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Analysis: The road to Damascus

By SAM VAKNIN, UPI Senior Business Correspondent

SKOPJE, Macedonia, April 8 (UPI) -- Is Iraqi leader Saddam Hussein hiding in Syria? DEBKAfile, an Israeli-owned rumor mill, thinks so. He is supposed to be in the Mediterranean coast town of Latakia in the Cote d'Azur De Cham Resort, a neighbor of the al-Assads, the indigenous dynastic rulers. If so, allowing him entry would be only the latest in a series of manifestly anti-American moves by the Syrian regime.

The Department of Defense has repeatedly accused the country -- still on the State Department's list of terror-abetting polities -- of shipping weapons and materiel, such as night goggles and jamming systems for satellite global positioning devices, across the border to Saddam's depleted and besieged forces. Arab volunteers, some bent on suicide attacks, have been crossing into Iraq from an accommodating Syria.

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Donald Rumsfeld, U.S. secretary of defense, called these unhindered flows "hostile acts." CNN quoted former CIA Director James Woolsey calling the Syrian regime "fascist." Even U.S. Secretary of State Colin Powell warned Syria that it is facing a "critical choice."

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According to the Kuwaiti daily Al-Rai al-Am, in a related incident U.S. special forces have demolished a pipeline which in defiance of U.S. requests continued to deliver more than 200,000 barrels of heavily discounted oil a day from Kirkuk in Iraq to Syria. A railroad link between the neighboring countries was also blown up. Western sources denied both these reports.

Structures within Syria's military and secret services, acting through business fronts, have been implicated in arms trafficking from Syria to Iraq, including, according to the pro-Israeli Forward magazine and the Israeli daily, Ha'aretz, anti-aircraft missiles, rockets and Scud missile guidance systems, tank transporters and antitank missiles from Russia, Yugoslavia, Ukraine, Belarus and Bulgaria.

The American Israel Public Affairs Committee, a powerful Jewish lobby, intends to capitalize on such bad blood. Its executive director, Howard Kohr, told various media recently that AIPAC will target the transfer of missile technologies from Russia to Syria, Iran, and North Korea, two of which are charter members of the "axis of evil" together with Iraq.

On Monday, repeating an accusation aired last December by Prime Minister Ariel Sharon, Brig. Gen. Yossi Kupperwasser, a senior officer in the Israeli intelligence community, told the Foreign Affairs and Defense Committee of Israel's Knesset that Syria was harboring Iraqi chemical and biological agents and long-range missiles. Even the Americans found these charges too outlandish to endorse.

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Despite fears publicly expressed by Bashar al-Assad and other senior Syrian officials, Syria is unlikely to be the next target of the coalition forces. It is an American strategic asset. An ardent historical foe of Iraq, it joined the American-led coalition in the first Gulf War and the war on terrorism.

Syria also voted for U.S. Resolution 1441 in the Security Council, calling for Iraq's disarmament under pain of war. It is also indispensable to any lasting Middle East settlement. The administration torpedoed the Syria Accountability Act, a congressional attempt to impose sanctions on Damascus.

According to the official Syrian news agency SANA, Tony Blair called al-Assad to inform him "that Britain disagrees completely with those who promote the targeting of Syria."

In an interview to the London-based Arabic language al-Hayat newspaper, Powell denied any intention to invade either Syria or Iran. But the conspiracy-minded noted the revival, by Israel, of a plan to carry oil from Mosul to Haifa, through a disused pipeline running via Syrian territory.

Hooman Peimani in Asia Times concluded: "Unless the pipeline were redirected through Jordan, another country bordering Israel and Iraq with normalized relations with Israel, the pipeline project will require a different regime in Syria. In other words, regime change in both Iraq and Syria is the prerequisite for the project. As (Israeli Minister of National Infrastructure Yosef) Paritzky did not mention a redirecting option, it is safe to suggest that the Israelis are also optimistic about a regime change in Syria in the near future."

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The demise of Saddam's pariah regime spells economic trouble for Syria. Still largely a socialist command economy, it has only recently embarked on a hesitant and partial path towards market reforms. Iraq served as both the source of cheap energy and a captive market for shoddy Syrian goods. Bilateral trade, excluding oil, amounted to $2 billion, according to the Khaleej Times, a United Arab Emirates daily.

Syria, itself a fledgling oil producer, re-exported some of the Iraqi crude and much of its own output through a pipeline leading from Kirkuk directly to the port of Banias. It reaped between $500 million to $1 billion annually from such arbitrage. Syria extracts about 400,000 barrels of crude per day and about 8 billion cubic meters of natural gas a year.

Lebanon is another paradise likely to be lost to Syria in the wake of the Iraq war. The country, largely occupied by the Syrian security apparatus, has been divided into lucrative fiefdoms controlled by politicians belonging to the late Hafiz al-Assad's old guard.

The Lebanese economy and its financial sector are far superior to Syria's. But the United States is pressing a reluctant Syria to terminate its "occupation" of Lebanon and, thus, to let the West dismantle the infrastructure of militant organizations, such as the Iran-backed Hezbollah, that thrive there.

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Observers say that the subtraction of the Iraqi and Lebanese windfalls is a blessing in disguise. It will force Syria to modernize, reform its bloated public sector, restructure or genuinely privatize its numerous state-owned enterprises, develop its energy sector and introduce the rudiments of a monetary policy and a banking system. Syrian manufacturers have already begun to develop markets in other Arab countries and in East Europe.

Not all is lost. Syria, a largely agricultural country, stands to enjoy bumper crops this year. Its ports will inevitably serve as the entry points for goods used in Iraq's reconstruction. Such traffic will be a boon to its budding service industries.

Nor is Syria as isolated as the United States and Israel might wish it were.

Jordan and Syria signed on Sunday an agreement to construct the $87 million Al-Wihda dam on the northern Yarmuk River, which flows from Syria to its neighbor. It will add 80 million cubic meters of drinking and irrigation water to Jordan's dilapidated supplies. The facility will be erected by Ozaltin, a Turkish construction firm, and financed by Jordan with loans from the Abu Dhabi Development Fund and the Arab Fund for Economic and Social Development.

Turkey has also been reaching out to Syria and Iran in a belated effort to counter an emerging Kurdish polity within a federated post-war Iraq. Days after Powell departed Turkey in the belief that fences have been mended, Iranian Foreign Minister Kamal Kharrazi visited Ankara and Turkish Foreign Minister Abdullah Gul announced an imminent trip to Syria.

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According to SPA, the Saudi Press Agency, Iranian President Mohammad Khatami is scheduled to travel to Syria and Lebanon in early May. Syria's al-Assad briefly stopped in Tehran in March this year to discuss the brewing crisis in Iraq. This flurry of summits indicates the formation of a broad front aimed at countering certain American allies -- notably the Kurds. The participants also aspire to affect the future shape of their region. It is a tall order and they may well be too late.

As Richard Murphy, U.S. assistant secretary of state for near eastern affairs from 1983 to 1989, recently told the Daily Telegraph: "There's a perception that the time has come to spread democracy in the Middle East. Their view is that the U.S. paid heavily on September 11 (2001) for having not stood by its principles in dealing with autocracies in the Middle East."


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