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The Panama Papers have revealed what all Syrians fighting for freedom and the coherent sector of the Left already knew: the Assad regime is not only dictatorial, bloody and extremely repressive, it is also deeply corrupt and a great defender of neoliberalism. That is the first and most established face of imperialist policies in the country, not the people in arms! Unfortunately, there is still a sector of the “Left” that persists in ignoring reality.

By Florence Oppen.

 

Information leaked by the Panama Papers revealed that Rami Makhlouf, President Bashar Assad’s cousin, has been largely benefiting from the recent wave of privatizations. He has acquired key economic industries in the country, such as oil and communication networks. He represents a sector of the bourgeoisie that has made $4 million in net profits and hidden them in Swiss banks. The Assad family, nebulous is indisputably corrupt and has made its fortune cooperating with the imperialist privatization project.

What a lovely family, committed to serving the Syrian people! The Assad family controls up to 60% of the Syrian economy![1] It is estimated that all the brothers have around $5 billion in HSBC. Their business empire includes duty free, retail, banking, and the giant mobile phone network Syriatel. Since these companies were incorporated in the British Virgin Islands, they do not pay taxes!

It all began in 1998, when Rami Makhlouf used Polter Investment Inc. to invest in the Syrian communication market with his Jordanian friends. Later in 2002, he started Syriatel, today a major cellular network company. Currently Rami holds directly 10% of Syriatel stock options and 63% through a British company (Virgin Island Drex Technologies S.A.). Rami has been hiding his money in HSBC because it is not enough to rob Syrian people by establishing a monopoly in a given industry, he also needed to evade paying taxes![2]

But Rami manages even more companies through HSBC: Cara, which he runs personally; Seadale International Corporation, which he co-owns with his brothers; Eagle Trading & Contracting, which is owned by his brother Hafez; and Hoxim Lane Management, that belongs to another brother. Rami also has 65% of the shares in Gulfsands Petroleum, one of the few privately owned companies in the oil industry.

The Assad family opened the door to imperialism in Syria

Syrian economy’s evolution has not been an exception in North Africa and the Middle East, contrary to what Castro-chavism and chronic Stalinists insist in arguing.

The IMF and the World Bank have been pushing the now “classic” neoliberal and structural adjustment reforms everywhere, including Syria, since the 1986 oil crisis, when oil prices crashed and indebtment of OPEC producers was on the rise. [3]

The explosion of public debt and economic crises in the region were met with World Bank and IMF loan “offers”, in exchange for massive privatizations and liberalization of these economies.

The Syrian government, headed by Hafez al-Assad since 1971 began the neoliberal turn which has drastically impoverished the population and destroyed the basis of a national and independent economy. In 1971, the same year Hafez came to power the  first Economic Free Zones were established. Yet it was not until the 1990s that the major “reforms” were accomplished. The Assad response to the 1986 crisis and slow growth was to attack workers wages, cut benefits and subsidies and open the economy to foreign investment – i.e. multinational corporations.

The privatization of the economy accelerated in the 1990s, in particular with the Law n. 10 in 1991 which began to encourage private investments and the fostering of “public-private” partnerships, meaning the now familiar privatization of state owned public companies because of their obvious inefficiency. In the 1980s and 1990s Syria saw what the Syrian economist Bassam Hassad has described as ”unofficial privatization and liberalization”, with the use of personal networks and ways to circumvent existing laws which protected a national economy and workers rights, combined with small law changes, like the Decrees 158 and 160 in 1989 which allowed imports for the private sector (instead of using national goods) or the decree 51 from 1979 which prohibited mediation between the state and private companies (national or foreign) to attract foreign investment.[4]

Bashar Al-Assad: the Chief Continuator of Neoliberal Policies

In 2000, the dictator Bashar takes over his father Hafez al-Assad and begins to accelerate the opening of the country to foreign capital and the process of liberalization of the economy. In 2000, the Presidential Decree n.7 which amended Law 10 from 1991, and allowed Arab and foreign investors to buy the land of the site they will use for their corporate enterprise, protected all investments and profits from expropriation. It also allowed the repatriation of capitals after 5 years of the investment and gave them generous tax exemptions.[5]

