SCENESETTER FOR VISIT OF SPECIAL ENVOY MITCHELL TO

S E C R E T DAMASCUS 000390


NOFORN

DEPARTMENT FOR MITCHELL; NEA FOR FELTMAN; NEA/ELA FOR MONZ
AND SHAMPAINE; NSC FOR SHAPIRO

E.O. 12958: DECL: 06/04/2019
TAGS: PREL PTER KWBG MOPS IS IZ LE SY

SUBJECT: SCENESETTER FOR VISIT OF SPECIAL ENVOY MITCHELL TO
DAMASCUS

REF: A. DAMASCUS 342

B. DAMASCUS 335

C. DAMASCUS 377

Classified By: Charge d'Affaires Maura Connelly for reasons 1.5 (b) and
(d).

1.(S/NF) SUMMARY: Special Envoy Mitchell, Embassy Damascus
is looking forward to your prospective visit. In your
initial meeting, it is unlikely that the Syrians will put
forward any new ideas. They will rely on your team to
present ideas that they can consider and possibly negotiate.
Asad and his FM Walid al-Muallim will undoubtedly recount
that Syria and Israel were "words away" from a deal in late
December. The details of the story often change, however, in
the retelling. In the wake of President Obama's speech, the
Syrians will be testing you to see if the USG is sincere in
its position against Israeli settlement growth.

2.(S/NF) Successive generations of Syrians have been raised
around the core principal that Syria is threatened by Israel.
There is endemic skepticism in Syria that a return of the
Golan will ever be possible. There is little objective
discussion of what peace would entail. A failure to prepare
the public for possible concessions could prove a
vulnerability on the Syrian side. The security establishment
which keeps Asad in power presently could conceivably be
threatened by the absence of war.

3.(S/NF) The Arab street continues to view Asad as the only
Arab leader to oppose Israel's actions and support the
resistance in an unambiguous way. Asad's credentials on this
point were strengthened immeasurably by Israel's operation in
Gaza. Iran has played Syria well in this regard, and it may
be too late to extract Syria from the Iran-Hizbollah defense
relationship. On Palestine, SARG officials have not
demonstrated a significant understanding of the ins and outs
of PA-PLO relations. Asad and Muallim will tout Hamas's
electoral credentials and will criticize Abu Mazen as a weak
leader, for example, but will be unable to engage in a
detailed discussion on why Hamas ought to join the PLO (a
notion which they support). It appears less likely now that
the SARG can expel Hamas, particularly as Hamas enjoys warm
relations with key Syrian allies Iran, Turkey and Qatar.

4.(S/NF) State-owned and controlled Syrian media will give
your visit maximum play, billing it as confirmation of
Syria's importance as a regional player, as recognition of
Syria's indispensable role in any future peace settlement,
and as the final nail in the coffin of the isolation imposed
on Asad by the former U.S. Administration. Syria media may
try to contrast your visit with that of FPOTUS Carter, who
departs Syria on June 12. They could portray your visit as
USG "official" outreach, and Carter's visit -- which is
likely to include a meeting with Hamas leader Meshaal -- as
USG "unofficial" outreach.

5.(S/NF) Syrians have been hit by the global economic
slowdown, SARG cuts in fuel and other subsidies, and soaring
inflation. The general negative state of the Syrian economy
translates into more pressure on the SARG to address the
issue of U.S. sanctions. Asad is desperate to increase
foreign direct investment, and this goal is hampered by the
stigmatization that accompanies U.S. sanctions policy.
Syria's private banking sector -- which is growing in both
size and importance -- is harmed when foreign banks decline
correspondent banking relationships for fear of running afoul
of U.S. law. Syrian civil aviation has been severely
impacted by provisions of the Syria Accountability Act. With
the Syrian Air fleet atrophied from 16 to just four aircraft,
SARG officials are desperate to obtain U.S.-made spare parts
for their aging planes. END SUMMARY.

