Iranian construction companies are to build thousands of residential units in the suburbs of Syria’s capital, Damascus, an Iranian state-run news agency has reported.

Iranian Students News Agency (ISNA) recently quoted a business official with the country’s investment association, who announced that Iran would build 200,000 residential units near Damascus.

Iraj Rahbar, vice president of Iran’s Mass Construction Society, said the massive housing project has come about after the Iranian and Syrian governments signed a memorandum of understanding (MOU) in January 2019.

Tehran has been encouraging prominent Iranian developers to buy property in Damascus, analysts and construction industry sources in Iran said.

“This is not the first time that officials encourage developers to invest in Syria,” Amir Reza Masoumi, a Tehran-based architect, told VOA.

Masoumi, who has knowledge of ongoing discussions, said that instability in Syria has dissuaded many Iranian developers from investing in the war-torn country.

“Even now, details on how to protect the interests of Iranian investors in Syria are still unclear,” he said.

FILE - People ride their motorcycle by damaged buildings in the old town of H
FILE – People ride their motorcycle by damaged buildings in the old town of Homs, Syria, Aug. 15, 2018.

Since the beginning of Syria’s civil war in 2011, Iran has been a major supporter of Syrian President Bashar al-Assad’s regime in battling Syrian rebels across the country. Iranian Revolutionary Guard Corps (IRGC), a U.S.-designated terror group, and other Tehran-backed Shiite militias have played a major role in recapturing Syrian cities and towns from rebel forces.

Foothold in Syria

As the war is waning, Iran wants to keep a strong footing in Syria by urging Iranian construction companies to invest in the war-torn country.

“The projected location of these buildings is several parts of Damascus suburbs, where massive destruction has taken place,” a Syrian journalist, who requested anonymity because of fears from the Syrian regime, told VOA.

“The Syrian regime doesn’t make such things public,” he added.

He said that he has witnessed some Iranian business groups exploring destroyed parts of Damascus, adding that Tehran has already been involved in several other housing projects in Homs and Latakia provinces.

Syrian regime troops, supported by allied Iranian forces and Russia, regained full control of eastern Damascus in 2018 after nearly five years of fighting with rebel groups.

Iranian officials say that more investments in countries like Syria would help ease some financial pressure on Iran from the international sanctions imposed on the government.

“This is a great way of increasing international turnover and benefiting from our capabilities in terms of construction overseas,” said Rahbar, of Iran’s Mass Construction Society.

FILE - Heavy equipment works at a building site in southwestern Damascus, Syr
FILE – Heavy equipment works at a building site in southwestern Damascus, Syria, Oct. 8, 2018.

Experts said Iranian companies would shift their focus to places like Syria since a large number of Iranian investors have been barred from working in the U.A.E. and other Gulf countries, due to inability to transfer money using international banks after recent U.S. sanctions on additional Iranian entities.

“There are quite many methods Iranians have learned to subvert sanctions,” Masoumi said. “But a big project like this needs a great banking support between both [Syrian and Iranian] governments.”

During several visits by Syrian officials to Tehran, including a recent one by Assad, large investments and increased financial cooperation between the two allies have been one of the major points of discussion, local news reports said.

The role of cleric

In Damascus, Iran has reportedly relied on a prominent Shiite cleric, Abdullah Nazzam, to arrange its real estate dealings. Using his religious authority in Damascus and ties with the Syrian government, he has persuaded residents to sell their properties to Iranian businessmen.

While Iran — a Shiite-majority country — continues to build itself as one of the major players in Syria’s future reconstruction, it also wants to carry out a systematic demographic change in many parts of Damascus and elsewhere in Syria, some experts charge.

“Iran is exploiting the fact that many Syrians, who are mostly Sunnis, have become extremely poor because of the war, and so it is offering them high prices for their properties that they can’t refuse,” said Musallam Talas, a professor of economics at Mardin Artuklu University in Turkey.

Talas told VOA the reason Iran is largely focusing on the housing sector in Syria is the fact that Iranian officials are well aware of how significant rebuilding that sector would be in the future.

The International Monetary Fund (IMF) says the cost of reconstruction in Syria is almost $400 billion. Nearly 65 percent of that amount would go to the housing sector, according to IMF data.

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