WILL SMART SANCTIONS WORK ON SYRIA?

Sanctions are a byword for failed diplomatic policy in the Middle East. For decades unfavored regimes have been on the receiving end of a variety of US and UN sanctions, with little positive change evident as a result. In the context of the current diplomatic maelstrom in the region, are sanctions still an option?

Six months after the outbreak of protests in Syria there is little sign of the violence halting any time soon. Over 2,700 people have been killed and tens of thousands have either been arrested or have fled the country. In September, the emergence of the Free Syria Army, the most organized armed resistance group to oppose the regime, has led to real concerns that the last six months of civil strife may transform into civil war in the months to come. Yet with the UN divided there is little chance of the kind of military intervention seen in Libya and sanctions are left as one of the few key mechanisms available for placing pressure on the regime in Damascus.

Sanctions, however, are traditionally a byword for failed policy in the Middle East. For decades, Syria and Iran have both been on the receiving end of a variety of US sanctions with little positive change evident as a result. Stephen Walt wrote of the “sanctions paradox” whereby, regardless of US popularity, sanctions remain essentially ineffective especially in the case of Iran. Then there is the legacy of Iraq, where some of the most punitive sanctions in modern history devastated the country between 1991 and 2003. However, such is the speed of the Arab revolutions and their transformative potential that many believe smart sanctions can weaken the Syrian regime while avoiding massive damage to the civilian population.  Indeed in August US Secretary of State, Hilary Clinton, promised that the US would “mitigate the effects of sanctions on the Syrian people,” while British Foreign Secretary, William Hague,  has explained that “sanctions are not aimed at the Syrian people but at those responsible for the regime’s violent repression and those who support or benefit from the regime.” So can this be done or is British columnist George Monbiot correct when he suggested that when it comes to sanctions we are “damned if we do and damned if we don’t?”

Syria is not Iraq

The Syrian people are unsurprisingly sensitive to the legacy of sanctions, having witnessed years of failed international policies towards their eastern neighbor Iraq.  Throughout the 1990s, sanctions undermined the Iraqi state’s ability to provide basic services, reducing their governmental budget by 90 percent. Nearly all imports were blocked, with terrible consequences for a country that had previously imported 70 percent of its food and was dependent on imports for nearly every aspect of its economy and public services. Hundreds of thousands of Iraqis died as a consequence, including at least 500,000 children under the age five from dysentery combined with malnutrition. Sanctions also decimated the health of millions; by 1997 one million children under five were malnourished and by 1998 70 percent of Iraqi women were anemic. Sanctions destroyed Iraq’s economy and made a shambles of the nation’s education and health care systems. Despite these terrible repercussions, US Secretary of State Madeleine Albright famously claimed, the human price of the sanctions “was worth it.”

It is within this context that it is crucially important for western policy makers to highlight the differences between today’s sanctions on Syria and the devastating sanctions on Iraq. Crucially, Saddam’s Iraq had the full mechanisms of the United Nations against them—whereas it appears unlikely that Syria will suffer such a fate. In 1990, UNSCR 661 prohibited UN member states from trading with Iraq. Today the UN Security Council is chronically divided over Syria, with the Chinese, South Africans and particularly the Russians blocking any resolution that could trigger further sanctions.

Indeed the Russians, who have close cultural, economic and military ties with the Syrians, have consistently come out against sanctioning Syria. Moscow is particularly sensitive after their experience with UNSCR 1973, which they perceived as granting the establishment and enforcement of a no-fly zone over Libya but which was eventually used to push through regime change. Speaking ahead of his address to the UN General Assembly in New York this September, Russian Foreign Minister Sergey Lavrov argued that placing sanctions on Syria was not a strategy that Russia supported. He went on to explain that “we ask what the next strategy is, how have you calculated your next steps? The answer we get is that we haven’t thought about it yet … it’s a very simple but I believe not very reliable strategy, if it can be called a strategy at all.”

No Turkish Delight

With the United Nations route off the table all eyes will be on the impact of EU and Turkish sanctions. In early September, the EU agreed the imposition of a ban on Syrian crude oil imports. The EU is the destination for around 95 percent of Syrian oil, which makes up some 25 percent of state revenue. Yet the fall of Tripoli and disappearance of Qadhafi has made it likely that oil from Libya will be able to flow to Europe again soon, freeing European hands to sanction Syria.

This is already having a significant impact. On the 26 September, The Financial Times reported that the EU embargo on crude oil exports meant that Syria had been forced to instruct foreign oil companies to cut production due to a backlog of crude that had filled its storage capacity, despite the EU ban on oil imports only fully coming into force in November. The Syrians have reassured their public that they will be able to find new markets for their oil—with China an obvious candidate to absorb the slack. However, like a game of chess, sanctions require blocking moves as well as directly aggressive ones and in late September Hillary Clinton urged China to support strong action on Syria when she met with Chinese Foreign Minister Yang Jiechi.

