Economy, Geopolitics, Syria, The Levant

Rami Makhlouf: Magnate of the Syrian State, Part Two

A cashier counts Syrian currency notes in Amman. (Photo Reuters - Ali Jarekji)

This is the second of a two-part article highlighting the influence of Syria’s wealthiest businessman on the power structure of the Syrian Arab Republic, as well as some of his contributions to the Syrian Conflict. Part One may be read here.

Rami Makhlouf has been connected to several private militias who operate outside of the direct command structure of the the Syrian Arab Army (SAA). The proliferation of these kinds of militias in Government-held Syria is quite large — they number in the dozens, with the exact number at any given time being difficult to identify due to the frequent disbanding of groups and creation of new militias. A substantial portion of these armed groups are foreign, with the majority being either the deeply-religious Shiite Iraqi militias operating under the banner of the Popular Mobilization Units (PMU), to armed groups operating as extentions of Lebanese political parties such as the Syrian Social Nationalist Party, with the most high-profile and widely-recognized actor in this category being the deep and widespread involvement of Lebanon’s semi-autonomous “state within a state”, Hezbollah.

Members of the Whirlwind Eagles militia displaying the distinctive flag of the Syrian Social Nationalist Party, a Lebanese political party typically associated with the Orthodox Christian community who also acted as an armed group during the Lebanese Civil War of the 1970s and ’80s.

The majority of Syrian militias that exist outside the command of the SAA are known as the National Defense Forces (NDF), which originated as armed “popular committees” that would patrol and guard neighborhoods of communities that were predominantly pro-government in their allegiance during the first year of the Syrian uprising. Under the guidance of the shadowy Iranian General Qasem Suleimani, they were transformed into a semi-regular volunteer army acting as an auxillary force to the Syrian Army. Coverage of the Syrian conflict by major media outlets rarely mention these varied groups aside from Hezbollah, and when closer attention is paid to the de-centralized nature of pro-Government groups it is usually the NDF that is acknowledged. However there are also numerous armed groups that effectively operate as private militias, funded by wealthy magnates of the Syrian state such as Rami Makhlouf.

Makhlouf’s Charities

The emblems of Rami Maklhouf’s militias, from left to right: Homeland Shield, The Leopards of Homs, and the al-Jabalawi Battalion

Rami Makhlouf funds his private army of militias through the Al-Bustan Association, an ostensible aid charity that Makhlouf owns and finances. Despite the sanctions leveled at Makhlouf described in part one of this article, Al-Bustan has recieved financial support from UNICEF as part of the United Nation’s Syrian aid program. This same company is also the financial channel through which Makhlouf’s patronage is given to militias operating in Syria outside of the SAA’s heirarchy of command. Three militias associated with Makhlouf that are also financed by his charity are known as Fuhud Homs (Leopards of Homs), Kata’ib al-Jabalawi (the al-Jabalawi Battalion) and Liwa Dir’ al-Watan (Homeland Shield). These three have been been recorded as participating in battles in Homs, East Ghouta, Palmyra, the Jobar neighborhood of Damascus, and many other locales, fighting a variety of Syrian Opposition forces as well as ISIS (in the case of Palmyra). Liwa Dir’ al-Watan also has the interesting distinction of being closely connected with another armed group known as Liwa Dhu al-Fiqar, an Iraqi Shia Militia that is also operating in Syria. The al-Jabalawi Battalion and the Leopards of Homs formed part of a network known as “the Popular Defense Forces in Homs.” The city of Homs was an epicenter for the original popular anti-Assad protests in 2011, whose resistant neighborhoods were the subject of a bloody siege by government forces until May of 2014, when an agreement was reached and opposition forces left the city after three years of struggle and warfare.

Members of the Iraqi Shia militia Liwa Dhu al-Fiqar. Note the image of Bashar al-Assad depicted on the patch of the man in center.

When reviewing the presence and history of private militias such as the ones described above, the question remains as to why the regular Syrian army has become so decentralized and susceptible to having its command structure subverted by the presence of irregular militias, both foreign and domestic. Part of the reason for this has been described as a historical tendency within Assad’s Syria to reward military promotions to people who cultivated connections with the government, a trend that increased during Bashar al-Assad’s presidency. Since military service in Syria is compulsory, the military became a mirror of Syria’s political reality — a hierarchy dominated by a select privileged few who received military, financial and political preference by the government. In 2011, thousands of Syrian soldiers and officers rebelled against the government when they were ordered to use lethal force on the protests that were sweeping across Syria, defecting and forming the original Free Syrian Army battalions. Although these defections did not alter the Syrian military’s command structure very much since key positions were already held by individuals with close relationships to the government, it did have the effect of making the networks of business patronage the dominant command structure in the Syrian armed forces. So in 2013 when Makhlouf began financing the Tiger Forces (an elite Syrian military unit that operates outside of the regular Syrian army), a powerful armed force was created that was not only better equipped than the Syrian Army itself but whose members are paid better wages than the salaries afforded to enlisted members of the Syrian armed forces.

Protests against the Assad government in the city of Hula, near Homs in 2011.

The economic influence of the “militiafication” of the Syrian army cannot be overstated. According to a highly-informative report published by the Carnegie Middle East Center in 2016, National Defense Force militias recruits received around 30,000 Syrian pounds a month, in contrast to the 18,000 pounds earned by regular SAA soldiers. Members of the militias financed by Makhlouf are paid even more substantial wages, according to statements made by militia members themselves.  The economic climate in government-held Syria is one where the the Syrian pound has depreciated around 80% of its pre-war value and over half of its working-age population are reported to be unemployed. Alongside these statistics, the nation’s infrastructure has been horrifically devastated and the national GDP has shrunk 55% in five years. With work hard to come by, prices of food and other necessities rising, and with what’s left of the State’s social safety net steadily shrinking, seeking employment in a militia may be one of the few options that tens of thousands of Syrians in the western part of the country have to support themselves and their families.

When considering this economic catastrophe in addition to the hundreds of thousands of deaths and the millions of refugees that have been rendered homeless as a result of the war, that Rami Makhlouf was discovered to still have millions in offshore accounts as recently as 2016 stands out quite starkly. However it is possible that it is precisely because of these offshore assets that a critical element within the economy is protected, since a handful of businessmen like Makhlouf possess a massive amount of shares in the Commercial Bank of Syria (the State-run bank of Syria), as well as sitting on its board of directors.

The likelihood of Assad’s government collapsing has become increasingly less likely in light of the lengths to which Russia, Iran and other state actors are willing to go to in order to prop up the Syrian state. The future of the Assad government and their allies in the business sector is uncertain, considering the amount of damage that has been done to their home. However when examining the influence of someone like Rami Makhlouf, it seems unlikely that fundamental policy changes are likely to happen, since Makhlouf’s fortune is deeply tied to the conditions that created the economic and political inequality that in turn contributed to the social unrest and subsequent outbreak of civil war.