The decision to suspend imports for goods that have over 5% custom duties was supposed to be “temporary” when it was announced on September 22. The temporary nature of the decision was evident this morning when the decision was cancelled merely 12 days after it was adopted. SANA made the news official after the weekly Tuesday ministerial meeting which produced the announcement that the Syrian government abrogated the import suspension.

It was only few days ago that the Governor of the Central Bank said that the decision to suspend imports would “enable Syria to save six billion U.S. dollars annually to face the sanctions imposed by both the EU and the United States”.

The initial import ban announcement was met with shock and disbelief by the country’s business community. An atmosphere of fear, panic, anger and confusion was the way many described the mood in the country. Syria was already reeling from the seven-month crisis and the sanctions imp0sed on it by the EU and the US. The import ban was the final blow that crippled the economy and almost brought it to a standstill.

No government decides to suspend imports hastily. It is clear that government officials reacted in a panic-like atmosphere when the announcement was first made 12 days ago. The official reason at the time was to “save foreign exchange reserves”. Presumably, the need to do so has not changed since then.

The new plan now is for the Central Bank to stop financing “a large part” of the imports of the private sector. Food and medical items may be excluded.  As for everything else, importers need to rely on their savings of foreign currencies outside Syria or by going to the black market. Mr. Shaar (Minister of economy and trade) announced that this solution was adopted on the suggestion of the business community which had been using this financing mechanism anyway since the ban was announced. The public sector will still be able to rely on the Central Bank for financing their needs of foreign exchange. The private sector, on the other hand, will incur a nearly 10% disadvantage as today’s black market rate for SYP is 51.5 rather than the official rate of 47.

Mr. Shaar urged the business community to lower the prices of their products as they can no longer use the execuse of the import ban. During a press conference early this morning, he demanded that he did not want to hear  that someone imported his products last week and hence the need still exists for higer prices and if such a case does exist, “it is life which involves profiting and losing”.  He later warned that there is no longer an “economic or humane  logic behind high prices from now on”.

It is fair to say that this policy reversal was a major embarrassment to this government. The damage to the reputation of the economic team will take time to reverse.

Foreign Direct Investments (FDI) in the Arab world:

Staying on economics, the Arab spring has sparked a sharp fall in foreign direct investment. Egypt, for example, is expected to experience a drop from $6.4 billion last year to a mere $500 million in 2011, a 92% slide, according to a report from the Kuwait-based Investment and Export Credit Guarantee Corp. Foreign direct inflow into Syria are forecast to fall by 62% from $1.4 billion in 2010 to around $500 million this year. Remember that the initial goals of the Syrian government under Mr. Dardari were based on attracting close to $10 billion a year. Interestingly, investments are pouring into Iraq. The country expects FDI to more than double to $3.5 billion this year.

 

Erdogan and Russia

In a news conference in South Africa, the Turkish Prime Minister was quoted saying that the United Nations can’t “remain indifferent” to violence in Syria and must act to resolve the situation.

Russia, on the other hand, continues to reject the latest wording out of the UN Security Council when it comes to Syria. The final text is expected to be announced later today. Russia is expected to veto the text as it stands now.

Syria experienced three noteworthy events over the past few days. First, the government has by all accounts taken full control of the restive area of Rastan. Second, the son of the country’s Mufti was shot dead together with a university Professor. Third, the opposition launched a joint National Council.

Personal Apology:

As many readers are already aware, an earlier version of this note relied on incorrect information from a fake website. As soon as the error was discovered (thank you SASA), a significant portion of the original post was deleted. The current version completes the corrections. My personal apologies to the readers as I fell victim to the tremendous amount of disinformation that I will have to be more aware of in the future.

Regaining Control over Rastan:

In taking full control of Rastan, the government forces reportedly used overwhelming force. Nearly 250 tanks were reportedly sent in. State news agency SANA summarized the situation by announcing that “stability and calm have been restored” in the town. This is a clear statement that the opposition and army deserters have been defeated and that the fighting has stopped. According to activists, nearly 3000 people have been detained in this rebellious town. The Syrian army has been keen to demonstrate that it will not allow any part of the country to become another Benghazi. Seven months into the uprising, the government’s military control over the country has been unmistakable.

The Attack on Mr. Hassoun’s son:

The attack on the Mufti’s son brought back memories of the early 1980’s. Reporter Nir Rosen continues his outstanding work from Syria. In another fine article of his, Mr. Rosen highlights the parallel with 1979 when the Grand Mufti’s son at the time (Mr. Kaftaru) was also assassinated. As it was the case back then, no one has claimed responsibility for the murders.

The Mufti’s full speech after the death of his son was characterized as “moving” by most listeners.

Special Question to Nir Rosen:

Syria Comment asked Mr. Rosen for his personal view on what he sees as the primary motivation of the opposition and how much of the discontent stems from economic versus sectarian issues. Set below is his reply which he agreed to share with SC readers:

“ Good question, and hard to answer briefly. Its hard to talk about a unified opposition, and lets start by saying i’m
only discussing the internal opposition, but their motives have evolved and since its a fluid and popular phenomenon it does not have a clear platform.  I dont think they wanted or imagined the downfall of the regime in the beginning, but they sure do now the motives i most often heard were economic, corruption, oppression and
sectarianism it varies according to region and social/economic class many people also turned against the regime once they were confronted by its “wahshiya,” as they said often, in suppressing demonstrations when i asked people they could usually only answer me in general terms, they would say they wanted freedom because of the oppression, but would have trouble elaborating. when pressed they would mention the economy, corruption, specific examples of mukhabarat brutality and violations and finally the unjust distribution of resources and power in favor of alawites (at least in their eyes)”.

The Forming of the Syrian National Council (SNC)

The Syrian National Council was formed on Sunday as an umbrella coalition of opposition figures to the current leadership in Damascus. There will be a general assembly of 190 members who will be elected next month. The council will also have a 29-strong general secretariat representing seven opposition factions. These factions include representatives from the Damascus Declaration group, a pro-democracy network; the Syrian Muslim Brotherhood, a banned Islamic political party; various Kurdish factions; the Local Coordination Committees, a group that helps organize and document protests; and other independent and tribal figures.

For now and for security reasons , the organizers disclosed only 72 names of council members. The names of those inside Syria was withheld to protect them.  The meeting did not officially elect a President but treated the Istanbul meeting as an “inaugural meeting”.

The SNC’s first principal is a “commitment to topple the regime” and to stay loyal to the “peaceful nature of the revolution” and the “unity of Syria”. A council member reiterated that they are “against any foreign intervention in their country”.

The SNC’s next goal will be to gain international recognition while it continues to exert both diplomatic and economic pressure on the Syrian regime.  Indeed, Canada, the Netherlands and Japan already sent diplomats as observers to Istanbul’s press conference.

 

Fall of Syrian regime a ‘matter of time’: US
Agence France Presse

It is “a matter of time” before the Syrian regime headed by President Bashar al-Assad is ousted from power by a popular uprising, US Defence Secretary Leon Panetta said on Monday. Speaking in Tel Aviv after meeting his Israeli counterpart, Panetta said Washington and other foreign capitals had “made clear Assad should step down.”
“While he continues to resist, I think it’s very clear that it’s a matter of time before that (exit) in fact happens. When it does, we don’t know,” he said. The Pentagon chief, in a visit to Israel and the Palestinian territories on Monday, said Assad’s regime had lost all credibility after a brutal crackdown that has killed at least 2,700 people, according to the United Nations. “Anytime you kill your own people as indiscriminately as they have over these last number of months, it’s pretty clear that they have lost their legitimacy as a government,” Panetta said at a news conference with Israeli Defence Minister Ehud Barak. Panetta, who served as CIA director until he took over as defence chief in July, pledged the United States and other countries would keep up pressure on the regime to make way for a government more responsive to the needs of its people.

Barak also said the regime’s days were numbered and that Assad’s fall from power would represent a “major blow” to what he called a “radical axis” of militants in the region supported by Iran.

According to US media reports, American officials are increasingly convinced that Assad’s regime will not survive and are bracing for a possibly violent aftermath.

The New York Times has reported that Washington was quietly working with Ankara to plan for a post-Assad scenario that could see Syria’s various ethnic groups battle for control of the country. Despite calling on Assad to step down, the United States has yet to withdraw its ambassador, Robert Ford, instead using him as a conduit to the opposition and Syria’s disparate ethnic and religious groups.

Last Thursday, a crowd of nearly 100 Syrians chanting hostile slogans tried to storm an office in Damascus where Ford had arrived to meet opposition figure Hassan Abdelazim, officials said.

In response, the US government summoned Syrian ambassador Imad Mustapha to the State Department last week and “read the riot act” to him over the incident, a spokeswoman said. Since mid-March, Syria has been shaken by an unprecedented pro-democracy protest movement that the Assad regime has sought to crush using deadly force. More than 2,700 people have been killed in the unrest, according to the UN High Commissioner for Human Rights in Geneva.

Late Sunday, protesters poured onto the streets in a mass show of support for a powerful opposition grouping that was launched in Istanbul, activists said. The Syrian National Council drew “demonstrations of support” in the country’s main protest hubs, including Hama, Homs, Idlib, Daraa, Deir Ezzor and the province of Damas, according to the Britain-based Syrian Observatory for Human Rights. The group also said the Syrian army had Sunday “taken complete control” of the central city of Rastan in Homs province, 160 kilometres (100 miles) north of Damascus, where fighting had raged between army deserters and Syrian forces.

Syria Faces A New Economic Reality
By Ehsani for Syria Comment
Sept 26, 2011

The recently announced import suspension prohibits the import of  all products that have a customs duty of over 5 percent. This notice also covers countries that Syria signed a free trade agreement with (Turkey, Ukraine and the Arab countries for example).  The original signed free trade agreements will no longer be fully adhered to.

As expected, the Ministry did issue a list of products which received an exemption from the ruling.  There are 51 items on this list. The first 17 are of the food products variety like meat, fish, cashew nuts, almonds and bananas.  Some of the details on the list are mind-bogglingly trivial.  The type of fish that was exempted from the ban for example was sword fish which made it to item number 5. Fish (with teeth) from the south pole or Australia also made it to the exemption list at number 6. But the sword fish were dropped again in item 7 which allowed all fish other than sword fish or those from the south pole and Australia.

The rest of the items are mostly medical in nature. Examples include x-ray machines, various Lab equipments, Dental chairs, and prescription and sun glasses.  The only vehicles allowed are buses for the local public transportation companies, fire and ambulance trucks as well as fork lifts. Mobile phones (current customs duty of 10%) were also exempt from the ruling.  This suspension is effective for all imports after September 22, 2011 (those who used a local bank prior to this date are exempt). Overall, the complexity of this ruling can only be appreciated when one delves into even more detail of what is banned and what is not.