In 2001 through the Law 28 on banks, the government allowed the creation of private banks by raising the private ownership of local banks from 49 percent to 60 percent, putting an end to state monopoly of the banking system.[6] In 2003 three new private banks were licensed.[7] Some years later the Syrian Real Estate Bank and the French- Lebanese bank announced the launching of Visa card and MasterCard credit cards.[8] New foreign entities such as private banks (the joint Saudi-French bank of Bimo, Fransabank, Bank of Jordan-Syria, and the Saudi Islamic bank entered the Syrian market as well as financial, monopolies (Citibank, HSBC) who were looking to open their business there just before the revolution exploded. [9]By 2006, private banks already owned roughly 13% of total banking assets.[10]

Actually, Bashar al-Assad has been pushing forward most of the structural reforms “suggested” by the WB and the IMF.  For example, a 2006 IMF report on Syria signaled that “the Syrian economy was facing daunting challenges”, but that fortunately, the government of Bashar al-Assad was addressing those challenges as “a number of reforms have already been initiated to encourage private entrepreneurship, promote market mechanisms, open the economy to the rest of the world, liberalize the financial system, and begin to strengthen the medium-term fiscal outlook. An increasing number of sectors have been opened to private enterprise (including most recently the insurance sector) and exposed to international competition (including most recently textile and cement), while the foreign exchange regime has been gradually liberalized. And although Syria still ranks poorly in the World Bank’s indicator Doing Business (121st out of 155 countries) there has been a momentum for reform to improve the overall business climate, including through a noteworthy simplification of the tax system and substantial improvement in the regulatory framework for the tourism sector.”[11]

A 2005 IMF survey explained that the IMF Executive Board commended “the [Syrian] authorities for pushing forward the structural reform agenda, including further liberalizing the trade and foreign exchange rate regimes, simplifying the tax system and broadening the tax base, and strengthening budgetary procedures to improve public spending efficiency.”[12] And indeed, Bashar Al-Assad really understood and responded to this “commendation” from the International Financial Institutions, continuing the overturning of the key nationalizations of the economy in the 1950s, after the independence (when the Stock market was suppressed and all banks were absorbed by the national bank under government control). By 2007, the private sector represented already 60.5% of the GDP, compared to 52.3% in 2000.[13]

Bashar Al Assad created the Syrian Investment Agency and established a new investment law in 2007, which allowed the establishment of private holdings and almost eliminated state control on private investments; in 2008, he passed Law 32 which increased the scope of investors to own land, and in 2009, he created the Damascus Stock Exchange. A year later, EFG-Hermes, an investment bank based in Egypt opened its office to launch a private equity firm.

Furthermore Bashar al-Assad has tried very hard to get Syria accepted in the World Trade Organization and managed, under the Obama administration, to acquire an “observer status” in 2010. The WTO website declared: “when the terms of our negotiations [between Syria and the WTO] are completed and agreed, they would contribute to improve market access, strengthening the rules-based multilateral trading system and contributing both to global welfare and the welfare of the people of Syria.”[14]

The Syrian government calls this turn a “Social Market Economy”,[15] supposedly a combination of central planning and free market logic… We call it the re-colonization of Syria and the North Africa and Middle East region by US and European imperialisms, carried out by the hand of so-called “socialist”, “nationalist” or “anti-imperialist” dictators, who have long ago betrayed the struggle for the self-determination of their peoples. Know which logic gave its essence to the economic policy: that of financial capital and speculation.

Who Is Really Fighting for the Syrian People’s Freedom and Independence?

So when comrades of Socialist Action and other Left groups argue that “today’s war in Syria is a war between U.S. imperialism’s direct and indirect capitalist-fundamentalist and reactionary forces on the one hand and the capitalist Assad government on the other,” we think they are being blind to the real connections of imperialism in Syria.[16]

The Assads are not an “independent” capitalist government (which it seems for SA could be seen as a “lesser evil” to imperialism). They are the agents of imperialism in Syria, in particular since Hafez al-Assad but in particular with the coming to power of Bashar al Assad.[17] They are the most direct tool of imperialist domination that existed in the country before the Syrian people’s revolt, which was objectively a revolt against the result of the structural adjustment policies pushed by the last 4 decades of Assad rule and progressive endorsement of neoliberal reform.

