”.
The U.S. has redefined victory in Lebanon in the election of a President there. It can now claim it won.
France has spent so much energy but won little publicly for this final resolution. Damascus upstaged it and won the publicity game as well.
Saudi seems to have agreed to yield more powers to the President’s office. Hariri does not have much to show for his efforts. Like Bush, his victory has been redefined as pushing for the election of Michele Suleiman. I guess he too can claim he won.
The Christians of Lebanon can thank Bashar but they will not of course. Events were moving beyond their direct control or understanding of the bigger picture encircling the region.
Regardless of who won or lost though, this is a major victory and breakthrough for the region.
January 6th, 2008, 12:10 am
Honest Patriot said:
Well, my friends, let’s hope this is indeed the beginning of the end, i.e., the (finally!) deflation of the Lebanese crisis. Regardless of how the developments are spun by this or that as their victory, I just pray that deflation does indeed happen. All’s well that ends well and, speaking for myself, I really don’t care who gets the credit. [And judging by your prediction, it sounds like everyone will claim success].
The majority of Lebanese – as, I guess, every majority – are the silent majority who just want to be able to go to their jobs, work hard at advancing their status. I hope they will soon be given the chance to do this more effectively than the current conditions permit.
Now (to keep things interesting), the zinger question:
Is it in anyone’s interest to foil this agreement ? if so, who ? and why ?
January 6th, 2008, 12:36 am
Alex said:
HP
Hizbollah will be barely able to accept it .. but I hope they will.
The Saudis will realize that this is taking Lebanon to pre-Taif status … but given the available options they have today, it is hopefully not considered a big damage, especially that it was orchestrated in a meeting of Arab foreign ministers in which they played a role … so they surely did not look like outsiders.
The ones you might want to worry about are the smaller parties … the fanatic small parties or groups … whatever they believe in, their role disappears when there is an agreement in Lebanon .. they will oppose any agreement, then they will find a reason why they want to oppose it.
Jumblatt? Geagea? … I think they will be ok. I hope … this is not “a Win” for the opposition.
January 6th, 2008, 12:48 am
AnotherIsraeliGuy said:
Jumping the gun as always. Neither the Syrians nor Hariri are going to elect Suleiman before he says which ministers he plans to appoint. This is far from over. In fact, it is not a solution at all, it pushes the problem downstream a little. Next fight will be about who the presidential ministers are.
January 6th, 2008, 12:50 am
AnotherIsraeliGuy said:
Oh, and we haven’t heard Aoun, “the negotiator of the opposition” agree to this.
January 6th, 2008, 12:52 am
Alex said:
AIG,
You sound disappointed a bit.
What would YOU like to see as a solution that you think everyone will accept in Lebanon?
One-man-one-vote democracy?
FYI, they proposed for the new government to start working immediately for a more permanent “solution” … through reforming the elections law
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January 6th, 2008, 12:58 am
G said:
It’s so nice to watch people with no understanding of what they’re talking about congratulate themselves over not understanding what they’re talking about.
January 6th, 2008, 1:18 am
norman said:
Alex ,
Didn’t Lahoud have minsters in the goverment who ended up in Hariri’s pocket?.
January 6th, 2008, 2:20 am
Honest Patriot said:
Hi G, now your post is rather amuzing (and I’m just kidding you – so don’t take it seriously):
1- you’re reading people here, not waching them
2- I read your sentence several times, scratched my head a few times, and I still have absolutely no idea which people you mean. Is it AIG, me (the honorable HP), Alex ? I really don’t know (unless I should have studied all previous posts for a few weeks … which would be too much work)
January 6th, 2008, 2:37 am
AnotherIsraeliGuy said:
Alex,
A one man one vote in Lebanon would be the best solution and I am all for it even if it means Hizballah takes over Lebanon. It is the right thing to do.