The General Reaction to the Ruling:

The deputy Minister of the Economy and Trade was in Aleppo today. He was in a packed room of businessmen at the city’s Chamber of Commerce. Several passionate pleas were made to rethink the decision and to exempt more products. Many explained how they already have goods on the way and wondered what they would with them (they did not have an L/C open before September 22nd).  One wondered why cashew nuts were exempted when the U.S. used to be the largest supplier of this product (Vietnam and India are now the world’s largest exporters).  To every question, the deputy Minister’s response was to ask that they do so in writing and when the Ministry receives their written questions, it will study them in detail and see how they can help. To which one food importer responded that it would be too late as his goods are already at the border and by the time his letter reaches Damascus and be read he would have already thrown away his rotting produce.

One can read more about these shock waves hitting the Syrian business community. In the meantime, government has tried its best to argue that the decision has both pluses and minuses. On the minus side, the government is aware that prices of the recently banned items will rise rather significantly. Indeed, reports of price hikes close to 40 percent have already been reported on few electronic items while companies like Sony, Sharp and others have suspended their sales in the country altogether. While the government did not mention it, the other minus will stem from the fact that the grey market will now flourish as illicit trade fills the inevitable void that will develop. On the plus side, the Minister of the economy and trade has tried to argue that this decision will help local producers and employment. The argument appears logical at first. However, by referring to the measures as “temporary”, one fails to see how local producers will add to expensive capacity and hire new employees knowing that the decision can be reversed anytime. Local manufacturers are unlikely to invest in new machinery and equipment in this atmosphere. As it is, a number of industrialists have put expansion or new projects on hold over the last few years as the government has proved incapable of delivering sufficient electricity capacity.

Syria’s external Accounts undermined by its fixed exchange rate

This article argues that while the decision to suspend imports for these products appears to have been caused by the recent sanctions imposed by the US and EU, Syria’s external accounts were already being undercut by the fixed exchange rate policy that had encouraged imports and discouraged exports for years.  In the end, the authorities have found it expensive and difficult to finance the insatiable demand for foreign made products at the rate of SYP 47 to the dollar while revenues from oil production and exports fell steadily.

The 2012 Syrian Budget Rises by 59%

In addition to the pressure stemming from an imbalance in its foreign trade position, the other main problem in the economy comes from the government budgeting situation.  Just yesterday, the state increased its expenditures by 59 percent when it announced its new budget for 2012. The Social subsidies alone will amount to 29% percent (US$ 7.72) of all government expenditures . This means that one third out of every Dollar that the government spends will go to supporting a hugely expensive subsidy program that has spiraled out of control thanks to the country’s demographics and illicit trading (especially in mazot – fuel oil). How large is the budget and total government expenditures this year? The number is $US 26.5 billion or 50 per cent of total nominal GDP. This is an astoundingly high number.

Failure to Tax

The US$9.8 billion jump in expenditures this year needs to be funded by increased tax collection in a business environment that will be extremely challenging. One of the examples of an obvious and gaping hole in the government’s ability to collect taxes comes from custom duties on imports. While the government imposes duties close to 50% on many products, the 2009 government revenue from this area indicates that the treasury was only able to collect US$ 0.56 billion or 4.3% of the total value of goods imported. Following the recent sanctions on Syrian crude exports, it seems that the country was able to export around 110,000  barrels per day.  Revenues from such exports used to be in the range of  $3.0 billion. Given the recent sanctions and even when alternative buyers are found, it is expected that this can only take place after a hair cut is offered on the globally traded price. This is likely to further erode the government’s ability to earn much needed foreign exchange. It is possible that the difficulties of finding buyers will be such that talk of barter trades will soon be discussed. Iran already does this with its own crude exports. Indeed, this morning the Financial Times claims that Syria is unable to find any buyers for its oil (See Story below).

The pros and cons of a stable exchange rate:

Since the last currency crisis in the mid-1980, Syria has defined both political and economic success by the stability of its foreign exchange regime.   The central bank used the stability of its foreign exchange as the main metric of successful economic management.  This metric did not include economic growth, employment level or the balance of payments as targets. Stable exchange rate led to inflation stability and this is all that mattered to the economic planners.

In a flexible exchange regime, a loss of competitiveness or a widening trade imbalance usually results in a weaker currency which acts as self-correcting valve that restores the initial imbalances over time. Artificially fixed exchange rates deprive an economy from such a correcting mechanism. This is what happened in Syria. While this policy seemingly held imported inflation in check, it was causing significant damage to external accounts.  As the country adopted the new social market economy and import restrictions were lifted, an import orgy was now underway.  This was augmented by free trade agreements with the Arab world and later with Turkey.  Local producers who lived for decades under the comfortable protection of “himaye wataniye” were now under assault from a global market place that was more efficient and competitive than them.  It did not take long for Syrians to dump their manufacturing hats and transform themselves into importers. Throughout this worsening export/import imbalance, the currency value did not budge.  The Central Bank intervened at any sign of SYP weakness.

For Syria to continue to finance importers at the rate of SYP 47 to $1 dollar, it needed matching foreign currency receipts from its exports, remittances or tourism.  The hopes were high when it came to the latter two.  Thanks to a steady fall in oil production and exports however, the country’s ability to accumulate serious foreign currency was becoming harder to accomplish.  In spite of such trends, the foreign exchange regime was never modified to weaken the SYP to help make imports more expensive and/or to give local producers a much needed slight competitive advantage.

Proponents of the stable fixed Exchange rate regime pointed to stable inflation as the primary objective and how allowing the SYP to devalue will harm the economy. In reality, however, what transpired is that the government exhausted its ability to finance the country’s increasing appetite to import. Much has been discussed of the fact that the Central Bank sits on a comfortable foreign exchange reserve position of nearly US$ 18 billion. In reality, this number is impossible to verify. The official government data and accounting is simply not transparent enough to confirm such claims. More transparency is highly desirable in an effort to reduce speculation and rely on factual data during such a critical period. In the meantime, the only thing certain is that the government has decided to conserve on whatever foreign reserves it has at its disposal to prepare for an extremely challenging economic times in the period ahead.

News Round Up

Ban forces Syria to cut oil production – Financial Times

Syria has told foreign oil companies to cut production due to a backlog of crude that has filled its storage capacity because the government has been so far unable to bypass an embargo on crude oil exports imposed by the European Union.

Syria has sought to sell its oil to nations outside the EU, which before the ban imported around 95 per cent of the country’s output.

But industry executives and oil traders said the country had been so far unable to attract new
buyers in spite of offering discounts.

The failure has forced foreign oil companies to pump crude originally earmarked for export into storage. “There is a backlog of crude in the country,” said an industry executive.

“Storage is filling up,” the executive added, saying that some companies had been told to reduce output.

Gulfsands Petroleum, the London-listed company which operates in Syria, has cut its production by around 40 per cent at the request of the authorities. The company is now pumping about 14,500 barrels a day, down from about than 24,000 b/d in August.

Industry executives said other international oil companies operating in the country, which include Royal Dutch Shell, Total of France, and state-owned CNPC of China and ONGC of India, have also recently received orders to cut back.

Although international oil companies hope the cuts are temporary, and will end when Syria finds nations willing to take its crude, others see the drop lasting as long as the EU embargo remains.

Brussels imposed the oil ban in response to a crackdown by the regime of Bashar al-Assad on pro-democracy activists that
has seen more than 2,700 people die in the past six months.

Syria produced in August around 370,000 b/d of low quality crude oil, according to the International Energy Agency, the western countries’ oil watchdog.

The country exported around 150,000 b/d, with the rest consumed domestically. Germany and Italy accounted for roughly two-thirds of Syria’s oil exports last year.

Imad Moustapha, Syria’s ambassador to Washington, said in a recent interview with the Financial Times that the country would have no problem finding markets for its oil.

“It’s not that we are approaching people, it’s the other way around. We
are being approached,” he said.

But so far this month not a single cargo of Syrian crude oil has left the nation’s main export oil ports, according to shipping data. Several tenders of low quality, high sulphur Souedie crude, the country’s main export stream, have failed to attract any interest, traders said.

Oil traders said the impact of the EU ban on Syrian oil was wider than previously expected as international banks refused to open letters of credits – a common instrument used in trading – with Syrian entities, even when to destinations outside the EU. Tanker-owners were also reluctant to send their vessels to Syrian ports, they said.

The production losses compound the tight supply and demand balance in the Mediterranean and European region, home of four of the world’s 10 largest oil importing countries: Germany, France, Spain and Italy.

But the shortfall is not nearly as big as that created by the civil war in Libya, which produced before the start of the revolution 1.6m b/d of high quality, low sulphur crude oil.

Shell directed questions about production in Syria to the Damascus-based Al-Furat Petroleum Company, which could not be reached. Al-Furat is a joint venture between Syria’s state-owned General Petroleum Corporation, which controls a 50 per cent stake, Shell Oil and CNPC. Total did not responded to calls and e-mails.

Also from the FT, Syrian to look east for oil markets

Imad Moustapha, Damascus’s envoy in Washington, says the country will be able to offset the impact of western sanctions by looking east.

Mr Moustapha would not elaborate on which companies or countries had contacted his government but Syria’s bravado underlines the difficulty that western nations have in trying to inflict economic pain on President Bashar al-Assad’s regime in a bid to make it stop its violent crackdown on six months of pro-democracy protests.

“It’s not that we are approaching people, it’s the other way around. We are being approached,” Mr Moustapha told the Financial Times. “But no contracts have been signed yet.”

The US has imposed repeated rounds of sanctions on the Syrian regime since the unrest began in March, most recently banning any US investment in Syria’s crucial energy sector and prohibiting US companies from buying Syrian oil.

The sanctions were mainly symbolic as the US has minimal involvement in Syria’s energy sector. But the European Union, which buys more than 90 per cent of Syria’s crude oil exports, followed suit with an oil embargo of its own.

The 27-member bloc, however, said members had until mid-November to stop importing oil, a grace period during which Syria could line up other buyers for its oil, thereby possibly limiting the immediate impact.

Mr Moustapha brushed off the American sanctions, saying the US had been taking such actions since the 1950s. But the European sanctions were a different story.

“Of course they are going to have a negative effect. They create a challenge for us to find a way to develop our economy and we are not denying that it will be a challenge,” he said.

Syria would be forced to shift its economic gaze eastward, Mr Moustapha said, just as Iran increasingly looked to China after chilling sanctions on its energy and financial sectors.

“We will re-orient our economy towards Asia, Africa and South America. We have a whole spectrum of options open to us,” he said.

Syria exports a heavy, sour crude oil called Souedie, chiefly to refiners in Germany, Italy, France and the Netherlands. Although it would be expensive to transport it beyond the Mediterranean Sea, both China and India have the technical capacity to refine this type of oil.

