Syrian Businessman Becomes Magnet for Anger and Dissent
By Anthony Shadid
The New York Times
April 30, 2011
BEIRUT, Lebanon — When protests erupted in March in the forlorn Syrian border town of Dara’a, demonstrators burned the president’s portraits, then set ablaze an unlikely target: the local office of the country’s largest mobile phone company, Syriatel, whose owner sits at the nexus of anger and power in a restive country.
Syriatel is owned by Rami Makhlouf, first cousin and childhood friend of President Bashar al-Assad and the country’s most powerful businessman. In the past decade, he has emerged as a strength and a liability of a government that finds its bastions of support shrinking and a figure to watch as Mr. Assad’s inner circle tries to deal with protests shaking his family’s four decades of rule.
Leery of the limelight, he is alternatively described as the Assad family’s banker or Mr. Five Percent (or 10, or whatever share gets the deal done). His supporters praise him for his investment in Syria, but they are far outnumbered by detractors, who have derided him in protests as a thief or worse. Sometimes more than Mr. Assad himself, he has become the lightning rod of dissent.
“We’ll say it clearly,” went a chant in Dara’a. “Rami Makhlouf is robbing us.”
Egypt had Ahmed Ezz, the steel magnate who favored tight Italian suits (and now faces trial in white prison garb). In Tunisia, it was Leila Traboulsi, the hairdresser who became the president’s wife, then a symbol of the extravagance of the ruling family. Mr. Makhlouf, 41, is Syria’s version, a man at the intersection of family privilege, clan loyalty, growing avarice and, perhaps most dangerously, the yawning disconnect between ruler and ruled that already reshaped authoritarian Syria even before the protests.
Like Mr. Ezz in Egypt, he has become a symbol of how economic reforms turned crony socialism into crony capitalism, making the poor poorer and the connected rich fantastically wealthier.
“A huge liability,” was how a Syrian analyst described him.
“On the economic side, he really symbolizes what the people hate about the regime,” said the analyst, who asked not to be named. “They hate the security services and they hate Rami Makhlouf. On the economic side, Rami symbolizes the very worst about the way the country is run.”
An e-mail sent to Mr. Makhlouf’s company on Saturday, asking for comment, went unanswered. Calls to the headquarters seeking comment were not answered Saturday.
The origins of Mr. Makhlouf’s wealth mirror the consolidation of the Assad family’s rule over Syria. Mr. Assad’s father, Hafez, a former air force commander who took power in 1970 and soon forged an alliance between officers like him from the Alawite minority and Sunni Muslim businessmen in Damascus, the capital, offered privileges to his wife’s family, the Makhloufs. Mr. Makhlouf inherited the mantle, while his brother, Hafez, went into the other family business — state security — taking over as intelligence chief in Damascus.
“Together they make quite a duo,” an Obama administration official said.
Though prominent even before Mr. Assad’s ascent in 2000, Mr. Makhlouf grew even wealthier as he and Egyptian partners won one of two mobile phone contracts. (The partners were eventually forced to sell.) Syriatel has about 55 percent of the market, Syrian economists say. As the reforms moved Syria away from a state-led economy, he penetrated the economy’s most lucrative sectors — real estate, transport, banking, insurance, construction and tourism — and his interests run from a five-star hotel in Damascus to duty-free shops at airports and the border. He is the vice chairman and, Syrian analysts say, the real power in Cham Holding, which was set up in 2007 with 73 investors and $360 million, in what seemed an attempt to tether wealthy Sunni businessmen to the government. It has effectively been charged with renovating Syria’s aging infrastructure, attracting Arab capital in another network of support for Mr. Assad’s rule.
Some praise him for the work, especially employees in Syriatel, whose sleek offices and good salaries make it the first choice of many young graduates for jobs.
“No one can say he spends his money in nightclubs with girls,” said a manager at Syriatel who only gave his first name, Muhammad. “He spends his time thinking how to build a new Syria. He is the ideal for Syrian youths as a successful businessmen.”
But many contend his success came by way of no-bid contracts and leverage with the force of the state behind it, where the government and his interests are merged. A former government adviser recalled Mr. Makhlouf’s father insisting on amendments to a banking law, even after it was passed by Parliament. (It was revised, he said.) The American government, which imposed sanctions on him in 2008, accused Mr. Makhlouf of manipulating the judicial system and using Syrian intelligence to intimidate his rivals.
“Everybody knows that you can’t do anything without him,” said Amr Al Azm, a Syria expert and professor at Shawnee State University in Ohio. “He has his fingers in so many pies. Anything you want to do you partner with him, or you give him a share.”
In a country where criticism of Mr. Assad himself was long taboo, Syriatel became an early proxy for protest under his rule, much of which centered on the government’s failure to profit from the sale of its license.
Riad Seif, an opposition member of Parliament, criticized what he called irregularities in the phone licenses and was soon arrested and imprisoned. So was Aref Dalila, another dissident. Rami Nakhle, an activist who fled Syria for Lebanon in January, began an Internet campaign to boycott Syriatel in 2008 over its high fees. They urged people to switch off their phones for four hours on the first day of the month. An online petition that he and other young activists circulated received 5,000 signatures.
“We were touching Rami Makhlouf but not naming him,” Mr. Nakhle said. “We were doing something political but in a way that we thought was safe.”
His efforts were humbled when the mother of one of his friends figured out what they were doing. She smashed her son’s laptop, Mr. Nakhle recalled, and barred him from the Internet for a month. “Do you want to disappear?” he recalled her asking her son.
Like Mr. Ezz’s place in Egypt, Mr. Makhlouf’s profile illustrates deeper changes in Syria that have made the uprisings more than simply calls for individual rights.
Mr. Assad’s father was famous for his ability to hold together disparate elements of the country, most remarkably in 1982, when merchants in Damascus sided with the government in its brutal suppression of an Islamist revolt that culminated with the killing of at least 10,000 people in the central city of Hama.
Since then, the tacit understanding that underlined his rule — Alawite officers and Sunni merchants — has weakened, as the sons and grandsons of those Alawite officers enter business. Administration officials and economists say there are growing indications that support of the traditional Sunni commercial elite has begun to falter, too.
Joshua Landis, a professor of Middle East studies at the University of Oklahoma, called Mr. Makhlouf “the tendons that reach out to the new capitalist class that was empowered.”
But others see him as more divisive, emblematic of a state that once brought electricity to every town but, as in Egypt, can no longer afford the social contract of taking care of its people’s needs. As that falters, figures like Mr. Makhlouf grow richer, alienating the traditional elite and people who view him as a symbol of injustice.
“Ideologically the regime doesn’t stand for much anymore beyond the interests of certain individuals,” said Nadim Houry, a researcher with Human Rights Watch in Beirut. “ He’s a symbol of what is perceived as private interests controlling large chunks of Syria’s economy.”
Even some sympathetic to the government have speculated whether Mr. Makhlouf might be sacrificed in an attempt to preserve the government, as Mr. Ezz was early on. But, others note, Mr. Ezz never had the ties of blood and clan that matter so much in Mr. Assad’s Syria.
“Right now, they will do anything to hang on to power,” the Obama administration official said. “That might lead them to do something, kick Rami aside, but I don’t see it going there quite yet.”
The official added: “At the end of the day, they’re family.”