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Saturday, 15 May 2021

Syria’s family fortunes

Cracks have emerged in the Syrian ruling family in an unprecedented public quarrel about financial power and influence, writes Bassel Oudat in Damascus

Bassel Oudat , Tuesday 19 May 2020
Syria’s family fortunes
Makhlouf speaking out his grievances on social media (photo: AFP)

Out of nowhere, Rami Makhlouf, a maternal cousin of Syrian President Bashar Al-Assad and a prominent businessman who controls large chunks of Syria’s economy, appeared in a video on social media addressing Al-Assad and declaring that the Syrian Finance Ministry was unlawfully demanding 234 billion lira ($180 million) in taxes from him and accusing the Syrian security agencies of targeting his companies.

He played on the strings of Alawite sentiment, the president’s clan, saying that his companies had donated vast amounts of money to help the sect and that the government actions would deprive them of this help.

Rows between Al-Assad and members of his family have been unknown for many years, and Makhlouf has been a key financial and military supporter of Al-Assad, creating and bankrolling many of the armed militias known as shabbiha (thugs) that have violently suppressed the current uprising in Syria and killed civilians not supporting Al-Assad.

Makhlouf’s last media appearance was nine years ago when he gave an interview to the New York Times at the beginning of the uprising in which he warned against the repercussions of the regime’s overthrow, especially on Israel’s security, claiming that Israel’s survival was contingent on that of Al-Assad.

 Nine years later, contentions within the Syrian ruling family have spilled over into the public domain, as the political and economic contexts that nurture their support for each other have changed. Many analysts believe that the cracks in the regime have finally started to show.

Makhlouf is a key investor in Syria, and he has accumulated billions of dollars by taking control of major economic sectors. His companies are models of nepotism and cronyism, with revenues helping to support the regime and its inner circle.

They have strengthened the regime by weaving together political allegiance and economic control, including through telecommunications and construction companies, banks and other interests. Makhlouf has a share in every type of investment in Syria from the largest to the smallest.

He has been the target of protesters against the Al-Assad regime, who have accused him of corruption and the abuse of power. Although he has threatened to aid in the obliteration of the protests, he has not been able to dodge US and European sanctions against him and his companies, even if the war economy in Syria has helped him to expand his activities.

He has begun trading in oil, winning exclusive contracts to supply the regime, and in the nine years of war has created more than eight major companies.

Makhlouf has formed pro-regime armed militias under many names, including the Al-Kumayt Forces, the Special Task Forces, the Homs Commandos Regiment, the Al-Bostan Lions, the Popular Defence Forces and the Jabalawi Brigades.

Most of their members have come from Latakia and Tartus, the birthplace of Al-Assad. He has collaborated with the Syrian Air Force Intelligence and the 4th Armoured Division to arm and strengthen the militias. The Al-Bostan Charity Foundation, owned by Makhlouf, has financially supported the regime’s domestic allies.

Makhlouf’s relationship with Al-Assad changed after the latter’s mother, Anisa, died and her brother Mohamed, Maklouf’s father, became ill and left for Belarus. The Makhlouf family thus lost its two top advocates inside the presidential palace, and its troubles grew worse as Al-Assad’s wife Asma gained influence and tried to redistribute the family’s wealth. Makhlouf referenced such moves in his second video on social media, accusing those surrounding the president of inciting him against him.

Makhlouf has another rival in the ruling family in the shape of Maher Al-Assad, Al-Assad’s brother and commander of the 4th Armoured Division, who has been vying with his cousin for business activities he wants to control.

 It seems clear that the president has decided to back his wife and brother in weakening Makhlouf’s grip, dismantling his financial centres of power and concentrating the sources of political, financial and security power in the presidential palace.

Since the summer of 2019, Makhlouf has been under intense pressure as a result, and many Syrians believe the dissensions in the family are due to shortages of resources and the international sanctions on Syria, along with the near-collapse of the Syrian economy, the flight of capital, the collapse of the value of the lira and the growing economic pains of the regime. Some sources estimate accumulated losses between 2011 and 2019 at $428 billion.

After having been the primary financier of the Syrian regime for decades, today Makhlouf’s empire is in upheaval. The bonds between Al-Assad and his cousin have been broken, and the family’s political and financial interests are at loggerheads. Many believe that Makhlouf has gone public because of the pressure building up to marginalise him.

Meanwhile, Asma Al-Assad has emerged stronger from the dissension some years after her late mother-in-law refused to accord her the title of Syria’s “first lady” before her death in 2016. Al-Assad’s wife is now in a standoff with Makhlouf and wants a slice of his enormous wealth.

The Syrian economy today has been debilitated by war, with the lira dropping to a record low against the dollar of 1,500 lira, meaning that the dollar’s value against the Syrian currency has multiplied 30 fold since the war started.

Even areas under regime control are suffering from major economic upheavals, fuel shortages and astronomical hikes in the price of food. As the Syrian people toil under brutal economic pressure, the ruling family is feuding over wealth, influence and future roles.

The removal of the Makhloufs, the family of the president’s mother, from positions of power has started, and the measures taken against Rami Makhlouf, said to have once controlled 50 per cent of the country’s economy, could escalate in this quarrel among kin.

It seems likely that this quarrel will be resolved quickly with the least possible damage, because the collapse of one part of the family could threaten the collapse of the rest. A swift resolution will need to be at hand to ensure the survival of the ruling family.


*A version of this article appears in print in the 21 May, 2020 edition of Al-Ahram Weekly

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