Russian-Iranian Economic Interests in Syria (Part 2)

Publication type Article
Status Published
Occupation: Associate Professor, National Research University Higher School of Economics; Research Fellow, Institute for African Studies, RAS
National Research University Higher School of Economics
Institute for African Studies, RAS
Address: Moscow, Russian Federation
Occupation: Assistant Professor
Affiliation: Shahid Beheshti University
Address: Tehran, Iran
Journal nameAsia and Africa Today
EditionIssue 9

This paper discusses Russian and Iranian economic activity and interests in Syria and focuses on two macroblocks. First of all it seems to us important to highlight the level of trade and economic cooperation between Russia and Syria, on the one hand, and Iran and Syria, on the other. If for Iran’s economic relations with Syria, it should be noted that although the country has long been one of the top priority targets for Iranian trade and the trade interactions between the two sides were on the rise before 2011, the Syrian Crisis caused bilateral trade to fall drastically. However, Russian economic interests in Syria do not look so obvious and convincing. If we talk about the Russian economic presence in Syria after the Arab spring, it would be more correct to consider the interests of individual Russian businessmen and representatives of the economic elite in specific projects in Syria. Also, this work will be devoted to the difficulties faced by Moscow and Tehran in the implementation of their economic and investment projects in Syria and prospects of cooperation and competition between Russia and Iran. Given the close partnership between Iran and Russia in supporting Bashar al-Assad government, this paper also takes a look on the prospects of economic cooperation or rivalry between Tehran and Moscow in Syria and shows that no mechanism has yet devised by the two parties to manage their competition and promote cooperation in Syria’s economic sphere. Of note, this paper deals exclusively with Iran and Russia’s non-military economic activities in Syria and does not cover issues like arms exports or military aids of the two countries to the Syrian government.

KeywordsIran, Russia, Syrian crisis, economic development, Syrian reconstruction
AcknowledgmentThis article is an output of a research project implemented as a part of the Basic Research Program at the National Research University Higher School of Economics (HSE) in 2019 with support by the Russian Science Foundation (Project No. 19-18-00155).
Publication date09.09.2019
Number of characters23239
100 rub.
When subscribing to an article or issue, the user can download PDF, evaluate the publication or contact the author. Need to register.
Размещенный ниже текст является ознакомительной версией и может не соответствовать печатной
1 The Trade Promotion Organization of Iran (TPOI) has prioritized 40 countries around the world as “first priority target markets” for Iran’s trade, meaning that they are of a higher level of interest for Iran to conduct trade relations with. Since the period prior to the breakout of the Syrian Crisis, Syria has been one of these top-priority trade targets for Iran.


3 Official and institutionalized economic relations between Iran and Syria date back to 1996, when the first meeting of Iran-Syria joint economic commission was held in Damascus. Between 1996 and 2010, a total of 13 meetings were held in this format. However, since early 2011 and with the start of the Syrian Crisis, the joint commission meetings were suspended [1].
4 The trade turnover (Tab. 1) between Iran and Syria hit a record $545 mln in 2010, of which, some $ 516 million was the value of Iran’s export to Syria and the remaining $29 mln was the value of Iran’s imports. However, the beginning of the civil war in Syria and its expansion into a large part of the Syrian territories caused bilateral trade to reach a record low of $100 mln in 2014. This clearly shows the negative impacts of the civil war on Iran-Syria trade relations [2].
5 Although Syria’s share of Iran’s trade is rather small, Iran has always been among the main trading partners of Syria. According to the latest data published by the TPOI, as of November 2016 Iran has been the third largest exporter of goods to Syria, accounting for 8.8% of the Syrian market, following Saudi Arabia (with a 22.8% share) and the UAE (with a 11.2% share). Main items exported by Iran to Syria include light oils, wheat flour, pharmaceutical supplements, electrical conductors, powdered industrial dry milk, active yeasts, urea, butane, propane, valves and antiserums. Iran’s major import items from Syria include olive oil, phosphate, olive, yarn, scrap and waste batteries, fatty acids, polyurethanes, textiles and plastic products [1].

