(Amjad Rasmi, Arab News, 5/14/04)

American Sanctions on Syria: Godsend to Hardliners, Hell for Liberalizers
By Ehsani, January 19, 2010
For Syria Comment

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The United States first imposed economic sanctions on Syria, May 12, 2004. These sanctions were imposed mainly because of Damascus’s support for resistance groups: Hezbollah and Hamas. Even though Syria withdrew its troops from Lebanon in 2005, the U.S. expanded the sanctions regime in February of 2008 by targeting the wealth, possessions, and travel of senior officials and anyone who does business with them. The new U.S. Administration failed to reverse this policy. On May 8^, 2009, President Obama renewed economic sanctions against Syria despite diplomatic outreach to the Damascus government. The October 2009 visit by Deputy Foreign Minister Faysal Mekdad to Washington produced no breakthroughs. Finding a way to end US sanctions on Syria was at the top of his agenda; but his efforts were in vain. The White House threw up its arms, claiming that only congress had the power to lift sanctions; in order to make any headway on that front, Syria would have to change its regional policies. This is a recapitulation of President Bush’s Syria policy. To make the point further, President Obama declined to relax US objections to France’s sale of Airbus planes to Syria, which could be justified as an exception to the sanction regime on the basis of civilian safety. Spare parts for Syria’s antique and failing Boeing jets were earlier released using this rationale.

Even though the sanctions were first imposed under the rubric of punishing Syria for interference in Lebanon, their dismantling will come only when Syria abandons its policy of resistance to Israel. Syrian-Lebanese relations have improved dramatically since sanctions were imposed, but this change has not been reflected in the economic relations of Washington with Damascus. While former regional foes kiss and make up, America finds it hard to follow suit.

Economic sanctions will not change Syria’s foreign policy or the priority it places on getting back the Golan Heights, which Israel took when it launched the 1967 war and annexed in 1981. Only peace and the return of the Golan Heights will change those policies and end Syria’s resistance to Israel.

What is the effect of economic sanctions? They retard economic reform and liberalization in Syria.

They give ammunition to hardliners and Baathists within Syria to preach fear of the West and America.

It is not easy to be a Syrian economic reformer.  First, you have to convince the socialists within your ranks of the virtues of free markets and capitalism. The latest credit crisis has made this job a lot harder. And if this were not hard enough, the reformers also have to deal in a world where the global economic superpower can slap you with sanctions that are designed to bring weaker nations to their knees. In this environment, those arguing for self-sufficiency and insular economic policy will score a comfortable and easy win over those arguing for reforms and open markets. Indeed, the only reason Syria has weathered the storm and has been able to survive the American sanctions is because of its long standing policy of self- sufficiency and relatively closed economic system.  To embrace capitalism and economic reform while the threat of economic sanctions is always waived against you is akin to committing political suicide.

Syria needs to create close to 250,000 jobs a year to absorb its rapidly expanding labor force. In order to do that, she needs her economy to grow by at least 7% a year.  Growing an economy this fast requires large foreign investments in infrastructure and domestic reforms. While the latter has been in motion for the past few years, attracting foreign investment while the U.S. imposes economic sanctions on Syria is not an easy feat. Any investor that decides to do business in the country runs the risk of having his international accounts frozen by Mr. Levey of the U.S. Treasury.

What the U.S. sanctions accomplish is to hand Syria’s economic hard liners a carte-blanche with which to push their anti-western agenda.  Those arguing for an opening to the West must bite their tongues for fear of being branded supporters of America and her regional ally Israel.

The American sanctions on Syria have added to poverty and lowered the country’s standard of living. The Syrian leadership is fully aware of the domestic economic reforms that it must implement.  While the speed and breadth of these reforms can be accelerated and expanded, this cannot take place while the stick of economic sanctions waved above Syria’s head by the White House.

The Arab world as a whole needs to create close to four million jobs, according to various projections.  If America and the West want to reverse the spread of extremism and religious fanaticism, as it says it does, a modern day Marshal Plan is needed for the region, not more privation. Given America’s budget deficit troubles, such a policy ought not to involve tax-payer grants of money by the US government. Only private investment can pick up the slack. American foreign policy must be focused on prodding the governments of the Middle East to promote maximum economic growth without inflation. This has been the mandate that America’s Central Bank (Federal Reserve) operates with. Indeed, when it comes to China, successive U.S. Administrations have accepted its emergence as an economic power before its political liberalization.  When it comes to the Arab world and Syria, however, the notion of pushing governments to embrace a similar economic principal goes out of the window. What the Arab people need from America is support for open markets, higher standards of living, and faster integration in the global economy.  What the Syrian people have received instead is sanctions and abuse that impede economic growth and make them poorer.  Those who continue to argue for keeping the sanctions fail to show how these measures have achieved their stated objectives.

Syria’s economic reformers already have their hands full trying to undo the country’s 40-year experiment with socialism. They do not need America — the apotheosis of capitalism and free markets — working against them as well.

Netanyahu must avert Turkey’s slide toward Syria and Iran
By Itamar Rabinovich
Haaretz

Hit TV series behind Israel-Turkey spat, The Valley of the Wolves, is a long-running ratings hit which has drawn criticism for being nationalistic and violent.

“Pay attention that he is sitting in a lower chair . . . that there is only an Israeli flag on the table and that we are not smiling,” Ayalon told the media, which he had invited to the meeting. Two weeks ago, Foreign Minister Avigdor Lieberman announced a new Israeli diplomacy: diplomacy of national pride. The days of groveling are over, he said.

Now that the melodrama of insults and apologies has passed, the government of Israel should seriously tackle the challenge of its relations with Turkey – one of the most important elements of our national security. What’s needed is a departure from routines, and primarily the engagement of the prime minister in managing the crisis.

The strained relations between Ankara and Jerusalem affect the balance of power in the entire region. A decade ago, Turkey was an ally of the United States and maintained varied and extensive relations with Israel. In recent years, it has been sliding toward Syria and Iran and away from America, and has become a venomous critic of Israel. If it slides any further, Turkey could become part of an Iranian-Syrian-Turkish triangle that would be a key element in Middle Eastern politics – to the detriment of Washington, Israel and the moderate Arab states.

Turkey’s foreign and domestic policies have undergone a transformation in the wake of developments upon which outside forces, including Israel, have no influence. The end of the Cold War eliminated Ankara’s dependence on Washington as a shield against the Soviet Union, and the European Union’s de facto refusal to take Turkey in has weakened the part of the country that advocate a secular, modernist and pro-Western orientation. Most importantly, the Islamist party, which has gradually shed the moderate cloak it started out with, has been taking over the country’s power centers.

The secular parties are weak, while the military is paralyzed by a dilemma: Grabbing power in a military coup, as has occurred in the past, would finally slam the door on the European dreams harbored by the secular modernist camp the army represents. Meanwhile, the government of Recep Tayyip Erdogan has been systematically wiping out the opposition’s remaining power centers. A similar pattern has emerged in relations with Israel: estrangement accompanied by calming rhetoric, followed by hostile rhetoric and actions. Turkey’s role as mediator between Israel and Syria served to cover up the course of these developments, but it has ended in a breakdown.

There is not much Israel can do under these circumstances. The sources that yielded the collaboration have for the most part dried up. The Soviet Union is no more and Turkey has joined the radical camp in the Arab world. The influence held by Washington and Europe has diminished. The main assets Israel still wields in its ties with Turkey are mutual economic and security interests, the need of the Turkish ruling party to take into account the opinion of the army and pro-Israeli elements, and the country’s goal of playing a central role in regional politics. The Turkish leadership realizes that to mediate between Syria and Israel, or to help the Palestinians, it must maintain a dialogue with Israel.

To take advantage of its assets, Israel has to make a concerted effort, managed by the top governmental echelon. A considerable part of the damage caused last week would have been averted if the prime minister had intervened earlier. He must ensure coordinated action and division of responsibilities. The embassy and consulates in Turkey must also be strengthened. Turkey is still a democratic country with a developed economy and infrastructure, and with which Israel should engage. Moreover, “Jewish diplomacy” – to which the Turks tend to ascribe great importance – should be put into effect. Having already made bitter enemies of the Greeks and the Armenians, they certainly don’t want to do the same with the Jewish people.