Meanwhile EU action has highlighted the diverse array of sanctions that are available, with agreements to a ban of investment in Syria’s oil sector, blocking the delivery of banknotes to the Central Bank in Damascus and the imposition of travel and visa bans on officials linked to the regime. As the EU’s foreign policy chief, Catherine Ashton, explained “the EU restrictive measures are designed to have maximum impact on the Syrian regime, while minimizing any potential negative impacts on the Syrian population.” The EU has other tools in the toolbox for future use, with a possible consensus on banning exports to Syria as well as pressure on global financial institutions not to deal with the regime in Damascus.

However there is no better example of the precision of so called smart sanctions than the targeting of individuals. Currently there are 56 individuals and 18 entities subject to EU travel bans and asset freezes. Those on the list range from the president to his senior security figures, while US Treasury Department sanctions have even gone so far to freeze the assets of Assad’s advisor, Bouthaina Shaaban.

In Iraq, US-led sanctions were designed both to prevent weapons and dual-use materials entering the country, while simultaneously and covertly punishing the regime and encouraging regime change. In Syria the US has come out publically to state that Assad should go. Aware that it already has a series of sanctions in place, the US has focused its energy on pursuing a widening of sanctions amongst its allies. Washington is conscious that it has already pursued sanctions against Syria to little effect over the past decade. The 2004 Syria Accountability Act (SAA) prohibited the export of most goods containing more than 10 percent of US-made parts to Syria and in 2006, sanctions were targeted specifically against the Commercial Bank of Syria while a series of Executive Orders has allowed the US President to target individuals and entities—much like the new EU sanctions.

While the Syrian regime has been able to cope with US sanctions in the past they are scrambling to try and deal with the double whammy of internal economic collapse and new forms of external pressure. Turkey, a key regional player, is leading the way on sanctioning Syria and considering that bilateral trade between the two neighbors is worth £1.5 billion a year, Damascus is understandably concerned. Turkey is already playing host to some 7,000 Syrian refugees and has emerged as the de facto base of the nascent Syrian opposition. The Turks have intercepted ships carrying arms to Syria and Prime Minister Recep Tayyip Erdogan is expected to announce in early October a series of sanctions against its Arab neighbor.

So, having outlined the catastrophic impact of sanctions on Iraq and the ineffective US led sanctions on Syria in the past, the million dollar question is whether the new raft of European and regional sanctions will alter Syrian behavior or even bring down the regime?

It’s the Economy, Stupid

Mohammed A- Jleilati, Syria’s finance minister, is bullish about the country’s ability to withstand sanctions—claiming that Syria has $18 billion in foreign currency reserves and could secure all of its imports for two years “if not a single other dollar came.” However there can be little doubt that the Syrian economy is struggling to breathe under the constrictions that have been placed upon it. The International Monetary Fund (IMF) predicted last month that Syria’s economy would contract 2 percent this year, altering the 3 percent growth forecast it issued in April. The Syrian government is in the process of transferring millions out of accounts in Jordanian banks, having restricted the amount of foreign currency people can purchase and banned the import of goods with a tariff of more than 5 percent (except 51 items including raw materials and grain), which has led to a rise in the price of a huge range of products. The Guardian has also reported that workers at the Central Bank of Syria have been asked to ‘contribute’ about £6.50 of their monthly salary to fund the government.

Tourism, worth an estimated £5 billion a year, has entirely collapsed as the rising death toll has scared tourists away from what was previously a rapidly flourishing destination. Meanwhile sources in the shipping industry say that the volume of shipping in the ports of Tartus and Latakia declined by 35 to 40 percent in the first eight months of 2011. Overall the economic situation is bleak, but as Chris Doyle, director of the Council for Arab-British Understanding (CAABU), explained “Syria is a relatively wealthy country so it will take some time for a real deterioration in people’s living standards.”  Doyle spoke of the more immediate concern of besieged cities such as Hama, Dera’a and Homs, which have been under intermittent attack since the protests began.  While the UN has been able to send in delegations to Syria there has yet to be a thorough humanitarian assessment.

Creating an environment for change

Sanctions alone are unlikely to bring down the Assad government and if the Syrian regime can endure in the short to medium term there are real concerns that sanctions will hurt the very people they are nominally seeking to protect.

However the noose of increasing sanctions and rapid decline in the economy could trigger traditional allies of the regime to reconsider where their interests best lie and abandon the regime. Although the regime will likely prioritize and maybe expand its $1.8 billion (3.5 percent of GDP) spend on the military, they will be unable to prevent business being hit hard by both the sanctions and the Syrian government’s attempt to tax their way out of the crisis. Although there have been reports of a $6 billion loan from close ally Iran, nothing has yet been made manifest and a truly isolated regime is a weak one.  Meanwhile the opposition is becoming more cohesive and organized. Fresh from a meeting with British Foreign Secretary William Hague, both Catherine Al-Talli and Bassam Ishaq, recent exiles from Syria, agreed that the people of Syria would prefer to endure the impact of sanctions over the short term than the continued long term oppression of living under the Assad regime

This article originally appeared in the Majalla on the 11.10.11