GOVERNOR IYAD GHAZAL OUTLINES HIS "DREAM OF HOMS"

C O N F I D E N T I A L SECTION 01 OF 03 DAMASCUS 000093

SIPDIS

DEPARTMENT FOR NEA/ELA AND ECA/PE/V/R
LONDON FOR MILLER, PARIS FOR NOBLES

E.O. 12958: DECL: 02/01/2020
TAGS: PREL PGOV ECIN ECON EIND EINT EINV EPET ETRD
KPAO, OEXC, SCUL, SY
SUBJECT: GOVERNOR IYAD GHAZAL OUTLINES HIS "DREAM OF HOMS"

Classified By: CDA Charles Hunter for reasons 1.4 (b) and (d)


1. (C) Summary: Homs Governor Iyad Ghazal waxed poetic on his
vision of economic/social/political revival that he
romantically called the "Dream of Homs" during a January 26
meeting with the Charg in Homs. Two key elements stood at
the "dream's" center: (1) the development of an industrial
park in Hissyah (45 kilometers south of Homs); and (2)
President Asad's assurance that some administrative powers
over economic development that were once the sole province of
the central government would devolve to the Governors as part
of a SARG move toward greater decentralization. Ghazal
detailed a voluminous list of ongoing projects and studies to
be used in developing "industrial cities," decreasing
corruption, increasing efficiency in granting business
licenses through an E-government project, streamlining
administrative procedures (especially in the health care
sector),and stimulating a new culture of partnership between
citizens and the Homs government. End summary.

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Background on Homs
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2. (SBU) The Homs Governate, the largest of Syria's governate
at approximately 42,000 square kilometers, is situated in the
center of the country, shares borders with Iraq and Lebanon,
and is home to a number of national heritage sites, including
Palmyra and the Crac des Chevaliers. The capital of the
governate is the city of Homs, which dates back to around
2300 BC. According to Ghazal, the governate has a population
of around two million people, with an additional two million
"Homsy" living abroad. Traditionally known for agricultural
production, (e.g., dairy, poultry, sheep, wheat, sugar beets)
as well as for its oil refinery, Homs has experienced an
increase of new industry in recent years, especially since
Legislative Decree No. 57 (2004) set forth guidelines for the
creation of industrial cities. Energized by the new decree,
Ghazal explained his office had launched a series of
strategic research studies to assess where and how to
maximize economic development projects that would, he
proclaimed, make "the Dream of Homs" a reality. In 2009,
Legislative Decree No. 52 designated Homs as headquarters for
the Federation of Chambers of Industry.

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New Autonomy?
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3. (C) Ghazal recalled how during a meeting between President
Asad and Syria's governors in 2005, the president directed
them to "pay more attention to strategic studies." Governors
in the past, he contended, had not had the power to initiate
studies of this sort; that had been the purview of the
central ministries. Asad's directive provided the impetus
for the governate to commence a round of development-oriented
studies that would, Ghazal said, direct his office's future
efforts in reshaping administrative and businesses practices.
At the same time, the governor emphasized the central
government's role in approving all future projects. He
characterized these studies as "incentives for reform," but
noted that while many decisions would be made at the local
level, the "huge, positive impact of the central government"
should not be underestimated.

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The Dream of Homs: Administrative Reform
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4. (C) Ghazal characterized the "Dream of Homs" as first and
foremost rising out of, and playing a role in, the central
government's five-year plan. The "industrial cities decree,"
however, had given local governments greater concrete
administrative powers than they had previously enjoyed, he
added. Without detailing precisely what new powers were
ceded to the governates, the governor described a number of
proposals in which the governate seemed to wield primary
authority. Homs had begun a broad administrative reform
initiative featuring an "E-government" program to simplify
licensing and administrative procedures for both business
investment and the management of certain public sector
operations.


5. (C) Ghazal cited a 2004 UNDP report that stated the
average length of time to process a business license in Syria
was 680 days. With a new E-government on-line application

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procedure, "we will shrink 680 days to half an hour," Ghazal
exclaimed. (Comment: From the governor's description, the
application procedure appeared to apply exclusively to
individuals seeking investment opportunities inside the
industrial city of Hissyah. End comment.) Using the
E-government site, an entrepreneur could learn about
available real estate plots and fill out the appropriate
application for license and land-use permission in the space
of 30 minutes. Another 15 days of processing would be
needed, Ghazal continued, before the entrepreneur would
receive the formal go-ahead to begin development. Inside the
industrial city, "the land is free," the governor said.
Investors needed only "pay for the infrastructure." The new
system also streamlined the multiple licensing costs into a
single fee payment. This new payment structure would, the
governor asserted, "cancel 90 percent of the corruption" that
had attended the fee-paying process in previous years. Begun
in 2006, the E-government program would yet require two years
before full implementation, Ghazal said.


