Syria’s foreign policy sits atop a mountain of apparent contradictions that have long bedevilled outsiders. Its self-proclaimed goal is peace with Israel, yet it has allied itself with partners vowed to Israel’s destruction. It takes pride in being a bastion of secularism even as it makes common cause with Islamist movements. It simultaneously has backed Iraqi Sunni insurgents and a Lebanese Shiite armed group. The U.S. has wavered between different approaches in unsuccessful attempts to persuade Damascus to clarify its stance, from a peace process focus in the 1990s to isolation and pressure under George W. Bush in the following decade. Barack Obama, having turned an old page without settling on a new one, seems intent on engagement on bilateral issues, albeit more cautious than ambitious. It might work, but not in the way it has been proceeding. Syria might amend its policies, but only if it is first reassured about the costs – in terms of domestic stability and regional standing. That will entail working with Damascus to demonstrate the broader payoffs of a necessarily unfamiliar, and risky, journey.

At the heart of the problem is a profound mismatch of expectations. The West wants to know whether Syria is ready to fundamentally alter its policies – loosen or cut ties to Iran, Hamas and Hizbollah; sign a peace deal with Israel – as a means of stabilising the region. Syria, before contemplating any fundamental strategic shift, wants to know where the region and its most volatile conflicts are headed, whether the West will do its part to stabilise them and whether its own interests will be secured.

From Syria’s vantage point, there is good reason to cling to the status quo. For almost four decades, it has served Damascus well. Despite a turbulent and often hostile neighbourhood, the regime has proved resilient. It has used ties to various groups and states to amass political and material assets, acquiring a regional role disproportionate to its actual size or resources. One does not readily forsake such allies or walk away from such a track record.

But satisfaction with the past does not necessarily mean complacency about the future. On virtually all fronts, Syria can see peril. Its economy is wobbly. The country lacks significant natural resources or human capital, most conspicuously a qualified workforce and entrepreneurial business class. Its infrastructure is obsolete. And unlike years past, when the Soviet Union and then Saudi Arabia offered support, Iran or Iraq provided cheap fuel and Lebanon was prey to its plunder, Syria no longer can count on a foreign rent. All this, coming amid an increasingly competitive global market and financial crisis, calls for structural reforms that the regime almost certainly cannot undertake without Western help and a more pacified regional environment.

In terms of societal dynamics, regime policies are fanning Islamist sympathies that, over time, could jeopardise its secular foundation. Cuts in subsidies and the collapse of the welfare system, as well as high unemployment and inflation rates, have chipped away at the regime’s ideological pillars. Its pan-Arab rhetoric gradually has been replaced by a “resistance” discourse that has more in common with Islamist movements than the Baathism of yore. Clashes between government forces and Islamist militants are not uncommon, their frequency ebbing when the regime more clearly espouses regional Islamist causes – which further harms its secular outlook. The posture of the past few years – close ties to Iran, Hamas and Hizbollah, promotion of resistance against Israel and support for what was a Salafi-oriented Iraqi insurgency – encouraged trends that threaten longer-term social cohesion.

Recent gains in the region could prove short-lived. However vindicated leaders felt by events in Iraq (where they opposed the U.S. war), Lebanon (where the Western-backed coalition was unable to bring Damascus to its knees, and Hizbollah stood its ground against Israel) or Palestine (where its Islamist allies have gained influence), they remain preoccupied by lingering conflicts and persistent fault lines. The spread of sectarianism, uncertainty on its eastern and western borders, stalemate in the Arab-Israeli peace process and threat of confrontation over Iran’s nuclear program cloud the horizon. The potential for domestic spillover of regional tensions haunts the regime and helps explain why, in addition to economic and social fears, it might be searching for a different way forward.

Syria’s ambivalence – its reliance on existing alliances and longing to break out of the current mould – is perhaps best embodied in its Iranian-Turkish balancing act. Syrian doubters argue that the regime will not cut its ties to Iran. They are right. Tehran remains a valued and indispensable partner, especially in a context of regional uncertainty. The long relationship provides military assets and security cooperation, as well as diplomatic leverage in dealing with Western and Arab countries.

But that is only half the picture. Budding ties with Ankara show a different side. For Damascus, they are an opportunity for economic stimulus through increased tourism, investment and the possibility of a more integrated region in which it could be central. More, they are of huge strategic value as a gateway to Europe and a means of bolstering regime legitimacy in the eyes of its own and the Arab world’s Sunni population.

Besides, not all is tranquil on the Iranian front. The relationship became increasingly unequal as Tehran’s fortunes soared. Excessive proximity harms Syria’s posture in Arab eyes and cannot mask deep disagreements. Syria warily watches Iran’s growing reach, from Iraq (which Syria believes must remain part of the Arab sphere and where it objects to Iran’s backing of sectarian Shiite parties) to Yemen (where Syria has sided with Riyadh in what appears as a proxy war against Tehran). As long as Syria’s environment remains unsettled, in short, it will maintain strong ties to Iran; at the same time, it will seek to complement that relationship with others (Turkey, France, and now Saudi Arabia) to broaden its strategic portfolio and to signal a possibly different future.

President Obama’s effort to re-engage was always going to be a painstaking and arduous task of overcoming a legacy of mutual mistrust. Syrian doubters have their counterparts in Damascus, who are convinced Washington never will truly accept that the Arab nation can play a central regional role. The administration’s slow and cautious moves are not necessarily a bad thing. There is need for patience and realism. The region is too unstable for Damascus to move abruptly; relaxation of U.S. sanctions is tied to Syrian policies toward Hamas and Hizbollah that are hostage to a breakthrough with Israel for which conditions do not seem ripe. Neither side is ready for a leap, and both have domestic and foreign skeptics with whom to contend.

But the pace is less worrying than the direction. The temptation in Washington seems to be to test Syrian goodwill – will it do more to harm the Iraqi insurgency, help President Abbas in Palestine or stabilise Lebanon? On its own, that almost certainly will not succeed. The U.S. is not the only one looking for evidence. So too is Syria – for proof that the risks it takes will be offset by the gains it makes. The region’s volatility drives it to caution and to hedge its bets pending greater clarity on where the region is heading and, in particular, what Washington will do.

A wiser approach would be for the U.S. and Syria to explore together whether some common ground could be found on regional issues. This could test both sides’ intentions, promote their interests and start shaping the Middle East in ways that can reassure Damascus about the future. On Iraq, it may not truly exercise positive influence until genuine progress is made toward internal reconciliation. The U.S. could push in that direction, test Syria’s moves and, with the Iraq government, offer the prospect of stronger economic relations with its neighbour. Syria claims it can press Hamas to moderate views but only if there is real appetite in the U.S. for an end to the Palestinian divide. Both could agree to try to immunise Lebanon from regional conflicts and push it to focus on long-overdue issues of governance. Given the current outlooks and suspicions in Damascus and Washington, these are all long shots. But, with little else in the Middle East looking up, it is a gamble well worth taking.

This is the first of two reports on Syria’s evolving foreign policy. The second, to be published shortly, will take a closer look at specific changes in Damascus’s regional approach and the prospects for U.S.-Syrian relations.

Damascus/Washington/Brussels, 14 December 2009