Rebuilding Syria would revive its nexus status

A stable environment in Syria, Lebanon and Iraq would encourage an influx of foreign capital

December 16, 2024, 1:35 PM

People walk with flags before the first Friday prayers at the Umayyad Mosque in Damascus after the downfall of Assad — People march with flags before the first Friday prayers at the Umayyad Mosque in Damascus since the downfall of Assad

There is no doubt that the change of regime in Syria will transform the region’s politics.

It will deliver a blow to Russia’s and Iran’s ambitions, providing hope to a war-ravaged society.

If peace can be achieved – and this may be the best opportunity for generations – there could be a huge economic dividend for supply chains and transport networks across the whole of the Middle East.

Historically, Syria occupies a highly strategic geographical location, a nexus for east-west goods flows from Iran, Iraq and even Pakistan to the Eastern Mediterranean, as well as south-north, from the Gulf states to Turkey and Europe.

Rebuilding infrastructure links would provide fast and effective ways of moving goods to and from some of the world’s most dynamic economies, namely the GCC countries and Turkey.

A stable political and security environment in Syria, Lebanon and Iraq would encourage an influx of foreign capital to rebuild transport infrastructure destroyed or underinvested after many years of conflict and of isolation from the west.

In terms of rail, a whole range of previous project plans could be dusted off, including new international links between Damascus and Lebanon and from Jordan to Aleppo to Turkey and beyond.

Work is already under way on developing a rail corridor from Basra’s Al-Faw port on the Gulf to Turkey, involving the construction of 15 train stations en route. When Assad-era sanctions are finally lifted, Syria could also become an important transit country for the transport of oil from Iran and Iraq to the Mediterranean Sea.

Investment will also be urgently needed to rebuild roads, develop air passenger and cargo services at Aleppo and Damascus airports and renew Syria’s ports at Latakia and Tartus on the Mediterranean Sea.

There are grounds for optimism in Syria but there is no guarantee that a stable country will emerge

A normalisation of international relations would also bring benefits to the shipping industry. The US and the UAE were already in talks with the previous Assad regime over lifting sanctions, and negotiations could now be fast-tracked if a new and acceptable government is in place.

Existing measures include penalties on ships involved in the delivery of oil to Syrian ports, as well as on their insurers. Removing sanctions will open up a lucrative market for shipowners and carriers.

The return of stability and certainty in Syria is of more than just marginal interest to the Gulf states. Rather, regional integration is at the heart of the GCC’s strategic development plans.

Only in August did transport ministers from Turkey, Iraq, Qatar and the UAE meet to discuss a $20 billion road development project to facilitate the movement of goods from Europe to the Gulf via Basra in Iraq.

Road links to Turkey can be up to two weeks quicker than shipping through the Suez Canal, and they are cheaper. The rehabilitation of Syria would provide a major boost for these plans.

There was a time when there would have been concerns that Syria’s instability would have economic and political implications for GCC countries, especially given Iran’s involvement in the conflict.

At the time of the so-called Arab Spring in 2011, there were fears that uncertainty could threaten volumes at GCC container ports and airlines, hubs that many thought were vulnerable to risk-averse shippers.

However their resilience throughout the past year seems to have reassured shippers and investors that the GCC is largely immune to the various crises playing out in neighbouring countries.

Although there are grounds for optimism in Syria, there is no guarantee that a stable country will emerge, at least in the short term.

The unexpected and precipitous fall of the Assad regime in Syria has created a vacuum which the many competing political and military groups in the country will seek to exploit.

While Hayʼat Tahrir al-Sham (HTS), a rebel group with erstwhile connections to the terrorist organisation Al Qaeda, is currently in power in Damascus, multiple proxy groups control other parts of the country, creating a dangerous and unstable environment.

What is more, the disruption to shipping in the Red Sea by the Iran-backed Houthis has shown that events in one part of the region can have unforeseen consequences elsewhere, because of complex political and religious inter-relations.

A tipping point has been reached in Syria. However, it is still unclear whether it will result in reconstruction and reintegration within the global community or be a catalyst for further chaos and conflict.

John Manners-Bell is CEO of Transport Intelligence Insight and founder of Foundation for Future Supply Chain