It is a difficult and complex task, whose fruits will not be immediately evident. The prime minister must place it high on his agenda.
[end]

Addendum: Yossi writes in the comment section:

Israel presents a big conundrum for the Europeans, who are torn between despise to its occupation policies, guilt, indifference and in times collusion with Israel against the Arabs, this is a very confusing mix. Aside from Germany always pulling an extra sub for Israel when asked to, the overall policy indeed seems to hover between indifferent and erratic. It seems that the same way European academics and businessmen boycott Israelis—without much fanfare or saying they are doing so—is the same way diplomats are tacitly supporting the critical Turkish stance towards Israel. Short of a major economic shift of powers—e.g., China stopping its underwriting of America—I have no idea where this all will lead to, probably nowhere anytime soon. Whatever aversion lefty academics and diplomats have against Israel, it seems to be countered by the right-wing/anti-immigrant/anti-Muslim politics that have taken hold of the continent

To the extent this will end up in some chilly atmosphere for Israel.. I personally don’t believe that a weaker Israel will be more moderate. It could turn more bitter and belligerent. This could turn really explosive.

I also don’t buy what Norman and Shai are saying: Israel is extremely unlikely to bow to any of the Turkish demands. It will not accept Turkish mediation, it will not lift the siege over Gaza, and it will not let the Turks visit Gaza or send aid. Israel will only lift the siege when the Americans say so. It doesn’t need Turkish mediation. It was only necessary when the Americans were unwilling to mediate themselves. Any politician who would accept Turkish mediation is sealing his fate in Israeli public opinion court as the Israelis are fuming at the Turks.

The Turks are playing with Israel, on the one hand they are extremely critical and allow for incitement against Israel on their media, on the other hand they continue to buy Israeli arms. This is sure to cause tensions within Israel between “pride” oriented politicians like Ayalon and perhaps long-term strategists who could be worried that the weapons will end up eventually in hostile hands, and the military complex who wouldn’t want to give up the opportunity to make a buck.

It’s been a long time since Israel had to deal with such nuisances, we’ve gotten used to applying a sledgehammer to any problem and the political system doesn’t really have the skill anymore to deal with delicate situations such as the current one poses. This is why Israel imploded with the theatrics of FM deputy Ayalon a few days ago. Such an incident could not have happened before the Bush years, when Israel got thoroughly intoxicated with power. Expect to see that only the following will be allowed to deal with the Turks going forward: Bibi, Barak, maybe Meridor, the top brass of the IDF. Lieberman and his cohorts will be kindly asked to continue their diplomatic forays into equatorial Africa and leave Turkey to the grownups.

The surface-to-air missiles armament of Hizballah is an interesting question. My guess is that Syria will not give them to the Hizb, and if they do, then Israel will bomb them, and nobody will say or do anything serious in response. On the other hand, if the Lebanese army got them from Russia, that would put Israel in a more complex situation.

Turkey’s Prime Minister Erdogan has sp0ken of Syria, Lebanon, Jordan and Iraq as the “?amgen area” or Greater Syria. (“?am” is Cham in Turkish, which historically in Arabic/Turkish refers to both Damascus and ‘Greater Syria’): A couple of interesting articles on the reemergence of the Turkish “Damascus Province” (wilayat Dimashq) collected by Idaf – [Thanks Idaf for bringing this to our attention.]

Turkish-Israeli tension on the axis of the ‘Damascus Province’
Hurriyet

During an unexpected spring atmosphere in Istanbul in the middle of January, at the garden of Four Seasons Hotel in Bosphorus, Lebanese ministers and I, together with my colleagues, are having a conversation.

“You have arrived to cause a war between Turkey and Israel,” I joked. Lebanese officials are in laughter. They are happy, especially Prime Minister Saad Hariri who tells me that he had a multi-purpose visit and it was quite successful.

The pleased Lebanese guests are discussing the importance of Hariri’s visit to Turkey, which is the extremely critical first visit of the prime minister. Some are excited to be in Istanbul for the first time. The Lebanese agriculture minister, representing Hezbollah in the Cabinet, is asking “Which side of Istanbul are we on right now?”

I answered, “On the European side.”

He says: “The other side is Asia,” as tear drops appear in his eyes. “That side is the East,” the minister adds while staring at the district of Üsküdar. And I point my finger and say: “Yes. But Lebanon is across from it.”

I jokingly say to the Lebanese ministers: “Considering the point Turkey and Lebanon have reached; a kind of a triple-axis is emerging in the region.”

One of them adds, “Don’t forget to add Jordan,” in a way to approve my remarks. Jordan is another regional country which Turkey has recently lifted visa applications.

Yet another one is jumping into the conversation, “As Turkey has lifted visas, the Damascus Province has come out again.”

The Druze Transportation Minister Gazi Aridi, a member of Walid Janbulat’s party, is warning that the Lebanese media have not completely grasped the importance and value of the prime minister’s visit to Turkey. The Lebanese press today will be aware of the “situation,” just like the Turkish press, which also skipped Prime Minister Recep Tayyip Erdo?an’s remarks on Israel during a joint press conference he held with Hariri two days ago. So, the “arrogant reaction” Israel showed the other day will wake up Turkish media inevitably.

The Israeli press is already aware of the situation. On the front pages yesterday, Israeli newspapers fully concentrated on the tension that recently emerged with Turkey.

Following Erdo?an’s statement, the Turkish ambassador to Tel Aviv, Ahmet O?uz Çelikkol, was called back to the Foreign Ministry. Israeli Deputy Minister Danny Ayalon didn’t get the chance for a handshake with the Turkish ambassador, let him sit on a lower chair than his own and told the cameramen in Hebrew: “Pay attention that he is sitting in a lower chair … that there is only an Israeli flag on the table and that we are not smiling.”

I tried to explain in my article the other day that the “situation” that has emerged between Israel and Turkey is the result of the steps Turkey is taking beyond the “Middle East status quo.” The latest developments taking place in the last 24 hours, therefore, have confirmed my piece.

***

The rapprochement policy Turkey followed toward Syria has born the fruit of a lifting of visa restrictions. A total of 51 agreements were signed. Turkey also lifted visas against Jordan. As Hariri was visiting Turkey this time, relevant agreements were signed too.

One of the Lebanese ministers told me the other day that free entry will be enforced as of Thursday. He also stressed that the training and equipment of the Lebanese Army will be provided by Turkey and that electric and gas deals, which all are critically important for Lebanon, were signed.

All these confirm Turkey’s leadership in the Middle East and can be read that the country is taking a geopolitical position against Israel. All of the above countries, along with the Palestinian land today, were called the “Damascus Province” under the Ottoman dominion.

In fact, Erdo?an, in a private conversation with the Lebanese officials, made an irony and referred to the Schengen area in the European Union. I’ve learned that he said “We have the created ?amgen area;” “?am” means Damascus in Turkish.

As Turkish-Israeli relations turn sour, Turkey has lifted the visas to all Arab countries neighboring Israel and a political-economic integration is being pursued.

This means being a “center of power” in the region.

But if you pay attention to Erdo?an’s remark on Israel the other day in the press conference with Hariri, you realize that Turkish Prime Minister said: “Israel says ‘I am the power of the region’ because there is an imbalance of opportunities. We never approve of this picture. We will continue to be with the aggrieved.”

Against a state that declares itself to be the power of the region just because of having more opportunities than the others, Turkey gathers the “aggrieved” around it, lifts visas, engages in serious economic ties and does all these by applying “soft power” only.

We should expect more reactions to come because Turkey and its prime minister have made serious moves against Israel and have caused debates both at in the region and outside it.

***

Discussions have already started in Israel. We see two tendencies in the Israeli government toward Turkey: The “anti-Turkey” camp is led by Foreign Minister Avigdor Lieberman, famous for his racist approach toward the Palestinians. According to the Jewish daily Haaretz, Lieberman is looking for ways to dynamite the Likud Party leader and Defense Minister Ehud Barak’s visit to Turkey next week.

Making an attempt to insult Turkey via its ambassador is interpreted as Lieberman’s plot to cause tension with Turkey.

