Syria is Back on the World Stage. Now What?

[00:00:06]July has been a pivotal month for Syria's international relations. From its participation in the NATO summit in Ankara to the visit of French President Emmanuel Macron, it is now [music] clear that Damascus is no longer considered a pariah state. But diplomatic recognition is only part of the story. [music] Syria still faces enormous economic, political, and security challenges. And it remains unclear what this new international [music] role will mean for the country.

[00:00:35]>> Dangerous space >> and deployment >> That's something that Syrians are trying [music] to figure out right now.

[00:00:41]>> Turkey's foreign minister says attacking Iran >> This is my >> still positioned [music] in the Middle East.

[00:00:49]>> The Middle East crossed a threshold.

[00:00:53]>> Welcome to Med Insights, the ISPI podcast where we unpack the forces shaping the Middle East and North Africa and what they mean for global politics.

[00:01:02]I am Nicola Missaglia, curator of the Mad Mediterranean Dialogues.

[00:01:06]In this episode, we focus on Syria, on its renewed diplomatic engagement, and the economic opportunities it offers.

[00:01:13]With Noah Bonsey, Syria senior advisor for the International Crisis Group, and Moayad al-Bunni, senior consultant at Karam Shaar Advisory.

[00:01:23]Noah, just a year and a half ago, few would have imagined that high-level international diplomacy would welcome Syria back.

[00:01:31]Today, Damascus is engaging with Western and regional leaders alike.

[00:01:35]Now, beyond the fall of Assad, what explains this remarkably rapid comeback?

[00:01:41]>> It's fair to say that just about no one anticipated when the forces led by Ahmed al-Sharaa when hit Tahrir al-Sham, HTS, overthrew the establishment and took over the country. Certainly, at that moment, nobody could have possibly anticipated just how quickly and how far um Syria's return to the international scene uh would progress, um just how rapidly they would develop quite a wide range of strong relations with the United States, of course, with key Gulf countries, Saudi Arabia, eventually the UAE, um with Europe as as well as even with a former adversary in Russia. The the breadth, but also the quality of relationships that they have forged is an accomplishment by any standard, and when you factor in um the position they started from, it it it's very striking. Now, a few things we can note about this, right? One, you know, I do think it's important to point out that the work that HTS did on this preceded their taking over Damascus, right? I mean, over a period of years, they had been changing not just their rhetoric and political positioning domestically and internationally, but they've been changing their behavior.

[00:02:59]They've been changing really the way that they operated in the war, the way that they governed territory.

[00:03:05]>> So, it is not something that started with the establishment [music] of the new government.

[00:03:10]>> You know, they they from the very beginning, they had a very clear strategy of diversifying their alliances and alliances.

[00:03:19]Um you know, they did not want to be too dependent, for example, on Turkey, the one state they sort of came into this with with relations with.

[00:03:26]Hence, the immediate outreach to the Gulf, hence the immediate outreach to the US and Europe, and also again, hence the effort to neutralize Russia at least and build a constructive relationship rather than treating it with an adversary. Hence also the efforts to negotiate with the Israelis with US mediation, which has obviously faced many challenges, especially on the Israeli side, but still a notable attempt. So, all of this, I think, you know, this is the most successful part of Syria's transition just thus far.

[00:03:51]Now, it doesn't change the fact that there are massive challenges and there have been other missteps.

[00:03:57]Um but that's sort of how we can describe the international relations in in in in broad strokes at this stage.

[00:04:04]That said, at the same time and on the negative side of the ledger, you know, a big part of Syria you know, the Syrian leadership understands that many Syrians will judge this transition, judge their leadership, primarily on how quickly and how far the economy recovers. And given given how long the war was, given how devastating it was in every sense of the word.

[00:04:27]>> Now, exactly on this point, namely Syria's economic recovery, Moayad, what is the current state of the country's economy? It is difficult to imagine a thriving Syria after 15 years of civil war and years of international sanctions.

