Identifier
Created
Classification
Origin
05DAMASCUS5909
2005-11-13 15:09:00
CONFIDENTIAL
Embassy Damascus
Cable title:  

DEPUTY PM DARDARI: REFORMER OR APOLOGIST?

Tags:  ECON EFIN EINV PGOV SY 
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C O N F I D E N T I A L SECTION 01 OF 02 DAMASCUS 005909 

SIPDIS

NEA/ELA
NSC FOR ABRAMS/DORAN
TREASURY FOR GLASER/LEBENSON
EB/ESC/TFS FOR SALOOM

E.O. 12958: DECL: 11/12/2015
TAGS: ECON EFIN EINV PGOV SY
SUBJECT: DEPUTY PM DARDARI: REFORMER OR APOLOGIST?

REF: A. REF A: DAMASCUS 5373

B. REF B: DAMASCUS 5662

C. REF C: DAMASCUS 4977

Classified By: CDA: Stephen Seche for Reasons 1.5 b/d

C O N F I D E N T I A L SECTION 01 OF 02 DAMASCUS 005909

SIPDIS

NEA/ELA
NSC FOR ABRAMS/DORAN
TREASURY FOR GLASER/LEBENSON
EB/ESC/TFS FOR SALOOM

E.O. 12958: DECL: 11/12/2015
TAGS: ECON EFIN EINV PGOV SY
SUBJECT: DEPUTY PM DARDARI: REFORMER OR APOLOGIST?

REF: A. REF A: DAMASCUS 5373

B. REF B: DAMASCUS 5662

C. REF C: DAMASCUS 4977

Classified By: CDA: Stephen Seche for Reasons 1.5 b/d


1. (C) Summary. After a two-week absence, Deputy PM
Dardari spoke out last week to reassure the Syrian public
that their government has a plan to deal with any possible
sanctions the international community may impose on the
country. His recent pronouncements (ref A, B) seem to fit
more with a regime apologist than an economic reformer, but
his defenders insist it is the cost of doing business with
this regime. Whether Dardari,s motivation is simply
personal advancement or a real desire to contribute to
positive change by working within the system remains an open
question. Irrespective of Dardari,s motivations, two things
remain clear: his high-profile pronouncements help shore up
public support for the regime, and he is viewed as an
opponent by those within the regime who remain committed to
the old socialist economic models at the core of Baath Party
ideology. Many argue that whether Dardari will be able to
maintain his position and influence within the SARG in coming
weeks will depend on his ability to continue to reassure
average Syrians that their government will defend their
economic interests. End Summary.


2. (C) Deputy/PM for Economic Affairs Abdullah Dardari, the
SARG public face for its economic reform efforts, has been a
feature of the state-controlled media in Syria for months.
He has effectively used his economic portfolio to co-opt
domestic critics and to combat efforts to internationally
isolate Syria (ref A). He has also worked to lessen the
economic effect of the increasing political pressure on the
regime (ref B). For the two-week period following the
release of the Mehlis report and subsequent passage of UNSCR
1636, however, D/PM Dardari had been noticeably absent from
the headlines. He re-emerged last week to forcefully
discount rising public concern about the negative impact of
potential new sanctions on Syria. In international and local

media, Dardari was quoted as commenting that the Syrian
economy is well-positioned to withstand economic sanctions;
that sanctions would hurt Syria,s neighbors, like Lebanon
and Iraq that are dependent on transshipment of goods through
Syria more than they would Syria; that FDI would continue to
pour into the country irrespective of sanctions; and that the
SARG had created a committee to counter sanctions, which he
chaired.


3. (c) Though Dardari,s statements last week were jarring
insofar as they associated him with an increasingly
recalcitrant regime, his defenders explain them as necessary.
According to them, Dardari and other reformers like Minister
for Economic Affairs, Dr. Amer Husni Lutfi, feel threatened
and are desperate to show their utility to the regime.
Commenting on Dardari,s recent conspicuous absence,
independent economist Nabil Sukkar opined that Dardari may
have felt, like him, co-opted by the nationalist upswing
following UNSCR 1636. He pointed to what he viewed as the
recent re-emergence of people like Minister of Expatriate
Affairs Dr. Buthayna Shaaban, as proof that those opposing
economic reform felt empowered by current events. Dr. Abdul
Rahman Attar, head of one of the leading Sunni business
families in Damascus, told us that he recently consulted with
D/PM Dardari about the current situation. Dardari told Attar
that his own position within the government had recently
deteriorated to such an extent that Dardari felt obliged to
go to President Asad to ask that Asad clarify to the other
cabinet members that D/PM Dardari remained in charge of all
economic issues within the government. According to Attar,
Finance Minister Hussein and others had recently
countermanded Dardari directives and refused to implement
agreed-upon reforms.


4. (C) Abdel Kader Husrieh, architect of the SARG,s
monetary policy reforms, likewise defends Dardari on the
grounds that the ends justify the means. According to
Husrieh,s line of reasoning, Dardari,s actions to lessen
pressure on the regime are necessary for him to maintain his
influence with President Asad. By doing so Dardari
incrementally advances the cause of economic reform. Husrieh
believes Dardari,s continued presence in the government
allows reformers such as himself to undertake efforts to
loosen the regime,s control over all economic activity.
Husrieh believes that without Dardari, the only economic
advice President Asad would hear would come from the
unreconstructed socialists.


5. (C) Husrieh asserts that President Asad,s continued
commitment to economic liberalization is in part do to
Dardari,s ability up till now to quiet the markets and
reassure the public. As proof of this, Husrieh points to the
exchange rate, which has shown much less volatility than
expected following recent developments. Husrieh argues that
the SARG lacks the monetary tools to effectively combat the
pressures on its currency so it must be trust in the SARG,s
economic message as presented by D/PM Dardari that inspires
the average Syrian to hold onto pounds and not seek the
safety of a hard currency. Though the SARG,s package of
reforms, which Dardari announced in August (ref C) have
worked till now to contain the volatility of the pound, that
may be starting to change (septel).


6. (C) Dardari,s detractors, on the other hand, claim his
actions are little more than a smoke screen that allows a
corrupt regime to maintain the semblance of reform while
continuing to economically exploit the nation. According to
them, Dardari is more interested in managing a media message
than he is in advancing real reform. In this more cynical
view of Dardari, he is motivated largely by his strong desire
for personal self-aggrandizement. These contacts insist that
Dardari,s reform rhetoric is a mask that hides the true
nature of a regime which exploits every business interest for
its own advantage. The system is fundamentally corrupt, they
argue, and Dardari,s maneuvering on the margins lacks real
value. For them, Dardari skews the debate on economic reform
and makes less clear the choices facing the nation.


7. (C) Comment. There is no doubt that D/PM Dardari has
played an important role in the economic reforms the SARG has
implemented thus far. But all unbiased observers agree that
those reforms have been halting and painfully slow. Still,
there does seem to be a clear consensus within the business
and economic community that Syria is better off with Dardari
in charge of its economic policy than the alternative.
However, whether Dardari can maintain his position within a
regime that feels increasingly embattled remains to be seen.
The other question, which only Abdullah Dardari can answer,
is at what point does a very public association with an
increasingly autocratic government rob an ostensible economic
reformer of his credibility?
SECHE