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Home / Economy / Sensing opportunity in Syria, UAE leads Arab efforts to do business with Assad

The United Arab Emirates is at the leading edge of an effort in the Arab world to bring Syria in from the cold.

Government officials and business executives from the U.A.E. and Syria say the oil-rich state is attempting to normalize a closer relationship with Bashar al-Assad’s regime, a decade after he was ostracized for his brutal crackdown on opponents and plunging the country into civil war.

Most of Syria’s Arab neighbors joined the West in breaking ties with Damascus. Mr. Assad remains shunned by most of the world due to his government’s record of human-rights abuses, including the use of chemical weapons and bombing schools and hospitals. Tens of thousands of people have been tortured.

But, backed by Russia and Iran, Mr. Assad has clawed back control over much of the territory he lost to rebel forces, and now Egypt, Jordan and some others are trying to bring him back into the Arab diplomatic fold—a move that could unlock trade benefits for all sides and reduce Iran’s influence—with the U.A.E. leading the way.

“These overtures reflect the U.A.E.’s assessment that Assad isn’t going anywhere and it has to adjust its policies accordingly," said Steven Heydemann, a fellow at the Brookings Institution’s Center for Middle East Policy, a think tank in Washington.

In recent months the Syrian pavilion at the Dubai Expo has seen a steady flow of visitors eager to meet with top officials from Mr. Assad’s regime. One encounter saw the host country’s economy minister, Abdulla bin Touq Al Marri, sign a deal with his Syrian counterpart, Mohammad Samer al-Khalil, aimed at boosting trade between the two nations. The U.A.E., Mr. Marri tweeted at the time, is “Syria’s most prominent trade partner." Other guests picking their way through the neighboring exhibits from Kiribati and Vanuatu have included representatives from Egypt, Algeria, Poland, Mexico and Malaysia, according to officials.

Syrian companies, meanwhile, have registered offshore entities in Dubai and Abu Dhabi in recent months to conceal their origins, evade U.S. and European sanctions and continue trading in goods ranging from petroleum products to electronics and garments, according to people familiar with the matter. Some are openly promoting their products at the Dubai Expo, while in November, U.S.-sanctioned Syrian airline Cham Wings started regular flights from Damascus to Abu Dhabi.

The U.A.E. and Jordan reopened their embassies in Syria in recent years. Last month, Bahrain, a close ally of Saudi Arabia, appointed its first ambassador to Damascus in a decade.

Also last month, representatives of the Syrian central bank visited the U.A.E. capital to set up a financial channel using private banks to support trade between the two countries, Syrian businessmen briefed on the talks said. Under the arrangement being discussed, Syrian importers would pay international suppliers from accounts in the U.A.E., while the Emirati banks would receive the equivalent amounts in accounts at Syria’s central bank in Damascus, effectively avoiding direct transfers that could be blocked by international sanctions, these people said.

The Emirati Embassy in the U.S. and the country’s Foreign Ministry didn’t respond to requests for comment.

Syrian state-controlled cellular operators Syriatel and WafaTel, meanwhile, are using shell companies in the U.A.E. to purchase Western telecommunications equipment, according to people familiar with the matter. Representatives of the two companies were in Dubai and Abu Dhabi as recently as mid-January to negotiate the deals, they say. Syriatel and WafaTel didn’t respond to requests for comment.

Other Arab countries, notably Saudi Arabia and Qatar, have kept their distance from Mr. Assad, and the U.S. has maintained its hard-line position on his regime. In recent years, Washington has sought to increase international pressure on Mr. Assad to accept a broader role for his opponents. Asked about recent moves by countries in the region to normalize relations with Mr. Assad, a State Department spokesperson said, “We urge states and organizations in the region considering engagement with the Assad regime to consider carefully the atrocities inflicted by the regime on the Syrian people over the last decade."

But, taken together, the moves by the U.A.E. and others are providing Syrian companies some cause for optimism.

“I suspect that in the near future, we will work with international companies again," said Fuad al-Mohamed, an executive at the oil-services unit of the Katerji Group, a Syrian business conglomerate owned by the family of a pro-regime lawmaker and sanctioned by the West for selling oil to the Assad regime.

Katerji is already using shell companies in Dubai to buy the computer equipment needed to set up a new bank in Syria, according to a person close to the group. The Katerji Group didn’t respond to a request for comment.

In perhaps the biggest development, U.A.E. Foreign Minister Sheikh Abdullah bin Zayed met with Mr. Assad in Damascus in November, making him the most senior Emirati official to visit Syria since the start of the civil war.

For the Assad regime, reconciling with its Arab neighbors could open the door to fresh investments to revitalize its war-damaged economy, and could lead to readmission to the Arab League, which could enhance its legitimacy.

Jordan reopened its main border crossing with Syria late last year and King Abdullah II spoke on the phone with Mr. Assad in October for the first time since the beginning of the civil war in 2011. The king also argued to President Biden during a visit to Washington in July that Jordan needed to communicate with the Syrian government on essential issues such as security and that continuing to isolate Mr. Assad was unsustainable, according to U.S. and Jordanian officials familiar with the talks, providing another boost for entrepreneurs hoping to expand trade.

On Thursday, Jordan’s military said its troops killed 27 smugglers attempting to enter the country from Syria. Amman has said security cooperation with Damascus would help it curb cross-border smuggling.

“Syria is the next opportunity," said a businessman from a prominent Dubai family, who recently started exporting Italian shampoo to Damascus and importing garments from a manufacturer in Aleppo.

The U.A.E. has been at the forefront of this trend. It previously normalized ties with Israel in 2020 in a deal brokered by the Trump administration and last year promised billions of dollars of investment in Turkey after years of animosity. The U.A.E., Saudi Arabia and their allies also lifted an embargo on Qatar in a further sign of how old tensions are easing.

Joel Rayburn, the U.S. envoy for Syria under the Trump administration, said he expects Washington to act cautiously in targeting Emirati ties with the Assad regime. “If friends undertake action contrary to U.S. interest, we try to warn them first," he said.

Indeed, there are indications that in some limited circumstances the U.S. might choose to help closer involvement in the Syrian economy.

Egypt, for instance, is pushing for the revival of a gas pipeline running from the Red Sea through Syria to Lebanon. The plan involves repairing existing pipelines that run from Egypt to Jordan and on to Syria, and a separate pipeline that goes from Syria to Lebanon.

Despite opposition from Mr. Assad’s critics, the Biden administration chose to waive sanctions for the countries involved to help secure badly needed fuel for the people of Lebanon, which is enduring a worsening economic collapse.

 

 

This story has been published from a wire agency feed without modifications to the text

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