The Cable

Syrian Reconstruction Spells Juicy Contracts for Russian, Iranian Firms

Bombed-out cities meant death and destruction. Now they promise billions of dollars — for new construction.

Members of the Syrian Democratic Forces stand guard next to a bridge in Manbij, northern Syria, on June 23, 2016. (Delil Souleiman/AFP/Getty Images)
Members of the Syrian Democratic Forces stand guard next to a bridge in Manbij, northern Syria, on June 23, 2016. (Delil Souleiman/AFP/Getty Images)

The worst violence of the six-year-long Syrian civil war is winding down, as government forces under Syrian President Bashar al-Assad have reclaimed large swathes of rebel-held territory and the Islamic State has been pushed out of its major strongholds.

But where millions of Syrian civilians have seen destruction and hundreds of thousands have died over the last six years, companies inside and outside of Syria now see dollar signs. Almost every destroyed bridge, road, building, and power plant will be a chance for a potentially lucrative government construction contract, which the regime will soon start handing out.

In August, companies from almost two dozen countries flocked to Syria for the Damascus International Fair. The first such expo since the start of the war in 2011, it essentially declared the country open for business again. Well, not entirely — companies from countries that fought Assad’s regime aren’t invited.

Reconstruction contracts are likely to go largely to firms linked to Russia and Iran, which support Assad, though China and Brazil also aim to throw their hats in the ring. Most Western companies aren’t invited, not that they were going anyway: During the United Nations General Assembly in September, 14 mostly Western and Gulf nations opposed to the regime indicated that they would not participate in Syrian reconstruction until a “political process” to get Assad out of power was underway. U.S. national security advisor H.R. McMaster reiterated that position at an event on Washington on Oct. 19, saying, “We should ensure that not a dollar, not a dollar goes to reconstruct anything that is under the control of this brutal regime.”

As early as April 2016, not long after it jumped into the Syrian war, Russia had already signed almost $1 billion in infrastructure and other contracts. In November 2016, Damascus pledged to give Moscow priority in awarding contracts, according to RT. A pair of Kremlin-linked energy firms have already started doing business in oil, gas, and mining in areas just cleared of the Islamic State. The two countries are even considering creating a new joint bank to smooth such transactions.

But Damascus is also turning to another longtime backer for help. Earlier this year, Iranian firms linked to Iran’s Islamic Revolutionary Guard Corps signed deals to rebuild phone networks and mines, and last month Iranian companies signed a host of preliminary accords to build new power plants in a handful of Syrian cities, including Aleppo and Homs. Iranian oil officials have also said the country will build an oil refinery in Syria.

Other countries want in on the action. On Oct. 19, Brazilian Foreign Minister Aloysio Nunes said that Brazil intended to re-establish full diplomatic relations with Syria and open its embassy, which it had closed in 2012, in order to give Brazilian businesses a shot at participating in reconstruction there. And even some small Western firms attended the International Fair last month, hoping for a shot at what aid groups estimate will be at least a $300 billion rebuilding effort.

The reconstruction won’t benefit all Syrians, though. Elites who opposed the regime have mostly fled, leaving Assad supporters who are already positioning themselves, by starting new businesses and construction companies, to obtain as many contracts as possible alongside international firms. And not every part of the war-torn country is going to be showered with largesse from Damascus: The regime wants to punish the regions that rebelled by denying reconstruction funds, said Lina Khatib, head of the Middle East and North Africa program at Chatham House.

“The Syrian regime is not interested in reconstructing the whole of Syria, but only the loyalist areas,” she said.

Aid groups are worried that the rush to rebuild the loyalist core of postwar Syria will only cement the same kinds of divisions and abuses that have been on display during the six-year conflict. Several aid organizations, including Oxfam, Save the Children, and CARE International, issued a joint statement this spring warning that “a move towards reconstruction assistance risks doing more harm than good” if it takes place within a Syrian government framework that does not respect human rights.

Bethany Allen-Ebrahimian is a contributing writer at Foreign Policy. @BethanyAllenEbr

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