3. The Rise of the Transactional State
As the state’s military and security capacity has diminished, Syria has been transformed from a shadow state into a ‘transactional state’ – that is, one essentially underpinned by transactional relationships. Such modes of interaction are not in themselves new to Syria. Even before the uprising, the regime’s network of elites had operated on a transactional basis. However, this always occurred without changing or impinging upon the basic parameters of state control. Now, the network has grown to include profiteers who were not part of the original power system. These opportunistic new actors perform some of the functions of the state, but from outside state institutions. Their power has grown to the extent that the government can no longer control them.
The system of circles of power created by Hafez Al-Assad and modified by Bashar al-Assad is being rearranged. The smaller ‘circles’ are becoming larger and more influential, outgrowing their pre-assigned role in the system. In the past, profiteers would primarily defend the interests of state and regime as this guaranteed their own interests. Today, the new profiteers are mainly pursuing their own interests and acting independently of the interests of the state and regime.
The rise of profiteers has been facilitated by several factors. First, the need to circumvent sanctions on businessmen close to the regime has obliged it to recruit new faces to act on its behalf. These players are becoming increasingly active in business, and have been involved in transactions cumulatively worth billions of dollars. Recognizing the regime’s need for them, they have grown in ambition and are more influential than regular regime cronies.
The second factor is that many areas have fallen outside the regime’s direct control. This has required the regime to find new partners on the ground who can operate on its behalf and facilitate business and services in areas beyond the reach of government.53 Again, these local partners are taking advantage of the regime’s dependence on them.
A third, related factor is the state’s loss of institutional capacity as a result of the war. Many institutions – such as those handling customs, water supply, agriculture, and the production and distribution of oil – have ceased to be fully functional. This has forced the regime to rely on the capacity of non-state actors. As towns and cities have slipped out of central government control, the regime has relied on local groups and individuals in various parts of the country to manage state affairs. In certain cases, as in the selling and buying of oil and the transport of goods, this has involved negotiating with ISIS commanders and Islamist groups such Jabhat al-Nusra, as these actors controlled supply routes.54
New warlords have risen to prominence as the country’s economic and security dynamics have changed. Moheddine al-Manfoush took control of the smuggling of goods in and out of Eastern Ghouta. George Hasswani emerged as the regime’s main negotiator with Jabhat al-Nusra, working on everything from oil transactions to an agreement to secure the release of captured nuns in Deir Attieh. Samer al-Foz is the new front for Rami Makhlouf (the latter is targeted by sanctions), and has been involved in a variety of lucrative deals, from reconstruction projects to the purchase of large plots of land and hotels (including a major share in the Four Seasons hotel in Damascus, bought from Saudi Prince Al-Walid Bin Talal).55
A variety of other names have surfaced in recent years, acting on behalf of the government and running businesses around the country. Some control the oil sector, some aviation, and others – depending on their location, influence over the local community, and links with armed opposition groups – iron and reconstruction. Some figures, such as Ayman Jaber, a business mogul connected to the Assad family in Latakia, have formed their own militias to support the regime. Jaber’s fighters helped in the battle for Palmyra.
Reliance on profiteers has created a vicious circle for the Syrian state. The profiteers have come to recognize the regime’s growing dependence on them, and consequently expect ever greater support from the state in exchange for their services. This is further eroding state capacity and altering institutional functionality. In short, the transactionalism that used to be just one tool (of many) used by the shadow state has now become the defining characteristic of the Syrian state.
The rise of army, security and militia profiteers
Beyond the rise of warlords and economic actors, state power in Syria is challenged by the rise of profiteers from within state institutions and affiliated militias. Far from being driven by state interest, those in the army, the security apparatus or militias often use their positions for economic gain. The regime has given leaders of armed groups such as the NDF shares in businesses, in an effort to retain their military support. Certain petrol stations in Damascus that used to be publicly owned have been privatized and awarded to the same individual.
Most of the NDF warlords come from impoverished minority sects and earned relatively low incomes before the conflict. However, the war has made them rich. Many have gone from earning £S10,000 a month (equivalent to US$200 before the war) to earning nearly £S2 million a month (nearly US$4,000 at today’s rates). They appear to have no qualms about displaying their newfound affluence, and in Damascus can be seen driving fancy cars and sitting in expensive cafes. Their success in effect has created a new socio-economic class in Syria.56 If the experience of Lebanon is any indication, it will be difficult for the Syrian state to rein in this new class once the conflict is over.
