READ OUT FROM IRAN-SYRIA ECONOMIC MEETING

C O N F I D E N T I A L DAMASCUS 000775 SIPDIS SIPDIS NEA/ELA NSC FOR ABRAMS/DORAN/SINGH TREASURY FOR GLASER/SZUBIN/LEBENSON EB/ESC/TFS FOR SALOOM E.O. 12958: DECL: 02/27/2016 TAGS: ECON EINV ETRD SY IR SUBJECT: READ OUT FROM IRAN-SYRIA ECONOMIC MEETING REF: A. DMS 00710 ¶B. DMS 06389 Classified By: Charge d'Affaires Stephen Seche, reasons 1.4 b/d ¶1. (C) The annual meeting of the Iran-Syria Higher Economic Commission ended last week, meeting Syrians' already low expectations that it would lack economic significance (ref A). Government dailies trumpeted the signing of MOUs on a range of economic issues, from environmental protection to investment in petrochemical production. Contacts, however, dismissed the press coverage as mere propaganda. Shukr Ali, who works in the Chairman's Office for Business Development at Nahas Enterprises, a company that has been one of the primary beneficiaries of Iranian business since the 1980's, stated that the MOU's contain more rhetoric than substance, and provide no details or commitments for project implementation. ¶2. (C) Contacts contend that the project with the greatest potential economic benefit, the development of an Iran-Iraq-Syria oil pipeline, remains a distant dream despite local reports that Iran intends to invite an Iraqi delegation to Tehran to discuss it. According to Ali, despite the project lacking any real form, an unnamed Canadian company has already expressed interest in developing the Syrian leg of the pipeline. However, contacts in Syria's oil sector point to the fact that Iraq cannot even keep its existing pipelines running and that it has failed to make any progress on pipeline projects that are much less ambitious and much more feasible (ref B). ¶3. (C) Comment: The uneventful meeting of the Higher Commission allowed both Iran and Syria to claim that they have options in the face of international pressure without committing wholesale to a relationship. As one contact stated, Syria is pursuing its economic relationship with Iran by "grabbing the stick in the middle"- leaving itself room to either wield it as a club or hand it back, depending on the course of events. SECHE