Sunday, November 20, 2005

Economic Sanctions Assessed by Andrew Tabler

BAD MOON RISING
"Syria Today," November
By Andrew Tabler

US sanctions on Damascus have been largely ineffectual, writes Andrew Tabler. UN sanctions, however, could have serious implications for everyday life in Syria.

On October 31, the UN Security Council unanimously adopted Resolution 1636, which demands Syria's full cooperation with the UN investigation of the assassination of Former Lebanese Premier Rafik al-Hariri. The resolution warned of possible “further action” in case of Syrian non-compliance. While Damascus has promised to cooperate with the investigation, and has launched one of its own, it is now important that Syria take a hard look at the possible sanctions looming on the horizon and their implications.

Sanctions are nothing new to Syria, as it has been on Washington’s list of state sponsors of terrorism since 1979. These restrictions were tightened in May 2004 with the implementation of a series of measures under the Congressional ‘Syrian Accountability and Lebanese Sovereignty Restoration Act’.

The measures include a ban all US exports to Syria (other than food and medicine) and already non-existent Syrian flights to the US, an investigation into the Commercial Bank of Syria as a potential money laundering institution, and the seizing of assets of certain Syrians - including the late Ghazi Kanaan, the former head of Syria’s intelligence services in Lebanon and his successor Rustom Ghazali - in the United States. So far, these measures have had limited impact because they are fairly easy to circumvent. US products can be substituted, or re-exported from places such as Dubai, Syria now has private banks, and Syrian officials probably do not save their money in US institutions.

UN sanctions are an entirely different matter, however. Resolution 1636 was enacted under Article 7 of the UN charter, which involves “use of force.” Russian and Chinese pressure prevented the resolution from being passed under Article 41, which deals with sanctions. Nevertheless, press reports coming out of the United States and Europe indicate that UN pressure on Syria will likely be in the form of “smart sanctions” – tailor-made measures targeting the Syrian regime and not the Syrian people. Practice shows, however, that no matter how “smart” sanctions are, they can have a profound impact on a country’s economic development.

The first measure is likely to include an air and arms embargo similar to those placed on Libya in 1992 over the Lockerbie bombing incident. This could be accompanied by a travel ban or some other kind of restriction of movement on members of the Syrian leadership. Both measures will certainly make it difficult for Syrians, as well as the Syrian regime, to communicate with the Arab World and beyond. Isolation will make negotiations with the international community that much harder.

The second measure could include a ban on foreign involvement in Syrian energy, either in terms of vital components or company operations. As pressure from Washington has increased and US energy companies have departed, Damascus has relied on a host of Croatian, Russian, and Chinese energy companies for exploration and field development activities. At the same time, Anglo-Dutch Shell and French Total companies have continued to help keep Syrian oil flowing.

Should the UN restrict foreign energy companies in Syria, energy activities would then be increasingly in the hands of the state-owned Syrian Petroleum Company (SPC). While the SPC is involved in all Syrian energy projects in one way or another, it would likely find it difficult to employ the kind of technology necessary to make new discoveries and develop Syria’s already declining fields. Syrian oil production would certainly be negatively impacted, precisely when it needs to boost output the most. Development of Syria’s sizeable natural gas fields would slow considerably.

These measures could be followed by a ban on Syrian oil exports. Currently, Syria produces around 480,000 bpd, of which some 200,000 bpd are exported. Currently, oil proceeds account for around 50 percent of the state budget, and high oil prices over the last few years have helped Syria build up foreign currency reserves approaching $18 billion. With a ban, the Syrian state’s ability to fund its large public sector and development plans would be seriously curtailed, even if the state introduces austerity measures to survive what is in effect a siege. Tax rates and their enforcement would increase, with deep implications for the country’s business community. Financing of imports, which in 2004 amounted to $6.199 billion, would also become difficult.

This would almost certainly restrict the availability of machinery and transport equipment, electrical power machinery, food and livestock, metals, chemicals, plastics, yarn, and paper.

The growing role of Syria’s private sector and its ability to finance imports from Lebanon and elsewhere, however, could help keep the country running. But it might not be that easy. Should Beirut restrict Syrian trade financing through Lebanese institutions, the private sector’s ability to trade could then be put at the mercy of a possible ban on financial transactions with Syria. Such a measure would not only impact Syria’s public sector banks – which the international community is targeting – but its budding private sector financial institutions as well.

The ability of Syrians to finance trade is therefore key to promoting overall economic growth. Any restrictions on financial transactions would therefore cut off a vital lifeline to private banking at a key moment in the sector’s development, with negative implications for the country’s troubled reform process as a whole.

Here are the new monetary measures to stabilize the Syrian Pound.

For Syria's latest GDP figures see: Global Investment House - Syria Economic & Strategic Outlook I - Gross Domestic Product and Public Finance
Syria: Saturday, November 19 - 2005

The economy of Syria has witnessed a moderate growth over the last few years as can be depicted in the real GDP growth rate which grew at a CAGR of 3.5% over the last fives years.