The rightist Jerusalem Post backed up Lieberman and revealed the said “plot” the other day:

“The government removed the gloves on Monday in response to provocative actions and comments coming from Ankara, with the Foreign Ministry slamming Turkey as the last country that can preach morality, and Deputy Foreign Minister Danny Ayalon calling in Turkey’s envoy for a dressing down in front of the cameras.”

“Israel’s message to Turkey is clear,” one diplomatic official said. “If you want a fight, we’ll fight.”

As Lieberman tries to block Barack Obama and Bejamin Ben-Elizer, both who are in favor of protecting relations with Turkey, President Benjamin Netanyahu is apparently trying to create a “problem” between Turkey and U.S. out of Turkish-Israeli tension.

Who is to lose in this Turkey-Israel row?

Whichever losing power in the region and in international arena, weakening and being isolated, it will lose.

Whichever keeps “internal balances” tight will win.

Turkey embraces role as Arab ‘big brother’
By Sami Moubayed

DAMASCUS – After the Justice and Development Party (AKP) came to power in Ankara, many in the West referred to a new Turkish foreign policy called “neo-Ottomanism”, suggesting a revival of the intellectual, political and social influence of the Ottoman Empire, which departed the scene 92 years ago.

That policy was attributed to Prime Minister Recep Tayyip Erdogan and his advisor, now foreign minister, Ahmet Davutoglu. Quickly, however, the term “Ottomanism” began to fade, given that it was difficult to market in countries formerly controlled by

the Ottoman Empire due to continued indoctrination against Ottomanism by the Arabs over nine decades.

Some, however, continued to stand by the term, including Cuneyt Zapsu, an advisor to the Turkish prime minister, who said: “A new, positive role for Turkey in the world requires a reconciliation with its own past, the overcoming of societal taboos, and a positive new concept of Turkish identity. We are the Ottomans’ successors and should not be ashamed of this.”

Decision-makers in Turkey had once tried to hide their Ottoman past, ashamed of it during the heyday of Kemal Ataturk because it looked backward and was too Islamic for the secular state that was being carefully erected in Turkey. That is now a thing of the past thanks to the steady policy of the AKP, which has been opening up to countries such as Syria and, more recently, Lebanon.

Many wrongly interpreted Erdogan’s policy towards the Arab world, now entering its seventh year, as purely a Syrian-Turkish alliance. By nature of his new orientation, Erdogan is striving to restore Turkey to its rightful place amongst Arab and Muslim nations, and that by no means stops at the gates of Damascus. It is a policy that embraces Egypt, Jordan, Palestine, Syria, Lebanon and Iraq.

During the past few years, Turkey has sponsored indirect talks between Syria and Israel, tried to hammer out solutions between Fatah and Hamas in Palestine, and worked on mending broken fences between Damascus and Baghdad after relations soured last August.

Turkey has permanently stood as a mediator between Iran and the Arab world and has worked hard to help embrace non-state players like Hezbollah in Lebanon and Hamas, whose leadership it received in Ankara in 2004, despite public outcry from the United States.

Additionally, it has tried to flex its muscle within the complex world of Iraqi politics, calling on Sunni leaders to take part in the political process that was started after the 2003 downfall of Saddam Hussein. Big brother Turkey, after all, had mediated in similar waters at the turn of the 20th century and apparently still knows the region, its people and their plight only too well, and still feels best suited to solve existing conflict within it.

This week, Erdogan received Lebanese Prime Minister Saad al-Hariri in a groundbreaking visit to Turkey, adding yet another link to the long chain of alliances that Erdogan is carefully creating for the Turkish republic.

Among other things, the two countries agreed to increase technical and scientific cooperation in military affairs and lift visa requirements between Lebanon and Turkey. At first glance, this will boost tourism and people-to-people contact between Beirut and Ankara.

According to official numbers, 50,794 Lebanese tourists went to Turkey in 2008 – an increase of 18,000 from 2007 and large when compared with the number, not more than a few hundred, of Turkish tourists who streamed into Beirut.

It will certainly affect bilateral trade, which stood at US$225 million in 2002 and now stands at $900 million. It also means that Turkey has now lifted visa requirements with six Arab countries, the others being Libya, Morocco, Tunis, Jordan and Syria.

Erdogan best explained it by saying that a “regional Schengen” system, similar to the agreement signed between European countries in Luxemburg in 1985, has now gone into effect in the region, removing systematic border control between these countries – making them closer to how they had been under the Ottoman Empire. When Iraq normalizes, he added, it, too, could join the regional “Schengen” system.

Clearly from all the optimism shown by Erdogan for the Hariri visit, cooperation between Turkey and Lebanon will not end there. The Turkish premier, after all, has visited Beirut twice, in 2007 and in 2008, and was the most senior foreign guest attending the inauguration of Lebanese President Michel Suleiman.

During the Israeli war of 2006, he firmly stood by the Lebanese, and in its immediate aftermath, sent 600 Turkish troops to take part in peacekeeping on the Lebanese-Israeli border by the United Nations Interim Force in Lebanon. Erdogan saw to it that $50 million worth of aid was given to reconstruct southern Lebanon, along with building 41 schools, five parks and a rehabilitation center worth $20 million.

Politically, Lebanon and Turkey are now colleagues in rotating positions at the UN Security Council, and this is where real political cooperation will materialize in the months to come. Turkey’s heavyweight influence will come in handy as Lebanon tries to waiver Security Council resolution 1559, which called on the Syrians to withdraw from Lebanon and stipulates the disarmament of non-state players, including Hezbollah.

In as much as the Hariri team once called for implementing 1559 in 2005-2009, they would now prefer that it disappears, given that, far from being an adversary, Hezbollah is now a Hariri ally, strongly represented in both parliament and the Hariri cabinet.

The Lebanese government recently claimed that the resolution should be canceled, saying that all of its clauses had been fulfilled, noting that Hezbollah was a part of the Lebanese state and defense system and not merely a non-state player or a militia, as many in the West claim it to be.

That argument, which saves both Hezbollah and Hariri the burden of having to deal with 1559, was put forth last December by Hariri’s new Foreign Minister Ali al-Shami, an appointee of the Hezbollah-led team in the Hariri cabinet.

When speaking at a press conference with Erdogan, Hariri noted that not a single day passed where the Israeli Defense Forces did not infringe on Lebanese waters or airspace, claiming that this was a legal breach of UN resolution 1701, which was passed after the war of 2006.

Erdogan nodded, saying that Israel had breached “no less than 100” resolutions in recent years, adding: “This requires serious reforms at the United Nations. We do not support Israel’s position and will not remain silent.”

Having Turkey on Lebanon’s side will be a great boost for Hezbollah, which is preparing for a possible new round of confrontation with Israel in summer this year. From Ankara, Hariri came to Hezbollah’s defense, telling reporters, “Terrorism is not when one defends one’s land – the opposite is correct,” thus supporting Hezbollah’s war against Israel until the Sheba Farms are liberated from Israeli occupation.

This fits in nicely with the barrage of criticism that Erdogan has been firing against Israel for the past year, started in January 2009 when, speaking at Davos right after the Gaza war, he told Israeli President Shimon Peres: “President Peres, you are old, and your voice is loud out of a guilty conscience. When it comes to killing, you know very well how to kill. I know well how you hit and kill children on beaches.”

Erdogan, in the weeks to come, will help further normalize Syrian-Lebanese relations, saying that he advised his “friend” President Bashar al-Assad to reciprocate Hariri’s visit by paying a visit of his own to Beirut. He will further work with Syria and Lebanon to see to it that Hezbollah is sheltered from another Israeli war, and try to pressure Israel to return to the negotiating table to lift the siege on Gaza and restore the occupied Golan Heights to Syria.

Best mirroring Erdogan’s new policy is that, despite the new and firm relationship with the Arabs, he has not wasted his country’s historical relationship with Israel. Although critical, his embassy remains open in Tel Aviv, and he is preparing to receive Israeli Defense Minister Ehud Barak in Ankara in late January.

