The Iranian regime has long portrayed its alliance with the Syrian government as a cornerstone of its regional policy. While political ties between the two regimes remain robust, economic partnerships have faltered, exposing significant challenges. Recent developments highlight the inactivity of Iranian industries in Syria, despite years of promises and investments.
Iranian Factories in Syria: A Legacy of Inactivity
On November 16, Saeed Aref, Secretary General of the Iran-Syria Joint Chamber of Commerce, announced that all Iranian factories in Syria, including those of Saipa, Iran’s primary car manufacturer, are inactive. This revelation underscores the failure of the Iranian regime’s industrial ambitions in Syria.
The Saipa facility in Homs, inactive since mid-2023, was reportedly targeted by Israeli airstrikes in October, further exacerbating its stagnation. While the Iranian Chamber of Commerce reported $15 million in car part exports to Syria in 2022, this figure plummeted to zero last year.
Aref noted that despite “good” political relations, the total trade volume between Iran and Syria remains modest. At its peak, annual trade reached $350 million, but in 2023, it dropped to $124 million. By comparison, Turkey, which supports Syrian opposition forces, exported over $2 billion to Syria last year, importing an additional $363 million in Syrian goods. Iran’s imports from Syria, in contrast, amount to a mere $5 million annually.
The Costly Oil Subsidy
While Iranian factories remain idle, the regime continues to deliver 50,000 barrels of oil daily to Syria, equating to approximately $1.5 billion annually. However, Tehran has yet to release an official report on these oil shipments. This subsidy reflects the Iranian regime’s ongoing financial commitment to Damascus but underscores the lack of reciprocal economic benefits.
Broader Trade Challenges
Aref highlighted that this economic imbalance is not limited to Syria. Trade between Iran and Iraq, another key ally, has also declined. In 2023, Iran exported $9.24 billion of goods to Iraq (excluding gas and electricity), while Turkey exported $12.8 billion. Iran’s imports from Iraq totaled just $580 million, compared to Turkey’s $1.5 billion.
Despite the establishment of Iranian-built factories in Syria across sectors beyond automotive, none are operational. Iranian companies, however, continue to offer technical and engineering services and undertake infrastructure repairs.
A History of Support: The Iranian Regime and the Assad Government
The Iranian regime’s support for Bashar al-Assad dates back to the Syrian civil war’s outbreak in 2011. Viewing Assad as a key ally in its “Axis of Resistance,” Tehran provided military, financial, and logistical support to prop up the Syrian government. The Islamic Revolutionary Guard Corps (IRGC) played a pivotal role in training and equipping pro-Assad forces, while Iran-backed militias such as Hezbollah fought alongside Syrian troops.
This intervention has come at a tremendous cost to Syria. Entire cities were destroyed, and millions of Syrians were displaced. While the Iranian regime framed its involvement as a fight against terrorism, many analysts argue that its actions prolonged the conflict and exacerbated human suffering.
Economically, Iran positioned itself as a partner in Syria’s reconstruction. However, the failure of Iranian industries to establish a meaningful presence in Syria underscores the gap between the regime’s ambitions and its achievements.
Conclusion
The Iranian regime’s economic endeavors in Syria reveal a striking disparity between its political ambitions and its economic outcomes. While the alliance with the Assad government remains a pillar of Tehran’s regional strategy, the inactivity of Iranian industries, the imbalance in trade, and the ongoing costs of subsidized oil reflect a broader failure to translate political ties into tangible economic benefits. As regional competitors like Turkey strengthen their economic influence in Syria, the Iranian regime faces mounting challenges in justifying its costly investments in Damascus.
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