Middle-east Arab News Opinion | Asharq Al-awsat

From 5 percent to Mother Theresa | ASHARQ AL-AWSAT English Archive 2005 -2017
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Every corrupt regime requires means of consolidation, most importantly financial consolidation. The Arab revolutions have exposed the role that finance has played in corrupting the regimes in Tunisia, Egypt, Yemen, Libya, and of course Syria. In all these regimes, talk has centered mainly on the role played by the president’s inner circle; how its members managed to impose their influence on the economy, how business deals were concluded only through them, and even how legislation was “tailored” specifically for them.

In Syria, a secret was known to everyone, but no one dared to speak about it. The secret was Rami Makhlouf, the president’s cousin. This man, who suddenly became the keystone of the entire Syrian economy, entered the field of communications by establishing the first Syrian mobile phone company, after he “won” a tender for the license. He also had “a role” in approving the second license for a rival firm. On one occasion, when another communications company entered into partnership with Makhlouf’s SyriaTel, the chairman of the former soon found himself under tremendous pressure. He eventually resorted to the media after the Syrian judiciary became “blocked” in front of him, and he ultimately sought to leave the Syrian market with the least possible losses. Rami Makhlouf’s influence and power increased with the complicit knowledge of the regime. As a result, the entire free market transformed into Rami Makhlouf’s private firm, where he could import whatever he wanted from anywhere and for special prices, with which he could [unfairly] compete with the country’s merchants. He soon opened more branches at border crossings and airports, and his profits were never scrutinized or audited. As Rami Makhlouf’s stature grew, he established a company under the name “Al-Sham Holding Company” – a name which certainly befits his character – where well-known and unknown names were willingly and unwillingly incorporated. Every business owner had to enter into “partnership” with Rami, to the extent that the following proverb became popular in the country: “If you want to invest in Syria, you have two options: either you work illegally, or enter into partnership with Makhlouf.”

One Arab businessman told me a story about a situation he experienced during his visit to Syria to search investment opportunities there. He said he met with relevant ministers, then Rami Makhlouf was informed about his presence, and an appointment was hastily decided. My friend entered Rami’s office, which was the size of a small football pitch, and then Rami confidently said, “You should be aware that the road to business in Syria goes through me.”

When the Syrian regime first came to power, it had a historical hostility towards the old economic class; the Damascus merchants and Hama’s feudatories. The regime declared war on them and nationalized their properties, forcing them to leave the country, hence thwarting their influence. Yet, the regime needed new aids and adherers in order to fulfill its dreams, and so it gave rise to new names, creating a “new bourgeoisie” consisting of well-known names (and others less known) which the regime introduced as the façade of its economy. This was revealed recently by a list issued by European and American firms, which included names of businessmen close to the regime as well as to Rami Makhlouf. It is for this reason that the Syrians have mocked the recent stance which Rami claims to have adopted, when announcing – after the revolution broke out against the regime – his decision to donate his commercial profits to charity, and that he will be entirely devoted to philanthropic work. The Syrians now crack jokes about how “Rami 5 percent” – the name given to him because he used to take 5 percent from each project for himself – has transformed into someone who speaks as if he is Mother Theresa. Yet in reality, deceiving people in this manner will only increase the people’s rage and consolidate the impression that the regime is corrupt, and that the new guard is no less corrupt than the old one. We saw evidence of this with the Daraa governor, a man whose actions provoked the outbreak of the revolution, yet he managed to escape punishment simply because he was a relative of the President. Likewise, Rami Mahklouf was not punished for his financial crimes. If the issue of financial corruption is fully exposed, the case of Syrian oil will be high on the list – having not been incorporated into the state budget. There is also the dubious agriculture issue, whereby policies continue to protect the narrow interests of some.

There is an exceedingly wealthy class in Syria which has made its fortunes from dubious financial resources and is being protected by the regime. Meanwhile, the majority of the Syrian people are suffering from increasing poverty, humiliation, and hunger. This is the real economic reality, and all the recent “open-door economic policies” were none other than a means of protection for the class that derives direct benefits. It is hard for any rational person to come to terms with the fact that Syria, a country with a deeply rooted tradition of trade whose distinction is mentioned in the Holy Koran, is managed economically by a group of beneficiaries akin to mafia gangs. All of this must end, and now the time has come God willing.