Russian President Vladimir Putin recently floated a proposal to Israeli Prime Minister Benjamin Netanyahu, envisioning a reduced Iranian military footprint in Syria – where Russia, Israel and the US all have interests – in return for the US scaling back its ramped-up sanctions on Tehran. The offer might reflect growing Russian-Iranian competition as the two scramble to reap the monetary benefits of Syria’s key economic sectors and of reconstruction, estimated to cost more than $250 billion. While the Trump administration considers the policy dilemma the proposal presents, Moscow-Tehran tensions over the future of Syria are a worthwhile dynamic for Washington to exploit.
Simmering under the surface alliance between Syrian President Bashar Al Assad’s top backers, Russia and Iran, is a ferocious competition for contracts to rebuild Syria’s devastated infrastructure and to dominate its extractive industries. The benefits go well beyond a financial reward for Russia’s oligarchs and Iran’s Revolutionary Guard cronies: the winner could have significant influence over the levers of the Syrian state and by extension, much of the Middle East, for decades to come.
Iran would like to replicate its domination of neighbouring Iraq’s economic sectors. Its military intervention and proxies averted disaster for Mr Al Assad and, until recently, it enjoyed preferential treatment in Syria’s economy as it attempted to recoup the estimated $6 billion per year it spent propping up the regime. Unsurprisingly, since 2014, the Syrian government has consistently issued tenders for the exclusive bidding of Iranian companies at a rate of one to three per month. The past few years also witnessed sweeping memorandums of understanding granting Iran rights in the lucrative telecommunications, phosphates and agricultural industries.
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