Analysis: Changes to Syria’s Business Elite Concentrates Wealth in Hands of Presidential Couple (Open access)
Recent months have confirmed the increased influence of Bashar Al-Assad and Asma Al-Assad over the country’s economy. Almost every other week, new information emerges indicating that businesspeople known for acting as fronts for the Syrian president and his wife have acquired stakes in a company or business project. With unrivalled economic power in their hands, this represents a major turn in how wealth is shared and distributed among Syria’s rulers.
This tightening control over economic assets also holds potentially long-term risks for the Syrian regime and creates serious challenges for any economic recovery effort.
The demise of Rami Makhlouf in 2020 and the emergence of new business figures, such as Samer Foz or the Katerji brothers, have been apparent indicators of the Syrian conflict’s impact on the composition of the business elite. No less significant, however, has been the control by Syrian president Bashar Al-Assad and his wife, Asma Al-Assad, over an increasing number of business sectors and the very different nature of the new elite, which has little to no networks within the pre-conflict business community and scant influence among the traditional classes of Syria’s leading cities.
When Hafez Al-Assad arrived in power fifty years ago, one of his most significant decisions was to open up his regime to the business community, particularly in Damascus. After years of strongly statist policies, the government’s efforts to moderately liberalise the economy broadened the support base of the new regime. It also helped Hafez Al-Assad gain the business community’s support during a politically tumultuous period between the mid-1970s and the 1982 Hama massacre, and on. Business figures of this period included AbdulRahman Al-Attar, Saeb Nahas, Osman Al-Aidi, and BadrEddine Al-Shallah, who was later succeeded by his son Rateb. The last two chaired the Damascus Chamber of Commerce for decades.
Twenty years later, in the early 1990s, with the collapse of the Soviet Union, the Gulf war, and the need to begin liberalising the Syrian economy, Hafez Al-Assad was compelled to enlarge again his domestic support base. He expanded the size of Parliament to accommodate the entry of new relatively independent figures, including businessmen such as Riyad Seif, and introduced new legislation to attract private investment.
Displacing the traditional business elite
However, Bashar’s arrival to power in 2000 marked a meaningful change. The young president represented a whole generation of men, often sons of the previous elite of army officers and Baath party officials, who were interested in doing business, not entering the army or politics. These young men grew up in cities and were sons of the neo-liberal age and the Internet. Rami Makhlouf was the typical symbol of that generation. While his father, Mohammad, had accumulated massive wealth from bribes and shady deals from his position as a senior civil servant, Rami did business in telecommunications and other sectors.
By entering the business world, the children of government and army officials of Bashar’s generation broke the implicit pledge that Hafez made to the Damascene business community, namely that these officials would remain on the sidelines of business and not compete with it. Besides Rami Makhlouf, other symbols of that period included Majd Suleiman, son of security officer Bahjat Suleiman, who led one of Syria’s largest media groups throughout the 2000s; Samer Duba, son of the much-feared former head of the Syrian military intelligence Ali Duba; Firas Tlas, son of former defence minister Mustafa Tlas; and the children of former Vice President AbdulHalim Khaddam.
At the end of 2006, when Rami Makhlouf and dozens of other investors established Cham Holding, Syria’s largest company by its capital size, many of the older businesspeople refused to join, including Saeb Nahas, Osman Al-Aidi, and Rateb Al-Shallah.
By allowing a new generation to access significant economic assets, Bashar lost the unwavering support of the Damascene business community and reduced the size of his support base. The consequences of discarding the interests of many businesspeople were evident when the uprising erupted in 2011. In fact, at the time, members of the business elite refused to openly back the regime, a far different reaction than that of the business community under Hafez, which supported the regime against the Muslim Brotherhood’s insurgency in the 1980s.
The entry of war profiteers
During the conflict, new actors, best characterised as war profiteers, emerged within Syria’s business community, displacing others who had, until then, enjoyed some degree of influence.