Ayham Kamel, a Middle East analyst at the Eurasia Group in Washington, said he would not be surprised if customers had been knocking on Syria’s door, looking to take advantage of the political situation to get a cheap de

Harvard website hacked by Syria protesters – BBC

Along with a picture of Syrian president, Bashar al-Assad, the hacked home page showed a message saying the “Syrian Electronic Army Were Here”.

A further message made terror threats against the United States and criticised its opposition to the Assad regime.

Harvard said this has been the work of a “sophisticated individual or group”.

“The university’s homepage was compromised by an outside party this morning. We took down the site for several hours in order to restore it. The attack appears to have been the work of a sophisticated individual or group,” said a Harvard spokesman.

The website was hacked on Monday morning by what appeared to be sympathisers of President Assad of Syria, with a picture of the president in military uniform appearing in front of a Syrian flag.

This was linked to another image of Syrian national colours, with a message accusing the United States of involvement in the uprisings against President Assad.

Brief Note:

The Sarkozy story from the previous thread has elicited many responses questioning the accuracy of the report and why the story was published without investigating further into the claim. It is indeed the case that SC did not do more than link to the story as it appeared in Al Diyar. Another reader asked the source of the information behind Hotbird’s decision to stop carrying addunia. It was here.

This morning, the official journal of the EU announced the seventh set of sanctions imposed on Syria. Two individuals and six companies were added to a list of people and entities facing assets freeze and travel ban. In addition to the earlier sanctions on importing or exporting energy products, an important prohibition on investment in the crude oil sector was made official. The delivery of Syrian banknotes and coins to the Central Bank of Syria is now also officially prohibited.

Today’s sanctions continue to largely target Mr. Rami Makhlouf and the entities that he controls.  The other notable target this time was Syria’s official and non official media.  Both the Information Minister and Addounia TV were hit with sanctions. This means that the channel will stop broadcasting on the Hotbird satellite and may also be banned from both Arab sat and Nile sat. The response of the Addounia management was made available on the company’s website. The new E.U. sanctions were to be regarded as a medal of honor for being able to keep 27 European countries and its leaders busy enough to sanction a company that has believed that what is happening in Syria is a conspiracy and that these sanctions clearly illustrate that this is not just a media war but a global war targeting the basic existential needs of the Syrian people. The company promised its viewers that it will continue to expose the conspiracy and everything that harms the Syrian people.

As for Cham Holding which was also targeted today, the company is yet to make an official response. With a start-up capital of $360 millions, Cham Holding was launched in 2007 by the collaboration of 73 top Syrian investors.  The new sanctions will put further pressure on this company that was already reeling from the recent change in its Board of Directors whose earlier Chair (Mr. Nabil Kuzbari) and Vice Chair (Mr. Rami Makhlouf) were both personally sanctioned. The new Board of Directors saw its new Vice Chair (Mr. Fares Al Chihabi) also get slapped with sanctions just recently.

Set below is a more detailed list of who was added to the sanctions and the official reason why:

Tayseer Qala Awwad (Minister of Justice)

Associated with the Syrian regime, including by supporting its policies and practices of arbitrary arrest and detention.

Dr. Adnan Hassan Mahmoud (Minister of Information)

Associated with the Syrian regime, including by supporting and promoting its information policy.

Addounia TV

Has incited violence against the civilian population in Syria.

Cham Holding

Controlled by Rami Makhlouf; largest holding company in Syria, benefiting from and supporting the regime.

El-Tel Co.

Manufacturing and supplying telecommunication equipment for the Army.

Ramak Constructions Co.

Construction of military barracks, border post barracks and other buildings for Army needs.

Souruh Company

Investment in local military industrial projects, manufacturing weapons parts and related items. 100% of the company is owned by Rami Makhlouf.

Syriatel

Controlled by Rami Makhlouf; provides financial support to the regime: through its licensing contract it pays 50% of its profits to the Government.

Staying on economic issues, the country’s business community is in a state of confusion and anxiety over the recent decision to suspend the imports of cars and other items with 5 percent customs duties.  Besides cars, no one is sure what the import ban will include. Many products carry customs duties of over 5% percent. What will be banned and what will be deemed a “luxury” is still open to speculation. The consensus is that a detailed list of the banned items will be released over the next few days.  The business community cannot wait to find out. For now, an article by Reuters quotes businessmen reporting  no selling or buying amid fears that prices of existing foreign imports will now soar.

Syria: The revolution will be weaponised – Aljazeera

Journalist Nir Rosen spent seven weeks travelling throughout Syria with unique access to all sides. He visited Daraa, Damascus, Homs, Hama, Latakia and Aleppo to explore the uprising and growing internal conflict. In the first article of his series he meets with leaders of the armed opposition in Homs.

Turkey seizes Syrian ship with weapons – PM Erdogan – BBC

He did not say where or when the vessel was stopped, but vowed to confiscate any arms shipments for Syria coming through Turkish waters or airspace. Mr Erdogan has repeatedly criticised Syrian President Bashar al-Assad over his government’s violent crackdown on street protesters.

Arab leaders absent while Erdo?an talks to UN – Hurriyet

The Arab people like us. But today, the policies of current rulers of the Arab countries are based on competing with each other and hampering each other. We should not take those who are giving us a pat on the shoulder too serious. Our politics should reflect our interests. There should be no room for emotions.

Erdogan: Assad Will Be Ousted “Sooner or Later”

WASHINGTON – Syrian President Bashar Assad will be ousted “sooner or later” by his own people as the time of dictatorial rule fades around the world, Turkish Prime Minister RecepTayyip Erdogan said. Erdogan, in an interview on CNN’s “Fareed Zakaria GPS” to be aired on Sunday, maintained his stern tone towards Israel and warned relations may “never become normal again” but he had warm words for US President Barack Obama as Turkey rises as a diplomatic power in the Middle East. “You can never remain in power through cruelty. You can never stand before the will of the people,” Erdogan said in a transcript released by CNN on Saturday. “This process might be extended a little bit more but sooner or later in Syria, if people take a different decision, that decision is going to be catered to. Such as in Egypt, such as in Tunisia, such as in Libya. People want to be free.”

Malek Jandali’s parents had fled to the United States – CNN

The home of a Syrian musician’s family was ransacked this week, an act viewed as further intimidation by security forces angry at his views about the government. Malek Jandali, a renowned composer and pianist in Syria, told CNN Saturday that he learned from close sources that two armed security officers broke into his family’s Homs residence and looted and destroyed furniture. The house was empty because his parents had fled to the United States.

French envoy mobbed in Syria

(CNN) — France’s ambassador to Syria was attacked on Saturday morning in Damascus, the French Foreign Ministry said.
People threw stones and eggs at Eric Chevallier after he met with Greek Orthodox Patriarch Ignace IV in the Christian quarter of Damascus’s old city.

Why don’t the Christians in both Lebanon and Syria migrate to Europe is allegedly what Sarkozy asked the Maronite religious leader on his recent visit to France.  According to the article, Christians had no place in the Middle East given the clash between Christianity and Islam.  The Maronite leader was shocked by what he heard which prompted the French leader to point to a document that cites how over three million Christians emigrated from Lebanon over the past 20 years and that the Middle East will face many problems in the future.

Niall Ferguson’s 6 Killer Apps of Prosperity – Worth Watching

1. Competition
2. The Scientific Revolution
3. Property Rights
4. Modern Medicine
5. Consumer Society
6. The Work Ethic

In a rather dramatic step towards preserving the country’s foreign exchange reserves, Syria’s finance minister announced that new car imports into the country are suspended till further notice. All products that are subject to customs duties of 5 percent and over will be included in the suspension notice. Such products include luxuries including passenger cars. Mr. Al Chaar made the announcement to reporters following the weekly cabinet meeting. The decision was made to “conserve the country’s foreign reserves and to reallocate it to the lower income groups”. The decision was thought to be “preventive and temporary”. As imports of such products are halted, local producers are thought to pick up the slack by increasing domestic production and employment. Raw materials, food and other basic materials will be exempt from the ban. Products that are not locally produced will also be exempt.

Here is the official summary from SANA

For the record, Syria imports approximately 70,000 new cars a year. The country’s car industry is likely to see used car prices soar. This decision will force all new car dealers to close down till the ban is lifted. This is the most dramatic economic development to date since the Syrian events unfolded almost 7 months ago.

A knife stuck in the heart of the Syrian car market

Syria’s local manufactures prospered for years under the old “himaye wataniye” paradigm. Imports were generally banned for those products that were produced locally. With no imports to compete with, local manufacturers produced inferior products at high prices that the consumer had no choice but to buy. The old days are back.

Syrian economic officials have long assured the country that the country’s foreign exchange reserves are sufficient. Figures around US$ 17-18 Billion have been cited. The above announcement either indicates that this number is not accurate or that the government has concluded to dramatically tighten its belts for what is likely to be a long ordeal. In order to preserve its foreign exchange reserves, the government had to make the choice of either cutting back on some of the key subsidies like energy or to resort to the above decision of halting car imports and other “luxuries”. The decision was easy to make. This is not the time to touch the subsidies as winter approaches. Industrialists have been warning the government of the impending rise in fuel prices used for production.

ONGC mulls bringing its Syrian oil to India – The Economic Times

NEW DELHI: State-run Oil and Natural Gas Corp(ONGC) is considering shipping crude to India from a Syrian joint-venture if US and European sanctions prevent sales continuing to refiners in Europe.

Hezbollah Considers a Future Without Syria’s Assad – The Atlantic

BEIRUT, Lebanon — Hezbollah supporters have been watching the turbulence next door in Syria with apprehension. Rhetorically, the Lebanese Party of God has backed its patron in Damascus, although its embrace has grown tepid of late. But Hezbollah was worried enough to shift its weapons caches from Syria into Lebanon, reportedly, and its emissaries have been working behind the scenes to mend relations with Syria’s opposition. At the core of their worry is a sectarian concern: Syria without Bashar al-Assad might be willing to jettison Hezbollah — after all, Syria is a majority Sunni nation, and Hezbollah is a Shia standard-bearer.

Since the new Governor of Aleppo took his new post recently, he has been making unflattering remarks about the city’s cleanliness. Back in 2009, similar remarks were made here. The pictures taken of garbage cans make the situation clear.

Aleppo was recently host to a conference entitled “creating 6,000 new jobs”.

This was sponsored by the Chamber of Industry, a private education facility, and the Syrian Trust for Development. During the conference, the Aleppo Governor was quoted as saying that the “sanitation and cleanliness of Aleppo are in a terrible state”.  The conference’s noble goal of creating 6000 jobs was soon overshadowed by news that over 41,000 employees had lost their jobs nationally between January and mid May of this year. Indeed, the head of the Chamber of Industry, Mr. Chehabi, warned that poverty and unemployment are the two major problems that need immediate attention. Unemployment is thought to be somewhere close to 30% (official government figures continue to record a number around 8.5%). The poverty rate is believed to be close to 40% with 400 villages out of 1000 falling under the the poverty line.