--------------
What to expect
--------------

6.(S/NF) After just three months of re-engagement efforts
between the U.S. and Syria, the SARG decided they were


unhappy with the level and scope of our engagement. Perhaps
stung that the steps they hoped for from us (return of a U.S.
ambassador, your visit, high level contacts) appeared to be
delayed until after Lebanon's June 7 elections, the SARG
conveyed its unhappiness during the May 7 visit of A A/S
Feltman and NSC Director Shapiro (refs A, B) and then even
more explicitly during the May 28 visit of CODEL Kaufman.
"The U.S. approach and methodology are wrong," Syrian
President Bashar Asad told Senator Kaufman (ref C). Asad
went on to make a veiled pitch that you represent the U.S.
side in our bilateral re-engagement efforts as well as on
comprehensive peace efforts. The Syrians will want to talk
to you about the "political umbrella" for potential bilateral
cooperation as well as a "road map" (their term) that lays
out a formal understanding and sequencing of forward movement
on the U.S.-Syria relationship. Underlying these efforts is
the SARG's lingering resentment over its treatment by the
Bush Administration and its fears that the Obama
Administration will ultimately mete out similar treatment.
Although Asad often tells visitors that bilateral
relationships are based on a calculation of interests and not
trust, the SARG at present is looking for evidence it can
trust the U.S. on both the big issues and the small ones.
Your visit, for them, represents a significant step in
restoring a normal relationship. Another important step is a
U.S. decision to return an ambassador to Damascus; they will
hope you come armed with good news on that issue.

7.(S/NF) The SARG's focus on the bilateral relationship is
based on the regime's hunger for respect from the U.S. and an
acknowledgment from the Obama Administration of the
legitimacy of the regime. On a bilateral level, we have few
national interests to pursue in Syria; it is Syria's
centrality to regional issues that makes it necessary for us
to deal constructively with the SARG. Sanctions, dating from
1979 and culminating in the 2004 Syria Accountability Act,
enforce a highly restricted framework for trade and generally
cast a pall over relations. During the Bush Administration,
Syria kept its ambassador in Washington despite the lack of
access to administration officials. The U.S. pulled out the
American ambassador in 2005 after the assassination of Rafiq
Hariri; the withdrawal of the ambassador sparked the Syrians
into taking a series of measures harassing embassy
operations. The alleged U.S. raid on Abu Kamal in October
2008 ultimately led to the late 2008 closing of the Damascus
Community School, the Cultural Center, and the Language
Center. Discussions of the bilateral relationship,
therefore, generally revolve around sanctions and the
Syrians' desire for some alleviation, and the operational
constraints placed on Embassy Damascus. While SARG
intentions remain murky, it seems likely the push for a "road
map" is meant to raise the discussion to a higher level, but
one that will inescapably involve issues related to Iraq,
Lebanon, and Middle East Peace.

--------------
Arab Israeli Peace
--------------

8.(S/NF) It is unlikely the SARG will put forward new ideas
in your first meeting. For Asad, given his skepticism over
Israeli intentions, the overriding significance of this
initial meeting is recognition of Syria's regional importance
and the implicit U.S. acknowledgment of regime legitimacy.
Asad, his FM Walid al-Muallim and Advisor Bouthaina Shaaban
will almost certainly rely on your team to present ideas they
can then consider and react to. It seems increasingly
certain they will assess interactions on the comprehensive
peace effort within the context of their calculations on the
U.S.-Syrian bilateral relationship, a development that may
greatly complicate our efforts. They will want to hear in
detail about our position vis-a-vis Israel (although they may
not ask for it directly) so they can assess whether the Obama
Administration is sincere in its apparent position against
Israeli settlement growth. Even if they are satisfied on
that point, they will complain that the USG approach is not
strong enough. All problems in the region, in the Syrian
view, stem from Israeli behavior and can only be resolved
through changes in Israeli behavior.


9.(S/NF) President Asad has been in the waiting mode on the
Syria-Israel track since October 2008, when the Israeli
government entered into a protracted
campaign/elections/government formation process. Except for
late December, when the Turks unsuccessfully attempted to
broker agreement on the broad outlines of a deal, Asad has
been able to sit back and wait for the new Israeli government
to develop a position. With GOI PM Netanyahu now in place
and making statements, Asad claims he does not see an Israeli
partner. Asad has taken no first steps, offered no
initiatives, and has risked nothing since the indirect talks
were suspended. Israel's Gaza operation at first threatened,
then later strengthened Asad in his comfort zone. Initially
embarrassed that he'd been negotiating, even indirectly, with
Israel, Asad later turned waves of Arab outrage over the
treatment of Palestinian civilians to his benefit. As the
self-modeled Arab center of support for the "resistance,"
Asad found himself both responding to and shaping regional
public opinion. The Arab street generally continues to view
Asad as the only Arab leader to oppose Israel's actions and
support the resistance in a vigorous, unambiguous way.