Table 1. Iran-Syria trade relations, 2009-2018, $ mln

7 Source: Trade Promotion Organization of Iran 2019 [2].
8 According to the data provided by the Iranian Customs Administration (IRICA), the value of goods exported to Syria from 2011 to November 2017 reaches $1,3 bln. Iran’s imports of Syria has been worth around $91 mln over the same period. Therefore, the balance of trade between the two countries during the war would amount to minus $1,2 bln [3]. This figure could also be considered as Syria’s debt to Iran, assuming that Syria has compensated for a small part of imports by exporting in Iran and given the fact that the Syrian government has not had enough money to pay for its imports from Iran.
9 These figures are separate from Iran’s nonmilitary spending in Syria with the label of “humanitarian aid.” According to the Iranian Foreign Minister Mohammad Javad Zarif, the value of Iran’s humanitarian aid to Syria since the start of the war has been about $2,8 bln. The money, he says, has been spent for providing medical aid, medical equipment, food and other consumables [4]. Zarif did not specify to whom exactly this money has been delivered, but most probably it’s been spent in government-held areas in Syria.


11 In the pre-war period, Iran did not have a significant presence in the field of investment in Syria and, as it’s clear from the titles of the agreements concluded between the two countries, Iran’s focus was mostly on developing trade with Syria. Iran’s most important investment projects in Syria before 2011 were the construction of Tishreen and Jandar power stations (worth about $500 mln) [5] and the establishment of a joint IranianSyrian car production company (worth about $60 mln) [6]. Meanwhile, the Free Trade Agreement was the most important economic agreement between the two sides, which failed to be realized due to the outbreak of the civil war.
12 However, over the past two years and with the gradual re-establishment of Assad’s position in Syria, Iran has signed a number of investment agreements to get involved in the process of Syria’s post-war reconstruction. On December 30, 2018, an agreement on long-term strategic cooperation between Iran and Syria was signed in Tehran by Syrian Minister of Economy and Foreign Trade Mohammad Samer al-Khalil and Iranian Minister of Roads and Urban Development Mohammad Eslami [7]. This is the only “comprehensive agreement” between Iran and Syria after 2011, which is supposed to be a framework regulating all forms of economic cooperation between the two sides.
13 Within the framework of this 20-year agreement, Iran has expressed its willingness to engage in some major economic sectors of Syria and some related MoUs have already been reached between the two sides in this regard. The MoUs include the construction of a power plant in Latakia, rehabilitating the Aleppo thermal power plant, as well as two power stations in Homs and Deir ez-Zor, the launch of Syria’s third mobile network operator, investing in phosphate mines in Homs and agricultural investments in an area of 5,000 hectares in Latakia. Investing in the Syrian ports of the Mediterranean and the construction of a new power plant in Latakia are among the other projects Iran is said to be granted to launch in Syria [8]. Furthermore, Iran has declared readiness to build 30 thousand houses in Aleppo, Homs and Damascus, to be built by the Iranian private sector [9]. However, it’s noteworthy that almost all of these projects are still on the paper and have yet to be materialized.

Number of purchasers: 5, views: 1193

Readers community rating: votes 0

1. Country report of Syria, bilateral relations // Trade Promotion Organization of Iran (TPOI) - (accessed 03.03.2019)

2. Country report of Syria, trade relations with the Islamic Republic of Iran // Trade Promotion Organization of Iran (TPOI) - (accessed 03.03.2019)

3. Annual statistics // Iranian Customs Administration (IRICA) - %D8%A2%D9%85%D8%A7%D8%B1%D9%87%D8%A7%DB%8C-%D8%B3%D8%A7%D9%84%DB%8C%D8%A7%D9%86%D9%87.html (accessed 05.03.2019)

