Rami Makhlouf: The Rise and Fall of a Syrian Tycoon

Published June 29th, 2020 - 07:21 GMT
Rami Makhlouf (twitter)
Rami Makhlouf (twitter)

Syria's ongoing currency collapse has sent the country into an economic spiral, with recent figures estimating 85 percent of the population now live in poverty. The cost of basic goods has skyrocketed, triggering anti-regime protests unseen in almost a decade and fresh American sanctions choking the war-torn country further.

Feeling the heat, Syrian President Bashar Assad continues to strip away the influence of his cousin, Rami Makhlouf. The Syrian government announced Monday that a series of companies operating at Damascus airport and various border crossings with Jordan and Lebanon are to have their duty-free contracts revoked. The majority of these companies, according to an AFP report, are owned by Makhlouf and signal the latest move against the president's first cousin.

Damascus' campaign to dismantle Makhlouf's business empire became public two months ago and since then he has been put under a travel ban until vast sums in supposed arrears are paid to the government. Makhlouf's economic weight, spanning real estate, construction, petroleum and telecommunications, and reportedly amounting to 60 percent of the economy, have been vital in financing the regime's war effort.

In an apparent coup de grace last month, the regime seized Makhlouf's assets and ordered his telecoms giant Syriatel to be placed in judicial custody. When Makhlouf responded with a series of public videos, the family spat spilt out into the open.

Family feuds have been a recurring feature of the Assad regime, since Bashar's father, Hafez seized power in 1971. Thirteen years later Hafez's brother Rifaat was exiled after plotting a failed coup, that according to former Defense Minister Mustafa Tlass, went Hafez's way thanks to the mother's intervention in his favor. More recently, in 2012, the unsolved assassination of Bashar's influential brother-in-law Assef Shawkat, amid rumors of a potential coup against the presidency, led many to assume that Bashar was behind it.

Speaking to The Daily Star, former Syrian diplomat Bassam Barabandi said the course such disputes have taken reflect the cardinal rule governing Syrian politics since Hafez. “One has a limited role within the game,” Barabandi explained, “but once you cross that limit, the role is taken from you and you are out of the game. Everyone in Syria knows this. “

While much has been made of Makhlouf's economic clout in Syria, Barabandi underplayed this image, instead pointing to a chain of command at work. “Makhlouf is an Assad employee. He does not own the money, but manages it as directed by [Bashar] Assad.” A major part of this was the Latakia-based charity, Al-Bustan, funded by Makhlouf businesses that parcels out humanitarian assistance mainly to the Alawite community the regime belongs to. Last year the government moved to retake control of the charity from Makhlouf. “Al-Bustan was part of that chain of command,” Barabandi stated, explaining Makhlouf's role in supporting the Alawite community through Al-Bustan while the ruling family maintains a distance to project a purely Syrian national image of themselves.

But the immense military pressure the regime came under during the war, created the need for local militias to protect areas the regime could not. So Al-Bustan evolved into a military outfit with its own militia. And there were other militias that Makhlouf bankrolled too. As the war evolved and foreign players came onto the scene, Makhlouf had dealings with all of them, enhancing his influence accordingly. “Makhlouf started to take on a larger role than what was expected of him both politically and militarily,” Barabandi said, pointing to the empowering of Iranian militias, his attempt to put Russian officers on his payroll as part of a wider attempt to cultivate closer ties with Moscow, a city where his brother and father reside, as well as his drug trafficking activities with Hezbollah.

Indeed in its latest move against him Monday, a government body has claimed that the companies whose contracts were revoked, was due to the main investor being, ''involved in smuggling goods and money.''

According to Syrian reformist Ayman Abdel-Nour, writing for the Middle East Institute, the fallout between Assad and Makhlouf can be traced to the beginning of last year, when Russia asked the regime for $3 billion in payment for the S-300 missile system. Assad turned to Makhlouf, who responded by proposing the sum be sourced from the various players fighting alongside Assad. This account, if true, clearly diverged from the no-questions-asked, apolitical role that Makhlouf was supposedly meant to fulfill.

As Barabandi explained, “Makhlouf was not supposed to be involved in politics. He crossed the limit.” Beginning last year contracts were gradually diverted away from him toward other players and in September, the Al-Bustan militia was shut down by the government, further clipping Makhlouf's wings. Now with his assets seized and barred from travel until vast sums are paid to the government, Makhlouf seems defeated. Many believe that his fall stems from the ambitions of Asma Assad, the president's Sunni wife, who runs a rival charity network in Syria.

Despite this, Makhlouf's public videos have tried to impress on his cousin, that he still holds significant Alawite support, and holds that support in Assad's name, as loyal to the government. However Makhlouf is simultaneously undermining that loyalty, according to Barabandi. “Every time the government makes a case against Rami, he goes to the community, saying the regime, the Sunnis, want to deprive the Alawites after all they have sacrificed.”

It remains to be seen if this spat could precipitate a full blown schism within the Alawite community. Rumors that Makhlouf's son is being earmarked to take over Syriatel would suggest not. Ultimately Barabandi predicts the Alawite community will remain largely loyal to Assad. “The Alawite community have never felt secure and believe the head of the army is the only one capable of protecting them. Within this mindset, Rami will always lose to Bashar.”

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