IMPACT OF SARG CLOSING OF THREE OF FOUR BORDER

C O N F I D E N T I A L SECTION 01 OF 02 DAMASCUS 000653

SIPDIS

SIPDIS

NEA/ELA; NSC FOR MARCHESE

E.O. 12958: DECL: 06/28/2017
TAGS: PGOV PREL ECON PTER SY
SUBJECT: IMPACT OF SARG CLOSING OF THREE OF FOUR BORDER
CROSSINGS WITH LEBANON

REF: DAMASCUS 0484

Classified By: Charge d'Affaires Michael Corbin, reasons 1.4 b/d


1. (C) SUMMARY: SARG officials and Syrian media have
characterized the recent closing of three of the four land
border crossings with Lebanon as a security precaution in the
wake of the fighting in the Nahr al-Barid camp in Lebanon.
For now they are publicly denying they will close the fourth
and final border crossing at Al-Masna'/Jdeideh. Commercial
traffic through the Jdeideh crossing appears to be flowing in
both directions, but excess demand from trucks that normally
transit the other three border crossings is creating delays.
Syrian businessmen express concern about instability in
Lebanon but downplay any significant negative economic impact
for Syria as a result of the recent border closings. Syrians
say, however, that increasing apprehension of Lebanese
hostility towards Syrians is encouraging them to delay travel
into Lebanon for vacation, shopping, or business interests.
End Summary.


2. (C) SARG CLOSES THREE OF FOUR OFFICIAL BORDER CROSSINGS
WITH LEBANON: There are four official land border crossings
between Syria and Lebanon. On May 20 the Syrian Ministry of
the Interior announced that it was temporarily closing the
two northern border crossings with Lebanon, al-Aridha and
al-Dabbousiyah, until the situation in Northern Lebanon
became secure (reftel). On June 21, the Ministry of the
Interior subsequently announced it would close a third
Lebanese border crossing at Al-Jusah-al-Qa. The SARG
continues to assert that security concerns are the reason for
the border closings and deny rumors that they will close the
remaining border crossing of al-Masna'/Jdeideh to squeeze the
Lebanese economy. Nevertheless, Vice-President Farouk
al-Shar'a's comments at a June 22 press conference, repeating
these denials, also conveyed an undertone of political threat
when he said "Syria cannot resort to completely closing the
borders unless it became impossible to improve
Syrian-Lebanese relations."


3. (C) BACKLOG OF COMMERCIAL TRUCKS AT THE JDEIDEH BORDER
CROSSING: On June 27 Econoff traveled mid-morning to the
Syrian-Lebanese border at Jdeideh and observed a backlog of
more than 250 trucks headed for Lebanon on the Syrian side of
the border. Half of the trucks had Syrian license plates,
with others from Lebanon, Turkey, Jordan, and multiple Gulf
countries.
We also understand that there is a significant backlog on the
Lebanese side of the border. The Jdeideh border crossing did
not appear to be adopting measures to assist movement of
commercial trucks to reduce the excess demand generated from
the closed border crossings. Contacts also report that
Syrian customs agents ) unlike during border closures in
previous years - are not being moved from other border
crossings to increase the truck volume handled at Jdeideh.
Contacts report that the regular twice-daily escort by Syrian
customs officials of trucks transiting from Lebanon through
Syria for third countries continue to occur.


4. (C) Several truck drivers waiting on the Syrian side of
the border ) from Lebanon, UAE, and Syria ) separately told
Econoff that the backlog was abnormal, but that truck traffic
was moving, and that they hoped the delay would diminish in a
week's time once new procedures were in place. They added
that they were not overly concerned about the closures
because in their assessment the delay was minimal compared to
border closings in previous years.


5. (C) ECONOMIC IMPLICATIONS OF BORDER CLOSINGS: Syrian
businessmen downplay significant economic impact for Syria
from the closed border crossings, but acknowledge there are
some negative implications - albeit much less than for
Lebanon. Contacts assert that the trucking delays will
likely increase prices for some commodities such as cement
and add to the rising rate of inflation in Syria (Note:
Independent sources estimate inflation is around 20 percent
when factoring in real estate prices). Contacts also point
to the central role Syria plays in the transit trade from
Lebanon to other countries, acknowledging that the delays
will lead to a loss in transit fees at the closed border
crossings - especially as SARG customs is not increasing its
capacity to handle truck traffic at Jdeideh.


6. (C) Contacts estimate that the black market trade between
Syria and Lebanon will also be hampered by the border
closings. Certainly much of the black market trade occurs

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illegally at unofficial crossings along the Syrian-Lebanese
border, but some does come through the official checkpoints.
Hence the closures will further exacerbate price increases in
Syria. SARG figures place Syria's 2006 exports to Lebanon at
only USD $379 million or just 4 percent of Syria's total
exports (USD $10.1 billion) and Syria's 2006 imports from
Lebanon at only USD $176 million of just 1.7 percent of
Syria's total imports (USD $10.6 billion),but contacts
estimate that the black market trade - including diesel,
cigarettes, and cement ) far exceeds the formal numbers.


7. (C) SYRIANS HESITANT TO TRAVEL TO LEBANON: Notably,
compared to the heavy truck traffic at Jdeideh, Econoff
observed that there were relatively few passenger vehicles,
either coming from or going to Lebanon. The cars that were
passing in either direction predominantly carried Lebanese
license plates. This is consistent with assertions from
business contacts that most Syrians are indefinitely delaying
travel to Lebanon ) even though this may undermine business
interests that many of them have there. Marwan Al-Kadri, the
exclusive agent for Kickers, Gap, and Banana Republic-brand
clothing, echoed others when he told Econoff that more than
ever before Syrians are concerned about traveling to Lebanon,
believing they could be targeted by anti-Syrian Lebanese
groups ) especially in the event of another bombing such as
the one that killed Lebanese parliamentarian Walid Eido.
There are also rumors among business contacts that Syrian
workers in Lebanon are beginning to return to Syria both
because of a lack of work and their own security concerns.
Overall, these concerns appear to be manifesting themselves
in other ways, with some Lebanese businessmen in Syria
reporting that they are not as warmly welcomed in Syria as
before, and some Syrian businessmen voicing frustration with
the regional political instability and claiming satisfaction
with the border closings if it means Syria can distance
itself from the problems in Lebanon.


8. (C) COMMENT: Since the 2005 withdrawal of Syrian troops
from Lebanon, Syrians have generally become less reliant on
its neighbor as a shopping or vacation destination -
reinforced by recent Syrian trade liberalizations that make
it easier for Syrians to import luxury goods directly. The
current instability next door appears to continue that trend.
Overall, the border closings appear to have a far greater
economic impact on Lebanon than Syria. Separately, while the
SARG publicly claims that instability in Lebanon prompted the
closure of the three crossings north of Damascus, Shar'a's
June 22 remarks hint at possible political motivations for
the closures and at the possibility that Syria could
completely close the border. To avoid the quantum leap in
negative publicity and a backlash in criticism such a move
could certainly entail, the SARG may conduct themselves for
now with the lower-level pressure on Lebanon that the three
border closures allow.
CORBIN