Only by being able to talk to all parties will the Turks achieve the security and normalcy they aspire to in the Middle East. While Israel is not pleased with Erdogan’s new policy, claiming that he has clearly taken sides in the Arab-Israeli conflict, the Arabs are thrilled that the Turkish giant has emerged and, unlike the case since 1918, is now clearly on their side in the battlefront.

He has reminded the Arabs that despite a very rough period in bilateral relations during World War I, the Ottoman legacy in the Arab world was not all bad, and not all autocratic. Why? Because by defending Syria, Lebanon and Palestine, Erdogan feels that he is also defending Turkey, seeing all four countries as one, given their geographic, historical, social, religious and cultural proximity.

Many of the finest buildings in Damascus and Beirut, after all, were constructed during the Ottoman era. So were many of the codes, laws of commerce and aspects of civil administration, which lasted well into the 20th century. The Ottoman influence on Arab language, heritage, music, heritage and cuisine, cannot be ignored, despite years of trying to write off anything Ottoman as being destructive to Arab culture.

Although the Ottomans struck with an iron fist at the Arabs working with Great Britain against them during the Great War, they also – very symbolically – refused to sell land in Ottoman Palestine to the Zionists during the reign of Ottoman Sultan Abdulhamid II. It is that part of Ottoman history that Erdogan wants the Arabs to remember, not the hangman’s noose that was erected by the Ottoman governor of Syria, Jamal Pasha, in the central squares in Beirut and Damascus in 1915-1916.

When the republics were young in Lebanon, Turkey and Syria, Turkish and Arab nationalism stood in the way of a clear appreciation of history, leading to nothing but bad blood between Arabs and Turks. That era is now hopefully gone – never to return – thanks to the efforts of Erdogan, referred to, very symbolically, by Hariri as “Big Brother” during his Ankara visit.

Sami Moubayed is editor-in-chief of Forward Magazine in Syria.

Analysis: Assad’s new regional strategy creates fresh options
By Moshe Maoz in the Jerusalem Post, Jan 11, 2010

… Damascus is likely to use this new configuration to advance yet another crucial objective: to negotiate with Israel the return of the Golan Heights from a position of regional strategic advantage. Apart from seeking to renew indirect talks withIsrael under Turkish auspices, Syria can now use Saudi good offices in convincing Washington to mediate a peace deal between Damascus and Jerusalem, either bilaterally or within the framework of the Arab Peace Initiative. Concurrently, Assad can exploit Iran’s strategic umbrella and Hizbullah’s serious nuisance value to signal toIsrael that he has military options. While he would like to keep all these options open, he would certainly prefer the diplomatic track, in league with the United States and Sunni Arab states, notably Saudi Arabia.

As a precondition, Syria has to be assured that under a peace treaty with Israel it would retrieve the entire Golan Heights (and the Shaba Farms) and receive massive financial aid from the US and Saudi Arabia (and other Arab Gulf states)…..

However, Damascus will reject any precondition requiring it to sever its strategic-military alliance with Teheran, lest it abandon the regional maneuverability and strategic umbrella Iran affords it vis-à-visIsrael’s military advantage. For its part, Israel should insist that Syria erase from its bilateral military agreements with Iran the anti-Israel clauses and eliminate Hizbullah’s arsenal of missiles and rockets. In return, Israel should undertake to withdraw from the Golan Heights (and Shaba Farms) within the framework of a peace agreement modeled on the 1979 Egypt-Israel treaty, meaning demilitarization and effective supervision of the Golan Heights, diplomatic, economic and cultural relations with Syria and cessation of Syrian anti-Israel and anti-Jewish incitement. Israel should also initiate, with international funding, a regional water project designed to supply the crucial needs of both countries as well as of Jordan and the Palestinians.

It can be expected that the majority of Israeli Jews (now some 70 percent) will maintain their refusal to relinquish the Golan Heights even in return for peace with Syria. By contrast, the core of the Israeli military-security establishment is advocating the afore-mentioned deal with Syria, provided this helps reduce Iran’s and Hizbullah’s threats. Prime Minister Binyamin Netanyahu, despite his rhetoric, may also be inclined to pursue a peace agreement with Assad, if only to deflect US, Arab and international pressure to resolve the more complicated Palestinian problem….

Turkey and Israel: Quo vadis?
SUAT KINIKLIO?LU in Zaman

Despite some Israeli and American efforts to paint Turkey’s objections to Israeli policies as “anti-Semitic,” people in the business understand very well where Turkey is coming from. They equally recognize that disagreements between Turkey and Israel are likely to continue provided there is no recognizable change in issues such as improving the humanitarian situation in Gaza, the complete and immediate freezing of settlements and the overall posture of Israel toward the peace process — if one can still talk about such a process.

I remember vividly the days when the US was criticizing Turkey for engaging with Syria at a time when Washington and the Europeans were trying to isolate Syria. Today we see a full reversal of US and European policies on Syria. These actors now recognize that engaging with Syria is the right course of action. Then, Turkey’s views on the Middle East were shunned and disregarded — in my view, primarily due to the inability to make the mental shift about Turkey and its new posture. The Americans began to revise their position in 2007 and recognized that Turkey is a regional power and no longer the satellite state of the Cold War years. They understood that Turkey needed to be treated accordingly. It took quite a bit of time and effort to facilitate that mental shift, but US President Barack Obama’s early visit to Turkey was a confirmation of that perception vis-à-vis Turkey.

The Europeans still have a hard time making the mental shift concerning Turkey, which is why our relations remain fragile. Israel appears to be in the same position. They also do not seem to have fully accepted that Turkey has changed — as Americans came to notice on March 1, 2003 — and that Turkey’s re-entry into the Middle East is permanent. Israel appears to be yearning for the golden 1990s, which were the product of a very specific structural situation in the region. Those days are over and are unlikely to come back even if the Justice and Development Party (AK Party) ends up no longer being in government. The natural uniting and bonding in Turkey over the Ayalon affair should be an eye-opener for those who believe that all would be dandy if only the AK Party would fall from power. Friends and foes better treat our ambassadors accordingly. Clumsy efforts to humiliate a Turkish ambassador should never be part of Israeli domestic political calculations.

Our neighborhood policy seeks to reintegrate Turkey into its immediate neighborhood, including the Middle East. Turkey is a member of the G-20, a member of the UN Security Council, negotiating with the European Union and increasingly influential in various regions. Turkey will continue to advocate a new inclusive order in the region and will seek diplomatic means to further this agenda. As is confirmed consistently by public opinion polls, our people and government have great sensitivity to the plight of the Palestinians. Unless there is visible change addressing the humanitarian situation in Gaza and a more constructive position is adopted in relation to making peace with Syria, it is highly unlikely that the quality of the bilateral relationship will improve. The first step to take in the right direction is to recognize the new regional setting and Turkey’s interests in the region. For that to happen, it is necessary to make the necessary mental shift about Turkey.

Why Israel humiliated Turkey in response to a TV show
By Yigal Schleifer, Christian Science Monitor / January 12, 2010

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.

The West has remained surprisingly silent in the Israel-Turkey spat. Erdoghan has won boisterous praise in the East, and few reprimands in the West for his tough criticism of Israel. Western politicians from one end of the political spectrum to the other are silently, satisfied to see Israel’s leadership brought up short for continuing to implant its citizens in the heart of what should be a future Palestinian state, making a mockery of Western efforts to jump-start negotiations, and ignoring regional peace offers.

Syria is also the beneficiary of this new Obama strategy – which might be called benign neglect.

Obama is powerless to change America’s relationship with Israel. He continues to provide it with more and better arms.  He cannot stop it from acquiring ever more Palestinian land and progressively whittling away at the prospect of a Palestinian state, but he can stop the US from acting as an overt cheerleader and advocate of this usurpation.