As the regime continues to devise new mechanisms to channel state funding to these groups, the functions of some state institutions have changed accordingly. For example, the Syrian Ministry of Foreign Affairs has set up a bureau to regulate the registration and funding of NGOs. As a number of pro-regime militias (including the NDF) are funded by figures such as Rami Makhlouf through his NGO al-Bustan, the bureau has become a route for the funding of al-Bustan and others – all ostensibly on the basis of supporting civil society. Some militia leaders have even set up their own NGOs for the specific purpose of obtaining state funding.
Before the uprising, when the state was comparably more solid (under both Hafez al-Assad and Bashar al-Assad), the security branches competed to show loyalty to the regime. This allowed the regime to ensure stability through a divide-and-rule approach. Today, competition is over power, benefits and financial gain. The conflict has enabled each branch or sub-branch of the security agencies to expand its power, and has encouraged each to carve out a share of the war economy for itself. As a result, the security branches are increasingly acting in their own interests rather than those of the state.57
One example is the setting up of checkpoints. Just as some rebel groups have done, pro-regime militias, the army and branches of the security agencies have all set up checkpoints for the sole purpose of extorting money. Some have gone as far as to rent out checkpoints to private individuals or groups, thereby guaranteeing a regular income without having to man the checkpoints themselves.58 The regime tolerates this activity not only because it does not have the financial means to pay all of its affiliates, but also because allowing such groups to profiteer from the war is a way of keeping them on its side.
Bribery is rampant in respect of people-smuggling, with army officers often paid thousands of dollars to facilitate the transport of individuals to Turkey or Lebanon to escape military service or avoid arrest by the regime.
Outside Eastern Ghouta near Damascus, pro-regime checkpoints are charging £S50 per kilogramme for building materials that residents want to bring into the district to renovate properties (only minor renovations are permitted). Checkpoints in the area not only impose taxes on the transport of commercial goods but also on the passage of people travelling to Eastern Ghouta or Yarmouk. In one reported case, a woman paid a total of £S20,000 at a series of checkpoints, each charging £S2,000–3,000, to be able to reach her house in Eastern Ghouta. The checkpoints also sometimes charge a fee (reportedly up to £S200,000 per truck) to ensure the safe passage of trucks carrying goods in regime-held or regime-acquired areas, with local forces accompanying each truck to its destination. This has pushed tradespeople to add the cost of ‘accompaniment’ to the selling price of goods.59
Army officers are also accepting bribes in exchange for helping people to avoid reserve conscription. Officers are making up to US$300 a month for each person who would normally be conscripted from the districts that they oversee – the fee ensures the person’s name is deleted from the conscripts’ register or that their absence from service is ignored. Bribery is also rampant in respect of people-smuggling, with army officers often paid thousands of dollars to facilitate the transport of individuals to Turkey or Lebanon to escape military service or avoid arrest by the regime. In such cases, individuals are typically provided with ‘security identity cards’ showing military affiliation under a different name, and their exit from Syria is arranged using military vehicles to avoid being stopped at regime checkpoints.60
Unregistered and fake security identity cards have offered a way for people to avoid military service ever since the Syrian state announced that NDF membership was permitted in lieu of being in the army. Some people have registered as NDF members without being active in its combat units, while others have simply purchased fake security identity cards on the black market, paying anything from £S500,000 to £S2 million for them. The rise of this phenomenon has since led the Syrian government to announce that only the Bureau of National Security can issue these cards.61