[00:04:42]>> Syria, I think this has become clear, [music] the the the amount of economic devastation that Syria has been through throughout its 15-year 15-year conflict is massive. Um the figures estimating the the destruction range between 200 billion upward to 600 billion. Um the these are terrifying figures, but even the gap between these figures, they also point to another important realization is that we have little data about little access to what is happening in the Syrian economy and what's going on on the ground. Of course, a lot of the external barriers to economic engagement with Syria and the Syria's economy are being reduced quite rapidly by political decisions from the region in Europe and the United States most prominently. Most recently was the order from the US President Trump of removing Syria's name from the state sponsors of terrorism.

[00:05:43]Um those definitely remove a lot of the barriers, a lot of the legal barriers to engaging with Syria, but they do not remove uh a lot of the uh uh pre-existing risk assessments um of a lot of the external economic actors about the country. Um they do not remove um the as the specially designated persons uh in the list of sanctions in a lot of these countries, which is also still um enforce some level of compliance, some level of caution in engagement with the Syrian economy.

[00:06:15]>> And yet Syria seems to be a priority now for many regional and international actors.

[00:06:21]>> What is What is clear so far is that there is a big interest across uh Europe and the US uh including regional actors in Syria's uh stability. We're seeing that a lot in the political messaging and of course most clearly in uh the the US political messaging starting from the top of the pyramid with uh with President Trump.

[00:06:41]Um this is This is a clear investment in Syria's uh stability, but I worry that this might be sacrificing short-term short to medium-term stability for long-term stability. This good political signaling is allowing the signing of some MOUs, is allowing the uh entering of uh agreements in some key sectors in energy and infrastructure. What is risky on the long term is that the contents of these agreements are is not known to the public. We don't know how they're entered, what conditions are in them.

[00:07:09]And this highlights the long-term stability created to sign agreements that are politically motivated is it it might secure some stability in the short to medium term, which is something really to the benefit of all actors involved including Europe uh where, you know, um stability in Syria I think it's a strategic necessity right now for for for the EU. On the longer term, creating institutions that are uh politically consolidated, not not inclusive, that do not account for the interest of the broader segments of the population >> You mentioned Europe several times.

[00:07:42]President Macron's visit and the role European actors are increasingly playing points to a growing interest, especially for investments. Do you think this political momentum is beginning [music] to translate into real investment opportunities? And what conditions still need to be met for these to materialize?

[00:08:00][music] >> Perhaps all types of investors would this word when looking at the Syrian market is that it's nearly a virgin market that everyone wants to get in even at this stage just to get a hold of what's to come of a piece of what's to come.

[00:08:20]Um that's that's a pretty pretty broad assessment of of the economy. But moving the focusing closer, we notice that the the political backing of investments is very important. The arrival of President Macron to the country is an important political signal for European investments to invest in the country, but also it is an important it is an important signal also to state institutions that there's some sort of political interest in Syria's recovery.

[00:08:55]And this brings us back to the institutions problem that for French investments to enter Syria, there is some sort some sort of political thresholds that they have to meet for these investments to to to take place. We're talking about institutional engagement now. We're not just talking about just broad attraction of all types of private investments. I think the financial action task force regulations on anti-money laundering and counter-terrorism financing is among the very obvious steps that need to be taken. Um some governance related to clear regulations, legal structures are also required. And I know that these are things that engagements from European governments are required just for them to be at least all European governments are working with taxpayer money, so they need to have the at least some standards in in knowing how how that money will be spent, who it will get to, especially in avoiding that it would reach malign actors on the ground in Syria.

[00:09:58]>> Now, however, Macron's visit also coincided with the deadly terrorist attack in Damascus, highlighting the persistent threat posed by ISIS. To discuss the group's continued presence in Syria and the government's efforts to counter it, I'm joined by Silvia Caranci, associate research fellow at ISPI.

[00:10:18]>> The main forms of organized political violence in Syria in the aftermath of the fall of the Assad regime emanate from different actors. Among the main actors, there are the so-called Islamic State or IS, as well as elements and groups loyal to the former regime. In these weeks, there have been security campaigns to dismantle cells affiliated with IS. And in particular, since the fall of Assad, over 1,000 men, members, alleged members of IS have been arrested by authorities in Syria.

