Beyond Its Military Presence, Iran Monopolizes Major Economic Projects in Syria

The interests of the Syrian regime and Iran intersect on the one hand, with the latter handing over vital factories that were considered as the backbone of the Syrian economy before 2011, something that Tehran is very enthusiastic with.

Iran's economic plans in Syria go hand in hand with the military presence, until each of them complements the other, as Tehran has already succeeded in extracting giant economic projects locally from the ownership of the regime's government.

Iran realized that the Syrian regime is unable to operate factories that were damaged and destroyed during the last decade. That was due to sanctions, the absence of manpower and spare parts, and the lack of basic materials for production due to many internal and external factors at the same time.

This is what prompted Tehran to acquire strategic factories in several Syrian governorates, as re-operating them will have "disastrous" economic and social dimensions in the future for the Syrian people.

Since April 2018, Iran has begun its efforts to enter as a partner in the industrial public sector in Syria, after the Syrian-Iranian Businessmen Council officially submitted proposals to the government of Bashar al-Assad.

At that time, the Council affirmed Tehran's readiness to secure the requirements of the production process for industrial companies and to establish new projects, especially in the field of cement, food, chemical and engineering industries.

Since then, Tehran has wanted to know how it will get its financial dues? At that time, the Council presented the Assad government with several proposals to fulfill Iran's financial obligations, including what might include the exchange of olive oil in exchange for factories and implementation over a period of two years.

 

Monopolizing the Syrian Industry

The Iranian move four years ago was due to Tehran's realization of the nature of the Syrian local markets, which lack goods and products in light of the decline in local industrial production.

Therefore, attention was focused on the Iranian alternative through the establishment of joint industrial projects by taking advantage of Iranian technology and industrial development in Iran in some fields.

In late August 2021, the Ministry of Industry in the government of Bashar al-Assad agreed, with an Iranian delegation that included representatives of the Iranian “Amersan” company specialized in the production of household appliances, to submit the company a detailed study explaining their vision to develop production lines in the destroyed industrial company “Barada” a year ago.

The latter is the most famous Syrian government company that manufactures high quality refrigerators, washing machines, ovens and other household appliances.

Iran's acquisition of government sector factories in Syria has become a reality on the ground; because it will depend on Syrian workers and professionals, after rehabilitating the damaged factories or even bringing factories for the manufacture of electrical equipment from Tehran and transferring them to Damascus.

According to Firas, the son of Mustafa Tlass, the former defense minister of the Syrian regime and a businessman residing outside the country, the Assad government has relinquished 40 economic facilities to Iran.

He revealed in a post on his personal Facebook page in early October 2021, that "in coordination with the Follow-up Unit of the Republican Palace in Damascus, 40 industrial facilities belonging to the public sector are being transferred to the Iranian government's ownership through multiple companies owned by either the Iranian ministries or the Revolutionary Guards." After agreeing to it more than a year ago."

Tlass pointed out that "the follow-up unit prepared a list of 71 facilities, of which Bashar al-Assad approved only forty, and the facilities he excluded are those located in the areas of the Syrian coast and al-Ghab in the Hama countryside, either because they are for the Russians in the future or so as not to raise certain sensitivities."

The Syrian businessman confirmed, "Iranian committees came and started to visit these factories," noting that "(the regime's financial agents) Lina Kania and her husband, Hammam Msouti, are supervising this matter in full coordination with the Iranians.

In December 2020, Lina Kannaya and her husband, Hammam Msouti, included the sanctions of the US Treasury, as the former US special envoy to Syria, Joel Rayburn, confirmed that the issue of imposing sanctions on them lies in the fact that they "were basically a financial agent and a cover for Asma al-Assad and Bashar al-Assad."

The businessman, Tlass, listed the names of some factories whose ownership will be transferred to the Iranians, and they are factories for wood, sulfur, oils, biscuits, household items, foodstuffs, plastics, paper and others in more than one Syrian governorate.

 

Economic Concessions

Maan al-Sharif, an analyst specializing in Iranian affairs, believes that Tehran's move falls within the "religious objectives of spreading Shiism, when it operates such factories and attracts the impoverished local labor that suffers from a precarious economic situation. So that, matters reach the point of economic exploitation so that young people become dependent on Iran." as the main source of livelihood.

