Russian investments in Syria at risk
The number of victims in Syria continues to rise, but Syria is not the only nation suffering from the deteriorating security situation. Russian companies with investments in Syria are incurring huge financial losses amounting to billions of dollars. The Moscow Times discussed the commercial and economic ties between Syria and Russia, specifically the profitable arms contracts and Russian investments in infrastructure, energy and tourism in Syria.
The Moscow Times stated that the sum of Russian exports to Syria was 1.1 billion dollars in 2010, whereas Russian investments in the country amounted to 19.4 billion dollars in 2009. It can therefore be said that Russia has a lot on the line. The Moscow Times quoted Antoine Medrativ, sales manager for Uralmash drilling Co. that orders and export deals “invested in Syria and implemented for 14 years on the ground in Syria have come to a stop, as if they’ve reached a dead end.” He added that the nature of the company’s business necessitates working with people on the ground, dialogue and negotiation but that the current security situation makes that impossible.
According to UN estimates more than 2,200 demonstrators have been killed in the growing protest movement against Assad’s regime since March. The Syrian government, which does not allow reporters into the country, has used tanks, snipers and heavy artillery against the protesters to repress the uprising. The Moscow Times quoted Sergei Makarov, CEO of Stroytransgaz, a company that builds excavating equipment for natural gas in Syria, as saying, “despite the violence, our work continues without any disruptions whatsoever.”
But he added the company faced problems with its European suppliers responsible for providing the necessary equipment to the company, due to the suspension of tariffs following the standstill in the banking sector. Makaraov pointed out that the company had taken extra security measures to protect its employees and said, “If Russia announces the evacuation of its citizens, we are ready.”
On the other hand, the journal pointed out that other Russian firms have not been affected by waves of protests sweeping through Syria and quoted Nicolai Grishenko, manager of an engineering company as saying, “I have been in daily contact with the Russian team working Aleppo which consists of 20 employees. We have encountered no delays in our work.” Grishenko, who has worked in Syria for 50 years added that Assad ‘Is a decent man’ and compared the current protests with the unrest in 1980, which were successfully quelled by the government, leaving 25,000 civilians dead and injured.
According to reports from the Russian defense ministry, there are arms contracts worth 4 billion dollars with Syria, which include MEG29 fighter jets, short- range land to air missiles, artillery systems and anti-tank weapons. Syria is also host to the only Russian air force base in the Mediterranean.
The Moscow Times ended by saying, “Although Russia condemns the violence by the Syrian authorities against the protestors, and it rejects the international calls for economic sanctions by the U.N. that would obstruct any efforts within this framework.”
- Russian companies to jumpstart oil projects worth $1.6 billion in Syria
- Russians march in Moscow to protest air strikes on Syria
- A critical milestone: BP overlooks geopolitical risk and announces $12 billion investment in Egypt
- Russian journalists injured by missile in Syria
- All else aside, there is a bullish case for investing in Turkish banks