In 2004, nominal GDP grew significantly by 12.8% to reach SP1,203.5bn up from SP1,067.3bn in 2003. This was the highest growth recorded by the country over the last few years. It achieved a real GDP growth rate of 2% in 2004 and the IMF has forecasted a growth rate of 3.5% for the year 2005.
Also see Ferry Biedermann's article in the November 14 Finacial Times,UN inquiry spreads fear through Syria’s elites

British Foreign Secretary: "A military strike against Syria is not on the agenda of any party"
19/11/2005
By Mina Al-Oraibi

Manama, Asharq Al-Awsat- British Foreign Office Secretary Jack Straw spoke to journalists on return from his visit to Bahrain about Syria, his recent visit to Iraq and the failure of the signing of the Bahrain Declaration.

Speaking to Asharq al-Awsat correspondents, Straw said, "A military strike against Syria is not on the agenda of any party. Syria must be given time to implement Resolution 1636," before judging the level of its cooperation with the international inquiry commission, which deals with the investigation of former Lebanese Prime Minister Rafik Hariri...

Secretary Straw emphasized that the few weeks after the passing of the international resolution is not enough time to judge Syria. He added that it is international investigator, Detlev Mehlis, who will decide whether Syria is cooperating with the inquiry commission.

He dismissed reports that he encouraged a meeting of the UN Security Council at the end of this month to discuss Syria's cooperation. He said, "I am not pushing for a Security Council meeting." However, he noted, "Syria said it will cooperate, and I believe that it may cooperate."
Kaan Atac writes from Turkey about FM Abdullah Gul's visit to Syria.
Turkish FM Abdullah Gul made a surprised visit to Damascus to meet with his counterpart Al Sharaa and Syrian leader Bashar al-Asad yesterday. This visit is important for two reasons:

First, it just happened a few hours after a crucial cabinet meeting, in which Turkish government and top military and security officials discussed the incidents that have happened during the last few days in the southern and the eastern part of Turkey. According to some, terrorism has been raising due to unstable and uncontrollable conditions in the whole region, namely in Iraq and Syria. Last terrorists attacks has claimed dozens of lives both civilian and security forces. The Turkish government is worrying that if Syria would be dragged into the conflict already enflaming the Middle East, Turkey will undoubtedly suffer greater uncertainty.

Second, The Bush administration probably wanted to send a “strong signal” via Turkey to the Syrian regime that Asad should cooperate with the UN Commission led by Mehlis. In the second Forum for the Future meeting hold in Bahrain last week, the US Secretary of State Rice urged Damascus to cooperate. According to Turkish media, FM Gul has warned Damascus about Turkish anxiety that if Syrian regime does not settle with Mehlis, Bashar's end will be the same destiny as former Iraqi leader Saddam’s.

Same media sources claimed FM Gul urged Syrian authorities about 3 additional issues 1) Don’t support terrorism 2) Don’t support Palestinians terror groups and 3) Don’t interfere Lebanon and Iraqi internal affairs.

Turkey’s main concern is that it does not want to suffer anymore from both internal and international terrorism which has caused Turkey thousands lives and billons dollars. Most importantly Turkey could not cope with the burden of more American military invasion just happening south of Turkey.

5 Comments:

At 11/20/2005 09:20:00 AM, Blogger EHSANI2 said...

Dr.Landis,

Please refer to my question from the earlier posting. Would love to hear your opinion as to why Basahr does not spare us all these sanction and instead expose the lies of the evil Mehlis and his masters in Washington. More specifially, why not pack all the supporting documents and files, take his 6 commrades, hop on his presidential plane, ask CNN and AL-Jazeera to meet him at the point of arrival, ask to televize live all the interrogations and to proceed to show the world Tv audiences how his country is innocent, how the evidence is all fabricated and how his country has been targeted for its Soumoud & Tasaddi Stand. As to why Syria is not ready for life after Bashar, I also refer you to that same comment in case you missed it

 
At 11/20/2005 09:46:00 AM, Blogger Ghassan said...

Why Bashar is subjecting his "people" to the sancations just because of 6 criminals who should (and will) be brought to justice sooner or later? Doesn't he know that Saddam is in jail not like some "conspiracy theory lovers" Arabs who still think that Saddam is in a resort area somewhere on earth?

 
At 11/20/2005 11:12:00 AM, Blogger Innocent_Criminal said...

you guys count on assumptions way too often. Just because 6 people are going to be questioned doesn’t mean all 6 are gonna go bye bye. criticize them all you want but reserve the judgment of Mehlis report to… well Mehlis. Just say it might happen...MIGHT.

As for Ehsani's question, please be more serious and realistic. Just because Damascus says Mehlis is an agent doesn’t mean it’s true. And on the other side of the coin, even if Mehlis is being controlled by Israel/America doesn’t mean Bashar has tangible evidence to prove it.

 
At 11/20/2005 11:12:00 AM, Blogger Innocent_Criminal said...

This post has been removed by a blog administrator.

 
At 11/20/2005 01:09:00 PM, Blogger Syrian Republican Party said...

