Moscow is making friends in the Middle East

The Syrian conflict and Russia’s geoeconomics

Isaac Kfir

Development, Economics and finance, International relations | Asia, The World

12 July 2019

In efforts to challenge sanction regimes, Russia has been enthusiastically advancing its relations in the Middle East, actively engaging with Syria, Lebanon, and Iraq across various sectors, Isaac Kfir writes.

In the post-Cold War era, there was a convergence between peace, security, and economics. However, it’s become increasingly clear that a new geoeconomic reality is emerging – one that poses a major challenge to the maintenance of international peace and security. Whereas previously the goal was peace and security, the current regime seeks conflict and chaos.

The new reality is most visible in the Middle East, especially in the Syrian conflict. Moscow regards Syria’s post-conflict reconstruction as a means to encourage and promote its own manufacturing base and to challenge the sanction regime it has faced, which has impacted access to hard foreign currencies.

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President Putin wants others to support reconstruction efforts. In Syria, for example, it has argued that the US and Europe should provide loans to the Assad regime, which needs between US $250 to $400 billion to rebuild the country. Russia expects that, due to their close relations with the regime, their companies would benefit from this infusion of money. Specifically, in the financial, energy, mining, infrastructure, technology, cybersecurity, healthcare, and education sectors.

It wants others to support reconstruction efforts. In Syria, it has argued that the US and Europe should provide loans to the Assad regime, which needs between US $250 to $400 billion to rebuild the country. It expects that, due to their close relations with the regime, Russian companies would benefit from this infusion of money.

Moscow is aggressively looking for better relations in the region. This is why Dmitry Medvedev, the Russian prime minister, attended the Afreximbank Annual Meetings. Trade between Russia and African states stands at around US $20 billion, but the former is clearly keen to increase the volume of transactions, which is partly why senior Russian officials are traversing the Middle East.

The information technology sector is likely to see a lot of Russian investment, as the Russians recognise that Syria will need a massive IT boost. They can also rely on their ally, Bashar al-Assad, who has shown a keen interest.

The President established the Syrian Electronic Army during the conflict – an elite cyber unit responsible for carrying out operations against opposing powers. In 2013, it was allegedly responsible for hacking the Associated Press Twitter account and claiming that President Barack Obama had been injured in an attack on the White House. The hack allegedly caused the S&P 500 to drop by US $136.5 billion.

Increasingly, the group’s focus is on promoting the Assad regime.

As part of their geoeconomic strategy, the Russians are also looking to play a role in resolving Lebanon and Syria’s maritime border dispute. In 2013, Russia and Syria signed an agreement to explore gas and oil reserves in the territorial waters off Syria.

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Developing these fields would give the Russians enormous presence in the Eastern Mediterranean and accord well with their leasing of the port city Tartus, which was finalised in June 2019. Stroytransgaz, which is owned by Gennady Tymchenko – a close confidant of President Putin – intends to invest around $500 million in the port.

The Lebanese clearly recognise Russia’s importance in ensuring their security. Lebanon hosts around 1.5 million Syrian refugees creating enormous instability in Lebanon, with evidence of growing anti-refugee sentiments. Led by Foreign Minister Gebran Bassil, the country is veering towards economic slowdown.

Similarly, Russia values Lebanon. Historically an American ally, having Lebanon on ‘Russia’s side’ will dent American presence in the region. This may also explain why in February 2018 there were preliminary discussions between the Russians and the Lebanese about a military agreement that included opening Lebanese airspace, airports, and naval bases for the Russian military.

In return, Putin offered 15 years of interest-free deliveries of Russian arms to Lebanon – valued at around US $1.5 billion – as well as intelligence sharing and counter-terrorism training for their troops.

The agreement was scuttled by the pro-US Lebanese politicians, though not before Hezbollah MP Nawaf al-Mousawi rhetorically asked in parliament why Lebanon was hesitant to nurture its relationship with Russia, pointing out that there was no good reason for this to be the case.

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The Russians are pursuing a similar policy in Iraq. They recognise that the country is also in dire need of reconstruction efforts – and there is evidence that many Iraqis want to uncouple from the US.

This is why it was unsurprising to hear, in May, Hakim al-Zamili, a member of the Iraqi Parliament’s Security and Defense Committee, announce that Iraq had opened negotiations to buy the S400 system from Russia.

This means that Iraq will follow Turkey and Saudi Arabia in purchasing the system. Approximately two weeks prior to al-Zamili’s announcement, Russia opened an economic office in its embassy in Baghdad. The two countries have signed 16 bilateral agreements.

It is also notable that the Russian delegation to Iraq was led by Yury Borisov, the former deputy minister for defence, who was in Syria finalising Russia’s 49-year lease of Tartus prior to arriving in Baghdad.

Clearly, the Russians’ determination to have a place in the Eastern Mediterranean is gathering momentum. They have achieved their military, strategic goal of saving Assad and keeping Syria firmly within the Russian orbit. Now, they are turning their attention to Lebanon and Iraq, hoping to lure them from America’s circle through economic engagement.

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One Response

  1. Rezwana says:

    Policy shifts witnessed in many countries….Russia….no exception.

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