In the case of Syria, initial efforts to “remake the relationship” have been abandoned. No ambassador has been named. Sanctions have been reaffirmed, most strikingly with the recent refusal to allow Sarkozy to supply Airbuses to Syria causing serious ire in the Élysée Palace. All the same, Syria enjoys a period of delightful benign neglect from the White House. It is not being abused in the press. It has been allowed to reassert itself in Lebanon. Washington made no effort to stop Hariri’s visit to Damascus. Saudi Arabia has warmed up to Assad; the most recent visit by Assad to Riyadh lasted several days rather than the customary one. Turkey and Syria are still in the heady blush of young love after a century of estrangement. Obama has allowed the Iran deadline to slip by and is still holding out hope for a deal. The latest excuse not to do anything is that the Green movement is gaining traction and will take over somehow, relieving Washington of the task straightening out Tehran – something it is completely powerless to do. Rather than admit honestly, that Washington no longer has the authority in the international community or on the battle field force compliance from Iran, Washington prefers bluster. In some part, this is to placate pro-Israel sentiment among Americans.

Obama and his team undoubtedly understand that benign neglect is the only option they have to change the relationship with Israel. As Turkey assumes regional leadership, it will become a powerful and confident new voice in international affairs. It knows how to strike the correct note of moral disapproval without indicating anti-Semitism or enmity toward the Jewish state. Istanbul has a good track record toward Israel to prove its bona fides.

Israel will eventually discover a more dangerous and unbowed set of leaders emerging in the international arena who will not flinch at the notion of criticizing it. A post-holocaust order holds some surprises for Israel.

As Syria knits together a strategy for renewal, as Iran tip-toes through the minefield set for it by the Bush administration, and as Obama resists conflict with the Israel’s opponents, Authorities in Jerusalem will discover a more challenging environment in which it will have fewer defenders.

Turkey and Israel: The End of the Affair?
By Pelin Turgut / Istanbul
Time Magazine, Friday, Jan. 15, 2010

Not a month goes by without a new chapter in the increasingly bitter diplomatic sparring between traditional allies Turkey and Israel. Relations took a downturn a year ago, when Turkey’s government forcefully criticized Israel’s military assault on Gaza, and have since lurched from bad to worse. “One road accident, two accidents, three … all of a sudden it starts to look as if they’re not accidents — the road itself is the problem,” says Turkish foreign-affairs commentator Cengiz Candar. “The Turkey-Israel love affair is over.”

This week’s drama was provoked by a bizarre p.r. stunt on the part of Israel’s right-wing Deputy Foreign Minister Danny Ayalon. Ayalon called in Turkey’s ambassador to Israel and staged a demeaning photo op calculated to humiliate the Turkish diplomat as a rebuke for negative portrayals of Israel on a Turkish TV drama. Only Ayalon’s last-minute apology prevented the resulting furor from causing a diplomatic breakdown. (See pictures of heartbreak in the Middle East.)

But further rows seem inevitable. Turkey’s newfound ambition to become a major regional power broker has seen an energetic forging of ties with Arab and Central Asian countries. Asserting a foreign policy increasingly independent of Washington, Turkey has not hesitated to criticize Israel’s actions against the Palestinians, defend Iran’s nuclear program and expand economic ties at a moment when the U.S. seeks to isolate Tehran, and repair relations with Syria. Israel’s leaders warn publicly that they believe Turkey is moving into the region’s Islamist orbit, and hard-liners within Prime Minister Benjamin Netanyahu’s coalition government appear to have been spoiling for a fight.

In the past six months, Turkey has scrapped visa requirements for Lebanon, Jordan and Syria and signed a raft of agreements with each country designed to improve trade and cultural exchange. Since publicly chastising Israeli President Shimon Peres over Gaza at a conference in Switzerland last January, Prime Minister Recep Tayyip Erdogan has become a hero on Arab streets, and the latest diplomatic spat with Israel won’t do his popularity any harm. Beirut daily Al Akhbar’s headline on the Ayalon apology story praised “Sultan Erdogan” and exalted that “Israel understands only Turkish.”

But while Erdogan may appear to be striking out independently of his country’s NATO partners, it’s notable that his outbursts critical of Israel draw little comment from the U.S. and Europe. That suggests “there is a sense that Erdogan is saying things that someone needs to say to Israel,” says a European diplomat speaking on condition of anonymity. Just last month, Erdogan left an upbeat meeting with President Barack Obama, rode to a downtown Washington hotel and gave a speech lambasting Israel for “inhuman” deeds in Gaza. “The timing doesn’t suggest someone who is unaware of what he’s doing in an international context,” says Candar. “The West is relieved to have someone taking on Israel. They’ve outsourced the job to Erdogan. That’s why, when he does the cost analysis of saying these things about Israel, he has the added confidence of knowing that Turkey won’t face recrimination from its Western partners either.”

Turkish-Israeli relations are still anchored by military cooperation, as they have been since the 1950s. Israeli Defense Minister Ehud Barak is due to visit Ankara next week, hoping to reinforce strategic ties and negotiate deals for Israel’s military industries, which already have contracts worth more than $1 billion to supply Turkey. Meanwhile, a Turkish delegation is currently in Israel to wrap up the purchase of 10 Heron drones. “Defense ties have become the safety valve for bilateral relations,” says Candar. “They prevent a complete breakdown. That doesn’t change the fact that there has been a significant structural shift in the relationship, and it is open to future crises.”

Has President Assad Stepped Up Economic Reform?
By Ehsani 12 January 2010
For Syria Comment

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Syria’s economic reform continued at its deliberate and cautious pace in 2009. While one may argue with the speed and breadth of the process, there is no denying that the strategic decision to reform the country’s economy is irreversible today. Reforming a country’s economy after 40 years of socialism was never going to be easy or swift, especially in a country like Syria, where the leadership is characterized by caution and the desire to avoid mishaps. Patience and stability have been the hallmarks of the presidencies of both Assads. All the same, Syria’s economic transformation has been undeniable.

By and large, president Assad allowed his economic team to publicly argue over mostly tactical matters even if they agreed on the more strategic path towards reform. The president did not seem to favor a certain camp over another.

This was the case until yesterday when President Assad removed Tayseer al-Reddawi as head of the State Planning Commission (SPC), an office he has held since 2007. Prime Minister Otri promptly placed Abdullah al-Dardari in charge of the SPC on an acting basis. Mr. Dardari has effectively gotten his old job back as head of SPC, while he continues to serve as the deputy prime minister for economic affairs, a title he assumed in 2006.

The bad blood and policy disputes between al-Reddawi and Dardari had long since broken into the open. Reddawi was an outspoken critic of Deputy Premier Dardari and the economic policies he put into place as head of the SPC.  Dardari was the architect of the last 5-year economic plan. While Mr. al-Reddawi has launched a series of seminars on the economy lately, his attacks on Mr. Dardari were made public in October of 2009. Syria Comment translated and commented on al-Reddawi’s “51 point critique” of the liberalization process, which can be read here.  That post triggered a debate between Dr. Omar Dahi, an economics professor at Hampshire College, and me about the virtues and vices of “neoliberalism” and Syria’s economic reform, which can be read here.

So what is one to make of the firing of Mr. al-Reddawi? Why did the President himself dip down into the midst of his scrimmaging ministers in order to act as referee?

Most recently, Mr. al-Reddawi has argued that the development of the Syrian economy has suffered from weakness of investment and from to much consumption. Consumption had become the main growth area, he complained, and its benefits had accrued disproportionately to a small minority whose consumption patterns tended to drive up imports and whose savings preferences served capital flight and not local investment. He promised to change consumption patterns and limit the growing income gap in Syria by having the next 5-year plan include previously marginalized groups in such a way that would narrow disparities of income. Other highlights of his plan included improving education to better equip Syrians for the rigors and demands of the modern job market. He also promised to broaden the tax base.

Because of Reddawi’s criticism of free markets and the wealth that has accrued in the hands of a few, some analysts have concluded that his dismissal comes as retribution from Syria’s well connected business elite and serves as a blow to the economic reform process as a whole.

The Economist Intelligence Unit wrote the following analysis on January 11.

The move to dismiss Mr. al-Reddawi, “combined with the government’s recent decision to spurn an EU invitation to Syria to sign a much-delayed Association Agreement, raises question about the depth of Mr. Assad’s professed commitment to economic reform”.

I beg to differ with the EIU’s conclusions.