Al-Sharif told Al-Estiklal: “Iran’s selection of a specific type of vital factories that have social dimensions in terms of dependency in the future so that Tehran controls the issue of employment, especially since these factories are located in areas with a large popular incubator that can gain through the employment of workers social sympathy with its ideology."

Al-Sharif considered that "the Iranian role in Syria has four heads: military, political, economic and cultural, following the religious doctrine."

Therefore, Iran’s penetration into Syrian regions within these heads means that it has turned into Iranian cantons affiliated to it in every province in which such huge projects are established, especially if Tehran deliberately improves services and conducts training and development workshops for young people, attracting them, and perhaps providing social security for them to work in some industries. 

Al-Sharif stated that "all indications point to the Syrian regime's inaction to support the local industry and the displacement of industrialists and the creation of a new class of them, who are necessarily affiliated with the Iranian or Russian current."

The spokesman added: "These projects will be under the auspices of the Iranian Revolutionary Guard, specifically through the Khatam al-Anbia Construction Company, which is the Guard's economic arm that can implement rehabilitation in several areas of infrastructure, information technology, water networks, and investment in oil and gas."

Especially since this company has obtained contracts since 2018, to implement construction projects and supply energy equipment in Syria, according to him.

Iran's obtaining economic concessions from the Syrian regime was the shortest way to compensate for the support provided to it to protect it from the fall of its rule, especially since there are no accurate figures for the amount of Tehran's spending in Syria over the past decade.

However, Jesse Shaheen, a spokeswoman for the former international envoy to Syria Staffan de Mistura, put forward in 2018 estimates from the United Nations, which showed that Iran's average spending in Syria is equivalent to 6 billion dollars annually.

The Ministry of Industry in the Assad government had previously valued the factories it owned before 2011 with more than 10 billion dollars, as the value of buildings, lands and production lines, and in terms of their market value at the time.

 

Reciprocate Interests

Figures indicate that the annual trade volume between Iran and Syria is around $150 million annually, according to statements by Iranian officials.

Tehran aspires to raise trade exchange with Syria to $1.5 billion within the next three years, according to Farzad Belten, director of Arab and African affairs at the Iranian Trade Development Organization, in statements in March 2021.

Currently, Iran is the seventh largest exporter of goods to Syria, with a share of the Syrian market amounting to 3 percent, according to what Belten told Fars News Agency on August 21, 2021.

There are currently 24 Iranian companies practicing commercial activities in the "Iranian" commercial center, within the free trade zone in the heart of the Syrian capital, Damascus, on an area of ​​4,000 square meters.

In this regard, the economic researcher at the Omran Center for Strategic Studies, Muhammad al-Abdullah, considered that Iran's attempt to acquire Syrian factories can be viewed from two angles.

The first is related to Iran's endeavor to ensure the payment of even a small part of the bill submitted to the Assad regime, whose value exceeded the twenty billion dollar barrier, "and this bill is still increasing."

Al-Abdullah told Al-Estiklal: “The beginnings of the Iranian endeavor to control the components of the material production capacity in Syria, represented by factories and production companies, go back to the beginning of 2018. At the time, Iran realized that the economic deterioration of the Assad regime is continuing and that it is unable to pay its heavy bill, with no clear horizon for implementing the reconstruction contracts signed with the Assad regime.

He added, "Iran has sought to control existing productive assets through the regime's government, whether by imposing high taxes on them or by neglecting to respond to their necessary requirements to ensure the continuation of their factories and companies' work, or even resorting to security intimidation of the owners of these facilities and urging them to stop them."

The researcher hinted that this step can also be seen "through Iran's endeavor to replace the old industrial front before 2011 and trying to control the productive sector with industrial elites loyal to it, after realizing that the Syrian industrialists in the regime's areas are unwilling to cooperate with it."

This is what was recently stated by the Iranian consulate in Aleppo, which accused the city's industrialists of not having a serious turnout from them to deal with it, which prompted it to try to restrict them and push them to withdraw from the production sector, according to him.