Iran determined to prop up Assad economy

Dr. Majid Rafizadeh
Dr. Majid Rafizadeh
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This week, the Islamic Republic of Iran signed an agreement with Assad to supply Damascus with $3.6 billion in oil in exchange for Tehran to have the right to invest in Syrian cities. Syria's state news agency (SANA) reported on Tuesday that, “An agreement (on Monday) was signed in Tehran by the Iranian and Syrian central banks, granting Syria a credit line worth $3.6 billion.” The agreement stipulates that the Syrian government will have to pay back the cost of the Iranian oil loan ”through Iranian investments of various kinds in Syria,” as SANA stated. However, Syrian and Iranian authorities have not clarified what specific type of “investments” will be implemented.

Iranian authorities have argued that this agreement – to activate a $3.6 billion credit facility to buy oil products with long-term payment periods – is a normal economic procedure between Tehran and Damascus and is not linked to the three years of crisis in the country. Realistically, however, it seems that the motives behind such a move are directly linked to the internal conflict and pro-democracy protesters in Syria as well as related to the domestic and regional balance of power ambitions of Iran.

Iran has been attempting to revert back the efforts of the international community through the supply of oil, fuel and petroleum products

Majid Rafizadeh

As the death toll in Syria has exceeded 100,000 – according to the United Nations Chief and Secretary-General Ban Ki-moon – and as the number of displaced families and refugees has reached an unprecedented level, the Islamic Republic of Iran has been the sole regional state supporter and determined backer of Assad’s regime, (the only other proponent of Assad’s regime has been the non-state actor, Hezbollah). During the last 28 months of the Syrian conflict, Iranian authorities have provided financial support, military aid through Iran’s Revolutionary Guard Corps (IRGC), intelligence assistance through the Etela’at, and advisory support through high level Iranian officials and security apparatuses.

The ins and outs of Iran’s economic push

This $3.6 billion in oil is part of a package to extend Iranian aid to President Bashar al-Assad's government – Iran’s major regional political and strategic ally. In addition to the $3.6 billion aid in oil, another $1 billion credit line to Damascus has already been extended. Moreover, Iran has previously signed a free trade deal that granted Syrian exports as low as 4 percent customs tariff. These moves have been taken in an attempt to allow Syrian authorities to buy Iranian power-generating products and other goods in a framework of barter arrangement. In exchange, according to trade officials, Damascus will export textiles and some agricultural produce such as citrus and olive oil to Tehran. In addition, last January, when Syrian Prime Minister Wael al-Halki made a visit to Tehran, Iran deposited $500 million in Syria's central bank vaults, according to banking sources.

There are several reasons behind the $3.6 billion agreement. First of all, international sanctions, including those from the United States and Europe, have intensified on Assad’s regime, due to the brutality of the state apparatuses on the popular and pro-democracy demonstrators. As a result, Damascus has become considerably short of diesel and fuel; resources needed for its army in order to help keep the economy operating in normal conditions and to assist Assad retain power. However, Iran has been attempting to revert back the efforts of the international community through the supply of oil, fuel and petroleum products – particularly by sea – as well as through unconditional military and intelligence support. As a result, while regional and international pressure on Assad’s apparatuses increase and as Assad's fuel and cash lifelines reduce, Tehran has been guaranteeing the survival of the regime that continues to commit crimes against humanity, according to the United Nations.

By steadily expanding, strengthening and widening economic ties with Assad’s regime, the Islamic Republic of Iran has been able to withstand Western economic sanctions. Secondly, Iran has also been attempting to keep the balance of power in its favor and in the benefit of the regional Shiite coalition.

On the other hand, the question is raised whether the election of Hassan Rouhani – the president-elect – will bring forth a change to Iran’s foreign policy and firm support of Assad’s regime. It is quite unrealistic to believe that Rouhani will sympathize with the Syrian people and various democratic movements. First of all, Rouhani has been the Supreme Leader’s advisor and a member of Iran’s Supreme National Security Council since 1989. Iran’s foreign policies toward Damascus are guided and directly ran by the Supreme Leader Ayatollah Ali Khamenei, high officials of the IRGC, the Etela’at, and Iran’s Supreme National Security Council.

As a result, all previous decades of policies have been either approved or made by Rouhani. Secondly, from Rouhani’s perspective, supporting Assad’s regime will be to his benefit, as this will allow Iran to keep the regional balance of power in favor of Iran’s ruling clerics. The Syrian human rights crisis, the tragic situation of the hundreds of thousands of refugees’, and the rising death toll will not be included in the president-elect, the Supreme Leader and the IRGC’s political calculations towards Damascus.

Dr. Majid Rafizadeh is an Iranian-American scholar, author and U.S. foreign policy specialist. Rafizadeh is the president of the International American Council. He serves on the board of Harvard International Review at Harvard University and Harvard International Relations Council. He is a member of the Gulf 2000 Project at Columbia University, School of International and Public Affairs. Previously he served as ambassador to the National Iranian-American Council based in Washington DC.

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