Strange similarities in the declining fortunes of Syria's Bashar Al Assad and Iraq's Saddam Hussein

Ten years ago, residents of Damascus woke up to a sight most Syrians had never seen.

People were lining up at polling centres in the city to vote in free elections.

It was March 2010, a year before the initially peaceful revolt against five decades of Assad family rule.

But the voters were not Syrian: the United Nations had set up the polling centres for 190,000 eligible voters among Iraqi refugees in the country.

After almost a decade of revolution and civil war, Bashar Al Assad remains president. But a renewed currency collapse in the last few weeks is contributing to economic devastation in regime areas comparable to Iraq during the 1991 to 2003 United Nations embargo.

The deterioration is affecting core supporters of the Alawite-dominated regime, and undermining the triumphant posture of the Iranian and Russian backers of the Syrian president.

Promised rewards  

The democratic election the Iraqi refugees were taking part in was possible only because of the US-led invasion that toppled Saddam Hussein.

Even the Syrian opposition is not expecting the economy to bring down Mr Al Assad, and no American decision-maker is contemplating military action to decapitate or remove the regime.

But a new US sanctions law, the Caesar Civilian Protection Act, is limiting financial channels that had helped shield the regime, Alawite loyalists in particular, from sharp declines in the economy.

Mr Assad has been hinting at rewards to his co-religionists for helping deliver what he terms victory-in-the-making against "terrorism", since the Russian intervention in late 2015.

But the new sanctions imposed last week lessened the prospects of western involvement in the  international reconstruction effort that Moscow has been advocating to support what it describes as Syria’s sovereign government.

Demise of business hubs

In the last three years of Saddam’s rule, Syria was a major source of hard currency for Iraq.

The regime in Damascus helped Saddam government break the embargo after Bashar Al Assad inherited power from his father Hafez in 2000, despite mutual hostility dating to the split of the Baath Party into a Syrian wing and an Iraqi wing in the 1960s.

Lebanon acted as a business front for the Assads and their networks for decades, but a financial meltdown in Beirut has curbed dollar flows to Syrian regime areas and lowered the value of the Syrian pound.

The Syrian currency's fall has been staggering, with the average 20,000-pound salary now equivalent to seven US dollars. The exchange rate is about 2,700 Syrian pounds to the dollar, compared with 650 before the crisis hit Lebanon in October-November last year, and 50 pounds at the outbreak of the Syrian revolt in March 2011.

Money presses let loose

Part of the collapse is the result of the Syrian regime printing pounds to pay government salaries and war expenses, regional bankers say.

The Iraqi currency collapsed from 10 dinars to the dollar before the UN embargo in 1991 to 3,500 dinars to the dollar on the eve of the US-led invasion in March 2003.

The embargo dealt an all but fatal blow to the economy, and Saddam’s government printed dinars. The dinar recovered to 1,400 in the months after his fall in April 2003, and is trading at similar levels today.

Iraqi central bank figures, shown only to Saddam, revealed that the economy contracted by 56 per cent in 1991 before reversing some of the decline in 2001 as illicit trade with Syria went into full swing.

The World Bank classified Syria in 2016 as one of the world’s poorest countries, due to the “steep decline” in per capita income.

The bank said the classification "emphasises the sheer scale of the damage the conflict has done to Syria’s economy”.

A Syrian businessman supportive of the president said the war economy has been compensating many Alawites in the military and security apparatus for the decline in the value of their salaries due to the pound’s collapse.

But he said some in the Alawite Mountains and in coastal regions have been resorting to subsistence agriculture.

“More small plots of land are being harvested by those without a windfall from the war because they cannot afford their needs of food,” he said.

The businessman said murmurings in the Alawite community, indirectly against Mr Al Assad, had started in public and on social media.

He pointed to an administrator of a loyalist online network called the Latakia News Group. She recanted this month after complaining about the economic deterioration in her home city of Jableh on the coast.

Demonstrations demanding the removal of the president were held in the mostly Druze province of Suweida before security forces attacked and arrested seven civilians.

The regime had considered the Druze a natural ally, having marketed itself as protector of the country’s minorities.

Loyalist fragmentation

Veteran Syrian opposition figure Fawaz Tello expects the economic decline to compromise alliances between the regime and other minority communities, and spark more turf warfare between Alawite militias who expanded during the conflict.

Mr Tello told The National that regardless of economic conditions, he expects no significant movement among Alawites to bring down the president because the whole regime could come crashing down.

“Their main problem is that the war subsided and many are living off old loot,” he said.

The regime’s economic model since Hafez Al Assad took power in a coup 50 years ago “has been built on the extortion of the Sunnis whom it emptied the country of”, Mr Tello said, pointing out that most of Syria’s 12 million refugees and displaced people are Sunnis.

“The minority communities will come under pressure to cough up cash” to the Alawites in charge, he said.

