SPECIAL REPORT — The Syrian civil war appears to have at least temporarily reached a point of stalemate, with neither rebel forces nor the military and allied militias capable of making a decisive push for territory that could potentially turn the tide for either side. The offensive launched by the fractious rebel camp in late 2012 to dislodge pro-government forces from their remaining strongholds in the north and capture Damascus has stalled.

This is due to a lack of effective coordination by the dozens of small armed groups seeking to topple President Bashar al-Assad from power. In addition, logistical difficulties and insufficient material support from international allies played a role.

Government troops achieved an important strategic victory in early June, when outnumbered rebels retreated from Qusair city in Homs province, along the border with Lebanon.  After weeks of offensive operations, pro-Assad forces secured control of the Damascus-Homs road and the corridor connecting the capital with the Mediterranean port of Tartous. The capture of Qusair should enable Assad’s defenders to isolate the remaining rebel outposts in the provincial capital, consolidating the regime’s hold over central Syria and the main gateway linking Damascus to the Assad clan’s Alawite strongholds on the coast. 

Meanwhile, the standoff in the divided northern city of Aleppo continues with no sign of a breakthrough for either side, and while the regime held on to the eastern city of Deir Ezzor, the rebels continue to control most of the oil facilities adjacent to Iraq, helped by the presence of a largely sympathetic Sunni population on the other side of the border.  

Rebels Divided

The main weakness of the rebels remains the absence of central command structures, which has made it impossible to prevent regular clashes between rival rebel units, including one on July 12 that took the life of Kamal Hamami, a senior commander in the Free Syrian Army (FSA). Hamami was reportedly targeted for assassination by a jihadist faction of the Al Qaeda-aligned Al Nusra Front, an allegation that highlights the development of deadly tensions between Islamist and secular rebel outfits.

There are also signs of strife within the Islamist camp, as various commanders attempt to consolidate control over the local economy in the territories that they have captured. In April, a bid by the Al Qaeda-affiliated Islamic State in Iraq (ISI) to affect a merger with Al Nusra Front provoked a hostile response from Nusra’s local commander, Abu Mohammad al-Jawlani.  Most of the foreign jihadists stuck with the merged entity, which now operates under the name Islamic State in Iraq and Syria (ISIS), while many Syrian Islamists have remained loyal to Jawlani. Al Qaeda’s top leader, Ayman al-Zawahiri, has tried to mediate the dispute, to no avail, and it appears that it is only a matter of time before the two factions have a showdown.

No Knockout Blows

The government forces will turn their attention to the north once operations are wrapped up in Homs, with the aim of delivering a decisive blow to the rebel forces in Aleppo. In an interview with Lebanese media in May, President Assad claimed that the tide had turned on the battlefield, and expressed confidence that victory was near at hand.

Government forces rely heavily on artillery and air power, as they lack a sufficient pool of reliable ground troops to hold territory.

But that may prove to be too optimistic. The government forces rely heavily on artillery and air power, as they lack a sufficient pool of reliable ground troops to hold territory. Full control over Homs city was declared several times by the state media this year, only to see the rebels reclaim a foothold in the city when the pro-Assad forces turned their attention elsewhere.

The most likely scenario for the next six months is the consolidation of a status quo, with the rebels maintaining a strong presence in rural areas of Syria’s north and east, including parts of the border with Turkey. Reports of oil deals between the rebels and government officials in the Deir Ezzor area suggest that both sides have concluded that it could be some time yet before the battle lines shift again. 

Diplomatic Efforts Fruitless

A similar deadlock has taken hold in the international arena, after the failure of recent U.S.-Russian attempts to force the warring sides into direct negotiations. Joint plans by Washington and Moscow for the so-called “Geneva 2” international conference floundered over the basic question of whether Assad should resign before such talks take place. In light of the moribund mediating efforts by Lakhdar Brahimi, the joint Arab League-UN peace envoy, the chances for a diplomatic solution appear minimal over the near term.

With Russia’s backing, the Syrian government insists that talks be initiated without any preconditions regarding Syria’s political future, while most of the opposition groups operating under the umbrella of the National Coalition of Syrian Revolutionary and Opposition Forces (NCSROF) adamantly refuse to engage in a transition process that includes the participation of President Assad. Those same incompatible demands have been voiced by Assad’s allies in Iran and Iraq, on the one hand, and by the pro-rebel governments in Qatar, Saudi Arabia, and Turkey, on the other.

Assad can take some comfort from the continuing reluctance of the NATO nations to committing to the rebels. U.S. President Barack Obama’s recent decision to begin funneling direct military aid to secular rebel groups have been blocked by lawmakers from both Obama’s Democratic Party and the opposition Republican Party, who justifiably fear that arms and other material purchased with U.S. aid could fall into the hands of Al Qaeda-affiliated groups who are waging war against Assad’s regime. The EU arms embargo on Syria expired in May, but the French and British governments have so far promised only non-lethal aid, amid strong opposition to military support from other European capitals.