January 6th, 2008, 2:50 am
Alex said:
Norman,
Good point, but this is a solution for the current situation … later, they will work on the new elections law and new elections will take place in less than two years.
By then the world will be a different place.
We will worry about who can buy the loyalty of Sleiman’s ministers when we get there : )
I think Sleiman will pick the most Salim Hoss-like characters.
The big question is … who will be the Prime minister!
January 6th, 2008, 2:56 am
norman said:
Alex ,
I have faith in Syria’s forign policy.
I hope i am right.
January 6th, 2008, 4:16 am
norman said:
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????? ??? ????????? ?? ?? ???? ?? ????? ???? ????? ???????? ????? ?? ????? ?????? ???????? ?? ?????? ?????? ????? ?????? ????? ????????? ??? ?? ????? ????? ?????? ???? ??????????? ???????? ??? 2009 ?????? ??? ???? ???????? ??????????.?
??? ???? ??? ???? ?? ?? ???????? ????????? ????? ??? ???? ??? ??????? ??????? ???? ?????????? ????????? ?????? ?? ????? ????? ????? ?????? ??? ?????? ??????? ?????? ?? ?????? ?????? ?????? ??????? ????? ???? ?? ???? ?????.?
??? ????????? ????? ????????? ?? ??????? ???? ???? ??? ??????? ????? ?????? ??? ?????? ????? ???????? ???????? ?? ??????? ????? ????? ???????? ????? ??????? ???????? ?? ??? ???????.?
????? ????????? ?? ???????? ????? ????? ??? ???? ???????? ?? ???? ?????? ??? ?? ??? ?? ???????? ??????? ??????? ?? ??? ?? ??? ???? ?????? ???? ???? ?????.?
??? ??? ??????? ??? ???? ??? ???? ?? ????? ???? ?? ???????? ?? ??????? ??? ????? ?????? ???????? ??? ????? ????? ?????? ??? ????? ??? ?????? ??? ??? ????? ?? ???????.?
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?? ??? ???? ???? ????? ????? ?? «??????» ?? ????? ????????? ??? ???????? ???????? ????????? ???????? ?? ????? ?????????? ?????? ????? ?? ??????? ??? ??????? ???? ??? ?? ????????? ?????? ??? ?????? ??? ??????? ??? ??????? ????? ???? ???????? ??????? ????? ???????? ????? ?? ???:?
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???? ??? ??? ?? ??????? ????? ??????? ??? ??????????: ????????? ???????? ???????? ????????? ????? ??? ???? ???? ????? ????? ??? ?????? ???? ??? ??????? ??????? ??? ?????? ????????? ?? ?????? ????? ??? ????? ??? ???? ?? ???? ??????? ???????? ?? ????? ???????.?
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January 6th, 2008, 4:20 am
offended said:
I wonder why the French are under the impression that everything is gonna be fine in Lebanon (i.e. nor more political hassle, nor more factional bickering) once a president is elected.
January 6th, 2008, 7:41 am
offended said:
This agreement, as promising and satisfying as it seems, will only have a sedative effect for the time being. There will still be struggle over what’s supposed to happen in the morning after.
January 6th, 2008, 8:05 am
t_desco said:
“Moussa … said the foreign ministers called “for an immediate agreement on the formation of a national unity government” in Lebanon, constructed in such a way as to deny either faction the right to impose their policies on the other side.”
Naharnet
In other words, “veto power”?
January 6th, 2008, 11:42 am
GG said:
Alex,
Before you pat yourself on the back and walk up to the drinks cabinet to pour yourself a celebratory drink, consider 2 points:
1) When has a solution by the Arab League ever been implemented (apologies if this point has already been made)?
2) Most importantly for you: does the Syrian regime REALLY know Gen. Suleiman? Much has passed between 1998 and 2007. Norman rightly raised the point about Lahoud ministers ending up on Hariri’s payroll. If there’s one thing you can rely on it is the smell of money turning a Lebanese minister’s head and sending him weak at the knees. Could this also be true of Suleiman?
