The West is turning a cold shoulder to Syria’s much-anticipated reconstruction process, but Lebanese businessmen are already eyeing potentially lucrative opportunities to be had from rebuilding the country – opportunities that may even benefit Lebanon’s moribund economy, writes David Kenner

 

While many may survey the wreckage from years of war across the Middle East with despair, Wajih Bizri sees the glimmers of a brighter future.

“We hope that this is the beginning of the end of the crisis in Syria and Iraq,” says the president of the International Chamber of Commerce in Lebanon. “I think the worst part is past… there will be a lot of opportunities for everybody to share in the reconstruction of these two countries. And hopefully, they’ll be even better than they were before.”

Bizri says he has played host to a constant stream of Chinese, Russian, and European business delegations, who have visited Lebanon with an eye toward entering Syria now that the war appears to be winding down. He sees a natural partnership between these international firms and Lebanese businessmen, who have long experience doing business with the war-torn country next door. “Since the Lebanese companies know the logistics, and how to go about it, I think anybody who wants to enter will be looking into a joint venture with them,” he said.

“European and American wallets are still firmly shut to the reconstruction of Syria”

To Bizri’s chagrin, European and American wallets are still firmly shut to the reconstruction of Syria. Western powers have conditioned their funding on a fundamental shift in the country’s power structure, demanding the launch of a “credible and irreversible political process” before the money starts flowing. US Secretary of State Mike Pompeo recently added to that demand, saying that Syria “will not receive one single dollar” until the withdrawal of Iranian-backed troops from the country.

“I think their pariah status is solid,” one Western diplomat told The Brief, in response to a question on the Syrian government’s prospects for international rehabilitation.

A picture taken on August 2, 2018, shows a view of destroyed buildings in the opposition-held southern Syrian city of Daraa (Mohamad Abazeed/AFP)

In Lebanon, however, the rush to claim a piece of Syria’s reconstruction has already begun. Lebanese firms never entirely exited Syria, and Bizri says that they are dramatically accelerating their business ventures as the security situation returns to normal. Meanwhile, the Lebanese government is attempting to position the country as a key logistics and transport hub for foreign firms entering the Syrian market. Lebanese officials are hoping that the windfall from reconstruction can serve as the antidote for the country’s own financial crisis – and potentially help break the political deadlock in Beirut.

“For Lebanese and Syrian elites, shared financial interests have often served as a balm for political divisions”

Lebanese views of the Syrian war have broken down along sectarian lines. The country’s Sunni prime minister-designate, Saad Hariri, has voiced support for the opposition and vowed not to normalize ties with President Bashar al Assad’s government, even as the powerful Shia party Hezbollah has lent crucial military support to Damascus. For Lebanese and Syrian elites, however, shared financial interests have often served as a balm for political divisions: Rafik Hariri, the former prime minister and Saad’s father, struck such a deal at the end of his country’s ruinous civil war – acquiescing to then Syrian President Hafez al Assad’s political dominance over Lebanon in exchange for a free hand in securing international funds for the massive reconstruction program from which he and some of his business colleagues benefited.

Tripoli, a predominantly Sunni city that lies less than 35 kilometers from the Syrian border, is best poised to benefit from Syria’s reconstruction. Tripoli is poor – a 2015 UN report found that 77 percent of households were economically deprived. Lebanese officials are hoping that a windfall from Syria’s reconstruction can change its economic fortunes, tripling the capacity of the city’s port and introducing plans to build a railroad that links the city to Syria.

Hariri is already touting Tripoli’s benefits as a logistics hub for Western firms, if the United States and the European Union ever do open their wallets for reconstruction. And he has even made the case that using Lebanon as a base could serve to mitigate the risk of the Syrian government redirecting funds to serve its own political purpose, rather than reconstruct the country.

“Can you tell me how you’re going to reconstruct Syria with the Syrian regime?” he asked a gathering of journalists last year. “If we have maybe a little bit of corruption, then what do you think they have? So, you’re telling me you’re going to throw your money into Syria? Come on.”

“US President Donald Trump’s administration may have no intention of investing US funds in rebuilding Syria, but it also may be hesitant to obstruct the growing Lebanese economic role there”

US President Donald Trump’s administration may have no intention of investing US funds in rebuilding Syria, but it also may be hesitant to obstruct the growing Lebanese economic role there. The US and European governments have cumulatively pledged billions of dollars to support the over one million Syrian refugees who reside in Lebanon, in part as a way to limit the refugee crisis in Europe. International efforts to ensure Lebanon’s political and economic stability have long focused on Tripoli – USAID is currently funding dozens of activities in the city, which range from education initiatives to efforts to spur economic growth. If Lebanon’s economy receives a boost from investments in Syria, that would accomplish a US policy goal – even if the United States still considers Assad as a pariah.

Meanwhile, the Lebanese economy can use all the help that it can get. The country is in the midst of an economic crisis spurred by a slump in property prices and exacerbated by a five-month-long deadlock over the formation of the next government. The political paralysis has prevented Lebanon from receiving more than $11 billion in grants and soft loans pledged during the CEDRE conference earlier this year – the money is contingent on structural reforms aimed at reducing corruption and slashing the budget deficit, which only the new government can make.

A ship is docked near a container crane and port machinery at the tripoli Free Zone in the port of the same name in northern Lebanon on February 7, 2018 (Ibrahim Chalhoub/AFP)

Lebanon’s role in reconstruction could even help break the stalemate over government formation. The process is currently stalled due to a disagreement over whether six Sunni lawmakers who are not from Hariri’s party will be represented in the Cabinet. Hezbollah and its allies have insisted that they be included, while Hariri, who is keen to emphasize his position as the country’s dominant Sunni powerbroker, has sought to exclude them. Two of these six Sunni MPs hail from the Tripoli region, while Hariri also maintains extensive patronage networks in the city. If whichever group is forced to concede receives compensation through an increased stake in Tripoli’s role in reconstruction, it would not be the first time that economic incentives greased the wheels for a political compromise in Lebanon.

However these political dramas play out, Lebanese firms are moving full steam into Syria.
“The private sector in Lebanon is very dynamic and very flexible,” said Bizri. “We don’t count on the public sector opening the doors for us.”

David Kenner is a journalist based in Beirut