10.(S/NF) Though Asad may dream of being the leader who
returns the Golan to Syria, there is endemic skepticism here
that such a deal will ever be possible. The Syrians are
generally negative in outlook on this point, and successive
generations have been raised around the core principle that
Syria is threatened by Israel. The ethos that binds the
country together is essentially resistance to Israel. There
is little objective discussion of what peace would entail,
particularly in terms of potential concessions. There are
fundamental contradictions for the Syrians in the pursuit of
peace with Israel: a failure to prepare the Syrian public
for the inevitability of concessions could ultimately
threaten the acclaim Asad anticipates from the return of the
Golan. Additionally, the vested interests of the Syrian
security establishment would conceivably be the first to be
threatened by the absence of a state of war; that same
security establishment is what keeps Bashar in power now.

11.(S/NF) Asad and Muallim will want to tell the story again
of how close they were to a deal in late December when Olmert
was in Ankara and Muallim was on the phone, trying to reach
consensus on the phrase dealing with the "terms of reference"
or "issues related" to going to direct talks. The Syrians
insisted that the June 4 line be the "terms of reference"
while the GOI sought to avoid being pinned down. Even after
telling the story so many times, however, there are still
inconsistencies in the Syrian presentation. Sometimes they
talk about six points, sometimes three. Sometimes there are
six geographical coordinates or there are three
geocoordinates and three narrative points of policy. The
Syrians also claim to have deposited with the Turks narrative
responses to six questions from the Israelis dealing with
security arrangements. If the Syrian responses on Hamas and
Hizbollah are similar to their routine presentations, those
answers are not as constructive as the Syrians claim.

--------------
Hamas, Hizbollah and Iran
--------------

12.(S/NF) The notion of resistance has been elevated in Syria
from pragmatism to theology in the last year, with an
enormous boost coming as a result of the Gaza operation.
This trend strengthens the hands of Hamas and Hizbollah
vis-a-vis the SARG, thanks in part to a Syrian propaganda
effort that has glorified the resistance activities of two
groups which are otherwise antithetical to the SARG's secular
orientation. The SARG's relationship with Hizbollah has
morphed from a patron-client relationship to one of near
equals; the addition of Iran to their security alliance
further constricts Bashar's flexibility in dealing with
Hizbollah. SARG officials insist "Syria is not in the pocket
of anyone, including Iran" and point to increasingly warm
relations with Turkey as a counter-balance to the Iran
relationship. SARG protestations notwithstanding, the degree
of security cooperation among Syria, Iran, and Hizbollah has
created a defense relationship from which Syria will not
easily be able to extract itself. Hamas escaped any serious
criticism from the SARG for its poor performance during the
Gaza conflict and, despite rumors that Hamas chief Khalid
Meshaal's high profile annoys Bashar, there has been no
noticeable SARG effort to clip Meshaal's wings. The SARG is
uneasy with Hamas's Muslim Brotherhood affiliations but
claims its resistance mission takes priority. Hamas is
probably proselytizing in Palestinian refugee camps here.
Concerned about Fatah al-Islam and rogue Al-Qaeda (AQI)
elements (not those AQI elements whom they have coopted as
part of the foreign fighter network facilitation),the SARG
may have insufficient resources to also keep Hamas under
control. It appears less likely that the SARG can expel
Hamas now, particularly as Hamas also enjoys warm relations
with Syria's key allies Iran, Turkey, and Qatar. In fact, it
seems the SARG is actually open to a reconciliation with its
own Muslim Brotherhood movement -- a move that comes largely
at the behest of Turkey. Hamas seems to be less of a card to
play and more of a permanent guest.

--------------
Media
--------------

13.(SBU) Syrian media coverage of the possibility of your
visit has been muted and confined to private daily al-Watan
and websites. Syrian media, which are largely state-owned
and completely state-controlled, will give maximum play to an
actual visit. They will bill it as confirmation of Syria's
importance as a regional player, as recognition of Syria's
indispensable role in any future peace settlement, and as the
final nail in the coffin of the isolation imposed on Asad by
the former U.S. Administration. As the visit comes on the
heels of a June 10-12 FPOTUS Carter visit, Syrian media may
seek to cast your visit as our official outreach to the SARG
and Carter's visit (and his expected meeting with Hamas chief
Meshaal) as our unofficial outreach. The SARG could also use
Carter's visit to highlight and criticize our continued
refusal to officially engage with Hamas. The tone of
coverage is likely to be colored by the tenor of the meeting
itself. We expect coverage to be positive, but judging from
past practice, it may be accompanied by a subsequent public
statement or interview by Asad on the importance of
"resistance" to mollify the Iranians.

