MANAGING A TEMPORARY STALEMATE WITH THE SARG

C O N F I D E N T I A L DAMASCUS 000962

SIPDIS

SIPDIS

PARIS FOR ZEYA; LONDON FOR TSOU

E.O. 12958: DECL: 10/12/2015
TAGS: PGOV PREL SY
SUBJECT: MANAGING A TEMPORARY STALEMATE WITH THE SARG

REF: A. DAMASCUS 0888

B. DAMASCUS 0625

C. DAMASCUS 0068

Classified By: Charge d'Affaires Stephen A. Seche, per 1.4 b,d.


1. (C) Summary: In important respects, U.S. relations with
Syria seem to have reached an impasse. Over the past six
weeks, Syrian contacts, some of them regime proxies, have
voiced the opinion that the SARG senses it has hung tough
with a set of hard-line policies that are paying dividends.
As indicators of success, they point to its headline-grabbing
alliance with Iran, Hamas' electoral victory, continued
Syrian influence in Lebanon, the distracting impact of the
upsurge of violence in Iraq, a UNIIIC investigation that
seems to have lost steam, and the ascendance of hard-liners
who have pointed to each of the aforementioned events as a
vindication of their approach to the West. The SARG seems to
be moving to constrain any USG moves on the ground designed
to ramp up support for civil society and the opposition.
Despite the evidence of a temporary impasse and resurgent
SARG confidence, vulnerabilities remain, primarily economic,
as well as fears over the UNIIIC investigation. These
vulnerabilities support the view that this temporary
stalemate depends upon an unstable constellation of events,
and that we should continue to maintain pressure and impose
isolation, inflicting political and economic costs where we
can, as we continue to search for effective pressure points.
End Summary.


2. (C) 2006 LOOKING BETTER TO THE SARG: There are
indications in recent weeks that SARG confidence has
rebounded as it senses it has temporarily stalemated U.S.
attempts to isolate it and reduce its regional influence.
Contacts speak of a regime having stayed the course with a
set of hard-line policies that have paid off. In a recent
conversation, for example, with a Syrian foreign policy
expert who is very close to the regime (ref A),he noted that
2005 had been a very bad period for Syria, but that in 2006
"things are going very well," so well in fact that he saw no
possibility of a return to the tough times of late last year.



3. (C) IRAN, HAMAS ARE KEY INDICATORS: We pointed out in
ref B some of the same indicators that this contact cited.
The alliance with Iran has given the Syrians the sense that
they have a powerful protector they can turn to, which has
emboldened them as they have opted for a more confrontational
posture towards the U.S. and the international community.
The electoral victory of Hamas has invigorated their
Palestinian policy and convinced them that their long, often
embattled alliance with the Palestinian rejectionists has
paid big dividends and vindicated the risks they took in
their stubborn refusal to give up a strategic card without
receiving important benefits. Now the Syrians see themselves
well-positioned to serve as a bridge between Hamas and the
West (and to exert more influence over the Palestinians in
the territories than they have been able to do for years).


4. (C) INFLUENCE IN LEBANON: In Lebanon, they sense that
they have re-asserted their dominant influence, essentially
stalemating PM Siniora, as well as any unilateral move by the
March 14 group and Sa'ad Hariri to oust President Lahoud.
The foreign policy expert made clear to Emboffs that Lahoud
could be removed, if a compromise is worked out with Syria,
but short of that, he would stay put. The Syrians also seem
confident that their Hizballah allies can use sectarian and
political divisions, as well as the threat of instability and
violence (which the SARG has shown itself willing to deliver)
to maneuver safely around any pressure to disarm caused by
UNSCR 1559. In short, the regime's message is that Syrian
influence has to be recognized in Lebanon or the unstable
status quo will continue.


5. (C) OTHER FOREIGN POLICY "TRIUMPHS": On Iraq, SARG
officials and their proxies, while they restrain themselves
from saying so, are taking comfort in the recent upsurge in
violence and what they contend is the failure of American
policy there. They have shored up relations with the Saudis
and the Egyptians by playing the Iranian card. The Europeans
seem to have already forgotten the destructive attacks on
three embassies a month ago and have shown no interest in
trying to make the Syrians pay for their role in "guiding"
the inevitably violent demonstrations. The cartoon
controversy also demonstrated that the SARG knows how to play
the Islamist card effectively, to frighten its own population
over the risks of Iraq-style chaos and to remind the
international community that it is the last bulwark against
fundamentalism, as well as bolster its self-image as the
defender of Arab dignity. The regime does not feel isolated
the way it did several months ago and does not feel that it
faces a serious external threat. It believes it has
neutralized the Khaddam threat since there have been no
defectors to join him, and his voice has developed little
resonance in Syria or the region, despite the former VP's
ongoing maneuvers.