Check this, for selling out:
http://www.al-watan.com/data/20080106/innercontent.asp?val=outstate3_2
January 6th, 2008, 11:50 am
GG said:
P.S. The opposition will accept this Arab League plan knowing that M14 can’t accept it because its masters in the US don’t only want Hizbullah not to play any role in the government; they want Hizbullah to be seen to be defeated. The US is settling its 1985 score, and Hizbullah most be politically defeated first and then eventually militarily.
January 6th, 2008, 12:00 pm
EHSANI2 said:
One should not ignore the timing of this Lebanon news which has coincided with the imminent arrival of President Bush to the region.
Syria and Iran can now deflect any criticism by Bush and may even have him thanking them for helping carve out a deal. For the American President to have arrived in the region without having a Lebanese President elected was going to be an embarrassment that he could have done without. The pressure on Saudi, Egypt and Qatar to help find a deal in time must have been intense. One would suspect that Bashar was fully aware of this and was able to extract the most concessions by waiting for the last minute.
January 6th, 2008, 1:29 pm
offended said:
I agree with Ehsani, the last minute rush to concoct a deal was remarkable!
We usually have the intuition that Arab League’s communiqués are worthless, but for some vague reason (not very vague actually!), this agreement seems to hold some backbone to itself.
GG, Hizbollah can’t be defeated passively. Whether politically or otherwise.
And it’s too strong internally to be trumped by its rivals, and the Lebanese status is so brittle that an external intervention will most likely break the doors of hell loose (i.e. civil war).
January 6th, 2008, 2:00 pm
G said:
One would suspect that Bashar was fully aware of this and was able to extract the most concessions by waiting for the last minute.
Right, which is why the Arab statement nixed the Syrian demand of a veto power for Hezbollah and its friends and essentially adopted the position that March 14 has been advocating for weeks regarding the make-up of the next cabinet.
Like I said, people who understand nothing congratulating themselves over not understanding anything.
January 6th, 2008, 2:45 pm
GG said:
Offended,
I agree with all you say, but I don’t understand your point.
I feel that the Arab League plan, believe it or not, is a genuine attempt to solve a problem amicably. If it weren’t it would have leant more towards M14, which is what Saudi Arabia was pushing for in order to maintain Sunni power and containment of the Shia.
The US wants Hizbullah defeated even if it has to destroy Lebanon to do so. If not, why did the US administration not pressure Israel to stop bombing Lebanon, instead Rice went on about the “birth pangs of democracy.”
Ehsani,
This plan was not drafted because of the US, but in spite of it. Do you really believe the US will be happy with it? Of course not! If the US administration had any desire for a genuine settlement in Lebanon it would not have sent Welch to Lebanon to scupper the French brokered deal, and President Bush would not have gone on TV to openly declare that he is willing to recognise a Lebanese president elected outside of the constitution. This is not what the US wants and they will pressure M14 to knock it back.
January 6th, 2008, 2:51 pm
idaf said:
Ehsani,
Some people are waiting for your comments on the actual post from the Economist on Syria’s economic outlook. I’m not one of them 😉
January 6th, 2008, 3:49 pm
Alex said:
G,
If it makes you feel better, sure … why not. M14 won everything they wanted in this deal and the stupid, intellectually-challenged Syrians were taught a lesson they will never forget. I still like it and I hope it works out great for everyone in Lebanon.
GG,
This was not simply a meeting of the foreign ministers of the Arab league. A serious deal was reached, at the regional and at the Lebanese levels. Here is what happened:
1) Prime minister of Qatar visited Bashar in Damascus the day before
2) Foreign ministers of KSA, Egypt, Qatar and Syria met in Moussa’s house. That’s where the final agreement was reached. At first Saud al-faisal told Mouallem that Syria’s allies are asking for the undoable and that Saudi Arabia (and Egypt) are not going to be attending the Arab Summit if Syria does not help convince her allies to reduce their demands (Which implies that KSA and Egypt WILL attend the Arab summit in Damascus now). Then, Moussa suggested a compromise .. which I suspect he knew already from the Qatari prime minister who was in Damascus earlier, that Syria will accept.
