By Daniel Williams
Feb. 18 (Bloomberg) -- Eight years after the U.S. lumped Syria into the “Axis of Evil,” ushering in a period of political isolation, diplomats from Washington to Istanbul are on the road to Damascus.
The turnabout came without any significant concessions from Syrian President Bashar Al-Assad to Western and Arab critics who accused him of helping Iran spread terrorism, intimidating neighboring Lebanon and orchestrating the 2005 car-bomb assassination of ex-prime minister Rafik Hariri.
Assad waited out his adversaries and watched as the Americans became bogged down in Iraq and Afghanistan. Now, the U.S. has named an ambassador after leaving the post vacant for five years, France included Syria in a new grouping of Mediterranean nations and Turkey signed a visa-free travel accord last month.
“We opposed U.S. domination in the region and now everyone is coming to us, including the United States,” said Baha El-Din Hassan, 67, a member of parliament and of the ruling Syrian Baath Party.
Hassan said Syria hopes to use its regained status to push for talks with Israel to get back the Golan Heights, conquered by the Israelis in the 1967 Middle East War, in exchange for a peace treaty.
Syria’s rise in influence elevates the position of a country that supports both Hamas and Hezbollah, armed groups that oppose Israel’s existence and which the U.S. designates as terrorist organizations. U.S. officials have also implicated Syria in providing logistics support for the transit of anti- American insurgents into Iraq.
‘Unrepentant Regime’
“The administration is aiding an unrepentant regime and is sending a signal that the U.S. will make concessions and seek dialogue regardless of what the facts dictate,” Ileana Ros- Lehtinen of Florida, the top Republican on the House Foreign Affairs Committee, said in a Feb. 12 statement after the U.S. let Chicago-based Boeing Co. sell aircraft parts for the repair of two 747 jets owned by Syrian Arab Airlines.
The U.S. prohibits American exports to Syria unless special approval is granted, because of what officials say is support for global terrorist groups. Syria denies it supports terrorism.
Syria’s political progress hasn’t been matched on the economic front. Gross domestic product grew by about 3.5 percent last year, estimated Nabil Sukkar, managing director of the Syrian Consulting Bureau for Development and Investment, a Damascus research firm.
That is below the 7 percent needed to provide jobs for a growing labor force, according to a January report by the Oxford Business Group, a London consultant.
‘Economic War’
“The mere fact that the U.S. declared and led an economic war against Syria significantly lessened its attractiveness to foreign investors and companies,” said a report last year by the Tel Aviv-based Institute for National Security Studies.
Businessmen in Damascus say they would like to see the increased engagement lead to relaxed tensions on the home front, which in turn may facilitate selling off such state industries as chemicals and cement.
“The new atmosphere could help Syria take some needed risks,” Sukkar said.
Syria opened its first stock exchange only last year; 12 companies are currently listed. Emaar Syria, a subsidiary of Dubai-based Emaar Properties PJSC, the Middle East’s biggest real-estate developer, is building a residential and commercial community on Damascus’s outskirts.
Diplomatic Meetings
The city played host to U.S. Undersecretary of State William Burns yesterday as he met with Assad. The trip followed by a day the ambassadorial nomination of Robert Ford, the current deputy chief of mission at the U.S. embassy in Iraq. The Damascus post had been vacant since 2005.
President Barack Obama is trying to wean Syria from its alliance with Iran, which the U.S. and its allies accuse of trying to develop nuclear weapons, and to persuade Syria to close its border to transit by anti-U.S. Iraqi insurgents.
Lebanese Prime Minister Saad Hariri told a Beirut rally on Feb. 14 that he wanted to open “a new era in Lebanese-Syrian relations,” even though United Nations investigators in 2005 linked Syrian security officials with his father’s killing. After the attack, Syria was snubbed diplomatically by the U.S., Europe and close Arab neighbors.
In May 2002, Undersecretary of State John Bolton branded Syria, Libya and Cuba with the “Axis of Evil” label that then- President George W. Bush applied to Iraq, North Korea and Iran in his State of the Union address in January of the same year.
Iran’s Friend
Even now, Syria shows no sign of giving up its links with Iran. “We are friends,” Hassan said in a telephone interview in Damascus. “We don’t hide it. They stood by us when everyone else was against us.”
Even as Syria strives for talks with Israel to regain the Golan Heights, a war of words has raised tensions. Israeli Foreign Minister Avigdor Lieberman said on Feb. 4 that in case of hostilities with Syria, not only Assad but his family would lose power.
Syrian Foreign Minister Walid al-Moallem responded by calling in all the foreign envoys in Damascus to issue his own warning: Syria would strike back, according to two Western diplomats who attended. The day before, at a Damascus press conference, Moallem advised Israel: “Do not test the power of Syria since you know the war will move into your cities.”
--Editors: Anne Swardson, Peter Hirschberg
To contact the reporter on this story: Daniel Williams in Damascus at +2-010-330-2417 or dwilliams41@bloomberg.net.
To contact the editors responsible for this story: Peter Hirschberg at +972-2-640-1104 or phirschberg@bloomberg.net.