6. (C) NO INTERNAL CHALLENGES: Internally the regime has
shown little or no interest in political or economic reform
in the past few months -- despite a cabinet reshuffle -- and
has continued to maintain heavy pressure on civil society and
any attempts at opposition activity, however symbolic or
limited. The security services seem stronger than ever and
hard-liners inside the regime like Ba'ath Party Regional
Command National Security Office head Hisham Ikhtiyar, SMI
chief Asif Shawkat, and even Farouk Al-Shara'a (regardless of
his "transfer" from the Foreign Ministry to the Vice
Presidency),are exercising a dominant influence. Those who
have argued for the benefits of engaging with the U.S. and
making concessions are on the defensive. In short, the
regime senses that it faces no internal threat to its
continuing rule, with any opposition weak, divided, and under
siege from the security services and forty-three years of
Emergency Law repression.


7. (C) HAS THE UNIIIC LOST MOMENTUM? The Syrians also seem
to feel they have weathered the worst of the UNIIIC
investigation, although of all challenges they have worked to
surmount in the past few months, that seems to be the one
that continues to elicit concern, given that it is an ongoing
process. Nonetheless, in comparison with the paranoia and
panic that was evident in the period between the two Mehlis
reports, the present environment is characterized by a sense
that any crisis caused by the investigation can be managed,
as long as the Syrians avoid a finding of non-cooperation.



8. (C) REACTING TO U.S. EFFORTS TO SUPPORT OPPOSITION: With
regard to relations with the U.S., we have heard recently
that several Syrian officials have expressed the view that
"We don't want or need anything from the U.S.," usually
appended to the observation that the President is very
popular and would be hurt by accepting any concession the
U.S. might offer. The SARG has attacked the recent USD five
million Democracy Program Initiative, but has allowed
opposition and civil society figures to do much of the
criticizing, confident that with U.S.-Syria relations at such
a low point, activists would feel compelled to speak out and
avoid being branded as American agents. Locally, the SARG
has also started making bureaucratic gestures to the
Embassy's public diplomacy office as a warning that the USG
will not be able to go around the SARG to fund civil society
and NGO's directly, including putting a high school exchange
program on hold, failing to respond to the deadline for
nominations for participants in teacher training and
professional-development programs, and trying to insist that
only SARG-nominated candidates be eligible for Syrian
Fulbright grants. Given the precarious existence of many
Syrian NGO's, prevented by a welter of laws and regulations
from registering or becoming legal, the SARG warning cannot
be dismissed as mere bluff. More broadly, the SARG is
beginning to slow-roll the issuance of visas, impacting
already on the Embassy's ability to address pressing
operational requirements. (Note: We understand from
sensitive reporting that the SARG's new approach to visa
issuance for official travelers responds directly to its
belief that we have purposefully delayed issuance of visas
for its officials.) It also seems to be moving towards
implementing some ad hoc travel restrictions on select
Embassy personnel.


9. (C) WHISTLING PAST THE GRAVEYARD?: Despite this
evidence, there are also indications that the SARG is feeling
the pressure and that much of the emboldened signals we and
others are picking up is a regime attempt to make the best of
a bad situation. The Syrian economy has shown its
vulnerability whenever pressure on the regime has spiked
significantly. The Syrian pound in particular remains
vulnerable to dramatic devaluations when Syria is subjected
to international pressure and scrutiny. Rising prices for
basic commodities are also a risk for the regime that could
provoke a public backlash. In the longer term, sustained
isolation of the SARG likely will slow -- and in some cases,
block -- Western investment, especially in oil, the key
sector of the economy.


10. (C) VULNERABLE ON CORRUPTION CHARGES:
The regime also remains vulnerable to corruption charges.
If the USG is able to use tools currently available, like IEEPA
or executive orders derivative of UNSC resolutions, to seize funds of
regime insiders and deposit them into a development fund for
Syria, along the lines of what was done for Iraq, this could
resonate well with the population (ref C). Nonetheless, the
regime has shown itself adept at playing the corruption card
itself, sometimes pre-emptively, to cut off a perceived
threat or liability and to prevent others from using it
against them.


