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