Ed Blanche has covered Middle East affairs since 1967. He is the Arab Weekly analyses section editor.

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  • In Syria, IRGC banks on reconstruction boom

    Many of the companies the IRGC controls refuse to open their books to government inspection.

    Payback. Secretary of Iran’s Supreme National Security Council Ali Shamkhani (L) welcomes Syrian Prime Minister Imad Khamis (R) for their meeting in Tehran, last January. (AP)


    2017/03/19 Issue: 98 Page: 5



    Beirut - Syrian Prime Minister Imad Khamis, during a visit to Tehran, signed five ma­jor economic agreements with Iran that were widely seen as a reward for the Islamic Re­public’s support for sustaining the beleaguered Damascus regime of President Bashar Assad through six years of war.

    The memorandums of under­standing (MOUs) signed on January 17th included the provision of 5,000 hectares of land for agriculture, an­other 1,000 hectares for mining, pri­marily phosphates, and building oil and gas terminals. There was also an exclusive licence for a mobile phone service potentially worth billions of dollars.

    These deals are expected to pro­vide a massive boom for the Islamic Revolutionary Guards Corps (IRGC), which controls the Syrian regime’s military and intelligence apparatus and the vast and powerful business and industrial empire it has built up in Iran over three decades with the blessing of the clerical regime in Tehran it keeps in power.

    The IRGC, spearheaded by its elite foreign operations arm known as al-Quds Force, has provided the ground forces, including Lebanon’s Hezbollah and Shia militias recruit­ed in Iraq, Afghanistan and Pakistan totalling an estimated 10,000 fight­ers. Because of this, it is well placed to secure these contracts and reap the benefits.

    “Iran increasingly treats Syria as one of its own provinces,” observed Karim Sadjadpour of the Middle East programme run by the Carnegie Endowment for International Peace. “They saved Assad from falling and now seem to feel entitled to help themselves to the Syrian economy.”

    There is no doubt that the troops and treasure Tehran poured into Syria after the war there erupted in March 2011 — including a $3.5 bil­lion credit line opened in 2013 and boosted to $4.5 billion in 2015 — were what averted the total collapse of Assad’s crippled and corrupt re­gime dominated by Syria’s Alawite minority, a Shia offshoot.

    Syria’s official news agency SANA quoted Khamis as saying the deals signed in Tehran were an expres­sion of Damascus’s appreciation of Iran’s support. “We greatly appreci­ate Iran’s major role in combating terrorism and standing by the Syrian people in every way, politically and economically,” he declared.

    The Syrian National Council, which represents an array of groups opposed to Assad, branded the Tehran deals as “looting”. That is a widely held view among Syrians, who consider the Iranians more as conquerors than saviours.

    The Syrian war afforded the Ira­nians the opportunity to establish a permanent and controlling stake in Syria as the Mediterranean anchor of the Shia empire they are seeking to build westward from the Arabian Gulf to dominate the largely Sunni region.

    That involves establishing a large-scale business link through which Iran can consolidate its expansion­ist strategy. To some extent, this is masked by plans for the reconstruc­tion of Syria once the fighting ends.

    A May 2015 report by Naame Shaam (Letter from Syria), a group of activists founded by Lebanese Fouad Hamdan and Syrian Shiar Youssef after the war began to mon­itor the Iranian presence in Syria, caustically observed that “recon­struction efforts in Syria are actually part and parcel of the war”.

    The key element in the IRGC’s vast economic empire in Iran is Khatam al-Anbia, established during the 1980-88 war with Iraq as the IRGC’s construction and engineering arm.

    In the post-war reconstruction of Iran, the IRGC invested in leading Iranian industries but its business holdings really took off in 2005 when wartime IRGC officer Mahmoud Ah­madinejad was elected president and handed out big contracts to his former comrades.

    Since then the IRGC’s business interests have expanded in all direc­tions, with the support of the cleri­cal regime — the IRGC reports di­rectly to Supreme Leader Ayatollah Ali Khamenei with no parliamentary oversight — and has become Iran’s biggest and wealthiest business con­glomerate, with at least 800 subsidi­aries in Iran and abroad.

    In 2012 alone, it reportedly se­cured 1,700 government contracts worth billions of dollars. The IRGC’s holdings embrace mobile phone networks, oil companies, carmak­ers and shipping, most of them ac­quired over the last 15 years or so in a $120 billion privatisation binge with the blessing of the clerical re­gime the IRGC keeps in power.

    Many of the companies the IRGC controls refuse to open their books to government inspection — a meas­ure of the political and economic power of this sprawling business empire.

    Khatam al-Anbia dominates Iran’s construction business and is widely expected to secure lucrative recon­struction contracts inside Syria — and probably in Iraq as well — once post-war rebuilding gets under way. That is still a distant prospect but perceived to be coming closer.

    A peace settlement will open a vast reconstruction programme in Syria, where large tracts of most major cities and towns have been reduced to rubble, the national in­frastructure largely destroyed and the economy, in deep trouble even before the war, laid waste on a scale not seen since the second world war.

    The Iranians are expected to se­cure a lion’s share of the fat con­tracts that will be awarded once the shooting stops.

    Abdullah al-Dardari, a former Syr­ian deputy premier for economic affairs who is expected to join the World Bank as an adviser on recon­struction in the Middle East, esti­mates that rebuilding Syria will cost $350 billion.

    “Iran’s financial assistance is an investment, not an act of charity,” the US-based global security con­sultancy Stratfor noted in a Febru­ary 6th analysis. “Tehran views the money it is funnelling into Syria as a long-term insurance policy for its continued influence with Damas­cus, regardless of who is in charge. These economic ties will ensure that Iran has even greater leverage over Syria than it does over Iraq.”

    Naame Shaam observed in a September 2014 report: “There is abundant evidence that the Iranian regime has established and is exer­cising authority in Syria, both di­rectly through its armed forces and militias and indirectly through the Syrian regime.”

    In a later report, Hamdan and Youssef concluded that the relation­ship between Iran and Syria — one the only Shia power in the Muslim world and the other ruled since 1970 by a regime dominated by the Alawite sect, a Shia offshoot — has changed since the war began.

    “From historically being mutually beneficial allies, the Iranian regime is now effectively an ‘occupying force’ with the responsibilities that accompany such a role,” they said.

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