Businesspeople whose activities relied on tourism, representing western brands, or partnering with Gulf investors in the real estate sector lost their businesses and connections due to Syria’s increasing isolation. Manufacturers saw their plants destroyed and their markets shrink, while many businesspeople faced sanctions.
Meanwhile, business actors who operated checkpoints or traded oil products between the Islamic State (ISIS) and the regime amassed wealth and represented the country’s new elite. The most influential of the new business figures include Samer Foz, the Katerji brothers, Wassim Qattan, Khodr Ali Taher, Khaled Zubaidi, and many others. Meanwhile, the generation that accompanied Bashar’s rise to power is now largely on the sidelines: Rami Makhlouf lost his businesses; Firas Tlas supports the opposition; and Majd Suleiman is seeking opportunities in the Gulf.
This new elite is distinct from its predecessor, mainly because its members are largely isolated from the country’s established social and economic networks.
The business elite of the Hafez era came from well-known families, while Bashar’s generation was made of the sons of officers and senior civil servants who, although not from urban extraction, had been in power for decades and gradually assimilated into Damascene society.
Meanwhile, the war profiteers are mostly from smaller towns or the suburbs of larger cities, have relatively poor backgrounds, and do not appear to have been integrated into the country’s leading urban centres and economic powerhouses, namely Damascus, Aleppo, and Homs.
They are isolated individuals who made their money out of shady business deals and are now mostly under western sanctions. This has made it more difficult for them to function as a collective group and has made them dependent to a large extent on their ties to the presidential couple. It also makes them much weaker in their relation to the security apparatus, which represents the regime’s core. Therefore, it is unsurprising that the press regularly reports on the rise, fall, arrest, or disappearance of these individuals.
Bashar Al-Assad and his wife have seized that opportunity to become the country’s main economic players and have expanded their reach to a variety of sectors, including telecommunications, banking, real estate, and ports.
Mr and Mrs Assad conduct most of their business deals through Yassar Hussein Ibrahim, arguably the most prominent figure in the business scene in Damascus today. Mr Ibrahim was almost unheard of until two years ago. Yet, he has become the go-to person for any significant deal. He has been investing in countless companies and intervening in managing many others under his name or the names of his many partners. Mr Ibrahim holds the official position of economic advisor to the Syrian president, making the leading figure in Syria’s business community today an employee of Bashar Al-Assad.
The isolation of business figures and the high concentration of wealth in the hands of the presidential couple and their affiliates, such as Mr Ibrahim, has a variety of consequences, including making it much easier for the regime to clamp down on the businesspersons, as testified by the regular bouts of pressure for businessmen to pay taxes or share part of their profits. That was exemplified by the weeks-long arrest last year of Samer Afadar, the Western Union agent in Syria.
The changes in the business scene are also making the business environment increasingly unattractive. The regime has weakened its economic leverage on stakeholders by sidelining established business figures and promoting individuals who yield so little independent influence. Because so few of these new figures possess networking assets, it has become far more difficult to deliver commitments in the economic field, representing a major hurdle to attracting investment and kick-starting some form of economic recovery.
Of course, in practice the picture is slightly more complex. Besides Bashar Al-Assad and his wife, the president’s brother Maher is immensely powerful on his own and has become affluent from several activities, including the smuggling of captagon and oil products and looting building materials. Meanwhile, some new figures, such as the Katerjis, are more autonomous than others because their oil trade business grants them leverage over other local and international actors.
In his two decades in power, Bashar seems to have largely undone what his father had been patiently building. Rather than enlarging his support base, he has tightened it by first pushing out the traditional elite and then pushing out the generation that helped him accede to power.
Given his foreign backing, Bashar Al-Assad is unlikely to face threats to his power in the near future. The change in the composition and nature of the business elite is therefore unlikely to have any sort of political consequences for him. However, if a new wave of instability emerges, the regime will likely struggle to find the support it needs among the business community, a crucial constituency, amid a tightened support base.
