Wednesday, July 6, 2011

In Search of Leverage with Syria

PolicyWatch #1815

By David Schenker and Andrew J. Tabler
June 14, 2011

During his May 19 speech on the Middle East, President Obama defined America's policy objective in Syria by asking President Bashar al-Asad to either lead a political transition or "get out of the way." Asad shows no interest thus far in the former -- the death toll has reached 1,600, and atrocities and large-scale protests persist. To force Asad to step down or cause his regime to fragment, the United States should seek with its allies to increase the economic pressure and international isolation faced by the regime and to support domestic challenges to it. To achieve these effects, Washington has a number of unilateral and multilateral levers available, whether economic or diplomatic. U.S. and International Levers
To affect the calculus of Asad and his supporters, the United States must increase the regime's economic and diplomatic isolation, and lend international weight to the domestic challenge to the regime. The ongoing demonstrations and burgeoning international consensus give Washington a broad range of options to do so.
Economic Pressure
Target Syrian energy. Syrian oil production has been in steady decline since the mid-1990s and is now around 390,000 barrels per day. Of that, Syria exports around 148,000 bpd, with revenues accruing directly to the state. According to IMF and US government estimates, oil sales account for between a quarter and a third of state revenue, with the remainder increasingly made up through corporate and public sector employee taxes. As the protests decrease tax receipts, Damascus is likely to become increasingly reliant on oil revenue, forcing the regime to tap reserves and/or resort to deficit spending. This in turn would constrain the regime's ability to maintain market subsidies (e.g., for diesel fuel) and payoffs to patronage networks.
Accordingly, the Obama administration should prod the chief buyers of Syrian oil -- Germany, Italy, France, and Holland -- to stop purchasing the regime's heavy crude. It should also pressure multinational energy companies operating in Syria -- Royal Dutch Shell, Total, Croatia's INA Nafta, India's Oil and Natural Gas Corporation (ONGC), Canada's Tanganyika, SUNCOR, and Petro-Canada, and China's National Petroleum Corporation (CNPC) and Sinochem -- to exit the country. In addition, it should ask Britain to halt the operations of Gulfsands Petroleum, the one-time Houston-based company specializing in extracting heavy oil from depleted fields. The firm relocated to Britain in 2008 to avoid U.S. sanctions on Rami Makhlouf, Asad's cousin and the regime's primary businessman.
Target businesses associated with the regime. Elite defections could play a key role in pressuring the regime to either cut a deal with the country's Sunni majority or leave power. To date, the most effective U.S. sanction levied against Syria has been the Makhlouf designation. Along those lines, Washington should impose costs on other Syrian businesspeople who continue to back the regime.
One way to do so is to lengthen the list of U.S. Treasury Department designations aimed at businesspeople close to the regime, many of whom are the exclusive importers of a wide variety of goods on the Syrian market. This would not only create fissures in the regime's traditional alliance with the Sunni business elite, it would also diminish government revenue, since many major trading families pay an increasingly larger share of state revenues via a flat 20 percent corporate tax.
Encourage additional unilateral sanctions. Washington should add to its robust and growing set of measures against the regime by considering a U.S. investment ban based on the Syria Accountability Act. The EU is also investigating tougher trade restrictions, though multilateral sanctions via the UN are unlikely at this point. To further ratchet up pressure, Washington should urge Syria's leading trade partner, Turkey, to adopt trade sanctions (excluding food and medicine, as the United States does). It should also press Persian Gulf states -- particularly Qatar, Kuwait, and Saudi Arabia -- to curtail their business investments in Syria, which have been a lifeline for the cash-strapped Asad regime in recent years.
International Isolation
Refer Asad to the International Criminal Court. Washington should push the UN Security Council to refer Asad and top regime security officials responsible for atrocities to the ICC, based in The Hague. Because Syria is not a signatory to the Rome Statute, the ICC does not have jurisdiction -- as was the case with Libya, only the Security Council can refer Syria to the court, and opposition from China and Russia makes such a referral unlikely at present. If the massacres in Syria continue, however, a U.S. or European-led resolution supporting referral could avoid a veto.
Appoint a special human rights rapporteur. Although China and Russia may balk, Washington should press the UN Human Rights Council to designate a special rapporteur on Syria. To date, the Asad regime has failed to cooperate with the council. The mere discussion of a rapporteur would serve as a point of annoyance for Damascus and keep human rights issues in the spotlight.
Enhance relations with the opposition. Becoming overly involved with the Syrian opposition could prove counterproductive for Washington. At minimum, however, the administration should meet routinely with respected opposition leaders (exiles and, where appropriate, Syria-based figures), encourage Turkey to continue hosting opposition conferences, and consider recognizing a government in exile if one is established.
Focus on the International Atomic Energy Agency. In recent weeks, Washington issued a statement detailing the Asad regime's efforts to build an illegal nuclear weapons facility. The administration should continue to publicly hammer Damascus for this transgression, and seek to refer the IAEA's investigation of the reactor to the UN Security Council for action.
Enhancing Domestic Challenges
Hasten the unraveling of the Syrian military. In conjunction with Turkey and Jordan, the United States should pursue incentives-based information operations in Syria, encouraging military officers to defect or, at minimum, avoid complicity in regime crimes against the people. The more quickly the military unravels, the fewer atrocities that will be perpetrated and the less chance for conflict to degenerate into civil war.
Align with the Syrian people. Statements by senior U.S. officials in support of the Syrian people would boost morale and encourage more protestors to come out, accelerating the arrival of large-scale demonstrations in Aleppo and Damascus that would stand a better chance of toppling the regime.
Developments on the ground in Syria suggest that the regime is headed downward. Despite the appalling events of recent months, however, the Obama administration has not yet made the decision to move past Asad. As recently as June 3, for example, Secretary of State Hillary Clinton inexplicably left the door open by declaring that the regime's legitimacy had "nearly run out." The misperception that the United States lacks levers against the regime may be fueling this reluctance, given the long but relatively fruitless history of U.S. sanctions on Syria. This perception is mistaken, however: the broad international revulsion at Asad's tactics, combined with the changes sweeping the region, provides new opportunities to act against the Asad regime. Although the task of regime change lies squarely with Syrians, the Obama administration has a broad array of tools to increase pressure on the Asad government and, potentially, help hasten its demise.
David Schenker is the Aufzien fellow and director of the Program on Arab Politics at The Washington Institute. Andrew Tabler is the Institute's Next Generation fellow.

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