--------------
Sanctions
--------------

14.(C) Five years of U.S. sanctions have hurt the Syrian
economy, although they have not hurt the average Syrian's
standard of living. The sanctions' greatest overall impact
is the deterrent effect they have had on foreign direct
investment (FDI),coming at a time when Syria is less able to
meet its own needs. U.S. trade sanctions implemented under
the Syria Accountability Act (SAA) have severely restricted
the national air carrier's ability to obtain spare parts and
have prevented it from purchasing new aircraft. Sanctions
have atrophied Syrian Air's fleet from 16 to just four
aircraft, have grounded the SARG's VIP aircraft, and have
hampered Asad's cousin's (Specially Designated National Rami
Makhlouf) attempts to launch a private airline. The U.S.
Treasury Department sanction against the Commercial Bank of
Syria has stigmatized Syria's entire financial sector, to
include the nascent private banks, as most U.S. and European
financial institutions have cut off correspondent
relationships with all Syrian banks. Reformers and
businessmen argue U.S. sanctions have actually retarded the
SARG's liberalization of the economy ) and (they claim) the
political liberalization that would eventually follow )
while strengthening regime hard-liners who use sanctions as
ammunition against greater engagement with the U.S.

15.(C) The Syrians find the Administration's decision last
month to renew sanctions under the SAA as problematic and
ill-timed. Syrian Ambassador in Washington Imad Moustapha
told media the renewal was proof the USG can still be
"captive to Israeli interests." In meetings with previous
Congressional and other VIP delegations, the SARG had
refrained from raising the SAA and sanctions issues,
generally. However, in Asad's most recent meeting with
Senator Kaufman of the Senate Foreign Relations Committee,
Asad raised the issue directly, asking (rhetorically) whether
the U.S. was interested in working with the Syrians to remove
sanctions "obstacles" from the bilateral relationship (ref
C). The Department's report on Syria's progress in meeting
the conditions contained in the SAA is due to Congress on
June 12 -- coinciding with your visit.

--------------
Syria's changing economy
--------------

16.(C) Asad has presided over significant changes in
economic policy that were primarily driven by Syria's
diminishing oil reserves -- long the regime's primary source
of revenue -- and its decreasing influence over the Lebanese
economy. The most significant reforms so far include
liberalizing Syria's trade regime to authorize the direct
import of most consumer goods, re-introducing private banking
into the financial sector, and cutting government subsidies
on refined petroleum products. The reform program has
exposed political fissures between the generally pro-Western,
pro-reform private sector and the Ba'ath Party, who fear the
reforms threaten the system of patronage and corruption that
has sustained their dominant socio-economic position and
might lead to irreversible political freedoms that could
bring down the regime. While Bashar manages to remain above
the fray of day-to-day economic debates, his supporters say
he is simply pursuing the "China model" of economic
development while maintaining firm political control.

17.(C) While unlikely to threaten regime stability in the
short-term, Syria's most acute economic problems must
eventually be addressed to maintain the state's long-term
viability. Syria's burgeoning population suffers from an
estimated 25-30% unemployment rate, with some 35% of the
workforce employed by the public sector. Inflation is
rampant in Syria; even upper-middle class Syrians are having
trouble putting food on the table and paying rising utility
and fuel bills. The true rate of inflation, which we
estimated at over 30 percent in 2008, is never acknowledged
by the Syrian government. According to the Syrian Deputy
Prime Minister for Economic Affairs Abdallah al-Dardari,
however, the average Syrian is spending 42 percent of his
income on food.