The bad news was not done. The official representing the education center reported that close to 40% of Aleppo’s population is illiterate. He referred to this statistic as a “disaster”. Below I list a few other statistics that he cited:

University graduates make up 3.4% of Aleppo’s population.
Vocational center graduates are 2.9% of the population
High school graduates make up 9.2%
Middle school graduates are 13.9%
Primary school graduates are 29.2%
Illiterates who have not attended schooling make up the remaining 41.6%

Aa number of industrialists at the conference complain about the lack of fuel oil (Mazot).  The Governor promised that when Mazot could be purchased an effort should be made to make it available to manufacturers who need it to produce and keep workers employed.

The lack of fuel oil in Syria has been widely reported of late. This has become more acute since the government subsidy was increased, lowering the price of a liter from from SYP 20 to 15. It is now very hard to find it at the official price. The Aleppo Governor admitted that it is being smuggled to neighboring countries. This is not surprising. The price of fuel oil (mazot) in Turkey is now SYP 105. At the official price of SYP 15, the price difference is 86% (as Areal points out in comment 17, the difference is 600%) . This is astounding. No wonder smuggling is rampant. The Governor promised to put an end to this illicit trade soon. It is highly likely that such efforts will not work. Smuggling Mazot across the border to Syria is now the livelihood of many families. Taxis cross the border merely to sell their tanks in Turkey after they fill them up at the last gas station in Syria. Large tankers do the same. The latest joke in Aleppo is that it makes economic sense to drink Mazot in Syria and pee it out in Turkey given the price differential. As winter approaches, the domestic availability of this critical product is on everyone’s mind (the government could be stockpiling it too, hence the acute shortage).

David Goodman of the New York Times is seeking help from readers in deciphering a video showing a dramatic moment of gunfire in the suburbs of Damascus.

The NYT claims that an advisor to the Iraqi Prime Minister visited Syria and sent a message to Mr. Assad that he should resign.

Not long after the article appeared, we get the following denial

*(DP-News – agencies)

The media advisor to Iraq’s Prime Minister Nouri al-Maliki “absolutely”
denied statements reported by The New York Times this week that the Iraqi
government urged the Syrian president to step down.

Ali al-Moussawi said these statements, which are allegedly made by him, are
incorrect, and added that “it is neither the nature nor the
followed-discourse of the Iraqi government to intervene in internal affairs
of other countries,” AFP reported.

Moussawi said he “absolutely” denied these statements and added that the
Iraqi government did not request Syrian President Bashar al-Assad to resign.

Assad Has No Friend in Lebanon’s Christians-WSJ

The Maronite Church is not a bastion of democracy. But the church has long been an advocate for an independent Lebanon, free from the shackles of foreign powers—whether Turkish, French or Syrian. For decades the church has been in synch with Arab nationalists who yearn to be free of dictatorship and military occupation.

Syria’s Opposition – USIP

USIP’s Steven Heydemann discusses the state of Syria’s opposition and why the U.S. may be hesitant to recognize an emerging opposition.

The American Ambassador to Syria Robert Ford called Syrian dictator Bashar al-Assad evil –

“Yes, actually I do because what’s happening under his authority in terms of people being tortured to death, people being shot who are unarmed and no one being held accountable for it,” Ford responded following a pause after being asked by TheDC if he thought Assad was  “evil.”

“I can understand it if it was against orders and you just were trying to remake a police force or you were trying to remake a prison system and so there are a lot of orders being disobeyed, but you would want people held accountable. But because I see no accountability, I can only assume that on some level that he accepts it if not encourages it. To me that would be evil.”

 

 

This is the first News Round Up of the new regime. Dr. Landis is irreplaceable and we all owe him a debt of gratitude and appreciation for taking interest in Syrian politics, history and religion. Readers are encouraged to make recommendations. They are also encouraged to write opinion pieces that we will attempt to publish regularly.
Ehsani

The Arab Parliament has asked the League to suspend Syria’s Membership.

U.S. Is Quietly Getting Ready for Syria Without Assad

WASHINGTON — Increasingly convinced that President Bashar al-Assad of Syria will not be able to remain in power, the Obama administration has begun to make plans for American policy in the region after he exits. In coordination with Turkey, the United States has been exploring how to deal with the possibility of a civil war among Syria’s Alawite, Druse, Christian and Sunni sects, a conflict that could quickly ignite other tensions in an already volatile region.

Will foreigners get involved?

Further measures are being floated in Washington and Brussels. Private banks that deal with Syria’s regime, most of them Lebanese subsidiaries, may be targeted if the killing persists. Byblos Bank, in whose Syrian subsidiary Rami Makhlouf, the president’s cousin, has a big share, may be hit.

Damned if we do impose sanctions on Syria. And damned if we don’t

But no one with an interest in human rights can be unaware of what happened when western nations applied sanctions to Syria’s neighbour, Iraq. No one who has seen it can forget the CBS interview in 1996 with Madeleine Albright, Bill Clinton’s secretary of state. The interviewer pointed out that half a million children had died in Iraq as a result of sanctions. “We think the price is worth it,” Albright replied.

And if not sanctions, then what? So far the only alternatives on offer are vacuous condemnation and demands from the likes of Nick Clegg that “it’s time for Assad to go”, which, in terms of efficacy, is like being mauled by a giant sock.

The most widespread objection to the sanctions was that the governments imposing them are selective in their concerns and lacking in moral credentials. This is true on both counts. This column is discussing sanctions on Syria only because they are being imposed there, rather than on Saudi Arabia or Bahrain, which are also run by violently repressive regimes. Far from restraining them, the UK and other European nations continue to supply them with a hideous array of weapons. Though both the UK and the US committed the crime of aggression in Iraq, there is no prospect of sanctions against them. This is the justice of the powerful.

While the black-gold rush is on in Kurdistan, it’s a different story in Syria

The changing oilscape of the Middle East was mapped out yesterday, with prospering Kurdistan-focused Gulf Keystone preparing a $200m (£128m) rights issue to fund its rapid growth while Syria-focused Gulfsands Petroleum warned of a 40 per cent cut in production.

In the months before the Arab Spring uprisings, Syria looked to offer a more attractive, stable environment for oil exploration than Kurdistan, analysts said. With persistent uncertainty over whether contracts signed by Kurdistan regional government would be recognised by Baghdad, the so-called super-majors were putting off going into Kurdish Iraq. This paved the way for smaller operators such as Gulf Keystone to make their mark.

Then, in May, the Kurds reached an interim agreement with Baghdad, which safeguarded revenues generated in Kurdistan and fuelled increasing optimism that a federal oil law will be passed by the end of the year, formalising contracts signed with the regional government. As a result, big oil companies such as Repsol from Spain and Marathon Oil and Hess from the US have piled into the region.

In neighbouring Syria, prospects were moving in the opposite direction. Mr Malcolm of Gulfsands warned yesterday that “some considerable uncertainty now exists in Syria as to how events will unfold over the coming weeks and months”.

Perhaps due to the Arab Spring, Facebook users in the region has doubled

Women make up only a third of the users. Fadi Salem (a bright Syrian) is quoted in the article.

The Finance Minister takes issue with “Syrian Exceptionalism”

“If the question is whether Syria will follow the principals of market economy, then I say yes. But it will have to include a human dimension that addresses the personal needs in a society. I never studied the social market economy. All I have heard is that its an expirement that  took place in Western Europe and it ended with the people that called for it”

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The IMF’s latest forecast for the Syrian economy is to shrink by 2% this year as protests persist.

Rivals—Iran vs. Saudi Arabia

There are fears that the upheaval in the Middle East will exacerbate the deep rivalry between Saudi Arabia and Iran. The region’s geopolitical powers have long been locked in a so-called Cold War, but the Arab awakening is changing fronts in their proxy battles and both are vying for greater influence in a new Middle East.

International rivalry over Syria means conflict likely to intensify

Beleaguered Syrian President Bashar al-Assad received a boost yesterday with the visit of a Russian delegation led by Federation Council Deputy Speaker Ilyas Umkhanov. Upon arriving in Damascus, Umkhanov declared that any Syrian reforms ‘should be carried in conditions when no outside pressure is exerted on Syria, and with no foreign interference.’

Umkhanov’s announcement consolidated Moscow’s position on the Syrian protests, which has included a rejection of any U.N. council resolution, and the advocating of a ‘political, non-violent’ resolution to the Syrian question.

Russia’s moves counteract a western push in favour of regime change, which two weeks ago featured an oil embargo and expanded sanctions in an attempt to ratchet up the pressure on powerful business elites in Damascus and Aleppo that largely remain supportive of Assad. But while painful, these sanctions – and indeed, arguably any other that the west can bring to bear – are not lethal to the regime.

Russia’s foreign minister, Sergei Lavrov, immediately condemned the sanctions, illustrating the difficulty in putting together a robust sanction regime that can be universally implemented.

Yesterday’s Russian visit came just three days after Ghiyath Matar, a Syrian youth leader dubbed ‘little Ghandi’ for championing non-violence, was killed, his brutalised body returned to his family by the authorities with the claim that ‘gangs’ had been responsible. Matar’s killing sparked outrage and dismay, and the fear that protesters’ momentum was now ‘dying’.

The openSecurity verdict: As Assad’s Baath regime continues its crackdown against ongoing protests in Syria, the fate of the Syrian people may increasingly rely on the outcome of a tug of war between states who support regime change in Damascus and others who oppose it.

The outcome is unlikely to be pretty. More probably, the result of the clashing international agendas, a determined elite fighting to maintain power, and an increasingly desperate protest movement, is a Syria that is broken.

The question being asked is no longer whether there will be civil strife, sectarian violence, and economic hardship, but rather for how long and at what cost will Syria suffer under such conditions.

A New Era for Syria Comment – Ehsani and Alex take the helm

I must relinquish day to day oversight of Syria Comment to finish a book. Fortunately, both Ehsani and Camille Otrakji have promised to take the lead in keeping Syria Comment relevant, interesting and important. I have posted almost everyday since April 2004. I will continue to contribute but less frequently. I will find it very difficult to step back from Syria Comment, which has been such a big part of my daily routine for almost a decade. I will miss the constant community and smart commentators of SC.

Ehsani, a Syrian-American banker, has been writing economic analysis for Syria Comment since 2006. He will compile the “News Roundups”. He can be reached at [email protected]

Ehsani writes:

“When two people always agree, one is redundant.” Syria Comment’s strength will be judged by its ability to bring together the many different points of view that Syrians have about their future.

Camille Otrakji, a Syrian-Canadian analyst, has been writing for Syria Comment as Alex since 2005. He has also assisted me with most technical challenges of blogging, designing, and maintaining the site. He also maintains “Creative Syria“, Syrian Thinktank, and Mideastimage.com.He can be reached at:  [email protected]

Camille writes:

No other blog covering Syria comes close to Syria Comment in its sincerity in welcoming different viewpoints and opinions.  Since it first began in 2004, Syria Comment has brought together regular commentators from America, Israel, Lebanon, Europe, Turkey, Iran, Palestine and, of course, Syria. Our challenge is to promote the opinions and analysis of Syria Comment’s community of participants.