Rebels remain limited to the use of small arms, and have complained repeatedly over the dwindling supplies of weapons and ammunition that have contributed to the battlefield setbacks of the past few months. Reports that Saudi Arabia is financing shipments of anti-tank and anti-aircraft weaponry could bolster the fighting capacity of selected rebel groups, but Saudi Arabia’s opposition to arming the Syrian Muslim Brotherhood-linked militias favored by Qatar will pose an obstacle to united action by the Gulf Cooperation Council (GCC) states.

Although western governments seem reluctant to take the actions that would be necessary to tip the advantage decisively in the rebels’ favor, it is all but certain that the NATO countries will provide some form of assistance if the pro-government forces appear headed for a military victory. The direct involvement of Lebanese Hezbollah militants in the defense of Assad’s regime is one development that could produce such a scenario. Lebanese fighters played a key role in the capture of Qusair, and some are reportedly moving toward the front in Aleppo.

In any case, no form of NATO military intervention is likely. Russia’s recent announcement that it would supply Assad with S-300 air-defenses in response to a western commitment of air support on behalf of the rebels points to the distinct danger that any NATO involvement could turn the conflict into a proxy war with global implications.

Meanwhile, the NCSROF remains badly divided, a reflection of the conflicting interests of the foreign sponsors of the various factions. Ahmed Khatib resigned as chairman of the group in April, citing his frustration over foreign meddling in the NCSROF’s internal affairs. The mantle passed in July to Ahmad Jarba, a tribal leader from eastern Syria. Jarba is widely known to be backed by Saudi Arabia, and was elected by the coalition’s assembly over Qatar’s favored candidate, Mustafa Sabbagh, who is tied to the Muslim Brotherhood. In any case, efforts to form a revolutionary government similar to the National Transitional Council that won international recognition as Libya’s government prior to the downfall of Muammar al-Qaddafi have evidently failed, a fact highlighted by the resignation of interim Prime Minister Ghassan Hitto just days after the leadership vote won by Sabbagh.

By contrast, what remains of Assad’s regime has displayed impressive cohesiveness, with the minority Alawite population to which the Assad family belongs showing every sign of intending to defend the president to the last. The military command structure remains intact, despite the early defection of some high-ranking officers, and recent moves by Assad indicate that the president is digging in his heels. A major overhaul of the political structure undertaken in July saw the entire membership of the ruling Baath Party’s executive body replaced by younger stalwarts. Among the substantive changes was the demotion of Vice President Farouk al-Sharaa, a Sunni Baathist who last year was mentioned by more moderate elements among the anti-Assad forces as a possible candidate to head a transitional government of national unity.

In general, however, the reshuffle is largely a symbolic gesture. The Baath Party’s influence has diminished significantly in recent years, with the main decision-making power becoming concentrated within a small circle of Assad’s kin, his close advisors, and figures at the top of the military-intelligence apparatus.

Economy a Shambles

The Syrian pound plunged to a record-low of SYP310 against the U.S. dollar on July 10, coinciding with a new law that criminalizes business transaction in foreign currencies. A fresh attempt to crack down on black market currency exchange came after months of lax oversight, as the authorities shifted their attention from currency stability to financing the imports of heavily subsidized basic commodities. 

But the deteriorating exchange rate has translated into soaring prices of basic commodities, a politically sensitive issue for a regime that prides itself on having maintained a cap on prices, despite adverse economic conditions. Inflation is running at over 50 percent according to some estimates, and it is difficult to imagine Syrian foreign reserves lasting much longer without significant financial aid from Iran and Russia. 

Helped with credit lines supplied by Iran, Syria managed this year to bypass EU sanctions.

Helped with credit lines supplied by Iran, Syria managed this year to bypass EU sanctions and restore fuel imports using private mediators, while looking frantically for supplies of wheat to make up for the shortfall in domestic agricultural output. However, the currency weakness has inflated the cost of imports, prompting the government in late June to double the retail price of diesel fuel, which could be followed by a hike in gasoline prices. The cutbacks in subsidies have effectively offset the increased purchasing power created by a pay increase decreed earlier in the year for members of the armed forces and government employees. 

Real GDP is forecast to contract by 9.3 percent in 2013, under the weight of lost revenue, balance of payments difficulties, and sustained pressure on consumer prices, which are forecast to rise by an average of 48 percent this year. The current account deficit is estimated to have more than tripled between 2011 and 2012, expanding to 18.7 percent last year.

A lack of access to foreign exchange will help to shrink the imports bill, but the current account deficit will remain in double digits as a percentage of GDP again in 2013.  Under the circumstances, the government will likely be forced into money printing, and increased dependence on foreign financial support will be essential to preventing a complete economic collapse.

About The Author Christopher McKee [Full Bio]

Christopher McKee is CEO and owner of the PRS Group, a leading global provider of political and country risk forecasts and analysis, with offices in Syracuse, New York, and Mt Pleasant, South Carolina.