[00:11:09]And between early May and mid-July, nine IED attacks have been carried out in greater Damascus. Only two of these attacks have been claimed by ISIS.

[00:11:25]Although we have to say that this could also mimic a pattern already seen before uh the fall of the Assad regime where uh for instance ISIS uh tended to not claim all the attacks it perpetrated, especially in the Badia region of uh of Syria. And although of course ISIS has the the potential to to stage uh these attacks, uh in my opinion he does not represent uh an existential threat to the government, but rather a more a limited threat uh because for mainly two reasons. The first reason is that the government, the leadership, especially leaders drawn the from what used to be HTS, uh over the past years acquired uh robust solid experience in uh dismantling ISIS cells and uh fighting uh ISIS activities. And the second reason is that as of today ISIS has a limited appeal uh among the population in Syria because it basically uh lost most of its popular supports.

[00:12:46]While of course the these uh these campaigns, these uh security campaigns conducted by authorities in Syria to target ISIS, so aim to guarantee stability in the country. So there is an element of the dimension of course of the internal legitimacy. At the same time there is also a dimension of external legitimacy because uh we have to remember that Syria has joined the global coalition to fight ISIS. Government activities to fight ISIS activities can be interpreted also in this sense as of course Syria strives to uh project uh credibility in its fight against the IS.

[00:13:31]>> Now looking at Syria's wider neighborhood, Noah, how are the Gulf states engaging with Damascus? [music] What role are they playing?

[00:13:40]>> So, one part of Syria's bet had been >> [music] >> that Gulf states could play a huge role in helping jump-start that economy for everything, [music] you know, and everything from investing in your support for the state itself, investing in infrastructure was a hope and certainly investing in the private sector. Now, it's too early to say well, let's put it this way. Damascus had been very successful in generating interest in reaching MOUs with Gulf states, with with key state-aligned companies in the Gulf and so on. Um but MOUs are one thing, follow-through is another. That's true in the best of times.

[00:14:16]>> And then came the Iran war, which seems to have made Syria even more relevant for the Gulf.

[00:14:23]>> Yeah, I think when we talk about the ramifications of the Iran war, we we want to note opportunities as well as some very significant risks, right? Um and Damascus has been very focused on the opportunities. And and here the most important of them being um as as as Gulf states look for alternatives to the Strait of Hormuz to reduce reliance on the Strait uh and thus reduce Iranian leverage, the you Syria has really positioned itself as a part of the answer to that policy challenge, just a part of course.

[00:14:55]It's sort of marketing the concept of Syria as an energy corridor. Now, the easiest way to understand this is, you know, the potential for physical pipelines to be rehabilitated, to in some cases be built from scratch, connecting uh oil and gas in the Gulf to European markets um uh through Syria as as well as other countries, potentially through Syria's Mediterranean ports as well as as well as through Turkey.

[00:15:21]But certainly to the Gulf states it it appears obviously to Syria, to Turkey, to the United States, the economic and political math on this on on this concept of energy transiting Syria towards European markets starts to look a lot more favorable in light of the Iran war than it did beforehand. So, this is something that Syria could potentially take advantage of. That's on a big scale and on a small scale already Syria is benefiting from from transiting oil from Iraq to the Mediterranean just physically on trucks through Syria, right? Crossing over from the Iraqi border. So, that's just on a small scale. They're thinking bigger.

[00:16:01]>> But, these opportunities also come with significant risks, don't they, Mu'ayyad?

[00:16:06]>> The Strait of Hormuz is so massive that one country cannot replace it no matter how big and how important it is in the geography of the Middle East. We're talking about all Gulf countries trying to replace their trade networks and trying to find any alternatives. This might in the future allow us to see more investments in its infrastructure, but even that is subject to a lot of risks. One of the first risks is what if the conflict in Hormuz stops today? What do we do investments? This is a real risk that all of the alternative to Hormuz investments are facing.

[00:16:41]Also, in the past few months we've we've seen security incidents, repeated security incidents. Many of them targeting these oil trucks transporting oil from Iraq to the Mediterranean in Syria.

[00:16:54]This is also a real risky possibility.

