ELECTRICITY CRISIS PROVOKES PUBLIC DISCONTENT;

C O N F I D E N T I A L SECTION 01 OF 02 DAMASCUS 000868 SIPDIS SIPDIS NEA/ELA E.O. 12958: DECL: 08/22/2017 TAGS: ECON ENRG PREL SY SUBJECT: ELECTRICITY CRISIS PROVOKES PUBLIC DISCONTENT; SARG BLAMES U.S. SANCTIONS REF: DAMASCUS 0762 Classified By: Charge D'Affairs Michael Corbin for reasons 1.4 b/d ¶1. (C) SUMMARY: Unscheduled electricity outages that have plagued Syria since early June 2007 continue to affect large portions of the country and have caused increasing public discontent. Rather than assigning blame directly to the regime, however, the public has largely accused Iraqi refugees and corrupt bureaucrats for creating the crisis. The SARG has fueled these accusations through pro-government media and further insulated itself from blame by setting up the Minister of Electricity to take the fall for the regime's apparent lack of action. Nevertheless, as the crisis is now in its third month and promised power station upgrades have yet to be completed, public discontent with the government is beginning to grow. The regime has also adopted the tactic of blaming U.S. sanctions for the crisis -- a shift from previous SARG assertions of the negligible impact of U.S. sanctions. End Summary. ¶2. (C) ELECTRICITY OUTAGES CONTINUE: For the first time in recent memory, the entire city of Damascus faced a complete power outage for more than three hours overnight on August ¶21. This represents the latest example of the wave of unscheduled electricity outages plaguing Syria since early June, and is an indication of more problems to come. Over the past three months, some areas of Damascus and Aleppo have faced outages of up to eight hours a day due to the growing gap between Syria's electricity production -- currently 6400 mw -- and demand that is growing at an estimated ten percent annually (reftel). The situation has deteriorated even further in smaller cities and rural areas, with reports that some areas of the industrial city of Homs are facing up to 16 hours of daily power cuts. In addition to the unscheduled electricity outages, frequent power fluctuations are damaging electrical infrastructure and components. While some Syrians have used generators during the power outages, most do not have the financial means to make such a purchase and those that do have been stymied by dwindling supplies and inflated generator prices. ¶3. (C) PUBLIC OUTCRY BLAMES IRAQI REFUGEES AND CORRUPT BUREAUCRATS: Electricity and water rationing during the summer months had become a regular occurrence in Syria over the past few years, but as the situation has deteriorated this year, public concern has grown. The current electricity crisis -- now in its third month -- is provoking widespread public outcry, with government and local media outlets repeatedly discussing the negative affects on the Syrian public and economy. Emboffs' conversations with average Syrians this summer frequently turn to the subject of the power outages and frustration that nothing is apparently being done to alleviate the problem. Nevertheless, public outcry over the crisis has focused largely on Iraqi refugees and "corrupt bureaucrats" rather than regime insiders. Business contacts, by comparison, tend to assign more blame to the SARG for its lack of planning in the energy sector, and industrialists have publicly complained about the negative effect of the power cuts on production. ¶4. (C) MINISTER OF ELECTRICITY SET-UP AS "FALL GUY": The SARG appears to be capitalizing on the public focus on Iraqi refugees and corrupt bureaucrats as the source of the electricity problem to deflect blame from the regime. Numerous articles in the pro-government press state that Iraqi refugees are largely responsible for a 14 percent growth in electricity demand in 2006. The SARG also fired several regional electricity directors in June 2007 alleging corruption. Syrian press has typically portrayed this effort as an example of the regime's commitment to fighting corruption on behalf of the people -- a sentiment echoed in President Asad's inaugural address in July. Consistent with the SARG's tendency to shift blame to politically expendable figures during periods of crisis, Prime Minister Naji Otri also publicly blamed the Minister of Electricity, Ali Ahmed, for the electricity situation in June. In early August, the Director-General of the state-owned Children's Hospital also publicly attacked Ahmed, asserting the he would be directly liable for the possible loss of refrigerated medicines needed for sick children. By contrast, several industry contacts contend that Ahmed is a competent minister and argue that he is being positioned to take the fall for the regime's lack of planning. DAMASCUS 00000868 002 OF 002 ¶5. (C) SARG NOW BLAMING LARGER ELECTRICITY DILEMMA ON U.S. SANCTIONS: The SARG stressed early this summer that the electricity crisis was temporary and solvable. In June SARG officials assured the public that the crisis would abate upon completion within the next few months of several power plant upgrades -- expected to add a total of 425 mw of power. Despite the SARG's assurances, however, the projects remain incomplete and the public's frustration with the government is increasing. In a subsequent change of tactics, the SARG is now blaming the crisis on U.S. sanctions. This is a shift from previous SARG statements that U.S. sanctions have had a negligible affect on the economy. On August 4, Prime Minister Naji Otri asserted that the "real" reason for the electricity crisis was political, stating that U.S. sanctions were delaying the development of two new 750 mw power stations in Deir-ez-Zor and Deir Ali (Note: Even if these projects were on schedule they would not yet be completed and would not have been in time to alleviate this summer's crisis. Moreover, these projects are indefinitely delayed because of backroom maneuvering by regime cronies and insurmountable contracting issues. End Note). Otri further asserted that many of the largest electricity companies, Alstom, Misubishi, and General Electric could not work in Syria because of U.S. pressure. Industry contacts agree that U.S. sanctions have discouraged companies from working in Syria, but argue that most are staying away because of negative experiences with Syria's difficult business environment, bureaucratic delays, and corruption. ¶6. (C) COMMENT: Unable to hide the electricity crisis which is affecting major Syrian cities on a regular basis this summer, the SARG is seeking scapegoats that will deflect public anger away from the regime. The SARG's initial willingness to fuel the public's anger against the Iraqi refugees appears to have shifted slightly to an attempt -- at least for now -- to blame U.S. sanctions for the electricity shortages, creating a reliable external "bogeyman" to suppress dissent and position the regime as a victim of international pressure. The regime propaganda efforts, however, can only temporarily mask the underlying problem, namely a persistent gap between power supply and demand that will only be remedied by the completion of stalled power projects. If the regime cannot jump-start these efforts, the continued outages will fan public frustration and contradict SARG assertions that its policies are improving the Syrian economy. CORBIN