Economic sanctions only, weather smart and narrow, or dumb and wide reaching, will not work as an effective enforcement measure by itself, and it will not advance Syria or it’s ruler one inch into the program. Rather it will send it backward in leaps. With it, the whole Middle East will be sent backward, including Israel.

Economic sanctions needs to be accompanied with organizing opposition and arming them with the necessary fund and technologies to carry out an effective media campaign inside Syria, either based in Lebanon or through Arial means such as developed by Orontes Corporation (www.orontes.net). This campaign must be purely run and operated by Syrians only.

Additionally, the assured use of force must be present. That can not be just a U.S. action, it must be Syrian / US action. The face of this action must be at all time Syrian oppositions, not American.

The intent of all this should not be to occupy, chop-up or destroy Syria as the Petro-Zionist plan intend on doing. No Zionist brained, retarded and evil, Faith inspired Shock and Awe campaign to destroy Syria’s Industrial / Commercial Infrastructure and prepare Syria for perpetual Civil War ( for the benefit of Israel of course),. The surgical military operation, if necessary, is primarily to protect unarmed Syrians and their rights. For as long as the regime respect those rights, force should not be used. And if they did not, then surgical force should be used against the aggressor and or his governmental enterprise on a case by case basis. There will be no wide scale use of force and no Government official, Baathist, armed forces or regime base supporter, armed or unarmed, or Mukhabrat, specifically targeted, as long as the entity is not conducting offensive campaigns against Syrians, committing rights abuses, or is a party to such abuse or harmful tactics, but rather using the media in the same way to affect the street and the choices the Syrian people needs to make for Syria’s future. Orontes Corporation (www.orontes.net) has developed several defense system that are apt to be successfully and effectively used in such Civil Strife Seek & Combat deployment.

The intent of the Media campaign that is backed by in-kind response and a retaliatory use of force is not, and should not be directed at either removing Bashar or his regime from power, but rather to force him and his regime to make a behavior modification toward how they are running Syria and treating the Syrian people. Forcing him to stop the theft of State properties and resources, removing the Baath yoke from Syrian necks and allowing the kind of representation for various parties that can operate under real reformed laws, that will have an affect on the running of Syria.

Under such a plan, a wide economic sanctions can work concurrent with measures described above, because they will not be indefinite as the case in Iraq. The Baathist Mafia regime will thrive under sanctions only regiment, weather limited and smart or wide reaching, sanction busters are eager to move in on and cease on the opportunities that will be available. Almost positive, that large number of those sanction busters profiteers will be Americans operating through Iraqi boarder ( not Syrian-American).

Does this sound too much like “Barbie in Fairytopia”? Only for three reasons. First, Petro-Zionists planners will never agree to it, allow it, or even promote it. Should it pass through this first e-insurnamable ( how do you spell the damm word) hurdle, it will face the second less difficult obstacle, but not by much. Would international bankers willing to take a chance on the reverse cash flow, even to reverse transfer the $45 billion in cash Assad’s Mafia hoarded abroad, to the lesser benefits of those countries financial systems and economies. Finally can you convince a trenched and absolute Mafia boss, that is backed overtly or covertly by the most corrupt people on earth in power and or out of it, without much blood in the street, to give up his street corner or the whole block, give up absolute monopoly on the market and every cash transaction on that block? This cannot be assured (Saddam is an example) but it has a much better chance to succeed if the Mafia Boss knows that he better cooperate and live reasonably with dignity than if he did not, not only he will be on the run all his life, if he survived, but he will not find a cent to spend, because all his, his family, his Mafia gangster and their family hoarded cash and assets will be taken by the bigger and more powerful organized crime family.

President Buch needs to stop this monkey business and help the people of Syria. The country has the most politicized population in the entire world, They are fearful of the Mukhabrat. Syrians are very disappointed and now are totally distrustful with the Bush Administration, even more so, than from any previous U.S. Administration in the past 40 years.

Syria, like that of Lebanon is very ripe for the kind of transformation to a new updated country more than any country in the world, even more than Lebanon. In fact, the failure of accomplishing this will lead to mess that will spiral out of control. Syria is the missing link in bringing to fruition the goals set by President Bush Greater Middle East Initiative.

In the end, lacking any other measure, sanctions only can go on and on and Bashar will simply outlast the fourth president that will be elected after George Bush leaves office.

The older Bush made a serious and fatal mistake in the past when he left dictator Saddam in power. It is even a greater mistake if the younger Bush leaves the Baath party in sole control of Syria.

If President Bush listen and adopt the incompetent Petro-Zionist dreamers plan, if he to read the junk in-junk out dossiers his CIA and other intelligence agencies shove on his desk and do nothing as they recommend, ( No available alternative), ( No viable option) and rubbish such as this Baathist developed and inspired motto’s, he will loose the entire Middle East and it's oil. If he and America took a back seat and helped all the Syrian oppositions to do the talking and the campaigning, he will win big and leave office with remarkable achievements and good accomplishments that for 2000 years no one, not a person, and not an empire was able to do.




Metaz K. M. Aldendeshe
Syrian Republican Party
The future of Syria
The future of the Middle East
www.ssprs.com
web-media@ssprs.com

 

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