[00:16:58]Some another thing to note is that the vast majority of energy exports through Hormuz used to go to Asia. That means for Syria to be viable as an as a real big alternative and we're hearing numbers of, you know, ambitions reaching up to 2 million barrels per day through Syria's network. For that to be a possibility, this means that the route from Syria to Asia, which means from the Mediterranean Syria's coast on the Mediterranean to Asia to be needs to be secure.

[00:17:28]That's also a big risk because that then has to go to through Babel Mandeb, which is still also subject now recently has been closed or announced that it will be attacked by the Houthi Houthi movement. It's Again, these are factors I think just show the size of the crisis that oil exporters are scrambling to secure and I don't think they have a ready answer to. And because of the that desperation, they cannot just rule Syria out no matter how many risks they face in there.

[00:18:04]>> Now, looking at the other crisis across the region, let's turn to Lebanon.

[00:18:08]President Trump has suggested that Syria could potentially intervene against Hezbollah. How do you assess this possibility? And what impact [music] could such a move have on Syria's relationship with Lebanon, especially given the long and complicated history between the two countries? [music] >> Uh given everything that Syrian the the the [music] President Bashar al-Assad others in Syrian leadership have said and and Syrian actions up till now, they're signaling very clearly that they have no intent to intervene militarily directly within Lebanon, right? And I think they understand the cost and risk that would come with that. Um what they have also said at the same time is that of course they very you know, their the official position of the Syrian state now is support for the official position of the Lebanese government with regard to Hezbollah's arms, right? I Up till now, I don't see any indication that of any Syrian intent to um to go into Lebanon the way that Trump is suggesting. Uh I think the the more pertinent question for now is what might Syrian-Lebanese cooperation look like on such a complex and intractable issue politically within Lebanon geopolitically as Hezbollah's arms.

[00:19:31]>> Now connected to Hezbollah and the war in Lebanon more broadly, of course there is also Israel.

[00:19:37]Since the establishment of the new government in Damascus, there have been repeated rumors about a possible settlement between the two countries [music] or at least an end to hostilities.

[00:19:49]Do you see this happening at any point in the future?

[00:19:52]>> I [music] think you know, the the Israelis militarily in in the initial days uh of of the Assad regime's fall, you know, they obviously they expanded their zone of occupation within Syrian territory beyond the occupied Golan. They obviously justified that as as a security buffer. As best I can tell, the only reason they have been negotiating this at all with Damascus is is because the US has been pressing them to, right?

[00:20:20]Um but that has hit a ceiling. Um and while there is a lot from what we understand that sort of um was addressed in those discussions and you can imagine elements of a security agreement that are basically already in which the gaps are are already largely addressed. However, the core question that this now hinges on um is the you know, whether Israel will be withdrawing ultimately from the areas it has occupied since uh December [music] 8th, 2024.

[00:20:54]>> But Israel is heading towards elections in October. Do you think the current political context makes any meaningful progress impossible before Israelis go to the polls?

[00:21:04]>> I I everyone recognizes that it's very unlikely Israel is going to talk about, let alone begin any kind of withdrawal from these areas prior to the election.

[00:21:13]But after the election, who knows? Might it become possible uh might the US attempt another round of of mediation?

[00:21:20]Might the political and strategic math look differently on the Israeli side after the election, especially if there's a new government? Obviously, too early to say.

[00:21:34]>> More than a year and a half after the establishment of the new government in Damascus, >> [music] >> Syria is gradually returning to the international stage.

[00:21:44]While overcoming 50 years of dictatorship and 15 years of civil war is far from an easy or rapid process, renewed political and economic engagement within the international community is beginning to offer cautious hope.

[00:21:59]We will continue to follow these developments and their implications for the region and beyond.

[00:22:05]>> [music] >> Editorial support and production by Sara Isabella Lakien and Luca Butsangara.

[00:22:11]If you enjoyed this episode, follow the Med Insights podcast on Spotify, YouTube Music, Apple Music, and Amazon Music.

[00:22:19]For more analysis and updates, visit med.ispionline.it.

[00:22:23]Thank you for listening.