3) They called Seniora to inform him of the deal they reached (to inform him) and and he replied “I completely welcome” the agreement.
4) Hizbollah people were contacted and they expressed a similar opinion. But I have not heard a clear statement from Nasrallah yet.
As I said earlier, I expect that Hizbollah will require some clarification behind the scene when Mouallem comes back … this agreement is borderline acceptable to them. Although I tend to think that wen the Iranian envoy was in Damascus that day and gave his blessing to “Syria’s efforts to settle the conflict in Lebanon” that Hizbollah took part in the decision to go along with the eventual Arab League formula.
5) Saad Hariri called this agreement “Noble and Historic” .. that’s good enough I assume.
6) Nothing yet from Junblatt and Geagea. They also will need to hear some details from Tareq Mitri when he comes back to Beirut.
Before the Arab league meeting, M14 figures asked Arab ambassadors (Egypt etc) to take firm actions to punish Syria. Similar escalation came from the opposition side. Lebanese Information Minister held a news conference in which he compared the tense situation in Lebanon to that which preceded the assassination of Rafiq Hariri and expressed his worries that similar bloodshed might be ahead for Lebanon if an agreement is not reached.
Most likely we will see many new difficulties. But whatever the extent of the influence of outsiders (Syria and KSA at a direct level, then the United States and Iran behind them) an agreement was reached on the outside after consulting with their allies on the inside. We will now find out if the Lebanese themselves are to blame for their own problems or not.
AND … I hope that with the Lebanese challenge being under control, the region will be able to survive the rest of term of this American administration that refuses to speak to Syria. The problem with reaching an agreement with Lebanon is that it had a deadline attached to it … a president for Lebanon needed to be elected and that was looking impossible at some point without a way for America and Syria to talk (and Saudi Arabia and Syria to talk). The other regional issues could wait if necessary for the next administration to start with a clean sheet.
Prime minister of Qatar, then Saud alFaisal, and Mouallem talked for few hours and they managed to solve a problem. I wonder what Sarkozy, and those who advise America not to talk to Syria, will say about giving up on talking to the Syrians.
January 6th, 2008, 4:11 pm
EHSANI2 said:
Dear G,
You should be very happy then. March 14th got everything it wanted.
When you negotiate, you ask for the moon and then settle for what you think you could get. Having HA ask for the veto power and then step in to “pressure” them into accepting a deal is tactic that you don’t seem to fully appreciate.
Anyway, Syria was brought to its knees and yielded to pressure. I guess this is what you want to believe. If that makes you sleep better tonight, so be it.
Let us agree that this is good for the region and for Lebanon in particular.
January 6th, 2008, 5:11 pm
GG said:
Alex,
I admire your optimism, but I’d like to make two points:
1) I still think you imbue Syria with more influence over Hizballah than she actually has. You translated Hassan Nasrallah’s interview yourself:
‘He was asked if Syria CAN apply pressure? .. he said: “They can as friends ask us to do things as a favor for them, yes. This is Syria, not Cyprus”’
If the terms of this deal are not in Hizballah’s interest do you think he’ll subjugate his party’s interest to those of Syria?? I may be wrong, but I think you have a lack of understanding of Hassan Nasrallah as a person and Hizballah as a party. Nasrallah will listen to Syria’s opinion (as would any other politician meeting with his ally), but at the end of the day he’ll do what’s good for his party and community.
