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An economic lifeline from Saddam

Saddam Hussein may be isolated from the Western world, but he certainly isn’t cut off from his neighbor Syria, for whom the Iraqi leader is a financial lifeline.
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At this border crossing surrounded by the parched land that spans the Syrian-Iraqi frontier, a steady flow of truck traffic breaks the silence of the desert. Saddam Hussein may be isolated from the Western world, but he certainly isn’t cut off from his neighbor Syria, for whom the Iraqi leader is a financial lifeline amid persistent economic doldrums.

The sound of commerce between Iraq and Syria has reached a fever pitch at At Tanf. Countless Iraqi and Syrian trucks lumber past the border post every day. Drivers walk briskly inside the customs building for a quick document check, and then they are on their way — cashing in on the free-trade agreement between Baghdad and Damascus.

Even as the United States ramps up for war in the region, Syria has positioned itself as Iraq’s commercial link to the world. While Iraqi goods also flow into neighboring Jordan and Saudi Arabia, Syria’s visa-free entry for Iraqis has made it the destination of choice. And it’s not hard to see why.

Jordan, a close U.S. ally, has on occasion stationed U.N. monitors at its border with Iraq. Kuwait, Baghdad’s southern neighbor, has declared its frontier with Iraq a “closed military zone,” where U.S. soldiers train for an eventual invasion.

“This is the only place I trade,” said Mustafa, a Baghdad merchant with a carload of Iraqi soap. “I’ll sell my goods and use the money to buy spare parts for cars.”

Baghdad officials have made the trip even more profitable, Mustafa said, by scrapping a $400 “exit tax” on merchants leaving Iraq. Due to the quasi-legal status of Iraqi traders in Damascus, Mustafa didn’t want his last name used.

Although unregulated and untaxed, small traders like Mustafa add up to $500 million a year to the Syrian economy, Syrian officials say.

The goods and goodwill flow both ways.

Syria sends another $500 million a year in exports to Iraq under the U.N. oil-for-food program, through which Iraq’s oil export revenue is used to purchase humanitarian goods like food and medicine. A six-hour drive from Baghdad, Damascus has become a leading supplier of Iraq’s closely-watched imports.

“When you talk about $500 million to $1 billion, this is about 25 to 30 percent of foreign trade for Syria,” said Rateb Shallah, the head of Syria’s Federation of Chambers of Commerce. “It is not a small amount to belittle or neglect.”

Oil for cash
Also no small amount, U.S. officials and Western analysts say, are the some 150,000 barrels of crude oil that Iraq is pumping through a pipeline that runs from the northern Iraqi city of Kirkuk to Baniyas, a Syrian port on the Mediterranean — in violation of U.N. sanctions.

Syria vehemently denies the accusation, which American intelligence and oil analysts calculated from the sudden spike in Syria’s oil exports last year.

The oil adds an extra $2 billion to Syria’s coffers, officials say, and funnels large sums to Saddam Hussein.

The Kirkuk-Baniyas pipeline also illustrates the bonanza Syria could enjoy, should Saddam be toppled and Iraq’s largely untapped northern fields explored.

While much attention is paid to Iraq’s Persian Gulf terminals, piping oil to Syria’s Mediterranean port would give Baghdad immediate access to European market. Likewise, Syria could offer European manufacturers direct road access from Baniyas to Iraq.

Although Syria is strongly opposed to military action to topple Iraq’s leadership, which Damascus says would destabilize the region, Syrian officials acknowledge that, without sanctions, the two countries’ trade would skyrocket to $60 billion to $80 billion a year.

“In the past, present and future, Iraq has always and will always be a very important complimentary market for Syria,” trade official Shallah said.

Holy sites
At the Saida Zeinab shrine on the outskirts of Damascus, there is another kind of Iraqi visitor flocking to Syria: Iraq’s Shia Muslim majority making pilgrimages to holy sites revered by Shiites.

For Iraqis with money to spend, at least, Syria has also become a top tourist destination. The familiar orange-and-white taxis from Iraq regularly ply the road between Baghdad and Damascus, bringing thousands of Iraqis to the one place they can travel freely.

Iraqi Airways, banned from flying under U.N. sanctions, recently refurbished its Damascus office and now offers five flights a week to Baghdad. An official at the company said the airline contracts with a Persian Gulf charter company to avoid the “U.N. problems.”

At the At Tanf border post, several families crossing into Syria said they were planning to meet relatives who had settled in Western Europe and whom they hadn’t seen in years. Syria, it seems, has also become a meeting point for Iraqis still inside the country, and those who can’t return until Saddam’s regime collapses.

“Syria is easy for us,” said Haidar Kafel, a 46-year-old mechanical engineer returning from a two-week vacation in Syria with his wife and three children. “There are no problems here.”’s Preston Mendenhall is on assignment in Syria.