While one cannot dismiss the probability that Mr. al-Reddawi was punished for his attack on the business elite, it seems more probable that the President has finally decided to weigh in on policy disputes that have hobbled the reform process. By throwing his weight behind Mr. Dardari and his allies who espouse greater free trade and less government intervention, President Assad is setting the direction of macro economic policy and ensuring that the new 5-year plan will reflect the direction that Dardari set out on years ago, when he began pruning subsidies, reforming tax and business laws, and moving toward a social market economy.

If the President’s main motive was to punish Mr. al-Reddawi for attacking the business elite, he did not have to give his job to Mr. Dardari. In order to keep the status quo, he could have given the post to another individual that represented Mr. al-Reddawi’s camp but was more supine, hence keeping the balance that has dominated the economic team.

In a recent article in the WSJ titled, “Syria woos Wall Street,” the author quoted one member of a group of prominent money managers who spent a week in Syria and Lebanon to say that some presentations by government officials were “pretty pathetic.” The group came away with “the opposite impression of Syria’s President, Bashar Assad, and its deputy prime minister for economic affairs, Abdullah Dardari.”

Mr. Assad provided direct and open answers to their questions, the investors said, and talked about the need to raise incomes, build infrastructure, and ease the government’s grip on the economy.

This was “a fairly cynical group,” Mr. Biggs says. But “he [the president] blew them away.”

Perhaps these impressions made it back to the President’s ears in time to convince him that he needs to elevate the status of Mr. Dardari. After all, if Syria wants to woo foreign investors, and it must, the economic leadership team has to speak the language that foreign investors want to hear.

The 51-point economic critique made by Mr. al-Reddawi in October of 2008 does not make the cut. Attacking the reform process while offering precious little in terms of solutions is not the answer.

To be fair, sounding the alarm about growing income inequality has merit. But, while Mr. al-Reddawi places the blame on the reforms, his attention should be elsewhere. More specifically, he should have been advising the President on how to achieve faster economic growth rather than greater equality. It is only when the economy can consistently grow by 6 to 8% a year that Syria’s growing numbers of unemployed and undereployed with begin to find the opportunities they need and deserve. The pie must grow and grow fast for Syria to begin to tackle its serious economic woes.

Syria’s economic reforms are unlikely to slow down or be derailed. Just this morning, forty prominent Syrian businessmen were informed that their taxes were no longer going to be paid on an “estimated basis”. Instead, starting this year they were required to file their income taxes based on actual earnings. This morning, when I asked one of the forty people who will have to pay higher taxes why this decision had been made now, his answer was immediate:

“I think that the Syrian Government is finally waking up.”

[End]

Economic Press Review

Syria economy: Off message
EIU Views Wire 11 Jan 2010
FROM THE ECONOMIST INTELLIGENCE UNIT

The Syrian president, Bashar al-Assad, has dismissed a senior economic policy official, in apparent retribution for him voicing criticism of aspects of the way in which the Syrian economy is run. This move, combined with the government’s recent decision to spurn an EU invitation to Syria to sign a much-delayed Association Agreement, raises questions about the depth of Mr Assad’s professed commitment to economic reform.

Mr Assad issued a decree on January 10th revoking a decision taken in March 2007 to appoint Tayseer al-Reddawi as head of the State Planning Commission (SPC), a body that has been the driving force behind the reorientation of the Syrian economy towards a market-based system and which is currently drafting a new five-year plan to run from 2011. No reason was given for Mr Reddawi’s dismissal, which took immediate effect—the Economist Intelligence Unit contacted his former office on January 11th and was told that his job had been terminated, without explanation. The prime minister, Naji al-Otari, issued an order placing Abdullah al-Dardari in charge of the SPC on an acting basis. Mr Dardari is a former head of the SPC, and was responsible for drafting the previous five-year plan. He was promoted to deputy prime minister for economic affairs in 2006, and handed over the SPC job to Mr Reddawi the following year.

Too frank

It seems that Mr Reddawi has paid the price for being too free with his opinions on economic policy. A few days before his dismissal he launched a series of seminars on the economy. In his opening remarks he said that the development of the Syrian economy had been held back by the weakness of investment, both public and private, and by a high propensity to consume. He was quoted as saying that consumption had become the main engine of growth, and that the benefits of that growth had accrued disproportionately to a small minority whose consumption patterns tended to drive up imports and whose savings preferences accentuated capital flight. He said that the new plan would aim to include previously marginalised groups in the productive process and would seek to narrow disparities of income. Other elements would include a focus on improving education so as to equip Syrians better for the requirements of the labour market, broadening the tax base and revamping labour legislation.

As such, his implied criticisms appear relatively mild. However, some of his remarks could have been taken as attacking Syria’s business elite, including the president’s close family circle, and this could offer an explanation for Mr Assad’s harsh action. It would not be the first time that an economist has paid for being too outspoken—in 2005 Mr Assad dismissed Nibras al-Fadhel from his job as economic policy adviser to the president after he had spoken about shortcomings in Syria’s governance in an interview with a Lebanese newspaper.

Talent pool

Mr Reddawi is one of a small group of Western-educated economists that Mr Assad has entrusted with senior policy positions, which previously were the preserve of Baath party officials—other examples include Mr Dardari and the central bank governor, Adib al-Mayaleh. He obtained a doctorate in economics from the Sorbonne in 1980, and has spent most of his career as an academic in Syria and the Gulf. To judge by comments on websites reporting his dismissal he was held in high regard by his former students. As head of the SPC he was one of the main points of contact with international development agencies—in the week preceding his dismissal, for example, he was discussing the prospect of raising €600m in finance from France and the European Investment Bank for the Damascus metro project.

His departure not only deprives the Syrian government of an authoritative and capable economic strategist, but also risks souring relations with Western development agencies, whose support is vital to sustaining public investment projects.

Syria’s Deir Azzour Oil Output to Drop in 2010, Al Watan Says
2010-01-12 05:33:47.231 GMT

By Nadim Issa
Jan. 12 (Bloomberg) — Deir Azzour Oil Company, a Syrian oil producer, said production this year may drop to no more than 8.5 million barrels from 10 million in 2009 after more than a dozen wells were depleted, Al Watan reported. Of the company’s 38 wells, 14 were depleted recently, the newspaper said, citing Firas Qaddour, general manager. Deir Azzour plans five new wells to increase output, Al Watan reported.

SYRIA TO ALLOW FOREIGN OWNERSHIP OF BANKS

Foreign investors set to be given the right to hold majority stakes in Syrian banks.

Syria has opened up its banking sector to foreign speculators in an effort to attract more investment in the country. According to reports by local Syrian media, the government has moved to allow foreign investors to own more than 50% of Syrian banks sector in an attempt to revitalize the country’s economy. “This is part of the reformation of the banking sector which has been going since 2003,” Justin Alexander, an editor and economist with Economist Intelligence Unit, told The Media Line. “Formerly, all of Syria’s banks were state run.”

“Back in 2003 private banks could be established and foreign investment was allowed up to 49%,” he said. “Ten conventional and Islamic private banks have opened over that period, and they now manage one fifth of the assets of the banking sector.”

“They have grown quite quickly,” Alexander added. “But most banks that started have been regional ones – either branches of Lebanese bank or other regional banks and local Syrian owned ones.” “Governments have been keen to increase the availability of credit to expand the private sector,” he continued. “Syria needs to develop other sectors of the economy to make up for the losses in revenue from oil.”

“[The government] is particularly interested in attracting international banks,” Alexander said, suggesting names such as HSBC and Standard Chartered Bank. “There is also a political element,” he added. “Syria is increasingly challenging its international isolation and it made considerable progress over the last couple of years in terms of improving ties both in the region and with Europe and the U.S.”

Referring to United States President Barack Obama’s plans to appoint a U.S. ambassador to Syria, Alexander said that the Syrian government’s plans to open up its banking sector were part of a broader foreign policy strategy. “It is economic but nothing is just economic, particularly in Syria,” he said. “There are political benefits to Syria if they can be seen to host major international companies in the banking sector or indeed in other sectors. There are plenty of good growth prospects, particularly if [Syria] signs an Association Agreement with the E.U. [European Union].”

An Association Agreement is a treaty between the E.U. and a non-member country to establish a framework to develop economic, political and cultural relations between the two parties.

