Bloomberg News

Syria Says Sanctions Are ‘Economic War’ as UN Reports Abuses

November 30, 2011

(Updates with Merkel comments in fifth paragraph, Jordan’s King in sixth.)

Nov. 29 (Bloomberg) -- Syrian Foreign Minister Walid al- Muallem called the Arab League’s sanctions against his country a declaration of “economic war” as a United Nations human-rights panel said Syrian forces had committed crimes against humanity.

The unprecedented measures adopted by the bloc Nov. 27, including a freeze on Syrian assets and a travel ban on senior officials in President Bashar al-Assad’s government, will have no impact on day-to-day life, though they may affect some luxury goods, Muallem told reporters yesterday in Damascus. Iraq and Lebanon, two of Syria’s largest trading partners, and Jordan probably won’t implement the sanctions, he said.

“These sanctions are symbolic, and symbolism is important but not decisive,” Chibli Mallat, a Lebanese lawyer and visiting professor at Harvard Law School in Cambridge, Massachusetts, said by telephone. “They will lead to grave economic problems for Syria, but like all sanctions they are by nature overbroad, and cannot be decisive on the security side.”

Assad faces growing economic and political pressure to end a crackdown against protesters that began in mid-March, inspired by movements that toppled leaders in Tunisia, Egypt and Libya. The violence has moved Syria closer to a civil war as military personnel defect and take up arms against the government.

Arab League Approach

Germany supports the Arab League’s approach and wants a quick UN resolution on Syria, Chancellor Angela Merkel told reporters in Berlin today after talks with Jordan’s King Abdullah.

“The implications of what’s going on are alarming, especially on a humanitarian level,” King Abdullah said.

Turkey is not thinking of cutting electricity supplies to Syria due to humanitarian considerations, Energy Minister Taner Yildiz told reporters in Ankara today. Turkey is planning to shift its trade routes to the Middle East if the unrest in Syria worsens and embargoes go into effect, Minister of Transportation Binali Yildirim said.

Turkish trucking that would have taken southern routes through Syria will use Iraqi roads instead as new crossing points are opened on the border with Iraq, Yildirim said today in televised comments from Ankara. The minister said Turkey and Egypt had been in talks to set up a Mediterranean shipping line to carry vehicles before the Syria crisis and are working to establish trips.

Crimes Against Humanity

The UN Human Rights Council’s independent commission of inquiry yesterday said its probe found that Syrian military and security forces had committed “gross violations of human rights.” The commission, which interviewed 223 “victims and witnesses,” said it is “gravely concerned that crimes against humanity have been committed” throughout Syria.

At least 256 children have been killed by Syrian authorities, according to the UN report. Sexual torture of male detainees is described in “several testimonies” in the UN report, including the rape of a boy in front of his father.

Still, the International Criminal Court can’t begin an investigation without a referral from the UN Security Council, according to Richard Dicker, director of New York-based Human Rights Watch’s international justice program.

‘Beyond Paralysis’

“The reference to crimes against humanity increases the urgency that the council gets beyond its paralysis,” he said.

Russia and China, in the first double veto since 2008, blocked an Oct. 4 draft resolution that called for Assad to halt the crackdown that began in March and, by UN estimates, has killed more than 3,500 people. Human-rights activists put the figure at more than 4,500.

The action by the Arab League, imposed after Syria refused to admit Arab observers, and the release of the report may embolden the U.S. and the Europeans on the UN’s most powerful body to revive efforts to impose sanctions on Assad’s regime.

“We think it’s time to revisit the question about what might be possible here in New York,” U.S. Ambassador Susan Rice told reporters yesterday. It has become “increasingly clear, even for those that would rather deny it, that the Assad regime has participated in outrageous and now well-documented atrocities” and that “the patience of its neighbors as well as the larger international community is evaporated,” she said.

German Ambassador to the UN Peter Wittig, whose country is among the 15 UN Security Council members, said the body "cannot stand idly by.’’

Financial Transactions

The Arab League measures, which follow U.S. and European sanctions, will also halt dealings with the Syrian central bank, Qatari Prime Minister Sheikh Hamad Bin Jasim Bin Jaber Al Thani told reporters Nov. 27 in Cairo. The Arab League banned financial transactions and trade with the Syrian government, excluding basic commodities, he said. The sanctions aim to target officials and aren’t intended to hurt the Syrian people, he said.

“Syria’s economy is already falling apart,” Peter Harling, a Damascus-based analyst with the International Crisis Group, a conflict-resolution advisory organization, said by phone. “There is a shortage of cooking gas and heating oil, medicine, milk powder, and you have power cuts even in the capital, Damascus.”

Harling said the government is failing to protect the currency and that “the economic situation is already dire, and this isn’t having a noticeable political impact or bringing the regime closer to compromise.”

Growth Predictions

Adib Mayaleh, governor of the Central Bank of Syria, said in an interview last month his country had spent about $3 billion defending its currency and financing trade since the start of the uprising.

Syria’s $60 billion economy, which grew 5.5 percent in 2010, may shrink 2 percent this year, according to the International Monetary Fund, or at least 5 percent, according to the Institute of International Finance. The government expects growth of 1 percent, Finance Minister Mohammad Al-Jleilati said in September.

“There is a lot of resentment at the fact that the regime has allowed itself to be isolated in an unprecedented way,” Harling said. “Now the regime, in the eyes of most Syrians, is to blame for this situation, but over time the people could turn and put the blame on the sponsors of sanctions.”

Muallem also said a new constitution that is being considered to end the unrest won’t give Assad’s Baath party a monopoly on political power.

Iraq, Lebanon Abstain

The economic sanctions are the first the Arab League has imposed on a member state since its formation in 1945. In 1979, the league suspended Egypt’s membership after President Anwar Sadat signed a peace agreement with Israel. It reinstated the North African nation in 1989.

Syrian neighbors Iraq and Lebanon abstained from voting yesterday.

The most effective way to weaken Assad is to surrender the keys of these embassies to the opposition Syrian National Council, which can then start offering tangible, decent alternatives to Assad’s rule, Harvard Law’s Mallat said.

The Syrian National Council posted a statement on its Facebook page calling the sanctions “a defeat for the Syrian regime and an important step to isolate it and stop the supplies that feed its criminal war against peaceful protesters.”

Economic Isolation

Assad, who inherited power from his father in 2000, has moved to ease Syria’s economic isolation and encourage foreign investment. He had encouraged private industry in Syria’s state- dominated economy to provide long-term financing for development and economic reforms.

“Syria is a trading nation and they are natural capitalists,” said Andrew Tabler, a Syria analyst at the Washington Institute for Near East Policy. “The businessmen in that country will never tolerate being cut off to such a degree. This move will get the business elite off the fence and against the regime.”

Banque Saudi Fransi, a Saudi lender part-owned by Credit Agricole SA, said on Nov. 26 that it will sell its 27 percent stake in the Bemo Saudi Fransi Syria bank, citing “the financial risks” in the country.

--With assistance from Glen Carey, Lara Setrakian and Inal Ersan in Dubai, Abdel Latif Wahba in Cairo, Ali Berat Meric and Emre Peker in Ankara and Tony Czuczka in Berlin. Editors: Heather Langan, Jim Rubin, Karl Maier

To contact the reporters on this story: Massoud A. Derhally in Beirut, Lebanon at mderhally@bloomberg.net; Flavia Krause-Jackson at the United Nations at fjackson@bloomberg.net

To contact the editors responsible for this story: Andrew J. Barden at barden@bloomberg.net; Mark Silva at msilva34@bloomberg.net


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