How will Russia compensate its expenses bill in Syria?

By Syrializm Analytics


After more than 4 and a half years since direct military intervention in Syria, Russia has effectively contributed to preventing the fall of its ally Bashar Al Assad, and enabled him to regain control of large areas of the opposition’s hands.

But this military progress was not free.

Russia incurred huge military expenditures to achieve this.

On the other hand, it did not receive financial returns from the government, which has been suffering for years from economic decline, which made it unable to pay any money to its allies.

It is true that Russia has strengthened its military presence that existed even before its direct intervention, but it has not been able to reap significant economic benefits, and has not yet been able to prepare the ground in Syria to achieve returns covering its expenses.

According to a number of studies and reports, the rate of Russian military expenditures in Syria is between 3 to 4 million dollars per day, which means 5 to 7 billion dollars since its intervention.

Among those that conducted these studies, the International Research Foundation “IHS” and its headquarters in London, and in Russia itself, such as a report of the opposition “Yabloko” and the newspaper Gazeta.

In addition to this, support for the weapon it provided to the regime since its resort to the use of a military solution in the country, where it did not seize the price of those weapons and turned them into long-term debt, or chose to collect them through benefits or agreements guaranteeing their interests and presence in the region.

It can be said that most of what Russia obtained economically from Syria are long-term contracts in the fields of oil and gas from a system that appears dilapidated and threatening to fall at any moment, in addition to the fact that the economic feasibility of those contracts remains uncertain, especially since most of the rich fields are located in The east of the country is under American protection.

Russian companies have concluded several agreements with the system for exploration and extraction of oil and gas from the fields remaining in the hands of the system, and signed agreements to restore and develop oil installations, in addition to contracts to implement projects to generate energy and extract mineral resources.

In 2019, the Ministry of Oil of the Syrian regime signed a contract with the Russian companies Mercury and Vilada, and Stroy Trans obtained the rights to explore and extract phosphate from the eastern region south of the Syrian city of Palmyra, and a contract to lease the port of Tartous to STG ENGINEERING for a period of 49 years.

Energy contracts were also signed, in Homs, in March 2018, between the regime and Russian companies, and another contract to construct a railway linking Damascus airport to the city center.

However, all of these contracts, even if their economic viability is proven, are not applicable in the event that economic, political and military stability in Syria is not achieved, and reconstruction begins.

Russia seems to have been deeply disappointed with the international community’s repeated and firm refusal to fund any plans for the reconstruction of Syria, as long as no political transition has taken place in the country in accordance with Security Council resolutions, and Russia, despite all progress on the ground, has not been able to impose a fait accompli that is pushing the world to accept the survival The system with morphological changes.

And increased Russian disappointment, indicators of a complete economic collapse in Syria, where the value of the lira fell to record levels and an unprecedented acceleration, with the arrival of the exchange rate of the US dollar 3200 pounds a few days ago, while it was before 2011 does not exceed 50 pounds.

The US Caesar Act, which will enter into force on the 17th of this month, is a new and powerful blow to Russian hopes for economic recovery in Syria after the state of field progress achieved by the regime with the help of Moscow and Tehran.

US President Donald Trump approved the Caesar Act last December, and the Act was named after a defected Syrian officer who leaked thousands of photos of detainees killed under torture in the prisons of the Syrian regime, which shocked the world, yet no practical steps were taken against the Syrian government.

The Act imposes economic sanctions on every person or company that is proven to deal or deal with the regime in the fields of oil, construction, and military fields.

This means that Russian companies operating in Syria will gain their luck from these sanctions, which will increase economic pressure on Russia, which is mainly facing European and American sanctions because of its support for separatists in Ukraine.

After the Spring of Peace process launched by the Turkish army last October and the US withdrawal from large areas in the east of the Euphrates, Russian forces entered the region and deployed more than two thousand of its soldiers there, to fill the void left by the United States.

Since its forces entered the east of the Euphrates, Russia has tried to access the rich oil fields in it, but the American forces, which have withdrawn to the periphery of the oil fields, have prevented it from doing this repeatedly.

When Russia was unable to gain military access to these oil fields, it began to pressure the Kurdish organizations, such as PKK that controls the region to give it a share of oil, but the United States, the organization’s largest supporter, prevented it from doing so.

Unlike Russia, Iran was able to achieve significant economic gains in Syria, due to the fact that Iranian investments exist and are strong even before the outbreak of the Syrian crisis, in addition to the fact that the nature of Iranian investments is short and medium-term, and depends on manufacturing and production.

Since the Iranian direct military intervention in Syria in 2013, Tehran’s investments have increased significantly, and include the fields of electronics, petrochemicals, tractors, transportation, building materials and pledges to construct housing units.

Among the Iranian companies operating in Syria are the “Nikan Engeering Development” company in the field of pledges and construction, the Iranian Company for Tractors and Factory Supplies (İTMC), the electronic Afzar Azma company specialized in building materials, and the Hooman Polymer Petrochemical Company, among others.

These companies have obtained concessions from the regime during the past years, and they generate significant profits on the Iranian side, enabling them to a large extent to cover their military expenditures in Syria or part of it.

The large expenses incurred by Russia in Syria, led to the loud voices of opponents in the country, who questioned the benefit of continuing to support the regime militarily and the resulting costs.

This prompted Russian President Vladimir Putin and his Defense Minister to emphasize more than once, that participation in the war in Syria gave way to the testing of Russian weapons and their effectiveness, in an attempt to justify those expenditures as necessary and required.

Likewise, Russia’s consolidation of its presence in Syria by renting bases there for long periods of time may be a convincing reason in the mind of Putin and his men that it deserves to pump all these expenses for him.

Reaching warm water is an old Russian goal for many years, and this goal does not seem to have Its value has lost its time.

During the past years, Russia has strengthened its presence in the Hmeimim Airport in the coastal province of Latakia on the west, and expanded its area to become the largest Russian base in the region, and signed an agreement with the system to use it whenever it wants without any time frame.

It has also leased the port of Tartus on the Mediterranean for 49 years, while reports indicate that Russia is currently seeking to establish another base in the coastal city of Kassab, north of Latakia, in addition to a number of airports in Homs and Hama that are completely controlled by Russia.