“This could well happen in the next couple of months,” Alexander said. “That would make Syria a more convenient base for exporting to Europe as well as the Middle East.”…

Since American aircraft manufacturer Boeing was banned from selling spare parts to Syrian Air, the steady deterioration of its airplanes has often been cited as the most visible evidence of the embargo’s effects.

By Adam Gonn on Tuesday, January 12, 2010

Radwan Ziadeh

Project on Middle East Democracy
The POMED Wire
POMED Notes: “Syria’s Democratic Past: Lessons for the Future”
Notes taken January 8th, 2010 by Josh [not Josh Landis]

The National Endowment for Democracy hosted a presentation by Dr. Radwan Ziadeh entitled “Syria’s Democratic Past: Lessons for the Future.” Dr. Ziadeh is the founding director of the Damascus Center for Human Rights Studies and executive director of the Syrian Center for Political and Strategic Studies. He was most recently a visiting scholar at the Center for the Study of Human Rights at Columbia University and a 2008–2009 Visiting Scholar at Harvard University’s Carr Center for Human Rights. Dr. Steven Heydemann, vice president of the grant and fellowships program and special adviser to the Muslim World Initiative at the U.S. Institute of Peace, followed Ziadeh’s presentation with commentary and analysis. Karen Farrell, Senior Program Officer for NED’s Middle East and North Africa Program, moderated the event.

For POMED’s notes in PDF, please click here. Otherwise, keep reading below the fold.

Ziadeh began by emphasizing democracy’s value to Syria in three areas: stability in the long term, peace in the region, and economic development at home. Although many policymakers prioritize stability in the Middle East, he believes that democratic reform is the only mechanism to create a peaceful and prosperous future for the Syrian people.

Ziadeh transitioned into a political history of Syria in the post-war era, noting that it enjoyed nearly a decade of free and fair elections from 1949-1958, during which Syria became the first country in the region to grant women suffrage (1951). More than 270 newspapers and magazines were also created this decade, and Syria instituted its first progressive constitution in 1952. Additionally, this period was Syria’s golden age for pluralistic politics, with Kurds, Druze, Christians, and ‘Alawites all well-represented in the government. Ziadeh noted the rise of Faris al-Khoury, a Christian, to the position of Prime Minister twice within a ten-year period.

Diplomatically, Syria experienced excellent relations with the United States throughout its formative years. Ziadeh commented that Nazim al-Qudsi, Syria’s first ambassador to the United States and later both prime minister and president, corresponded quite often with John F. Kennedy prior to and during his presidency.

However, a 1963 coup led to the rise of the Ba’ath party and the disintegration of pre-existing democratic institutions. The structure of Syrian totalitarianism took the form of a 3-sided pyramid, with the Ba’ath party, military intelligence, and the administration working in concert to consolidate absolute power. In 1973, new amendments to the temporary 1969 constitution led directly to the authoritarian presidential system. Ziadeh highlighted the “Emergency Law” imposed in 1963, ostensibly created to ensure political stability and “national security.” It resulted in severe restrictions on the freedoms of association, expression, and assembly. Kurdish citizens became second class citizens and human rights violations spread across the country.

These violations peaked in the 1980s when the government began instituting the death penalty without fair trials. Ziadeh discussed the disappearances of politicians and activists, unfair sentences for political detainees, and the resulting sectarian and ethnic fissures which led the country into bouts of violence. One former detainee in Tadmur prison recounted that “life in Tadmur is like walking in a minefield; death can come about at any moment either because of torture, jailers’ brutality, sickness, or execution.”

Ziadeh explored the legacy of Hafez al-Assad, Syria’s most prominent and longest lasting president from the totalitarian era, and concluded that he failed to bring about progress in any of the following areas: the Golan Heights (remained occupied by Israel), global integration, economic development (even compared to similarly sized Arab countries), human rights, competent governance, and media/communications.

After Hafez was succeeded by his son, Bashar al-Assad, in 2000, Syrian civil society began to speak out against repressive governmental policies. In 2005, a wide coalition of political reform activists issued the “Damascus Declaration for Democratic and National Change.” A year later, more than 300 intellectuals and activists from Syria and Lebanon signed a petition entitled the “Beirut-Damascus Declaration,” which among other things called for improvements in relations between the two countries. Unfortunately, the government responded with the worst crackdown on civil society since Bashar al-Assad took power 6 years earlier. After 163 activists gathered in Damascus to create the National Council of the Damascus Declaration in 2007, Syrian security officials once again broke the movement’s momentum through mass arrests.

In trying to understand the Syrian government’s resiliency in the face of increasing domestic and international pressure for reform, Ziadeh introduced a comparison between ex-soviet satellites in Eastern Europe and soviet-friendly states in the Middle East. Specifically, he used Czechoslovakia to demonstrate why E. Europe has, generally speaking, had an easier time transitioning to democracy in the post-soviet era. For example, he finds that E. European countries have more respect for governmental institutions themselves, rather than the people who run them, which contrasts with the political culture in Syria where there is a more deeply imbedded respect for political dynasties and families rather than the specific governmental bodies.

To spur democratic growth, Ziadeh proposed a “Truth and Reconciliation Commission” to explore and officially document what he terms the Years of Fear (1980s). It would largely be modeled after similar commissions in various Latin American countries, with a particular emphasis upon developing a national strategy to combat “impunity of human rights violations” by those in power.

Both Ziadeh and Dr. Heydemann agreed that democracy is “an authentic part of the Syrian past, and a part in which they can take a good deal of pride.” Although Syrian officials have been adept at fending off challenges to their authority and legitimacy, there’s great potential for reform activists to draw upon Syria’s substantial democratic experience from the 1950s as a mechanism to produce popular momentum and pressure for political change. However, thus far this democratic history hasn’t been successful in mobilizing a consolidated and strategically sound movement, and the speakers feel it’s important to further examine the original reasons why democracy failed, and authoritarianism prevailed.

Also see Ziadeh’s new report on the Kurds in Syria – Thanks to Kurdistan Commentary, a fine blog.

The special report, ‘The Kurds in Syria: Fueling Separatist Movements in the Region?’ was written by Radwan Ziadeh for the USIP, which has published it. The report examines Kurds in Syria in the context of the lack of democratic governance, which Ziadeh explains affects all Syrians.  He suggests that the development of democratic governance in Syria could mitigate the Kurdish problem.

You can download it here (.pdf) from the USIP website.

Also see Ziadeh’s fine 118 page book (Arabic) on

Political Islam in Syria (I couldn’t figure out how to buy it from the site. If anyone has better success, please let me know. I want another copy.)

The study is divided into nine topics, in which the author has reviewed: the early relationship between religion and the state in Syria; the establishment of Al-Ikhwan Al-Muslimun (the Muslim Brotherhood) movement in Syria; religious dual containment policies; and armed clash between Al-Ikhwan Al-Muslimun and the Baathist regime. It deals with the mechanisms of institutional decision-making in Syria, the dominating position of the President, aspects of official Islam, political Islam in Syria after the Iraq War, the transformation of the Baath Party and its use of religious discourse to confront various crises, and finally the future of political Islam in Syria in the light of domestic and international developments.,

The massive Ataturk Dam (shown here in 1992), in southeast Turkey, harnesses water for one of the biggest irrigation and electric power schemes in the world. A drought and other factors have created an acute water shortage in the Middle East, and resentment in countries downstream from Turkey is growing.

Deborah Amos has just returned from Turkey and Syria, where she covers the water problems in an excellent series on National Public Radio’s Morning Addition. Listen and read:

1. Tide Of Arab-Turk Tension Rises Amid Water Shortage

2. Mideast Water Crisis Brings Misery, Uncertainty – Syria

Adilla Finchaan, 50, checks her drought-stricken land in Latifiyah, about 20 miles south of Baghdad, in this photo taken in July 2009. Below-average rainfall and insufficient water in the Euphrates and Tigris rivers — something the Iraqis have blamed on upstream dams in Turkey and Syria — have left Iraq bone-dry for a second straight year.

A Double Agent, the CIA and al Qaeda, To the Point with Waren Olney, NPR, Thurs, Jan. 7, 2010

When a double agent turned into a suicide bomber, seven US intelligence agents were killed. How much expertise did the CIA lose? What does the incident say about the abilities of al-Qaeda — and the quality of US intelligence? Also, the Obama Administration wants to crack down on smog.