2) You seem to have discounted the opinion of Nasrallah’s other allies, particularly Aoun. Do you think he would agree to something if Aoun doesn’t agree to it? Nasrallah has tried and succeeded in nurturing a “my word is my bond” image, if he agrees to something without the support of his allies he would be shooting his credibility, both in Lebanon and the Middle East. He spent the past year accusing Hariri and Jumblatt of stabbing him in the back (if I remember he mentioned this too in the interview), how would stabbing his allies in the back look to Nasrallah’s supporters. Remember image is very important to Hizballah! Plus Aoun is popular among the Shia.
January 6th, 2008, 6:39 pm
Observer said:
Many details need to be addressed before the fat lady sings. The three points are to use the constitutional means to elect Suleiman, to use the constitutional meas to form a unity goverment in which the President will have the final casting vote and the appointment of his ministres, and there will be a new electoral law. This is the undoing of Taif, it also opens the door for better representation of the Shia community and makes the President ( a pro Syria ) the king maker. Siniora showed how sovereign his goverment is by accepting this formula at once, HA has agreed on principle that this forms a new beginning and they are studying its merits. Geaga, Aoun, and Jumblatt have not had a major say in it yet. The key is what will Bush do now? The next few days will be very interesting.
January 6th, 2008, 6:40 pm
Alex said:
GG
The mood in Lebanon (among the journalists and politicians at least) is very positive and upbeat.
It will be quite a disappointment if Aoun or Nasrallah today showed up on TV and ruined the party. I seriously doubt they will do that.
Besides, many Hizbollah figures already appeared to give their support. they are not as enthusiastic as others, but they are already showing good signs.
My guess is that Nasrallah and Aoun will not announce their full support until they make sure Eliot Abrams will not call Jumblatt and Geagea ad ask them to sabotage it.
Syria and Iran seem to be reasonably confident at this point given Saudi and Egyptian guarantees they received.
But of course nothing is final … it remains to be seen if any of the valid reasons you mentioned could derail the reconciliation process.
As for Nasrallah … you might want to know that a friend of mine who just came from Syria told me that in a Christian village near Tartous, he found that Nasrallah’s picture is on many walls in those villagers’ homes.
The Syrians do not impose anything on him and certainly do not take him for granted. But they both understand each other’s needs and goals, and they never stabbed each other in the back … unlike the participants of most other shifting alliances in the Middle East.
If the Syrians said yes this week, they know that there is a very good chance Nasrallah will say yes.
January 6th, 2008, 7:47 pm
GG said:
Alex,
“It will be quite a disappointment if Aoun or Nasrallah today showed up on TV and ruined the party. I seriously doubt they will do that.”
You’ll get no argument from me! In fact if you look at the 9th comment up from yours you’ll read that I write, “The opposition will accept this Arab League plan…” It gives the opposition basically what it wants. In fact I’m sure that when Egypt’s foreign minister met with Aoun last Friday he put the outlines of the plan to him to gauge his reaction. Moreover, Gebran Bassil welcomed it as a positive step, and MP Ali Hassan Khalil said that the plan is what the opposition has been asking for, but that the split should be 10 ministers for opposition, 10 for M14 and 10 for the president.
My point is that the devil’s in the detail and if the detail is not to Hizballah’s liking then all Syria can do is walk away saying,”We did what you asked of us and there’s nothing more we can do.”
“My guess is that Nasrallah and Aoun will not announce their full support until they make sure Eliot Abrams will not call Jumblatt and Geagea ad ask them to sabotage it.”
I think the opinion of these two is irrelevant at this point!
January 6th, 2008, 8:06 pm
majedkhaldoun said:
this is the time for Geagea,Nasrallah,to stay quiet, waiting for the others to speak first. I am not optimistic, yet.Lebanese president is not appointed by Arab League,but by the lebanese parliament.
January 6th, 2008, 8:25 pm
SyriaComment - Syrian politics, history, and religion » Archives » The Regional Lebanon Deal? said:
[…] This al-Nahar article in Arabic spells out the deal as follows: […]
January 6th, 2008, 8:57 pm
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