4. Ghadimi A. Fact check: How much is the cost of Syria war for Iran? // BBC Persian, 26.02.2018 (In Pers.) - (accessed 07.03.2019)

5. The construction of Syria’s Jandar power plant has not stopped // Mehr News, 28.07.2012 (In Pers.) - (accessed 23.02.2019)

6. The inauguration of SAMAND production line in Syria // Asriran, 08.03.2007 (In Pers.) - (accessed 22.02.2019)

7. Iran, Syria sign long-term strategic cooperation pact // IRNA, 30.12.2018 (In Pers.) - (accessed 15.03.2019)

8. Abdolmajid M. Reconstruction of Syria: From imagination to reality // IRAM Center, 26.12.2018 - (accessed 18.03.2019)

9. Details of the activities of Iranian contractors in Syria // Alef, 31.08.2018 (In Pers.) - (accessed 16.03.2019)

10. Bassiki B. Iran sets sights on Syrian reconstruction projects // Al-Monitor, 24.10.2018 - (accessed 16.03.2019)

11. Abu Zeed A. Iran moving forward with railway link to Syria via Iraq // Al-Monitor, 30.11.2018 - (accessed 18.03.2019)

12. Iran to build railway through Iraq, connecting to Syrian port: Official // Kurdistan 24, 13.11.2018 - (accessed 10.03.2019)

13. The importance of Syria’s reconstruction in Iran’s strategy // Donya-e-Eghtesad, 13.09.2018 (In Pers.) - (accessed 25.03.2019)

14. Azizi H. Iran eyes major role in post-war Syria via reconstruction // Al-Monitor, 11.09.2018 - (accessed 25.03.2019)

15. Are Iran’s aids to Syria non-refundable? // Parsine, 17.01.2019 (In Pers.) - (accessed 23.03.2019)

16. Head of Iran’s chamber went to Baghdad together with the president // Iran Chamber of Commerce, Industries, Mines and Agriculture, 11.03.2019 (In Pers.) - (accessed 25.03.2019)

17. Iran-Syria economic agreement is strategic and long-term // Moghavemati News, 14.08.2018 (In Pers.) - (accessed 22.03.2019)

18. Iran, a leading actor in Syria’s reconstruction // Iranian Diplomacy, 15.07.2018 (In Pers.) - (accessed 22.03.2019)

19. Sveshnikova J. Russia, Iran compete to reconstruct Syria // Al-Monitor, 24.09.2018 - (accessed 02.04.2019)

20. Russia, Syria ink energy cooperation agreement - ministry // Reuters, 31.01.2018 - (accessed 02.04.2019)

21. Rahim Safavi: Like Russia, Iran should gain its share in Syria // RFI Persian, 18.02.2018 (In Pers.) - (accessed 03.04.2019)

22. Exclusive interview with Mohammad Javad Zarif // Azadi Today, 12.03.2019 - (accessed 03.04.2019)

23. Issaev L. Will Russia force Iran out of Syria? // Al Jazeera, 29.08.2018 - (accessed 30.03.2019)

24. Keinon H. Bolton: Iran one of four countries trying to middle in U.S. elections // The Jerusalem Post, 19.08.2018 - (accessed 30.03.2019)

25. Issaev L. Is Russia afraid of losing Syria? // Al Jazeera, 29.11.2017 - (accessed 31.03.2019)

26. Profile: Iran’s president Hassan Rouhani // Al Jazeera, 21.05.2017 - (accessed 01.04.2019)

27. Petkova M. Russia: Talking war in times of economic crisis // Al Jazeera, 01.01.2017 - (accessed 01.04.2019)

28. Iran, Russia Sign Financial Cooperation Agreement // Financial Tribune, 06.07.2018 - (accessed 03.04.2019)

29. Azizi H. Iran seeks economic benefits from Syria // Atlantic Council, 22.02.2019 - (accessed 03.04.2019)

Система Orphus