Moderation: Both Ehsani and Camille will moderate the comments on their own posts. Both insist that they will use the lightest possible moderation protocol.

The Opposition announced a National Council. Increasingly, the opposition is getting organized. Opposition members are scrambling to get their house in order. A number of differences have been put aside in order to make up the National Council on Thursday. But many differences remain and a few opposition groups within the country are trying to put together a National Assembly. The best article on the National Council is by Khalid Oweis of Reuters. He writes:

President Bashar al-Assad’s opponents have taken a step toward unity by forming a national council to represent Syria’s uprising but have a long way to go until they create a broad-based alternative to his rule….

the council has yet to produce a credible leader who can command wide respect on the street. Other groups may still try to set up alternative leaderships both inside and outside Syria.

“They have not brought together everyone, and there are varying objections on the members, but the fact is that they finally formed a council after months of bickering over the names, while the regime has been killing 20 Syrians a day,” prominent Syrian writer Hakam al-Baba told Reuters.

“A main objective now is to address the international community, and I think the council can do that. They have also left the door open for the rest of the opposition to join,” said Baba, a dissident who lives in the Gulf.

The opposition is also still far from forming a front similar to one set up in the past by Iraqi opposition groups which campaigned for Saddam Hussein’s removal and was well connected in the West, especially Washington.

One opposition figure not in the council said Islamists were over-represented on the newly announced body.

“The National Council has taken an Islamist flavor at the time we need to assure all minorities and the ethnicities more of their future in a post-Assad Syria,” said Thamer al-Jahmani, a prominent lawyer from Deraa who took refugee in Jordan last month after the assassination of a fellow activist….

The council will broadly be based on the principle of representing different sections of the Syrian society. For example, 30 percent of the council members are said to be from Islamic-leaning groups ( Muslim Brothers ), 30 percent left-leaning groups and 40 percent from various ethnic groups present in Syria; although, there is no rigid percentage system.

Yasser Tabbara, an independent member of the council, said “Everyone who is committed to our basic principles is welcome to join the council.” The council is made up of 65 people who live outside Syria and 70 from inside at the moment, although this number will be open to expansion as new figures will join the council.

Tabbara told Xinhua news agency that the basic principles of the council consist of toppling Bashar al-Assad’s regime, commitment to peaceful nature of the revolution, opposition to any foreign intervention and maintaining the national unity of Syria. He also said the council would not work with anyone who negotiated with the Assad government. The various positions in the National Council will be determined after an election process is completed in the next few weeks, said Tabbara.

See Tabbara on al-Jazeera debate the efficacy of the new council with Nadim Shehadi and Naim Salem – a good discussion by smart people.

“The council sees three stages in the near future consisting of changing the regime, post-regime transition and then the future political path,” said Bassmah Ghodami, a Paris-based Syrian opposition member. Ghodami said each stage is expected to last six months but the time frame is flexible depending on events on the ground.

Another aim of the council is to create a political umbrella for Syria’s rebels, according to Ghodami.

Syria’s internal opposition is getting armed and dangerous. Ugarit News reports that “a unit of the Free Officers’ Movement ambushed a Syrian security convoy on the Road to Hama, killing more than 30 and wounding more than 20. If true, it underlines Anthony Shadid’s recent contention that Syria’s opposition is increasingly becoming armed and lethal: “Syria’s Protesters, Long Mostly Peaceful, Starting to Resort to Violence.

Ausama Monajed, a leading activist and member of the National Council, insisted to me that the opposition is against taking up arms because they believe that a “tipping point” will be reached by peaceful action in which the regime “collapses,” due either to a coup inside the military or increased defections.

Many in the opposition believe this is unlikely. Some officials in the US also are beginning to fear that Syria has reached a stalemate: US worried Assad will weather storm, according to the Wall STreet Journal.   The armed opposition does not seem to be taking orders from the new National Council.

New OFAC Rules make it illegal for Americans to work in Syria.

I have asked experts whether this means that American-Syrians with duel citizenship are also forbidden to work in Syria as well, and await a more precise answer. It seems the State Department figure who can answer such questions is being reassigned so we must awaiting his replacement to take up his new post. So far the answer provided by one lawyer was: “tricky. Some argue that Syrian citizenship allows you to be treated as Syrian inside Syria…This needs clarification.”

STOCKS IN EGYPT last week reached a new low. They are now down 34%.
STOCKS IN SYRIA are now down 48%.

Nidal Maalouf, founder of Syria News, decided to immigrate after being harassed by security. He evidently was harassed because the site was not far enough in the pro-Assad camp. Last heard he is in Turkey.

Education School Year Begins in Syria: 5.6 million Syrian children entered school on September 18, the first day of the academic year – 1/4 of Syria’s population.

Imad Moustapha interview on CNN

Turkey Predicts Alliance With Egypt as Regional Anchors, By ANTHONY SHADID

COMMENTS BY READERS

Observations about Aleppo and the Economy

1- The areas outside aleppo have changed recently and have become more restive.

2- mazot is very hard to find. you cannot get anything at the official price of syp 15. You need to pay 23 and even then you get it in very small quantities. some who want to store for the winter cannot get it because the govt has forbidden mazot deliveries to home till October.

3- people in the city are very pissed off with the shabiha.

4- people are also very pissed off with the lawlessness and the illegal building that is taking place.

5- Tough boys are in control of the city.

6- Christians are very very pro-regime and that is surprising some Sunnis and creating some tensions.

7- winter is going to be key with mazot etc. also the upcoming sanctions are likely to impact Aleppo.

8- while Aleppo and Syria suffered in the 80’s , its not the same now. over past 10 years they have gotten used to things that will be hard to do without .

9-he feels that Aleppo was a fire wall from day 1 in Tunisia. it is not that the they were unprepared but the places the troubles started at came out of nowhere. no one thought of daraa, banyas or homs.

10-feels that just like every other place, it will be small villages outside Aleppo and then the poor areas of Aleppo that may see the action.

11- religious establishment has been totally embraced by the regime so that they don’t push the people. that worked. same for the business guys. the latter group does not feel that the regime is falling yet so they don’t want to pay the price of jumping ship now. they will stick with it but once they are convinced its going down they will do it fast.

12- when and if Aleppo does break , it will be uglier than anywhere else.

13. Many in the business community and among the elite have, over the past 2 months, started to get the feeling that things in Aleppo are not heading in the right direction and are thus trying to get family out of the country. Some are enrolling them in schools in the West, if they have family members there. The shabiha and their thuggish behavior is making people really mad. Mazzot prices will also be a barometer of public opinion.

Another view from a Syrian-American visiting Syria

None of the Syrians I met was panicking – including all of my first cousins who make their living entirely in Syria. Frankly, I was shocked. I was certainly more concerned than they were.

They seemed to indicate that we, as Syrians, have been there before and there is nothing new. And their survival confidence is higher than I have ever seen.

One prominent doctor from Aleppo whom I met in Istanbul told my that his wire transfer to his son in FL to purchase a condo was rejected by the US and returned to his bank in Beirut. Why? Because although his account was in Lebanon and it is in US dollars, the US does not accept or allow wire transfers from Syrians regardless whether they are on the sanction lists or not.

So, I sounded concerned and issued one of my famous (mainly fake) “sigh” in front of him in solidarity with his dilemma and in disgust with the US. He laughed. He said the money was re-transferred successfully the same day, under a different name and it cost him just $100 extra to do so.

His words: “Stupid Americans, they have no clue”.

So I asked how is Shihabi now going to get raw materials for his drug manufacturing factories in Aleppo. He laughed again (this time at me and my stupid question). Answer: “As he always did.” He buys raw materials from India. India gets it from all over.

The merchants of Syria – mainly in major cities will not be hurt in any meaningful way. They survived the Umayyads, the Abbassids, the Mongols, the Crusaders, the Ottomans, the French, the Baathists. They are survivors and they are there to stay. It’s just us who left and are scared for them.

Construction business? It is booming. They can hardly find enough workers to meet the demands – one prominent builder told me. In one story, he said his master tile guy was arrested because he was in a demonstration. The day after his arrest, his brother came in to fill the need. He was as good and there was no interruption.

An explanation by another reader

1- The construction business is booming because there is welcomed lawlessness in Syria. Aleppo is a construction site because no one is watching. You have an open roof on your building? you can turn it into a 2 bedroom apartment in a month. no permit. no baladiye to ask. our next door building did just that. You have a mazraa and you have always dreamt of a villa and a pool in the middle? No problem. in 3 months its done regardless of the fact that it is zoned as agrictultral land. my sister has one. she has 2 floors. her builder said i can add a third in 2 weeks. no need to ask anyone. basically over the past 6 months, syrians created their own tanzeem. once the f…ed up local govt was removed from the scene, your kids’ dream homes were quickly built. why the rush? because as soon as things return to normal , govt will come back. for now, they come , take a picture of what you have done and say goodbye.

2- Fares Chehabi can of course get raw materials from india, china, angola or burkina faso. 50 years of baaath have produced best smugglers in the world. every taxi driver can qualify. Every moukhales jumruki can import anything and produce documents to prove that it is something else. 3- money transfers in amounts that get wired in syria is a joke. of course you can always find someone. back in the days when a money transfer was subject to life in prison did not deter people. it just meant that you get charged more for the transfers. 4- the wealthy will always find a way. it just means a bit more expensively than the past but then again he can always charge more now because of the hardship in getting his wires and raw materials in.

Another Reader

I talked to a contractor friend of mine in Damascus and he says his business is back on track workers are more disciplined now, roads are opened and prices of cement are still up (very heavy building in the unplanned developments)

Another Reader

They are indeed enjoying the outdoor dining to the max! In Nadi Halab, the Gemini club and Swiss house in Damascus you can’t find a place to sit if you have no reservations. The sushi place and the 6 other cafes/restaurants in the four seasons boulevards are full every night. Same thing in the 10 restaurant complex near Pulman hotel in Aleppo. Even in Homs in eid the cafes near the malaab were half full! In revolting Douma, a guy there told me that during the early days of the uprising cafes used to close down immediately once a one of the daily demos start marching in the street where they are at. Now people continue to smoke argileh while watching the demonstrators there march 10 meters away, then order more drinks while watching the demonstrators run back while the security and shabbiha run behind them!

Syrians are now like the Lebanese. They adapted and decided to live their lives to the fullest despite everything. They will continue to adapt going forward.

Syrian Prometheus:

I am actually quite baffled by the stories denoting a construction boom. I have it on very good authority that the previously lucrative imports of timber, marble and other construction-related materials have slowed down dramatically. One major importer is keeping minimal inventories in this space while keeping food imports at relatively high levels.

