In January 2017, Syria granted Iran the right to develop phosphate fields south-west of Palmyra. The agreement, trumpeted at the time by Iranian media, was part of a bundle of bilateral projects that included providing Iran with 5,000 hectares of agricultural territory in the Syrian heartland, along with preliminary approval to establish the country’s third telecom company.
Nearly two years later, however, none of these agreements has seen the light, much to the displeasure of the Iranians.
The telecoms deal has been frozen and Damascus offered to give the Iranians agricultural land in the countryside of the demolished city of Raqqa, which is technically impossible since that territory is in the hands of US-backed Kurdish militias. The Iranians wanted land that was far more strategic, between Daraya in the Damascus countryside and the Sayyda Zeinab Shrine. The Syrians said no.
Adding insult to injury, the prized phosphate deal was formalised in August but with Russia, not Iran. Moscow was given a licence to operate the fields until 2068.
There are fears in Tehran that the rest of the projects might go to the Russians as well.
Since the Russian military entered the Syrian battlefield in 2015, Tehran and Moscow have worked together, very diligently, on supporting their allies in Damascus and wiping out the armed opposition. Now that the guns are going silent, cracks are emerging with regards as to who gets what in Syria’s post-war reconstruction.
Russian Middle East analyst Dmitry Frolovskiy said, despite their emerging competition in Syria, there was a substantial technological gap between the two countries and, ultimately, Russia’s economic capabilities were much higher than Iran’s.
“Russian companies will clearly prevail,” he said, adding that Iranian ones “will fill some niches but of smaller scale.” He said he didn’t expect the competition to lead to confrontations, however, because both countries’ presidents wish to maintain “good relations in times of uncertainty.”
The Russians have been given the right to build power plants, grain mills and schools and extract gas from the Syrian shoreline. In contrast, the only thing the Iranians have been given this year is a tender to build 30,000 residential units, a mediocre reward compared to the nearly $7 billion worth of credit offered by Tehran to Damascus since 2011.
No Iranian schools were allowed in Syria but the Russians laid the cornerstone for their first school in September and have started receiving Syrian students — for free — at the St Petersburg Military Academy, hoping to create a new generation of officers pro-Russian to the bone.
The Syrians say Iran is no longer able to provide substantial funding after US sanctions were reimposed by the Trump White House. In neighbouring Iraq, Iran has stopped providing free electricity and water and cut its monthly — and generous — subsidies to Shia politicians, which explains why some of them, such as Prime Minister Haider al-Abadi and Muqtada al-Sadr, shifted into the Saudi orbit.
In 2016, Moscow released two loans to Tehran, worth $2.5 billion, but withheld a third, valued at $5 billion, fearing that Iran was in no position to repay its debts.
Additionally, few Syrians fear Russian money, while many view Iranian funds with scrutiny, because of ancient Persian-Arab rivalry on one front and fear from Shia dominance on an overwhelmingly Sunni Muslim population on the other.
Behind closed doors, Syrians praise the Russians, whose military involvement restored large areas of the country to government control, comparing it to the Iranians, whose operations only led to the fall of Idlib, Aleppo, Jisr al-Shughour, Palmyra and East Ghouta, in 2012-15.
Technically, Iran and Russia remain excellent political, military and trade partners, although bilateral trade between them dropped from $3.5 billion in 2010-11 to $1.2 billion in 2015-16.
Russia greatly appreciates the fact that Iran was one of the few countries that did not criticise its operations in Chechnya or its more recent adventures in Ukraine. Apart from disdain for the United States and mutual oil interests, the two countries have very little in common, with one being a theocracy, the other a secular state, where nevertheless the Orthodox Church is firmly allied to the Kremlin.
Throughout most of the 19th and 20th centuries, the two former empires were often at daggers’ end, even after the 1979 Islamic Revolution in Iran, when Ayatollah Ruhollah Khomeini declared that the Soviet Union was “an atheist state.”
Iran had its eyes set on rebuilding Palmyra, which was occupied and greatly damaged by the Islamic State. The Russians said no, claiming that they had liberated the city and were better suited “technically” to restore ancient temples and tombs.
The Iranians offered to rebuild demolished parts of east Aleppo but that was vetoed by the Russians and set aside for Russian developers.
Iran then asked that 10,000 displaced Shia Syrians from the Idlib province be repatriated in the Damascus countryside, hoping to create a “Shia belt” around the capital, one that could develop and grow like the southern district of Beirut, which was once a Sunni stronghold and has now become a power base for Hezbollah. Once again, the proposal was rejected, fearing that it would give Iran too much influence around the Syrian capital.
The displaced Shia refugees were given homes in the countryside of Aleppo instead, away from the centre of power, to serve as a bulwark against Turkish ambitions in the region.
Frolovskiy said: “Interestingly enough, neither Moscow nor Tehran secure capacities to carry a full-scale reconstruction that is crucial for Syria’s future and it is likely that we will see an increasing number of investments coming from the [Gulf Cooperation Council] GCC monarchies in an attempt to acquire leverages.
“The latter poses a more serious threat to Russia as (it) could decrease anticipated economic benefits and influence in the post-conflict era that the Kremlin hoped for.”
Published in Arab Weekly on 30 September 2018.