Syria: Why Sanctions are Efficient

Since the first round of international sanctions against the Syrian regime in May, many observers have raised doubts about the relevancy and efficiency of economic sanctions.

A frequent argument has been that sanctions not only hit the regime leaders, but that they hit hard on the working classes, “making people poor and hungry”[1]. Moreover, looking at the Iraqi example, it is argued that sanctions may even strengthen the leader’s grip on the country. Impoverishing the population, sanctions make people even more dependent on state supplies for their every-day survival and, as a consequence, make them less able to challenge state domination over society. These ethical questions are important and it is well-known that sanctions alone cannot bring a regime down. However, in the Syrian case, sanctions add to an internal grass-roots pressure, and more recently, an increasing military threat from the Free Syrian Army. The FSA is drawing more and more defectors to its side and has proved its capabilities, boasting increasingly significant attacks. As each country is specific, it is important to look at the effects of these sanctions on the internal structures of power of the regime and on its basis of support among the population. By weakening the internal structures and by loosening the ties with their support base, these sanctions are effectively tipping the balance in favor of the opposition.

The first reason why these sanctions are efficient pertains to what guarantees solidarity among people within the regime- the elite but also those in lower ranks. The elite consists of government and deputy ministers, top managers of the public sector, generals, members of the Baath party regional Command. During the past twenty years, the Baathist ideology has lost most of its influence[2]. The Baathist rhetoric does not a play a role of cement any more. The bonds that tie up people actively taking part in the incumbent regime are, to a large extent, patronage relationships.

Even though the formal institutions of the regime are the security apparatus (army and intelligence services), the party, and the bureaucracy, institutional relations are reinforced by informal personal links resting on patronage relationships.[3] Patronage, as a technique of power, is based on the exchange of resources, or access to them, in exchange for loyalty or obedience.[4]  This system constitutes a hierarchical, informal network of dependence between patrons and clients that operates behind the façades of public institutions. These networks can be visualised as a pyramid, with, at the summit, the president, his close family and the regime’s most influential barons. Each person in this pyramid has a patron, upon which he depends for obtaining privileges (money, business opportunities, a blind eye to corrupted practices etc.) in exchange for which he pledges allegiance to him. But every person also has a wide network of clients with whom he redistributes a part of the privileges obtained. These informal hierarchical top-down networks of patronage pervade all institutions and even all levels of society, securing allegiance from very different people, with different or even conflicting interests and who would have not necessarily supported the regime otherwise. This, moreover, fragments society[5], forcing people to search in personal relationships with regime officials for the solution to their problems.

Firstly, by targeting high rank individuals, sanctioning their businesses and freezing their assets abroad, international sanctions have disconnected the summit, from the rest of the pyramid. The ‘hubs’ through which money and privileges was channeled are now ‘dysfunctional’. As it becomes more and more difficult to pour resources into these networks, the whole coherence and solidarity of the regime is less stable. Secondly, in addition to targeting the mechanisms of these structures, sanctions are also targeting the source of the resources. Secondly, in addition to targeting the mechanisms of these structures, sanctions are also targeting the way in which privileges are granted to clients. As business opportunities have dried up with the end of foreign investments in the country, privileges only take the form of bribes and the appropriation of public money. On the other hand, before the crisis, the oil sector accounted for half of state revenues, and 90% was exported to the European Union. The EU ban on oil implemented on the 2^nd of September has drastically restricted the liquid assets available to be poured in these networks.[6] As Samir Seifan states, the depletion of state resources means that “the regime has ceased to be a source of benefits for the groups that are loyal to it.”[7] Solidarity within the regime is now only guaranteed by fear of popular vengeance in the case of regime change. This is certainly not enough to provide the regime with a long-term future.

The second reason for economic sanctions’ efficiency is their role in alienating the regime’s support base. By dramatically reducing Syria’s exports, they endanger the stability of the Syrian pound. And as Bashar al-Assad recognized in June[8], the issue of the Syrian pound is of fundamental importance to the ongoing crisis. The regime did not only ensure its power by relying on individual loyalty (network of patronage), it supported this policy with the broad co-optation of socio-economic classes to give the regime some legitimacy. No matter what the anti-regime Syrian activists say, the regime has been relying on more than merely the military and Intelligence apparatus. Every regime needs a support base among the population to consolidate its legitimacy so as to avoid appearing as a military dictatorship. Without a socio-economic basis of support, the regime has no legitimacy whatsoever, and consequently no long-term future. Indeed, the history of Baathist Syria shows that co-opting large parts of society has always been a priority.

Since the Baathist revolution in 1963 and then Hafez al-Assad’s coup in 1970, urban and agricultural workers have been the traditional support for the regime. However, since the economic crisis of the mid-1980s, the rapid depletion of oil reserves and, as a consequence, the decrease in state revenues, it has been impossible to preserve the welfare state on a level on which the allegiance of the working classes was dependent. The regime subsequently entered a financial stranglehold. Hafez al-Assad decided to implement economic liberalisation. Even though this change in policy was likely to accelerate the alienation of working classes, it was aimed at co-opting large parts of the business community. This policy has been continued by Bashar al-Assad since his assumption of power in 2000. Since the alienation of urban and agricultural workers reached a level which was unthinkable before March, the business community is the only socio-economic classes on which the regime can rely.

As the majority of the Syrian business community is a commercial bourgeoisie, whose wealth has been built through import-export trade, the exchange rate is a key issue for Syrian entrepreneurs. The EU ban on oil imports, decided on the 2^nd of September, has made an imminent collapse of the Syrian pound a distinct possibility. Before the unrest, oil accounted for two thirds of Syrian exports[9], and the EU was the destination for more than 90% of it. The regime is now unable to find buyers for around 140,000 barrels of crude oil per day[10] while the daily production is 240,000 barrels. The negative balance of payments reduces the Central Bank’s currency reserves and a depletion of these reserves would lead to the collapse of the national currency. Even though state officials affirmed that the Central Bank had enough foreign currency reserves to secure imports for two years[11], numerous recent state decisions suggest that pressure on the national currency is extreme.[12]

A common argument is that the business community will never turn against the regime. I think this depends on what we mean by “turning against the regime”. Indeed, it seems unlikely that famous businessmen will either take an official stance in support of regime change, or financially support opposition groups. But in fear of a possible collapse of the pound they might be tempted to transfer their assets abroad. During the third quarter of the year, deposits in Syrian private banks decreased by 18%, while, according to the Byblos Bank, deposits in Syrian accounts held by Lebanese banks dropped by 24% by the end of April.[13] This increases the pressure on the currency and its collapse is even more likely.

The sanctions are undermining the structures on which the regime relies. They weaken the coherence of the regime and alienate its support base. In addition to the pressure from the Free Syrian Army and an increasing diplomatic isolation, it seems clear that there is no way back to stability for Bashar al-Assad. In these conditions, will the soldiers continue to obey orders to kill protesters while it becomes obvious that retaliation will not bring stability back? The fact that they are now risking their lives and that the payment of salaries is becoming uncertain[14] may help them answer this question. So yes, sanctions are efficient. They are tipping the balance.

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Tags: allegiance, Arab Spring, Bourgeoisie, Economy, Infitah, Middle East, oil, Patronage, regime, Revolution, Sanctions, Syria