11. (C) STILL FEELING THE POLITICAL HEAT: Politically,
there is also some evidence that the pressure and isolation
are having an effect, although it is slower and less visible
than we would like. While the regime seems stronger than it
was six months or a year ago, many contacts tell us that, at
the same time, it has adopted a certain siege mentality. The
inner circle of the regime has become smaller, made up
primarily of Asad family members. Its base of support in the
Alawite community has narrowed and its legitimacy among
Syrians is more in question. There is also some evidence,
although it is subject to debate, that the President, despite
any temporary foreign policy triumphs, remains frustrated and
unsure what to do next.


12. (C) THE FUTURE OF PRESIDENT LAHOUD: These occasionally
contrary indicators notwithstanding, we assess that the
current state of affairs with the SARG will persist for as
long as our search for new leverage continues and the SARG's
ability to resist our initiatives persists. There is a
widespread belief here that our policy has driven the SARG
into the arms of the Iranians and has been unable to prevent
the regime from benefiting from Hamas' changing fortunes.
The extremely fluid, often violent, situation in Iraq is seen
as distracting us from other pressing regional issues, and
undercutting our ability to keep the pressure on the SARG.
We have perhaps both overestimated the strength and unity of
our allies in Lebanon, and underestimated Syria's ability to
maintain its grip. The fight over the future of President
Lahoud is a case in point. Without the SARG's blessing, it
appears that Lahoud cannot be removed. He will continue to
reinforce the instability and political drift in Lebanon,
even as Syria continues to ship, or allows to be shipped,
arms into the country. If the Syrians are asked to acquiesce
in his removal, regardless of the source of this overture,
they will assume that their hard-line policies have
prevailed, that there is a new receptivity to their demands,
and that the U.S. policy of isolating them and denying them
their legitimate regional role has failed. They will also
insist on using their de facto veto to "name" any Lahoud
successor, ensuring their interests and influence are
protected.


13. (C) EVENT-DRIVEN POLICIES PROVOKE LULL: From early on,
our policy toward the SARG has to a significant extent been
constrained by events, even at times, perhaps inevitably,
driven by them. At present, events have not produced the
kind of "perfect storm" that might have swamped the SARG, and
we may be squarely in the eye of the storm, that lull before
the next round of destabilizing political winds begin to
blow, forcing the SARG to reconsider its course. Our
continuing challenge is to identify and effectively employ
political and economic tools that can create the desired
turbulence. In this regard, while we should continue to try
to build international consensus for new sanctions, we should
proceed with the imposition of targeted financial sanctions,
bearing in mind that, as the regime's assumptions about our
intentions grow more negative, it may direct its ire
increasingly at the operations of this Embassy, with all the
consequences for our ability to conduct sensitive activities
that contribute in important ways to the achievement of U.S.
policy goals in the region.


14. (C) Nevertheless, to the extent we can both calibrate
and sustain our direct pressure successfully, it will send a
further signal to Syrians, on the street and in the
opposition, that, contrary to any regime propaganda, we are
not about to cut any deals with the Asad regime. This
perception will be reinforced as we carefully continue our
efforts with the opposition and with aggressive proponents of
reform, maintaining a low profile where possible as we seek
to ramp up funding and activity levels. At the same time, to
the extent we can influence externally driven events, the
greater the likelihood the SARG will be forced to re-examine
its posture.


15. (C) The UNIIIC investigation remains a sword hanging
over the regime's head. Any move to interrogate SMI chief
(and Asad brother-in-law) Asif Shawkat, brother Maher
al-Asad, or the President himself, could force the regime
into a position of non-cooperation. Similarly, any
international echo resonates effectively here. While
evidence to date suggests otherwise, should the EU or
individual European governments find that attacks on their
embassies or the closure of their brand-new human-rights
institute (septel) provide sufficient reason to re-evaluate
their approach to the SARG, we certainly should encourage
such a process. At the same time, we urge strongly that any
expression of EU unhappiness with the SARG be as carefully
targeted as our own and avoid steps that can be construed as
punishing the Syrian people. In short, given the current
stand-off, we need to play our cards carefully, conserve our
assets, inflict some damage where we can, and accept that
changing the behavior of this regime, or ousting those who
refuse to change, may involve a longer-term effort than we
might wish to be the case.






SECHE