World News

Iran's Revolutionary Guards reaps economic rewards in Syria

DUBAI/BEIRUT (Reuters) - Iran’s government and entities close to the elite Revolutionary Guards have signed major economic contracts with Syria, reaping what appear to be lucrative rewards for helping President Bashar al-Assad regain control of parts of his country from rebels.

Iran's President Hassan Rouhani shakes hands with Syrian Prime Minister Emad Khamis in Tehran, Iran January 18, 2017. Picture taken January 18, 2017. via REUTERS

An opposition group condemned the telecommunications and mining deals signed with Iran, Damascus’s main regional ally, as “looting” of the Syrian people and the country’s wealth by the “Iranian extremist militias”.

Syria’s economy is shrinking fast as industrial and agricultural output falls after six years of civil war, and almost two-thirds of the population lives in extreme poverty.

Five memorandums of understanding were signed during a visit by Syrian Prime Minister Emad Khamis to Tehran on Tuesday, including a license for Iran to become a mobile phone service operator in Syria, and phosphate mining contracts.

Syrian state news agency SANA quoted Khamis as saying the deals reflect the special relationship between the two nations.

“We greatly appreciate Iran’s major role in combating terrorism and standing by the Syrian people in every way, politically and economically,” he said.

Syria will give Iran 5,000 hectares of land for farming, and 1,000 hectares for setting up oil and gas terminals, according to Iran’s state news agency IRNA. A deal was also signed on providing lands for animal husbandry.

Analysts said the Islamic Revolutionary Guards Corps (IRGC), a military force that runs a powerful industrial empire in Iran, would benefit from the deals, especially on the mobile network contract. IRGC largely controls telecommunications in Iran.

“Telecoms are a very sensitive industry. It will allow Iran to closely monitor Syrian communications,” said Karim Sadjadpour, senior associate of the Carnegie Endowment for International Peace’s Middle East program.

More than 1,000 soldiers deployed by the IRGC to Syria have been killed on front lines of the conflict in recent years.

Apart from military assistance, Syria is increasingly indebted to Iran financially: Tehran opened a $3.5 billion credit line in 2013, and extended it by $1 billion in 2015, which economists say has helped keep the Syrian economy afloat.

SANA quoted Iran’s vice president Eshaq Jahangiri as saying Tehran was ready to “implement a new credit line between Syrian Trade Bank and Export Development Bank of Iran” to help trade.

Tehran and Damascus also signed a memorandum of understanding to cooperate in a phosphate mine in Syria’s al-Sharqiya, according to IRNA.

Syria is among the world’s largest exporters of the rock phosphate, a raw material used in the production of phosphatic fertilizers, although the war has marred its ability to mine and market its supply.

In 2015, Islamic State militants seized al-Sharqiya mine, one of the largest in the country, located 50 kilometers (30 miles) southwest of the ancient Syrian city of Palmyra, the Syrian Observatory for Human rights monitoring group reported.

Syrian government forces backed by Iran’s IRGC drove Islamic State out of Palmyra in March 2016 but the militants recaptured the city in December.


In a meeting on Wednesday with Ali Akbar Velayati, the top adviser to Iran’s Supreme Leader, Syrian premier Khamis called for investment in reconstruction projects in Syria, as “the infrastructure has been destroyed by war”.

Tehran has already shown interest in helping Syria rebuild its roads, airports, power stations and ports - potentially benefiting the Revolutionary Guards, which own the biggest construction firms in Iran.

But not all Syrians have welcomed what Tehran and Damascus hailed as “a new page” for economic ties.

One political opposition group called the deals “illegal and unacceptable” under any circumstances.

“These agreements represent further a blatant violation of Syria’s sovereignty as they are meant to reward an occupation force in return for its involvement in shedding the Syrian people’s blood and attempting to break their will,” the Syrian National Coalition said in a statement on its website.

SANA reported that Tehran and Damascus aimed to sign a deal within two weeks to pave the way for investments by Iranian companies in a Syrian port, although it did not say which one.

“Iran increasingly treats Syria as one of its own provinces,” Sadjadpour said. “They saved Assad from falling, and now seem to feel entitled to help themselves to the Syrian economy.”

The Iranian energy minister was also quoted as saying by SANA that Tehran was ready to sign a long-term agreement with Damascus in energy sector.

Iranian firms are already involved in a series of electricity generation projects worth $660 million in Syria, according to state media in the Islamic Republic.

Iran aims to export electricity to Syria and create the biggest power network in the Islamic world by hooking up Iran’s national grid with those of Iraq and Lebanon.

Reporting by Bozorgmehr Sharafedin in Dubai and Ellen Francis in Beirut; Editing by Catherine Evans