6. (C) The health care sector, heavily subsidized by the
central government, would be another area of focus for
administrative reform, the governor continued. Based on
governate-directed research, he hoped to amend health care at
the local level to ensure better service without a fee
increase. Additionally, Ghazal outlined reforms in education
and waste management at the village level. The biggest
challenge, though, was his goal to relocate the oil refinery,
currently west of Homs city, to the east so as to reduce the
wind-borne pollution plaguing Homs. Ghazal noted that three
years ago the central government introduced a plan to
refurbish the refinery for approximately $800,000,000. The
governate, armed with land-use data, real estate value (the
refinery plot is worth $500,000,000, according to Ghazal)
plus the long term pollution costs, successfully lobbied the
central government to cancel the plan on the grounds that the
costs outweighed the benefits, thereby clearing the way for
the governate's relocation proposal.

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In Praise of Public Diplomacy
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7. (SBU) Governor Ghazal expressed his admiration for a
recent International Visitor Program in which a delegation of
Syrians, including Reem Balbaaki, an engineer who works in
Ghazal's administration, traveled to the U.S. to meet with
public-policy institutes, several U.S. governors, and the
Army Corps of Engineers for consultations on urban planning
and water management. Ghazal praised the program as having
provided a blueprint for future Syrian-based policy
institutes that could train the next generation of local
leaders. "We know we have a problem regarding qualifications
of heads of municipalities, especially in rural areas. Very
often the best candidates move to larger cities, leaving us
with few choices," Ghazal lamented. Better training, he
suggested, would help fill the knowledge gap.


8. (SBU) The delegation's meeting with the Army Corps of
Engineers about water management was, the governor noted, of
great significance. He argued Homs needed to focus more
intensely on water issues, including crop types and
irrigation practices. "It's illogical that we plant tomatoes
in the desert," he complained. The problem with bringing
about change lay in what he described as the "narrow
mentality" of rural farmers. Small landholders "only
consider the family's situation," and not the overall cost
certain crops exact on the terrain and water supply, he
explained. The governor expected a recent decree that no
summer vegetables be planted in the desert would help rein in
the problem.

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Chicago's Future Sister City?
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9. (SBU) Ghazal informed us that he had been in
correspondence with Chicago Mayor Richard Daley's office
about the possibility of starting a sister city program.
Mohammad Zuhur, a "Homsy" living in Chicago, chairman of the
Islamic Organizations of Chicago and head of the
Syrian-American Medical Association, had reportedly conveyed
Mayor Daley's "desire for a sister city relationship" to
Governor Ghazal's office. Ghazal, in turn, invited the mayor
to attend a hot-air balloon competition in Tadmur and then
sign a memorandum of understanding. Daley, who at the time

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of the balloon festival was slated to be in Amman, Jordan,
was unable to make the trip to Syria. Despite this initial
setback, Ghazal looked forward to future cooperation with the
mayor's office. (Note: In our effort to follow up on this
information, we learned from one of the governor's staffers
that there had been no direct correspondence between the
governor and the mayor. Rather, correspondence had passed
through a "third party" (NFI). End note.)


10. (SBU) In the interest of future cultural exchanges
between Syria and the U.S., the governor, on two different
occasions, seriously pressed the Charg to bring pop
song-and-dance sensation Shakira to the 2010 Tadmur Festival
in Palmyra. Without raising the irony that Shakira was a
Colombian of Lebanese extraction and probably not a U.S.
citizen, the Charg tactfully demurred on budgetary grounds.


11. (C) Comment: The Governor's ambitions for Homs's future
are clear and he has evidently placed much faith in the many
studies that will ultimately help determine when, where, and
how to implement new social, agricultural, economic, and
infrastructure development. Throughout our visit to Homs,
however, we heard from several local businessmen that "the
Dream of Homs" would never be realized, that the people of
Homs were unconvinced by the governor's reform strategies,
and that the governor himself was corrupt. Throughout the
meeting, Ghazal never once mentioned the presence of the
National Sugar Company (NSC),a state-of-the art sugar
refinery that represents the single largest U.S. business
investment in Syria through Cargill's minority shareholding.
We suspect his oversight was purposeful -- the NSC had
refused to build inside the industrial city, in part due to
water supply problems. When the governor attempted to block
the company's licensing for building on its current site just
north of Homs, the NSC reportedly appealed directly to the
Asad family for relief, and won it.


12. (C) Comment continued: Despite the governor's loss on
this front, we assess that limited economic and
administrative power appears to have been delegated to
governors and may, in the future, extend further to other
municipal leaders. It remains to be seen, however, whether
the central government's ministries in Damascus will allow
this decentralization of power to effect reform without the
ministries' direct participation. End comment.
HUNTER