The Harmoush Interview on Syrian TV – He is the leader of the Free Syrian Army who was captured by Syrian authorities

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Article in Sham Press about Harmoush’s TV interview. Harmoush explains that every opposition personality called him and asked Harmoush what his plan was. Harmoush would respond by asking them to present a plan and he would accept the most reasonable and the one that had financial logistics backing. Everyone promised and no one delivered.

According to Youth Syria for Freedom, Colonel Harmoush was conned by officers that he knew. They deceived him into believing that they needed to meet him inside the border to defect to Turkey. He went in and was trapped by security forces. Turkish Authorities have nothing to do with the incident.

Here is the complete video of the Harmoush interview on TV

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The Chief Commander of  the Free Syrian Army, Colonel R AlAs3ad, says:

Turkish Government is not to blame in the arrest of Colonel Harmoush by Syrian Forces. The Turkish authorities are investigating Harmoush disappearance and bringing him back. We hold the Syrian regime responsible for the well being and the life of Colonel Harmoush and we demand his release to the custody of the Turkish Authorities.

Syrian President Bashar al-Assad’s regime will likely live through the anti-government uprisings despite sanctions levied by the US and its European allies, according to Jay Solomon in the Wall Street Journal.

The Obama administration is planning for a protracted confrontation with Assad as the revolt in Syria enters month seven.

The U.S. and EU have slapped oil sanctions on Damascus that could threaten up to one-third of the government’s revenue, but many experts believe they lack adequate “bite”.

Not to mention, the upper ranks of Mr. Assad’s military, dominated by members of his Shia Alawite religious sect, remain impressively unified in their support for the president and his family.

Meanwhile, an opposition that has been fragmented across religious, ethnic and geographic lines has failed to make much headway against the brutal violence employed by Assad’s security forces which have killed over 2,400 protesters.

Why Many Syrians Still Support Assad
The Christian Science Monitor

The Arab League yesterday called on Syria’s Assad to stop his ‘killing machine’ as the uprising enters its seventh month. But Assad, still backed by key groups, is unlikely to bow to such calls….

EU Sanctions on Syria Oil and Gas Industry Come Sith Loopholes
By: Paul Richter and Henry Chu | Los Angeles Times

As Syria’s foes intensify pressure on Bashar al-Assad, its friends are adopting a new tune, appealing to the president to embrace reforms and buy time for his embattled regime.

The most curious call for political progress is now coming from Iran, Syria’s main strategic ally in the Middle East.

Political analysts say the change of rhetoric reflects Iran’s nervousness over Mr Assad’s management of the six-month popular uprising. It is also a tactical move designed to limit the damage to Iran’s image in a region where it styles itself as a champion of the oppressed.

Mahmoud Ahmadi-Nejad, the president who was himself accused of stealing the 2009 election, sparking an unprecedented wave of street protests, has spoken of “needed reforms” in Syria. More explicitly, Ali-Akbar Salehi, the foreign minister, has called on Mr Assad to “be accountable to his people’s legitimate demands”.

Mr Assad has waged a relentless military campaign to crush the revolt, leaving 2,600 Syrians dead so far, according to the UN. Western diplomats say he has been receiving advice and logistical support from Iran, a claim Tehran denies.

The campaign continues to intensify, with killings reported every day, but it shows no sign of breaking the will of the protest movement and is increasingly eroding the authority of the government.

Analysts in Tehran say Iran will support Mr Assad until his last day but is growing concerned about his increased weakness and ability to survive. A collapse of the Damascus regime would deprive Tehran of a vital ally and strike a blow to its ambitions for greater influence in the region at a time of historic change.

Syria’s uprising has been dominated by Sunni Muslims, the majority population that has been ruled by Mr Assad’s minority Alawite regime, an offshoot of Shia Islam. If the protest movement eventually prevails it is unlikely to produce a government that maintains as tight a relationship with Iran.

Some reports suggest that an Iranian official recently met activists from the Syrian opposition, in what could be an attempt to push for a dialogue between the opposition and the region in Damascus.

“Iran sees no other choice but to support reforms in order to buy time and also not to look like it is standing against Arab public opinion,” said a former Iranian official.

The Syrian uprising has exposed blatant contradictions in Iran’s attitude to Arab revolts. Tehran has hailed the Arab spring as an “Islamic awakening” inspired by its own revolution in 1979 but when it comes to Syria it has backed Damascus’s claims that the revolt is a foreign conspiracy designed to benefit Israel.

In Syria and across the region, however, Arabs who have risen against autocracy have more in common with the Iranian opposition crushed by the Islamic regime in 2009 than with current leaders. Their battles are driven by domestic considerations rather than a global struggle against America or a regional struggle against Israel.

Some of the slogans in Syria’s protests have directly targeted Iran and Lebanon’s Hizbollah, the Shia militant group backed by Tehran and Damascus, and expressed approval of Turkey, an ally of the regime which has been far more vocal in condemning Damascus’s actions.

“Iran cannot afford to be against Syrian public opinion any more because anger against Iran is getting really serious,” said one former Iranian diplomat.

More broadly, a recent survey of public opinion in six Arab countries, conducted by the Arab American Institute in Washington, found that Iran’s popularity has been in dramatic decline while that of Turkey has soared.

A political analyst with links to the ruling establishment in Tehran said Iran was pushing for more visible but still cosmetic reforms in Syria because drastic steps would spell the end of the Assad regime.

“The [Iranian] regime is steadfast in helping to keep Assad in power,” says the political analyst. “If there are real reforms, Assad has to leave power and that is not acceptable to Iran.”

The Arab spring is an Arab disaster – 15.09.2011, – Haaretz opinion

The choice in Syria will be either a bloodbath, an Alawite dictatorship or a Sunni dictatorship

The picture is clearing up. The Arab spring is an Arab disaster. In the coming years there will be no democracy in Egypt. The choice in Egypt will be either chaos, Islamic dictatorship or military dictatorship. In the coming years there will be no democracy in Syria. The choice in Syria will be either a bloodbath, an Alawite dictatorship or a Sunni dictatorship. In the coming years there will be no democracy in Jordan. The choice in Jordan will be either weakened Hashemites, the Muslim Brotherhood or Palestinians. In the coming years there will be no democracy in Libya. There the choice will be disintegration, disorder or renewed despotism. Perhaps in Tunisia a real change for the better will occur.

But the bottom line of the Arab spring is that the lives of hundreds of millions of Arabs will be worse. More poverty, more crime, more fear in the streets. More oppression of women, more persecution of minorities, more hatred of the West. Monarchies like Saudi Arabia, which thwarted the Arab spring – are now emerging as responsible states. In contrast, the republics defeated by the Arab spring are turning one after the other into failed states. They are tainted with fanaticism, spreading misery and creating unprecedented instability.

The picture is clearing up. The Palestinian September is an Israeli-Palestinian disaster. The Palestinian September was conceived by two European statesmen – Bernard Kouchner and Javier Solana. Those two naive men figured if they grant international sponsorship to Salam Fayyad’s Palestinian-state plan, they would force Israel to make a final-status arrangement.

But the Israelis did not cave in to the pressure. The Palestinians fell in love with the plan.

Syrian TV Station Accuses Al Jazeera of Fabricating Uprising – NYTImes Lede Blog, September 14, 2011

A YouTube channel called the Syrian Interpreter has posted a subtitled recording of the Syrian television station Addounia TV claiming in a Sept. 9 broadcast that the news station Al Jazeera has built enormous “cinematic replicas” of Syrian cities and squares in the Gulf state of Qatar in order to fabricate the uprising in Syria.

These replicas were built “with the help of some French and American directors” and are “exactly like the ones set up of the Green Square for Libya, with which they duped the Libyans and the world that Tripoli fell,” according to the channel’s English translation.

“With those replicas,” the subtitles read, “Al Jazeera will continue media fabrication and cinematic tricks by shooting scenes of big defections from the Arab Syrian Army and shooting scenes of clashes. Those scenes would be done by directors from the U.S., France, and Israel.”

A spokesperson for Al Jazeera said: “This is wackiness of the highest order which no one will be taking seriously. Many other journalists were in Tripoli reporting the same events, so it is telling that such is Al Jazeera’s influence in the region that supporters of these regimes are targeting Al Jazeera specifically for covering the uprisings.”

Erdogan’s Remarks Irk Muslim Brotherhood – SEPTEMBER 14, 2011 – Wall Street Journal

CAIRO—The Muslim Brotherhood objected to statements by Turkish Prime Minister Recep Tayyip Erdogan telling Egyptians not to fear building a secular state, in a rare clash that exposes the gap between the so-called Turkish model for building a Muslim democracy and what Islamists in the region believe when they invoke it.

For much of Mr. Erdogan’s two-day visit to Egypt this week, members of the Muslim Brotherhood made up much of the fan club that followed Mr. Erdogan around Cairo. They championed his tough stance toward Israel and his promotion of Muslim solidarity.

U.S. ISSUES TRAVEL WARNING FOR SYRIA
2011-09-15

The U.S. Department of State urges U.S. citizens in Syria to depart immediately while commercial transportation is available. Given the ongoing uncertainty and volatility of the current situation, U.S. citizens who must remain in Syria are advised to limit nonessential travel within the country. U.S. citizens not in Syria should defer all travel to Syria at this time…..

WSJ [Reg]: Sanctions Won’t End Syria’s Repression
2011-09-15

On Sept. 2, the European Union, supported by the United States, imposed an embargo on exports of Syrian oil. The EU buys some 95% of Syria’s oil output, accounting for almost a third of Syria’s national income. By hitting the regime of Bashar Assad …

Writing a New Syrian Constitution | By Sami Moubayed

…. A hard reality is beginning to sink into the upper echelons of power in Damascus; that the Baath Party can no longer survive with the same regime, methods, tools and personalities that it used for nearly 50 years.

The Baathists need to dismantle their monopoly on power at will, because they are going to have to do so anyhow under increased pressure from the angry Syrian street. At any rate, Baath Party control — if not mandated by a true democracy — cannot survive in a new Syria. Article 8 and a democracy — which is the ultimate goal– can never go hand in hand.

Syria’s ports suffer as unrest hits economy
By Suleiman Al-Khalidi, Reuters

…Shipping sources say traffic in general cargoes, dry and liquid bulk cargoes, and containers at Latakia and Tartous has been slipping since the uprising broke out in March. They estimate volumes shrank an average 35 to 40 percent from a year earlier in the first eight months of 2011.

“Importers and exporters are being very cautious, and that has led to imports of raw materials falling sharply as production slows down in many industries due to the troubles,” a Syrian transportation official, who requested anonymity, told Reuters from Damascus.

Shipping agents and industry experts said container volumes, the vast majority of which are handled by Latakia, dropped in June alone by 36 percent from a year earlier to 33,527 twenty-foot equivalent units (TEU).