Militias and business 

The coastal region is home to the Alawite "shabbiha", the nucleus of the regime’s paramilitary forces. Their smuggling and other illicit activities with Lebanon expanded after 2011, together with their role as enforcers for the regime.

The shabbiha moniker comes from the Arabic word for ghosts, as the black Mercedes S-Class saloons the militias drive are called.

A new class of Sunni frontmen and henchmen linked to Saddam’s son Uday emerged in Iraq after 1991. Their preferred transport was white Toyota Land Cruisers.

The Takarteh, as they were known, after Saddam’s home city, ran smuggling rings and struck deals under the UN oil-for-food programme, which was later exposed as having been significantly corrupt.

Uday’s network was replaced after 2003 with a more fragmented Shiite equivalent, known as "hawasem", meaning discounters.

Rise and fall of the moneymen

As the feeling grew among some Alawites that they were being sacrificed as foot soldiers for the survival of the Assads, the regime gave handouts to families who lost members in the fighting.

The funds were linked to a business network run by the president’s cousin, the oligarch Rami Makhlouf.

A rift between the two men broke out in the open, exposing parts of the huge fortune accumulated over decades by the inner circle.

Mr Makhlouf, who is widely seen as the regime’s moneyman, made a series of video statements in May lambasting the regime for what he saw as a betrayal. He has gone offline since.

Businessmen who know Mr Makhlouf’s intricate, and sole, knowledge about where the money is say this has contributed to sparing him physical harm

Saddam was not that patient with his relatives.

He had his two sons-in-law killed in February 1996, although one of them was entrusted with money Saddam did not recover.

Hussein Kamel and his brother, known as Saddam Majid, had defected to Jordan, taking with them Saddam’s two daughters, who were their wives.

Kamel was in charge of rebuilding the regime’s military-industrial complex, and had significant cash at his disposal. On behalf of all four, he decided to accept Saddam’s offer of a “safe return”.

Madeleine Albright, later US secretary of state, described his decision as one of the most idiotic she had seen.

Uday and his brother Qussay led a force that used anti-tank weapons to pulverise Kamel and Majid in a villa in Baghdad, two days after their return to Iraq, the same way Saddam’s two sons died nine years later in a US raid on a high-walled villa in Mosul where they were hiding.

Pragmatic Kurds

A main income for Saddam at the time was from fuel smuggled to Turkey via US-aligned Kurdish Peshmerga leaders in northern Iraq, his sworn enemy, in contravention of UN sanctions.

A reverse role is played by the Kurdish militia supported by the United States in northern Syria, who are selling crude oil to the Assad regime for use in its refineries.

A Kurdish faction led by Massoud Barzani even invited Saddam’s forces into northern Iraq to check the expansion of his rival, Jalal Talabani, who later became Iraq’s president.

Under US and British air protection, the de facto ruling elite in Iraqi Kurdistan enriched themselves and played a major role in the survival of Saddam, despite his campaign of destruction against northern Iraq the 1980s.

Saddam’s scorched earth offensive, called Al Anfal, after a chapter in the Quran, culminated in the chemical weapons attack on Halabja in 1988, which killed at least 3,000 civilians.

In northern Syria, the US presence is putting a lid on differences between the Turkish Kurdistan Workers Party (PKK) and its local offshoot, the People’s Protection Units, said a Kurdish source who works with the two groups to improve the administration of the region.

“The YPG has narrower goals than the PKK, and is more willing to strike deals with Assad, or with Turkey,” he said.

Costs of risk-aversion

A view of dictatorship as a lesser evil contributed to George H W Bush’ decision to hold back from marching unimpeded on Baghdad in 1991. US scholar Christine Helms cautioned the president that such a move would open what she termed a Pandora’s box.

The same rationale was partly behind President Barack Obama’s last-minute decision not to unleash military retribution against the Syrian regime after the gassing of 1,400 civilians in rebel suburbs of Damascus in 2013.

French fighter pilots were in their cockpits before Mr Obama pulled the plug and went for a Russian-brokered deal with the regime to hand over its chemical weapons.

The planned American-Franco attack would have been limited but it had the possible, unintended consequence of bringing down the regime, a European official briefed on the aborted offensive told The National.

As the Arab uprisings spread in January 2011, Mr Al Assad indicated that he had pre-empted a contagion effect by having started what he described as a “dialogue” with the people, citing a partial lifting of media bans and a draft law to allow for municipal elections.

He suggested in an interview with the Wall Street Journal that substantive political reforms would have to wait for another generation.

Among the reasons he gave for shelving democratic reform was “chaos and extremism” caused by the US invasion of Iraq, and a priority to improve the Syrian economy.

He has delivered neither, and like Saddam had the US not invaded, his regime looks set for long-term survival, but it is growing more brittle.