18.(C) Increasing demand for energy, water and transportation
is straining Syria's antiquated infrastructure, and Syrians
have grown accustomed to year-round water rationing and
seasonal power rationing. The SARG is counting on FDI to
make up for decreasing oil revenues (which dropped by 8.7
percent in 2007, according to the SARG) and to develop
critical infrastructure, although Syria's endemic corruption
) as well as U.S. sanctions ) act as a deterrent to FDI.
The regime believes Syria can leverage its geographical
location to reap economic benefits from increased trade
between Gulf Cooperation Council (GCC) countries and Europe,
particularly by exporting Iraqi oil and gas through Syria to
the European market. The SARG hopes to leverage its
relations with Turkey and Iran to improve its water, natural
gas and electrical supplies by physically connecting the
necessary pipelines and grid networks. (Note: Though not
contiguous with Iran, the SARG is working with Iran and
Turkey on possible construction of a pumping station to bring
water from the Tigris to Turkey, Syria and Iraq. End note.)

19.(C) The global financial crisis is affecting Syria
indirectly, as Syria's large expatriate population sends
decreased remittances, GCC investors -- who constitute the
greatest contributors to Syria's FDI -- have put some
projects on indefinite hold, and exporters of manufactured
goods -- particularly textiles -- have seen demand for their
products drop by 50 percent or more. The Office of the Prime
Minister has commissioned a group of high-profile economists
to analyze the effect of a prospective mass-repatriation of
Syrian workers from abroad on the Syrian economy and social
stability. (Note: The prospective repatriation would
include both laborers and white-collar workers. End note.)

--------------
Human Rights
--------------

20.(C/NF) The SARG continues to be deeply suspicious of human
rights and civil society activists. All political parties
that do not participate within the National Progressive
Front, of which the Ba,ath Party is the leading member, are
illegal. The SARG finds any dissent directed at the regime's
legitimacy, including more general calls for "democratic
reform," to be intolerable. The government has been swift to
detain, prosecute, and imprison oppositionist leaders.
Democratic reformers perceived to be colluding with foreign
powers are subject to especially harsh reprisals, as in the
case of the activist Kamal Labwani who, after an
international tour that included meetings with Bush White
House officials, was sentenced to 18 years in prison for
plotting against the regime. (He remains incarcerated.)
Human rights activists who are able to refrain from political
attacks are generally given more leeway. Lawyers for human
rights activists who do not engage in overt political
criticism remain under serious SARG scrutiny and suffer
harassment, but they are rarely incarcerated.

21.(C/NF) When addressing human rights and political
detentions with CODELs and other visiting VIPs, President
Asad has consistently maintained the following: (1) SARG
actions are justified on the grounds of national security
and/or the detained individuals criminality; (2) the issue is
an internal one -- Syria does not meddle in other nations'
internal affairs, nor should other nations meddle in Syria's;
and (3) there can be no conversation about human rights
without including the Israeli treatment of Palestinians,
especially the recent military action in Gaza.

--------------
Refugee Situation
--------------

22.(C) Syria has an interest in inflating the numbers of
Iraqi refugees to gain additional assistance and credit for
the burdens they are bearing, and occasionally raise this
issue with visiting delegations. Though the SARG reports
that Iraqi refugees number 1.2 million, diplomatic and
intelligence sources suggest a number at most half this size.
While the SARG might complain bitterly about the lack of
support provided by the U.S. on this issue, in truth the U.S.
has contributed approximately $200 million since FY07 (a mix
of contributions to NGOs and to U.N. organizations) to
support and assist Iraqis in Syria and the local impoverished
Syrian population. Iraqi refugees are becoming increasingly
vulnerable -- and more reliant on humanitarian aid -- as they
deplete available resources and are unable to work legally.
Syria also hosts some 400,000 Palestinian refugees, the
descendants of Palestinians who fled Israel in 1948. UNRWA
provides health, education, and social services. The
Palestinians, in contrast to the Iraqi refugees, enjoy most
of the rights of Syrian citizens.

--------------
Nuclear Aspirations
--------------

23.(C) Concerns linger over Syria's presumed intent to
establish a covert nuclear weapons program. Syria allowed an
IAEA inspection team to examine the al-Kibar site in June

2008. The SARG claims that soil samples that yielded traces
of enriched uranium were the result of Israeli bombs
containing depleted uranium. The IAEA has sought follow-up
visits to Damascus, to no end. Meanwhile, the Syrians have
waged a somewhat successful campaign within the IAEA for
preliminary assistance in establishing a civil nuclear
program, securing a Board of Governor's (BOG) decision to
move forward with technical cooperation. The Syrians read
the BOG decision as a sign they can continue to evade IAEA
requests for further inspections. We seek to convince them
that cooperation with the IAEA offers a choice preferable to
following the Iranian model of non-cooperation.
CONNELLY