An economic deal with a political agenda: Power supply plan for Lebanon

Sidelined from international politics for years, the Syrian regime is re-engaging in regional deals as Washington seeks to limit Iranian influence.

In August, the Lebanese presidency announced the US decision to assist Lebanon in obtaining access to electricity, following a meeting between the US Ambassador to Lebanon, Dorothy Shea, and President Michel Aoun. The plan approved between the parties will allow for electricity to be transferred to Lebanon through shared power networks between Lebanon-Syria and Syria-Jordan, which will obtain additional Egyptian gas to produce electricity for Lebanese consumption. This announcement came in light of the dire electricity crisis, which has dramatically affected the livelihood of the Lebanese citizens and every sector of the economy.

The first item of the US-proposed plan consists of Jordan generating electricity and then transferring it to Lebanon through the Syrian network that connects both countries. The second item consists of supplying Egyptian gas to Lebanon through the Arab Gas Pipeline. In both cases, Syria, and subsequently the Syrian regime and its affiliated business actors, will play a significant role.

Indeed, in addition to the fact that the Syrian power network will function as the primary vector of electricity between Jordan and Lebanon, Syria is also at the center of the Arab Gas Pipeline, which passes through Jordan and then Syria. The gas supplies through the pipeline stopped in 2011, due to Egypt's reduction of exports to focus on domestic needs, in addition to the outbreak of popular protests against the Assad regime in Syria. The gas pipeline was also targeted by several terrorist bombings in Sinai and Syria.

Behind-the-scenes political goals
A potential deal to utilize Egyptian gas to sustain the consumption of electricity in countries affected by the economic crisis in the Middle East was first mentioned in a statement by the Iraqi Oil Minister Ihsan Abdul Jabbar, following a meeting with his Syrian counterpart Bassam Toa'me in Baghdad at the end of April, which revealed Iraq's intention to import Egyptian gas through Syria.

This statement was followed by the visit to Egypt of the now-former Lebanese Prime Minister-designate Saad Hariri and his remarks in mid-June about reaching an agreement with Cairo to import gas through Jordan and Syria. Hariri also mentioned that Jordan proposed this step to the US to ensure that it would not be affected by the sanctions provided by the Caesar Act.

Indeed, this agreement fits within the plan presented by the Jordanian King Abdullah to US President Joe Biden, which experts say likely aims to re-establish a relationship with the Syrian regime to reduce the regime's reliance on Iran. It is, therefore, likely to include providing incentives to the Syrian regime to persuade it to reassess its relationship with Iran.

Therefore, the US-regulated sanctions will not be an obstacle to the plan's effectiveness since President Biden has the power to issue sanctions exemptions without referring to the Congress or relying on its approval. This wouldn't be the first time the US provides an exemption, as the SDF, the political wing of the YPG/PKK, is already exempt from sanctions despite engaging with the sanctioned al-Qaterji family regarding oil trade.

Towards normalization with the Syrian regime?
The Syrian regime will most likely be able to benefit from the deal. First, the Syrian regime will be paid for allowing gas and electricity to be transferred through Syria and its infrastructure, though the amount of fees paid to the regime has yet to be determined.

The Syrian regime will benefit from the repairs to be implemented in Syria, as the contract to repair the pipeline and the infrastructure will be awarded to one of the many businessmen affiliated with the regime, therefore directly financing it. At the moment, most Syrian businessmen are sanctioned by the US and the EU, and it remains to be seen whether exemptions will also be made for the repairs needed for the gas deal to take place effectively.

On another note, given Lebanon and Syria's lack of financial resources, it is likely that the World Bank will need to step in to finance the efforts to repair the necessary infrastructure, which may raise questions about the likelihood of this financial assistance ending up in the hands of the Syrian regime.

Second, the deal will require a political agreement between Jordan and Lebanon and the Syrian regime to repair the electricity network and the infrastructure related to the gas pipeline. Such engagement was previously addressed during a meeting in June 2021 between the Jordanian Minister of Energy and Electricity, Hala Zawati, and the Syrian Regime Ministers of Oil Bassam Toa'me, and Electricity Ghassan al Zamil, in the first visit of a Jordanian official to Syria since 2011. This heralds an increase in normalization of relations with the regime after the UAE and Bahrain reopened embassies in Damascus in late 2018.

In addition to possible economic and regional diplomatic benefits, the Syrian regime may be interested in the political developments occurring on the sidelines of this deal, which could allow the regime to return to its seat in the Arab League and benefit from trade with Arab countries. As mentioned earlier, while primarily focusing on Lebanon, this economic deal also aimed to address the desire of the US Administration to push for the re-establishment of relations between Jordan and Syria to reduce Iran's influence and power in Syria.

The meeting between the US President and the Jordanian King is part of a new quest by Jordan to restore Amman's diplomatic role in the Arab world through negotiations with American and Russian leadership to reach a new solution to the Syrian crisis, relying on a political, rather than the sanctions- and military-based approach used in the region since the beginning of the crisis in 2011.

Jordan, supported by Arab countries like Egypt, wants to achieve a breakthrough in the pro-Iranian axis by offering a solution to the electricity crisis in Iraq and Lebanon in an attempt to prevent Iran from increasing its influence in these countries and provide the political elite an alternative to the overwhelming Iranian influence.

On the other hand, this deal will not present a significant opportunity for the Syrian regime: financially speaking, the fees paid to the regime for the passing of gas and electricity through Syria will not constitute a magic wand for the struggling economy. Furthermore, this US step will not impact its policy regarding sanctions or engagement with the regime but serves as a message to Russia that sanctions can be amended if the regime changes its behavior. It shows that the US can take actual steps for a solution in Syria if its goals are at stake, including changing the regime's behavior regarding Iran and Hezbollah.  

This article was published in TRT World website under the title of “An economic deal with a political agenda: The power supply plan for Lebanon” on August 26, 2021.