Syria sanctions undermine stability and block economic recovery, says Foreign Minister

Asaad Al Shaibani tells UN Security Council that punitive measures imposed on Assad regime are deterring investment in Syria’s reconstruction

Syria's Foreign Minister Asaad Al Shaibani speaks at the UN Security Council on April 25. AP

Syria's Foreign Minister said on Friday that while his country has opened its doors and encouraged the return of displaced people, sanctions are undermining stability and blocking economic recovery.

Asaad Al Shaibani - the first Syrian official to speak publicly in the US after the toppling of former president Bashar Al Assad in December - told the UN Security Council that expired sanctions, originally imposed on the previous regime, are deterring international organisations and companies from investing in Syria’s reconstruction. These restrictions, he said, block capital and expertise while allowing illicit networks to thrive.

“In fact, those who benefit from operating in the shadows, often linked to extremist or terrorist groups, are the real beneficiaries of these sanctions,” he said. He also noted that the sanctions force Syria to play the role of "an aid-dependent" country rather than a partner in global economic growth.

Earlier, Mr Al Shaibani raised Syria’s new flag at UN headquarters in New York. The three-starred flag, once used by opposition groups, has replaced the two-starred banner of the Assad era as Syria’s official emblem, symbolising the political shift following the fall of the long-time dictator.

New Syrian flag raised at the UN

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Damascus’s new government has been seeking to mend ties with Washington, hoping for relief from debilitating sanctions imposed after Mr Al Assad’s suppression of 2011 anti-government protests that resulted in a civil war.

A Syrian delegation, which included the Foreign Minister, arrived in the US this week to attend World Bank and International Monetary Fund meetings in Washington before heading to UN talks in New York, signalling a tentative re-engagement with international institutions. While in Washington, Syrian officials attended a meeting on reconstruction co-hosted by the Saudi Finance Minister Mohammed Al Jadaan and the leaders of the World Bank and IMF.

Mr Al Jadaan told reporters the gathering had given the international community a new sense of urgency to turn Syria into a stable country. IMF Managing Director Kristalina Georgieva said initial priorities included building credible data capability and rebuilding the function of its central bank and tax policy.

"The fabric of Syrian society is deeply wounded. It's going to take a lot of work by the Syrians themselves to rebuild it," she said.

Mr Al Jadaan acknowledged the need to move cautiously considering the existing sanctions on Syria, but added it was important to rally support from the international community.

"Standing with them, providing capacity, support and advice, and ... even financial support is really crucial. I mean, the Syrian people deserve that support," he said.

US President Donald Trump's administration has not formally recognised Syria’s self declared government, led by Ahmad Al Shara, a former Islamist insurgent who commanded the offensive that led to Mr Al Assad's removal. Apart from providing limited sanctions relief, Washington has maintained most restrictions, complicating Damascus’s efforts to reintegrate into the global economy.

Washington has said the US will wait to see how the new authorities exercise their power and ensure human rights before lifting sanctions, opting instead for targeted and temporary exemptions.

“Almost all Syrians in and out of the country echo the call for sanctions easing to be at a larger scale and quicker pace," UN special envoy for Syria Geir Pederson told council members. "This is essential to reactivate Syria’s economy, to realise concrete support from the region, and to enable many to actively participate in a national effort to rebuild their country."

A person waves a scarf in the colours of the new Syrian flag in Hama, Syria. EPA

Mr Pedersen added that the complex intersection of sanctions "hampers peace dividends that we should be seeing from the suspensions already granted".

"And the chilling effect of sanctions is long-lasting,” he said, calling on governments to engage with the private sector to ensure that sanctions suspensions granted so far in critical sectors such as energy and banking materialise.

In a sign of shifting dynamics, two Republican politicians, Marlin Stutzman and Cory Mills, visited Damascus last week on an unofficial trip arranged by a Syrian-American non-profit organisation. They met Mr Al Shara and other officials in a rare engagement between US politicians and Syria’s new leadership.

The US has warned that it will hold Syria's interim authorities accountable for taking steps to combat terrorism, curb Iranian influence and address regional security concerns, the deputy US ambassador to the UN Dorothy Shea told the Security Council.

In particular, Ms Shea said Washington expects Syria’s interim leadership to fully renounce and suppress terrorism, adopt a policy of non-aggression towards neighbouring states and bar foreign terrorist fighters from official roles.

Meanwhile, the UK on Thursday ended restrictions on a dozen Syrian entities, including government bodies and media outlets, while the EU has started reducing its measures. The moves highlight diverging approaches between Washington and its allies on engaging with post-Assad Syria.