We are not blind to the reality that us imperialism is trying to control indirectly some factions of the FSA and the resistance. As we have argued imperialism will always try to control all outcomes of any revolution- this is what imperialism does.  However we think that the only hope for freedom from imperialism and oppression, the only real resistance and defeat its rule in the region will come from the people in arms, from the local armed militias, which revolted against a dictatorial and neoliberal government of Bashar al-Assad.

Our role as revolutionary socialists is to join the ranks of the revolution against Assad and oppose from within the any control from outside imperialist forces, to fight for the national and class independence of our revolution and to further it till its necessary end: the expropriation of imperialist and national bourgeois interest (banks, factories, land) and the constitution of a workers and peasants government.

This is why we would like to emphasize once again: “We continue to support the upraise of the Syrian People against the oppressive regime of Bashar Al-Assad. We still believe the main task of the revolution is to overthrow the regime. We remain together with the Syrian people against the foreigner interventions of Russia, USA, Saudi Arabia, Turkey and Iran. The Arab Revolution continues its course, with highs and lows, and we will support it all the way.”[18]

 

Long Live the Syrian Revolution!

Down with Bashar Al-Assad!

Against the Islamic State and foreign interventions!

Open the borders of the EU!

Release all the political prisoners!

***

Notes:

[1] http://www.theguardian.com/news/2016/apr/05/mossack-fonseca-panama-papers-rami-makhlouf-syria-assad-hsbc

[2] http://www.laizquierdadiario.com/Panama-Papers-grafico-interactivo-de-los-principales-politicos-involucrados

[3] First of all, in the aftermath of the OPEC oil embargo to the US in 1973, and as a result of a multi-billion investment of imperialist countries to diversify their oil importations and explore new production sites in non-OPEC oilfields  (Siberia, Alaska, North Sea, and Gulf of Mexico),  the OPEC share of oil production drastically dropped: : “OPEC had seen its share of the world market drop to less than a third in 1985, from about half during the 1970’s.” Furthermore, and a a result  “in 1986, the price of oil collapsed, falling briefly in the spot market to less than $10 a barrel, from $27 at the beginning of 1986.” Robert Hershey, “Worrying Anew Over Oil Imports”, New York Times, 1989. http://www.nytimes.com/1989/12/30/business/worrying-anew-over-oil-imports.html?pagewanted=all

[4] Bassam Haddad, Business Networks in Syria: The Political Economy of Authoritarian Resilience, pp. 119-153.

[5] Ibid, p. 15.

[6] http://www.thedailybeast.com/articles/2013/04/08/in-syria-follow-the-money-to-find-the-roots-of-the-revolt.html

[7] Anna Galdo “Policies for business in the Mediterranean Countries, The Syrian Arab Republic” 2004, p17

http://unpan1.un.org/intradoc/groups/public/documents/caimed/unpan018700.pdf

[8] Ibid.

[9] http://www.thedailybeast.com/articles/2013/04/08/in-syria-follow-the-money-to-find-the-roots-of-the-revolt.html

[10] http://www.thedailybeast.com/articles/2013/04/08/in-syria-follow-the-money-to-find-the-roots-of-the-revolt.html

[11] http://www.imf.org/external/np/ms/2006/051406.htm

[12] http://www.imf.org/external/pubs/ft/survey/2005/111405.pdf p. 338

[13] Haddad, “The Political Economy of Syria”, Middle East Policy, XVIII, 2, (2011), p. 53.

[14] http://www.bloomberg.com/news/articles/2010-05-04/syria-wins-wto-observer-status-as-u-s-drops-opposition-to-membership

[15] See  Bassam Haddad, Business Networks in Syria: The Political Economy of Authoritarian Resilience, p. 4.

[16] http://socialistaction.org/u-s-imperialisms-syria-policy/

[17] http://litci.org/es/lit-ci-y-partidos/partidos/workers-voice-eeuu/la-revolucion-siria-y-los-movimientos-contra-la-guerra-en-occidente-una-discusion-necesaria-con-la-izquierda-y-los-activistas/

[18] http://litci.org/en/five-years-of-the-syrian-revolution-the-people-demand-the-fall-of-the-regime/