Syria's Assad Seeks To Control Economy 06/04 06:14
BEIRUT (AP) -- On a summer day last year, presidential guards drove out of
the charity organization founded by Syria's wealthiest businessman and a close
cousin of President Bashar Assad, carting away boxes of documents and
computers. At the same time, the charity's director was being questioned at the
palace on suspicion of corruption.
The confiscated data included names of thousands of militia fighters who
have supported the government in the 9-year-old civil war, including salaries
they received from Al-Bustan, the charity group founded by Rami Makhlouf.
The incident last August was the opening salvo in a crackdown on Makhlouf's
power, signaling the beginning of the end of his role as the Assad family's top
The unprecedented crackdown burst into the public with a series of Facebook
videos Makhlouf posted contesting the measures. It revealed a new fragility of
the embattled president and gave a rare glimpse into the intrigues of an
opaque inner circle involving a powerful first lady and business rivalries.
Assad, who marks 20 years in power this month, has survived nearly a decade
of war with the backing of Russia and Iran and a loyal class of businessmen. A
number of those businessmen helped protect the state and economic interests by
also forming their own militias.
Now the war-ravaged country faces a new level of hardship.
The Syrian pound has fallen to 1,800 to the dollar, from 50 before the war.
Prices have soared, and electricity and fuel shortages are recurrent. More than
80% of the population lives in poverty. Once an oil exporter, Syria now lives
on a credit line from Iran, which faces its own economic troubles.
Sanctions in place before the war mean Syria can hardly export anything, and
new U.S. sanctions threaten to further choke the country.
With the crackdown, Assad seems set on bringing the economy more firmly
under his control and bolstering the state's empty coffers.
"Rami's potential demise is mostly a reflection of a change at the helm of
the regime" in players, not policy, said Jihad Yazigi, editor-in-chief of
the Syria Report.
New actors are competing with traditional powers within the family over the
shrinking resources, he said.
For instance, first lady Asmaa Assad has increasingly sought to centralize
all charity work under her aegis. She heads the Syria Trust for Development,
where most foreign aid for post-war reconstruction is channeled.
The Makhloufs have been the Assad family's longtime partners. Makhlouf's
father, Mohammad, was the brother-in-law of Assad's father Hafez and a mentor
to the younger Assad. Notably, he too now appears to have been sidelined.
Rami Makhlouf rose alongside Bashar Assad, who succeeded his father in 2000.
Benefiting economic liberalization, Makhlouf became an overwhelming figure in
Syrian business, most importantly controlling the largest telecommunications
His name became synonymous with Assad's power. Early in the conflict,
protesters torched his companies and Makhlouf moved out of the public eye.
Some Syria watchers compare the current crackdown to Saudi Arabia's
Ritz-Carlton moment. Seeking to consolidate power, Saudi Crown Prince Mohammad
Bin Salman arrested dozens of royals and key business figures, locking many in
the five-star hotel, in a 2017 anti-corruption campaign.
Signs of cracks emerged last year. Last spring, a paper owned by Makhlouf
criticized a rival businessman, Samer Foz, considered close to the first lady.
Soon after, an audit was launched against Makhlouf's Al-Bustan charity
with the raid on its offices and interrogation of its staff, details of which
were reported in Arab media and confirmed by an emigre Syrian businessman,
Tlass said the crackdown was driven by the first lady.
A career investment banker, Asmaa Assad is trying to secure her three
children's future, fearing consolidation of the family wealth in the hands of
Makhlouf and his sons, who live in Dubai, said Tlass. He estimates Makhlouf's
fortune at $13 billion.
The audit was the final rupture between Makhlouf and Assad, said Tlass.
After it, Al-Bustan's director and accountant were replaced by figures close
to the palace, and the affiliated militia was integrated into the armed forces.
This year, Makhlouf's assets were temporarily seized and he was banned from
Makhlouf, who almost never makes public comments, responded with his
Facebook videos, which shocked the country, turning the family dispute into a
He appeared to be banking on support from the Alawite community, from which
he and the president hail, and which make the bulk of the pro-government
militias he has long supported.
"It is the weakness of the regime that made it possible for such divisions
to be aired in public," said Tlass, who is the son of a former defense minister
and lives in exile but keeps ties with Syria.
By year's end, the government openly named Makhlouf and other businessmen or
officials in a campaign against corruption. State media, which once called them
the "nationalist business class," now branded them "war profiteers." Officials
spoke of billions of Syrian pounds embezzled. The government said Makhlouf owed
it $180 million.
Assets were temporarily seized from Ayman Jaber, a steel and oil trader
married to an Assad cousin. Also hit was Hossam Qaterji, a powerful oil trader,
who facilitated oil smuggling from eastern Syria and has a militia. The first
lady's uncle, Tarif al-Akhras, a food trader, was also named.
Reports suggest most of those businessmen settled with the government and
paid their dues.
Meanwhile, Russia, keen on translating its military role in Syria into
economic and political gains, appears to be losing patience with the chaotic,
So it would welcome Damascus moves to tighten control on the economy, said
Vitaly Naumkin, a prominent Moscow-based Middle East expert.
Kirill Semyonov, a Syria expert with the Russian International Affairs
Council, described the crackdown as a re-distribution of assets among the Assad
entourage's "military-criminal economy."
"Makhlouf has become a weak link in the chain," he told Russia's leading
business daily Kommersant. "Assad needs funds or his regime will crumble, so
why not take the money from someone who can pay."