Official Latakia port figures for the April-June period show a drop of 16 percent from a year earlier, but industry sources said this data was misleading because it included many containers with empty space.

In Tartous, which handles most of Syria’s bulk cargoes, or nearly 9 million tonnes of annual traffic in normal times, shipping sources said some European operators were avoiding the port after the European Union announced sanctions on Syrian oil exports at the start of September.

They said they were also seeing less business from Iraqi and other Arab traders who were deterred by the increasing checkpoints and roadblocks in many parts of Syria.

“We had 25 to 30 vessels daily arriving. This has dropped to between 10 to five daily,” said a major shipping agent based in Tartous, referring to vessels between 8,000 and 35,000 tonnes.

So far, major regular shipping lines such as Danish firm Maersk, French-based CMA CGM, Geneva-based MSC, and Germany’s Hamburg Sud have largely maintained normal vessel calls to Syrian ports despite lower cargo volumes, industry sources said.

Shipping agents say the companies are reluctant to pull out of a transit market that has served the whole region and still has great long-term potential because of its location.

New Party Formed

Syrian opposition members Hassan Kamel, Louai Hussain, Mona Ganem and Bahaa Al Deen Erkad at a press conference in Damascus to announce the formation of a party called ‘Building the Syrian State’. This is the first party to be announced in Syria since the endorsement of the multi-party law by Syrian President Bashar Al Assad last month.

Syrie : un officier supérieur parle
Le Monde Diplomatique, mercredi 7 septembre 2011

« L’armée de la Syrie n’est que l’armée des services de sécurité syriens (jaych amni). » Mon interlocuteur a prononcé ces mots gravement. On l’appellera Mohammed, c’est un officier supérieur sunnite.

Comment en est-on arrivé là ?

Il faut remonter aux années 1960 où, en quatre coups d’Etat, se mettent en place les cadres de l’actuel système politique syrien : la ruralisation des villes et du régime, l’arrivée au pouvoir de la minorité alaouite et la domination du parti et des civils par l’armée. Le dernier putsch, celui de Hafez Al-Assad, père de l’actuel président, en 1970, va parachever la construction du système autoritaire. Il instaure un maillage complet de la société syrienne autour de l’armée et des organes de la Sûreté, du parti et de la bureaucratie. Le régime utilise aussi les liens de solidarité familiaux, claniques, communautaires et régionaux pour se constituer une clientèle (qui est évidemment rémunérée par les postes de la fonction publique). Le croisement des liens communautaires et de l’obsession du contrôle sécuritaire produit la prédominance alaouite dans les hautes charges de l’armée et des organes de sécurité. Le ciment de l’édifice sécuritaire, c’est la culture de la peur que la révolte vient de mettre à bas. Sous M. Bachar Al-Assad (depuis 2000), le parti, la bureaucratie et l’armée sont passés directement sous le contrôle des services de sécurité, eux-mêmes entièrement aux mains de la famille Assad. Les Syriens considèrent même que le parti est le sixième service de sécurité.

– Z. : « Combien d’hommes travaillent dans l’armée et les services de sécurité ? »

– M. : « Leur nombre total dépasserait 700 000 personnes : 400 000 hommes dans les forces armées régulières, 100 000 hommes dans la police et les services de renseignement, et plusieurs dizaines de milliers employés à temps partiel par les organes de la Sûreté. »

Ce sont ces derniers qui forment les bataillons de chabbiha et de francs-tireurs. Les chabbiha sont des ruraux et sans doute des prisonniers de droit commun libérés au début de la révolte. On estime à plus de 100 000 le nombre d’Alaouites dans les services de sécurité, sans compter l’armée et la Garde présidentielle, forte de plusieurs dizaines de milliers d’hommes, qui est totalement alaouite. Les Alaouites représenteraient en 2011 quelque 10 % de la population. La moitié des fonctionnaires serait employée dans l’appareil de sécurité.

A ces hommes, il faut ajouter plus de 60 000 civils employés par le ministère de la défense (notamment dans l’établissement du logement militaire, mouassassat al-iskan al-askari, dirigé par un cousin d’Al-Assad). Ces hommes, comme d’autres agents de l’Etat, sont obligés, sous peine de perdre leur poste, de venir assister le pouvoir dans la répression : ce sont eux qu’on voit munis de bâtons électriques ou de barres de fer, souvent placés à la sortie des mosquées. Ils sont aussi mobilisés dans les manifestations de soutien au régime…

– Z. : « Mais cette armée est bien chargée de la défense du territoire ? »

Mohammed sourit, sa main qui allait prendre la tasse de café s’arrête, comme suspendue. Il la pose sur la table et me regarde.

– M. : « Certes, mais on peut s’interroger depuis les années 1990 : une grande partie du budget national est affectée à l’armée. Or, il n’y a plus de réel renouvellement de matériel pour la majorité des divisions et unités militaires. Alors, où va l’argent ? De plus, une brigade a été créée à la frontière avec Israël (liwa nitaq al-hita) mais elle n’est dotée d’aucune capacité militaire, elle n’a même pas de chars… Enfin, la direction militaire semble très occupée ailleurs comme, par exemple, écarter de l’armée et du service militaire les Damascènes : ainsi, un jeune Sunnite damascène peut payer une sorte de salaire mensuel à un officier responsable pour valider son service en restant chez lui ou en travaillant à Damas »…

– Z. : « En ce qui concerne les appartenances confessionnelles au sein de l’armée ? »

– M. : « On est arrivé à cette situation hautement symbolique où il n’y a plus que deux appartenances réelles : l’alaouite et la sunnite (fi alawi wa fi sunni) mais par sunnite, il faut entendre toutes les autres communautés » [sunnite, druze, chrétiennes, etc., soit 90% de la population, NDLR]. « En principe, poursuit mon interlocuteur, quand un commandant de division, de brigade ou autre unité militaire est sunnite, son adjoint est alaouite et vice-versa. »

C’est d’ailleurs le même principe qui dirige l’attribution des postes de ministres dans le gouvernement, chaque ministre non-alaouite étant chapeauté d’un adjoint alaouite qui détient la réalité de la décision politique. On notera que la récente nomination d’un chrétien à la tête du ministère de la défense, vise sans doute à impliquer plus encore les chrétiens du côté du régime.

– M. : « La décision dans l’armée (comme dans la Sûreté) revient toujours aux officiers alaouites, les sunnites n’ont pas de poids. Un lieutenant alaouite pistonné par la Sûreté peut exercer un pouvoir complet (kamel al-sulta) dans son secteur et avoir plus d’importance que son supérieur sunnite. Par exemple, ces officiers alaouites pistonnés, quelle que soit leur ancienneté dans l’armée, auront à leur disposition une belle voiture neuve et les officiers supérieurs sunnites poursuivront leurs déplacements à bord de vieilles Jeep… Les sanctions prévues pour les officiers en cas de faute grave ne sont pas appliquées avec la même sévérité aux uns et aux autres… De plus, les officiers sunnites peuvent faire l’objet d’enquêtes ou de surveillances internes pour s’assurer de leur loyauté au régime. D’ailleurs, il est très difficile pour un sunnite de s’élever au grade de général [amid], il est généralement mis à la retraite avant… »

– Z. : « Le principe confessionnel apparaît-il sous d’autres formes dans l’armée ? »

Mohammed prend sa tasse de café avant de répondre.

– M. : « Le principe confessionnel est généralisé mais relève du non-dit. L’armée syrienne est composée de sept divisions (firaq), chacune dirigée par un général de division (liwa). La quatrième division, commandée par Maher, frère de Bachar Al-Assad [et qui dirige aussi la Garde présidentielle], est la plus importante, elle compterait de 40 000 à 50 000 hommes, tous alaouites, et c’est la section qui reçoit l’équipement militaire le plus sophistiqué. C’est cette division qui a été impliquée dès le début dans la répression à Deraa. »

Mohammed boit une gorgée de café et ajoute :

– « Tous les officiers des services de sécurité viennent de l’armée. Dans la nomination des officiers, et leur promotion, c’est la Sûreté (amn) qui donne à l’Etat-major les noms des officiers à promouvoir… D’ailleurs, dans la répression de la révolte, toutes les décisions sont prises par les officiers de la Sûreté. Même lorsqu’il s’agit de déplacer un tank… L’armée syrienne incarne, si on veut, le pouvoir exécutif (al-sultat al-tanfiziyya) de la sûreté et pas de l’Etat-major. »

– Z. : « Et les officiers et soldats tués pendant la révolte ? »

– M. : « Il est difficile de savoir ce qui se passe exactement. Aucun militaire syrien ne doute de la capacité de la Sûreté à liquider ceux qui refuseraient d’exécuter un ordre. Dans la logique sécuritaire du régime, la Sûreté préfèrerait certainement abattre quelques alaouites pour pousser ou faire croire à un conflit confessionnel, c’est bien plus rentable pour le régime que d’abattre un sunnite ! Ceci dit, il n’est pas impossible que les militaires envoyés sur le terrain de la répression soient tous alaouites, on peut même penser que ce sont des éléments alaouites des quelque 100 000 agents de police et de la Sûreté que l’on a habillés en soldats pour les envoyer abattre du « sunnite ». Ce serait bien dans la logique de ce régime confessionnel qui ne dit pas son nom. Mais la mort de militaires ou de membres des services de sécurité peut aussi être liée à des actes de vengeance individuels, à des initiatives locales. Ainsi à Deraa en mars dernier, les gens ont repéré un sniper sur le toit d’un immeuble, ils ont brûlé l’immeuble pour se débarrasser du sniper… A Jisr al-Choghour, des habitants ont attaqué le poste de police avec un bulldozer. La répression est si violente, si barbare, qu’elle peut produire des réactions inattendues ! »

Il reste tout de même que l’on n’a aucune image de la mort de ces militaires alors que pour ce qui est des manifestants, on les voit tomber quasiment en direct…

J’ai dû penser tout haut, Mohammed me regarde avec un air ironique cette fois-ci.

– Z. : « Que faut-il penser de “l’armée syrienne libre” (al-jaych al-suri al-hurr) et peut-on envisager une éventuelle fracture au sein de l’armée ? »

– M. : « Il s’agit de dissidences individuelles et pas de la scission d’une unité militaire complète ! Ces dissidences isolées ne peuvent pas délivrer un quelconque message fort au pouvoir. La composition communautaire de chaque unité militaire empêche toute homogénéité pour les sunnites (mais pas pour les alaouites comme la quatrième division le prouve). La répartition des postes de commandement dans l’armée est organisée de telle sorte que même si un ordre dissident venait d’un officier du groupe sunnite, il serait bloqué à divers niveaux par des officiers et sous-officiers alaouites ou alliés du régime. Il ne faut pas attendre de cette armée le moindre soutien aux manifestants. Je le répète c’est une armée de barbouzes, jaych amni », dit-il en prononçant distinctement chaque syllabe…

– Z. : « Alors, quelles sont les perspectives de la révolte ? »

– M. : « Difficile à dire sinon qu’elles sont sombres. En même temps, le régime s’est perdu lui-même. Si les manifestants sont bien décidés à ne pas se soumettre, le régime n’est pas prêt non plus à céder quoi que ce soit. Les Assad n’arrivent pas à imaginer qu’un jour ils ne seront plus là ! C’est pourquoi la répression est allée en s’aggravant. Aujourd’hui, l’armée et le régime ont déclaré une véritable guerre aux manifestants pacifiques et aux civils syriens en lançant contre eux les hélicoptères, les blindés et la marine de guerre… La seule possibilité du côté militaire ne pourrait venir que d’une scission, peu probable, au sein de la direction des services de sécurité, qui pourrait alors entraîner d’autres secteurs de l’armée… »

Mohammed pose sa tasse de café, son regard se perd dans le vague.

