Iran to build Syria's first satellite as part of a newly signed strategic cooperation pact; Arab countries re-admit Syria to the League
Iranian President visited Syria last week for the first time since the civil war began and signed "The Long-Term Strategic Comprehensive Cooperation MoU". As part of the visit, Iran and Syria signed 15 MoUs in different sectors. The trip was celebrated by Iran and its allies as a sign of unity and strength and criticised by the opposition for signifying Iranian imperialism. Little information was officially released regarding the MoUs, but based on statements made by Iranian and Syrian government officials, I have gathered the key elements:
- Both countries agreed Iran will help Syria build and launch its first Space satellite.
- Syria will be connected to a rail network connecting Iraq and Iran.
- A joint bank and and a joint insurance company will be established to overcome trade obstacles such as extreme FX fluctuations and lack of willing insurers. This will help private sector investors in both countries explore new businesses.
- The establishment of a free trade zone will also proceed to facilitate industrial and commercial activities.
- The pair will increase the number of flights and tourists. In that pursuit, Iran is rebuilding and renovating Syrian airports, including Damascus airports.
- Oil and phosphate contracts will be activated after stalling for years.
- The creation of shipping lines to carry larger cargo and regular shipping
- Syria is to issue a third mobile operator licence which will be Iranian.
- Two water desalination plants will be constructed by Iranian companies.
- To address electricity shortages, Iran will develop new power generation plants and help repair the distribution network.
- Cooperation in the construction of factories and the production of “strategic defense equipment” in Syria.
Besides building the satellites, none of the MoUs discussed earlier is actually new. All were agreed at some point during the civil war and funded by credit lines offered by Iran where appropriate. Nonetheless, implementation did not take place.
The rebranding of these projects was a psychological and a media move by Iran to flex its regional muscles to show strength after undergoing troubling months at home during which the regime survival was questioned.
Days after signing the MoU, the Arab League decided to re-admit Syria after its membership was suspended during the war. The efforts were reportedly led by Saudi Arabia and Egypt.
It seems in anticipation of warming ties between Saudi and Syria, Iran wanted to demonstrate its strategic depth in Syria and what are the Saudis are up against there.
There is a core issue about how Syria will pay for many of these projects. Syria already owes Iran 30 billion and it is hard to take on more debt. The MoUs don't address the issue, but it seems long term concessions in natural resources extraction will be the main method of repayment. The Syrian economic space is already crowded, and Saudi does not stand to benefit economically from its rapprochement with Syria except maybe on renewables, Saudi can leverage its Syria ties broadly. Hence, the economic dividend for Saudi may not materialise.