Guests:

• Greg Miller: National Security Correspondent, Los Angeles Times
• Michael Scheuer: former Chief, CIA’s Bin Laden Unit
• Brian Fishman: former Director of Research, West Point’s Combating Terrorism Center
• Joshua Landis: Professor of History, University of Oklahoma

Also, don’t miss Deborah Amos’ story on Aleppo’s emergence as the food capital of the Middle East. Warning: You will be hungry for hours.

Syria Today has an entire issue devoted to the water crises in Syria and its many aspects.

Lebanon: Qifa Nabki provides an assessment of Syrian relations with Lebanon and the region for 2009 [We will add more as they come in…. Please add your contribution to the comment section of this post. We will review relations with each of Syria’s neighbors and with the states that have a large impact on it. Comments should be directed toward one particular section so that they will fit into the overall structure of the post without lots of repetition.]

I think that the Syrian government had a good year, as far as its relations with Lebanon were concerned. The parliamentary elections ended with a pretty ideal result: a win for March 14, followed by the self-destruction of March 14.  This meant that Syria did not have figure out how to run pass coverage for what would have surely been portrayed in the Western media as a “Hizbullah government”. At the same time, though, the defection of Jumblatt and the general fractiousness of the remaining coalition partners meant that M14 no longer posed a credible threat to Syrian interests.

The formation of a national unity government — enfranchising the Doha Accord as the new powersharing mechanism in Lebanon, at least for the time being — formalized the stop-gap mechanism that Syria has sought, with regard to the weapons of Hizbullah.

The rapprochement with Saudi Arabia seems to have inaugurated a new agreement over Lebanon. It’s not quite a condominium like the one that existed from 1990-2004, but the two countries seem to have agreed to stop making life difficult for each other in Beirut, in exchange for cooperating on matters like Iraq.

It’s not clear what Syria’s long-term aim is for the Lebanese file. Some believe that it wants nothing less than to re-establish control over Lebanon, albeit without having the expense of keeping its army posted there. Others say that its interests in Lebanon are purely instrumental: using Hizbullah as a card in its effort to regain the Golan, and in its bid for greater regional clout.

What’s clear to me is that Syria is trying to diversify its relationships in the region, distributing its eggs from the “axis of resistance” basket (Iran, Hizbullah, Hamas) to other players. This does not amount to a potential “flip”, as the State Department is hoping for, unrealistically. Those allies remain too valuable to Damascus. But as Tehran looks increasingly vulnerable and the credibility of the regime there is challenged, Syria’s cache as an interlocutor diminishes. This is where its relations with Turkey make much more sense, as does its rapprochement with Saudi Arabia.

Airbus’ refusal to sell planes to Syria is a clear sign of how bad relations remain between Washington and Damascus, despite a year of Obama engagement.

The French promised the Syrians that they would try to get the sale OK’ed by Washington. Some 10% of Airbus parts are bought from the US, making the sale of Airbus planes to third parties subject to US sanction laws. The decision by European governments to purchase Airbus parts from the US may have seemed like good business and political practice in the past. It has EU politicians gnashing their teeth today. Sarkozy must be considering changing Airbus’ purchasing percentages. Little wonder that today’s headline about Sarkozy is: Sarkozy cool on relationship with Obama.

Syria’s support for Hizbullah has Washington diplomats flummoxed. Assad insisted that its Shiite ally be accepted as a part of the Lebanese government, despite Washington’s insistence that Hizbullah terrorizes Israel and the US. Washington foreign policy mavens want Israel safe at any price. No Arab resistance to Israel is acceptable even as the US refuses to punish the Jewish State for continuing to push Palestinians off what land remains to them. Even more important to Damascus is Washington’s refusal to challenge Prime Minister Netanyahu’s assertion that Israel will not return the Golan Heights to Syria even for peace and security guarantees, which President Assad has made clear he is willing to provide. The only conclusion he can make is that resistance alone will win back the Golan. Israel is counting on unwavering US support and its military superiority to convince the Syrians to abandon their claims.

One can only repeat that such a policy makes the US enemies it doesn’t need. It also convinces people around the world that Washington is not smart or a good leader.

US rejects Airbus jet sale to Syria’s national airline
Dec. 28, 2009, Associated Press in THE JERUSALEM POST

The US has turned down a request by Airbus SAS to sell aircraft to Syria to modernize the country’s aging national airline, Syria’s transportation minister said Monday.

The Tishrin newspaper on Monday quoted Yarob Badr as saying that an Airbus delegation recently informed Syrian officials that the US Commerce Department rejected a request to lift an embargo on selling planes to Damascus.

The US imposed economic and diplomatic sanctions on Syria in May 2004 because of what Washington says is its support for terrorism, pursuit of weapons of mass destruction and other activities including undermining US operations in Iraq. Syria denies the allegations.

The sanctions have grounded much of Syrian Air’s fleet, leaving less than ten planes in operation.

Syria eyes Russian aircraft after US turns down request to buy Airbus jets
12/28/2009

DAMASCUS, Syria – Syria will buy two Russian-made Tupolev passenger jets to modernize its national carrier’s aging fleet after the United States rejected a bid by Airbus SAS to sell planes to Damascus, Syria’s transportation minister said.

Yarob Badr was quoted in Tishrin daily’s Monday edition as saying a deal with the Russian plane manufacturer was imminent, and that Syrian Air would first lease the two jets for a year and later purchase them.

Badr said the decision came as the U.S. Commerce Department turned down a request by Toulouse, France-based Airbus to lift the U.S. embargo affecting the sale of planes to Syria. Badr said an Airbus delegation recently informed Syria of the decision by Washington.

Airbus spokesman Stefan Schaffrath declined to comment on the specifics of the request, but said “In any case Airbus acts in accordance with the law.”

The U.S. imposed economic and diplomatic sanctions on Syria in May 2004 because of what Washington says is its support for terrorism, pursuit of weapons of mass destruction and other activities including undermining U.S. operations in Iraq. Syria denies the allegations….

Laura Rozen: Damascus envoy speculation: cold and colder
December 21, 2009, POLITICO

Damascus envoy speculation: cold and colder. Just fyi, since there’s lots of speculation around. Have been very reliably told by two senior administration officials that Adam Ereli, U.S. Ambassador to Bahrain, is not going to be nominated to be the Damascus envoy. If you want to see him, you will have to go to Bahrain.

And separately was told by a third source that the speculation about a Syria envoy is all a bit premature, and that nothing has been forwarded to the White House yet. UPDATE: Another senior official says a name has not been forwarded to the White House yet.

Finance Minister Hussein talks about the 2010 budget: (Syria Steps in Arabic)

260 public sector companies exist. They contribute $3.6 billion  to the treasury. Hussein says that they are not therefore all losers, he then admits that the treasury wrote off $11 billion in loans to them ($7 billion to sadkob and $2 billion to the electricity distribution business). It seems that they also decided to scrap the idea of regular issuance of treasury bonds and securities (an idea that has been floated around for a while).  Instead they will issue paper to fund specific projects when needed.

Year End Assessment: Over the next week – with the help of readers – Syria Comment will compose a retrospective of 2009 for Syria.  We will consider – foreign policy, economic and cultural changes. To treat foreign policy, which normally gets the lions share of attention, we will review relations with each of Syria’s neighbors and with the states that have a large impact on it. I hope readers will add paragraphs in the comment section that I can copy and past into post. Comments should be directed toward one particular section so that they will fit neatly into the overall structure of the post. If they treat several topics in one paragraph, it will be hard to find the right place for them.

Talking to Syria: What About?“,
Peter Harling in The Huffington Post, 2009-12-26

Nine months into an engagement process with numerous bilateral meetings, the U.S.-Syria relationship is not going well. The administration has yet to even clarify what precise, workable objectives it seeks to achieve in talking to Syria. Renewing …

Syria launches first economic arbitration center – Some suggest that a serious attempt to establish judicial oversight of commercial law in Syria could bring the economy to a “tipping point,” which will usher in a period of more rapid economic growth and foreign investment.