En attendant, le régime diffuse un numéro de téléphone pour que les citoyens puissent dénoncer ceux qui le critiquent. Délation de triste mémoire…

Zénobie

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This is a video of the declaration on the National Syrian Council.

Another video clip with the names of the members of the council

On the Regime and the Opposition in Syria by Nabil Fayyad

Despite my very negative position on the regime for private and public reasons, the truth is that the regime is very strong, and neither the outside nor the inside were able to make it change its usual stances. This strength does not come from a vacuum. The regime has a broad popular base that supports it at home and abroad, whether out of conviction or opportunism. And ignoring this issue on the part of the Transitional Council is the first indication that the opposition does not know yet the true meaning of democracy. . . .

Nabil Fayyad, an expert in comparative religion and biblical criticism, is a Syrian intellectual who is an outspoken critic of the Syrian regime. He has been arrested and detained by the Syrian authorities in the past. The original Arabic note by Fayyad was first published on a Facebook page administered by Fayyad’s supporters on 29 August 2011. The English translation above was adapted from Sate Hamza’s translation published in his blog Syrian Musings on 30 August 2011….

Turkey and the Syrian Kurds by Wladimir van Wilgenburg

Nuances are needed in understanding Christian-Kurdish relations in Syria by Wladimir van Wilgenburg

Christian-Kurdish tensions emerge by Wladimir van Wilgenburg

NORTHEASTERN SYRIA: IT’S MORE THAN JUST UNHAPPY KURDS, 09DAMASCUS209:

Stone Age, Here We Come
By Syrian Prometheus* – Opinion Piece
For Syria Comment
Sept 13, 2011

Anyone who lived through the failed revolution of the 1980s, or the “incidents”, as we call them, will tell you that this current revolution still has a long way to go. Hafiz al-Assad, or “Senior”, used the iron fist for three years before he brought the people back under his firm control. It took a further seven years of severe isolation, privation, and an eventual rapprochement with the US over Iraq (Dessert Storm) before the populace began to experience a bit of relief – the economy loosened up and a measure of civic comfort returned to everyday life.

So, is this time different from the eighties? We have not even begun to reach the upper limit of civilian casualties and economic pain that this conflict will exact.

The economic costs of this revolution will be staggering. International banking institutions have already stopped accepting US dollar payments from Syrian merchants. No consideration is being given to the legitimacy and good reputation of individual merchants. It seems that banks have decided that sanctions against the Syrian government imply an embargo on private citizens as well. This is causing severe commercial dislocation as importers whose businesses are overwhelmingly denominated in US dollars scramble to pay in other currencies. By doing so, they are exposed to foreign exchange risks that they were not counting on. And these costs are only the tip of the iceberg. Merchants are being battered by the collapse in demand. They importing goods in much smaller amounts and selling under more restrictive terms that they used to. Only the most necessary staples have retained their markets. The velocity of money is slowing down to a crawl (much as happened during the financial crisis on the global stage in 2008). Reduced monetary velocity can only be offset by printing money to keep the economy primed to the same level. But, printing money is inflationary (not in a good way in this case). The next stage is likely to be stagnation. There are many bankruptcies looming. This, of course, means layoffs which will bring even less demand and will establish a vicious cycle of contraction, unemployment, and failure.

Many in Syria believe that this effort at revolution will be different from the revolt of the late 1970s and early 1980s. Conventional wisdom states that the telecommunication technology has changed the playing field, like it did in Egypt, and that the Syrian leadership must undertake a different calculus. The world is watching this time around. Yeah? So what?

Many in the opposition and the silent majority (cowards like me who yearn for a better future) observe that Syria’s isolation is much more severe than it was during Senior’s era of the eighties. That is true; Europe, the US, and much of the Arab World have declared their opposition to the Syrian regime and demand that the Assads leave power (I would like to know where to). With continued embargoes, sanctions, and economic pressures, the expectation is that the Syrian leadership will either be overcome by fear and throw down its guns, or develop a conscience when it notices that the sanctions are exacting a heavy toll on Syria’s most vulnerable citizens (Much as they did in Iraq between 1991 and 2003).

Sanctions are going to be a very interesting case study. They will provide a fascinating data base for future historians and policy wonks. Too bad that the Syrian people will pay the price with their innocent blood. In all likelihood, the regime has analyzed its odds carefully, both in terms of its monetary resources and its ability to turn up the level of pain.

It knows how much money it needs to pay for a protracted war against the population. To borrow a term from the “Godfather” movie, it is time to go to mattresses. The regime will:

• Liquidate its opponents in such a way as to provide the most horrifying abject lesson to those of us who are cowards and readily intimidated. This explains the daily tales and videos of brutish behavior.
• Wait for high-profile individuals to step out of line and make an example of them. The commercial elites are not only scared about losing their wealth and businesses that many have built up over generations of hard work, but they are scared of losing their lives.
• Wait. Then wait. And when you are done waiting, wait some more. This is a lesson that Senior probably drilled into Junior. European and US elections are coming up soon. Syria is likely to be demoted relative to other issues for US politicians.  The “Pocket Book” is the number one issue over the next two years. The number two issue is…. Not sure there is a number two issue. Back to waiting; the regime will not be concerned with the numbers of casualties. It is said that one of its leading generals has mused about the expiration of a million Syrians during these trying times and was not greatly concerned.
• Sow the seeds of regional conflict. Reestablish the PKK connections. Push Hizbullah’s buttons in Lebanon. See if Hamas can start a fracas. It is always worthwhile finding out if other existential issues can distract the people and bring them back in line.

Syria is being shaken down by a regime which acts remarkably like an organized-crime racket. To assume that it would respond to the tools of diplomacy and public opinion is naively optimistic. It is a parasitic entity; it has latched onto its host and is not likely to know that it is in trouble until the host has died.

The regime is not going to respond to the delusional premise that peaceful demonstrations work. It is probably thinking about “fish-in-a-barrel”.

One way to stop the slaughter is to let the Sunni population arm itself. the Alawites have already done so. However, in a recent post, you have pointed out several reasons as to why that will not be the case. The BRICS will not permit it – being so concerned with the rule of international law. The West does not want another Afghanistan that much closer to home.

But, here is the rub, the Syrian on the street, being shot at, wondering where his sibling or parent has been locked up, feeling angst about impending starvation, and reeling about his family’s disastrously bleak prospects will not understand why he has been forsaken. HE WILL NOT FORGIVE!

Syria is already in a state of civil war. It just happens that one side has all the weapons.

The continued poverty and the absence of the rule of “fair” law will continue to corrode the social fabric of the nation. If anyone thought that corruption and graft were widespread today, just wait. Moral standards will become so twisted in the coming year and the need for survival so strong that the Syrian social contract will metastasize into something unimaginable. Society as we know it will collapse. A radical Islamization can potentially stave off such a collapse. But, it remains to be seen what brand of conservative Islam will prevail.

Couple the significant private sector slowdown with reduced receipts from oil and tourism and you will be staring economic collapse in the face.

Personal credit cards of all Syrians are no longer being processed.

I have often wondered about places like Saddam’s Iraq, North Korea and other similar locals. How could a country survive and move forward while millions are starving? How come the people do not leave the country and see how the rest of the world works and then bring back such exotic ideas as freedom, prosperity and self determination? How come the people have not risen up to throw off the yoke of a bankrupt ideology whose only purpose is to perpetuate itself through a cult of personality?

Well, the leader does not care about the people whose lives are nothing but value-less ephemeral playthings. Really, not one iota.

The populace is either too weak, too afraid, or simply does not know better. Things are so bleak that a father is forced to decide between doing what is right and feeding his starving children. One can argue that doing the right thing is the right thing to do. A small bit of sacrifice now is all that is needed to make sure that the value of future gains for the this person’s children and his neighbors are worth the price that is being asked now. Alas, this is not a rational matter. Given the immediate cost, this person will in all likelihood sell his soul to the devil before making the necessary sacrifices.

This is the wager that the Syrian leadership is making.

How does one get off this train wreck? Damned if I know. The regime has led us down a most destructive path. The damage is done. What remains to be seen is how high the price is going to be.

Stone Age, here we come.

* Syrian Prometheus is a Syrian-American businessman.

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News Round Up

OFAC Issues Libya, Syria General Licenses, September 12, 2011,

The Treasury Department’s Office of Foreign Assets Control released a set of general licenses late Friday governing transactions with entities in Libya and Syria.

Regarding Libya, OFAC authorized transactions (pdf) with subsidiaries of the Libyan National Oil Corp., except Zueitina Oil Co., “provided that such transactions do not involve the Libyan National Oil Corp. or any persons whose property and interests in property are blocked other than the authorized subsidiaries.”

Though the license doesn’t limit authorization to a specific list of subsidiaries, a number of those named in the document were placed under U.S. sanctions in March, among them Arabian Gulf Oil Co., Azzawiya Oil Refining Co. and Brega Petroleum Marketing Co.

U.S. persons doing business with the Syrian government prior to Aug. 18 have until Nov. 25 (pdf) to conduct any transactions that wind down their contracts, according to a license issued by OFAC.

Under the license, the U.S. person has to file a detailed report with OFAC within 10 days of completing the transaction that includes the date and value of the transaction.

OFAC said Friday that international organizations such as the United Nations, its specialized agencies and contractors can continue their business in Syria (pdf) and still comply with the Aug. 18 executive order sanctioning the country, provided they meet some specific conditions.

U.S. individuals living in Syria are authorized to pay day-to-day personal expenses “that are ordinarily incident and necessary to their personal maintenance within Syria” such as the purchase of personal goods, housing costs and taxes under a license issued Friday (pdf) by OFAC.

However, those day-to-day expenses cannot include paying debt on an account or institution blocked under a previous executive order; transactions involving property blocked by previous sanctions on Syria; or employment or a new business venture in Syria.

Those not named by the set of U.S. sanctions on Syria that have accounts in U.S. financial institutions can continue to operate their accounts (pdf) provided they are for a personal nature and do not involve transfers that were prohibited by previous OFAC licenses.