Detention has provided a lucrative business for many regime-affiliated entities. A number of groups have become brokers for detainees, with each outfit having its own method and price for performing certain services. The brokering services are headed by army officers, members of the security branches, lawyers and, in some cases, simply individuals who claim to have links to persons with authority and influence. The services include supplying information (not necessarily always of a reliable nature) to family members about the whereabouts and fate of detainees; delivering objects to detainees inside the security facilities in which they are held; and accelerating investigation processes to speed up the release of detainees. Without the latter service, detainees can often expect to be held for months.62
The sums paid to such brokers can range from hundreds to many thousands of dollars: reportedly up to US$20,000 to retrieve someone from detention, arrange for their case to be transferred to a court (usually a terrorism court), and finally secure their acquittal. The sums depend on the severity of the charges against the detainee, and the locality that he or she comes from. Fees for women are lower than those for men, and the price paid for someone from an opposition-controlled area will differ from that paid if the detainee is from an area under regime control. In many cases, charges against detainees are exaggerated so that more money can be extorted from their families. This grim trade extends to the terrorism court, to which a large number of detainee cases are transferred, and where large sums are paid to lawyers and judges in order to expedite trials and secure defendants’ release.63
Detention rackets are also associated with rampant theft. Detainees often have their personal belongings confiscated or stolen by officers at detention facilities. Some criminal gangs or thieves have connections with corrupt military officers, judges or branches of the security agencies. If arrested, the thieves simply surrender a share of the stolen goods to the authorities to ensure prompt release.64
Looting has also become systemic. In Eastern Ghouta, NDF members and other militiamen or thugs – accompanied by people in military uniform from the security apparatus – engage in the looting of entire buildings. The practice typically takes two forms: either the building is ransacked and its contents loaded on to trucks to be sold wholesale (one truckload reportedly sold for £S200,000); or the ‘right’ to loot a building is sold to a buyer for an agreed fee that can reach millions of Syrian pounds. (In the latter case, the buyer has typically ‘purchased’ the building’s contents blind.) Completing the process, army checkpoints then accept bribes in return for allowing trucks loaded with looted goods to pass. Where buildings have been destroyed in the fighting, the steel, aluminium and copper scrap from them is often collected and sold to businesses owned by warlords such as Muhammad Hamsho.65
The various entities involved in these activities sometimes compete over resources and sometimes cooperate, depending on their relative military clout, local connections and logistical need. This creates a ‘war economy’ ecosystem in which armed and security entities are incentivized to perpetuate violence, even at the expense of the interests of the state. As a result, the state’s ability to exert authority is further weakened.
53 Abboud, S. (2017), ‘The Economics of War and Peace in Syria: Stratification and Factionalization in the Business Community’, The Century Foundation, 31 January 2017, https://tcf.org/content/report/economics-war-peace-syria/?agreed=1 (accessed 29 Jul. 2018).
54 Borger, J. and Mahmood, M. (2013), ‘EU decision to lift Syrian oil sanctions boosts jihadist groups’, Guardian, 19 May 2013, https://www.theguardian.com/world/2013/may/19/eu-syria-oil-jihadist-al-qaida (accessed 6 Sep. 2018).
55 The Syria Report (2018), ‘Factsheet: Samer Foz, Syria’s Most Powerful Businessman’, 19 April 2018, http://www.syria-report.com/library/economic-data/factsheet-samer-foz-syria%E2%80%99s-most-powerful-businessman (accessed 30 Jul. 2018).
56 Sinjab, L. (2017), ‘How Syria’s War Economy Propels the Conflict’, Chatham House, July 2017, https://syria.chathamhouse.org/research/how-syrias-war-economy-propels-the-conflict (accessed 29 Jul. 2018).
57 Jassem, A. (2016), خبث السلطة: الاعتقالات في سوريا كجزء من منطق سياسي وإقتصادي [The wiliness of the authorities: Detentions in Syria as part of a political and economic logic], Heinrich Böll Stiftung, 12 January 2016, https://lb.boell.org/ar/2016/01/12/khbth-lslt-ltqlt-fy-swry-kjz-mn-mntq-sysy-wqtsdy (accessed 5 Sep. 2018).
58 Interviews with checkpoint personnel, Eastern Ghouta, May 2018.
59 Interviews with Ghouta residents, Eastern Ghouta, May 2018.
60 Interviews with military personnel in Damascus, May 2018.
61 Interviews with residents in Damascus, May 2018.
62 Interviews with residents in Damascus, May 2018.
63 Interviews with residents in Damascus, May 2018.
64 Interviews with residents in Damascus, May 2018.
65 Interviews with residents in Damascus, May 2018.