The U.S. Should Clarify Its Position on Third-Party Participation in Syrian Reconstruction

Forces fighting on behalf of Syrian President Bashar al-Assad, backed by Russian air power, have all but crushed the Damascus suburb of Eastern Ghouta, one of the last insurgent strongholds in Syria, leaving it devastated, like most of the country. While the war is far from over, extensive damage to Eastern Ghouta and other population centers has highlighted the priority of reconstruction.

Former Secretary of State Rex Tillerson made clear in January that the U.S., EU, and their partners would not fund the reconstruction of any areas under control of the Assad regime. Tillerson only said, however, that the U.S. would “discourage” third parties such Iran, Russia, and China from doing so. In December, the leadership of the House Foreign Affairs Committee introduced the No Assistance for Assad Act, which bans U.S. funding for the reconstruction of regime-held areas. Yet the act does not address third-party investment.

Iran, Russia, and China have all signaled that they seek to profit from Syria’s reconstruction. Iran last year signed five memorandums of understanding with Syria – though only a phosphate mining project is confirmed to be operational – amid reports that the Russians and Syrians are stymying Iranian business. Meanwhile, Damascus is reportedly seeking Russian investment in 26 projects across a wide range of sectors, including energy and infrastructure. According to a Syrian official, the Russian firm Evropolis, which has close ties to Vladimir Putin, is already receiving revenue from oil wells captured from the Islamic State by a Russian private military contractor. In addition, Chinese firms are reportedly considering $2 billion worth of investments.

The U.S. should be clear that it will sanction all foreign firms that do business with the Syrian government or with other sanctioned entities, including state-owned firms in the energy sector. Iranian firms, particularly those affiliated with the Islamic Revolutionary Guard Corps (IRGC), may not be deterred, but some Chinese and Russian companies may be wary of losing access to the U.S. market. Indeed, an executive from a Russian oil services firm cited sanctions as a significant deterrent to firms interested in working with Syrian partners. In any event, the U.S. should make crystal clear that companies face a choice of doing business with the U.S. or with Assad, not both.

Some argue that the provision of reconstruction funds would enable Western governments to influence Assad by mitigating his dependence on Iran and Russia. But Assad cannot be swayed by economic assistance because the Iranian and Russian military presence are what allow him to remain in power. Nor does investment from Iran and Russia (or China) come with strings attached for political and economic liberalization. Furthermore, whatever assistance or investment Assad receives is likely to benefit mainly the local warlords and crony businessmen who help him cling to power. The likelihood of favoritism toward Assad’s fellow Alawites and other pro-regime communities would also exacerbate the same tensions that contributed to Syria’s 2011 uprising.

If anything, the U.S. should look for new ways to exert economic pressure on Assad.

Amir Toumaj is a research analyst focused on Iran at the Foundation for Defense of Democracies. Follow him on Twitter @AmirToumaj.

Follow FDD on Twitter @FDD. FDD is a Washington-based, nonpartisan research institute focusing on national security and foreign policy.