By: Ahmad Sawwan
Lawyer and Researcher Specialized in Legal Reform
Bashar al-Assad’s regime did not stop at turning the homeland into rubble and ruins, nor was it satisfied with looting Syria over the past years. Instead, it sought to sell Syria’s future and shackle future generations with debts for decades to come. To fund its war on its people, the regime resorted to borrowing from numerous sources, burdening Syria’s already crumbling economy with enormous debts that future generations will struggle to repay, even the accumulated interest.
Iranian Debts: The Largest and Most Dangerous
Among the sources from which the regime borrowed, Iranian debts stand out as the most significant and perilous. Several media outlets reported a statement by an Iranian official dated December 12, 2024, a few days after the fall of Assad’s regime. The official stated: "We have debts on Syria exceeding $30 billion, and the new government must repay them.”
This statement has reignited discussions about the debts incurred by unstable or conflict-ridden nations, questioning their legitimacy and whether revolutionary authorities inheriting power from authoritarian regimes should bear responsibility for these debts. In international legal terms, this is referred to as "odious debts.”
The latest figures indicate that Syria owes Iran more than $50 billion, comprising direct financial aid, loans, credit lines, oil grants, and other support provided to Bashar al-Assad’s regime in recent years. However, there is conflicting information regarding the actual amount. Unofficial figures from parliamentary statements estimate the debts to range between $20 and $30 billion, while the media suggests the amount is closer to $50 billion.
Iran claims that these funds were spent on supporting Assad’s regime following the revolution, providing him with weapons, advisors, soldiers, and Shiite militia members. Tehran considers these funds debts that must be repaid by any means. In recent years, Iran has attempted to recover its funds by acquiring Syrian assets, companies, banks, insurance firms, and mines.
Despite Assad’s evasive tactics due to his government’s lack of liquidity, Iran managed to secure promises for repayment, including:
•A 50-year concession for phosphate mining.
•Licenses for Iranian banks in Damascus.
•A deal related to the Homs Oil Field No. 21.
•The "oil pipeline project” connecting Iran and Syria through Iraq.
•A contract to establish and operate a mobile phone company.
•A share of the revenues from Latakia Port for 20 years.
•A 25-year lease of 5,000 hectares of agricultural land.
•A livestock farming project named "Zahid.”
Debts to Russia
Although Russian politicians have acknowledged providing unlimited support to the Syrian regime and claim Syria owes substantial debts, there are no clear statistics or data on the exact amount. However, Russia has taken control of vital facilities like Latakia Port, phosphate mines, and oil investments, benefiting from them without disclosing details.
Debts to China
In 2012, the Syrian regime offered to sell $10 billion in treasury bonds to China, a country specializing in bond purchases. In return, China supplied weapons equivalent to part of the amount. Iran and Russia were also sold $10 billion in treasury bonds. Additionally, the regime sold treasury bonds to the Iraqi government under Nouri al-Maliki, though the exact value remains undisclosed.
Treasury bonds are loans extended to governments by individuals, corporations, or banks, typically aimed at funding war efforts or development projects. However, in Syria’s case, the regime issued bonds not for investment or economic development but to fuel its war machine against its people.
The consequences of these bonds include burdening the Syrian people with billions in additional debt, a continuation of economic ruin caused by Assad’s regime and his father’s before him over more than four decades.
The Concept of Odious Debts in International Law
Odious debts are loans obtained by authoritarian regimes not for the public benefit but for suppressing their people or enriching the ruling elite. Legal scholars argue that these debts are not binding on nations but are the personal responsibility of the regime that incurred them. When the regime falls, these debts should fall with it.
The principle emerged in 1927 when Paris University international law professor Naoum Alexandrov defined odious debts as loans incurred without public consent, not benefiting the populace, and with creditors fully aware of the borrower’s bad intentions.
For a debt to be considered odious, it must meet the following criteria:
•Lack of public consent.
•Absence of public benefit.
•Creditor awareness of the regime’s malicious intentions.
If these criteria are met, the debt is deemed invalid, and the new government has no obligation to repay it. However, this concept is complex, as defining "authoritarian regime” is straightforward, but determining what constitutes "odious debt” is more nuanced.
International Examples of Canceling Odious Debts
Several nations have successfully nullified debts incurred by authoritarian regimes:
1.Mexico:
In 1883, President Benito Juarez passed the "National Debt Liquidation Law,” refusing to pay foreign loans taken by the dictator Antonio Lopez de Santa Anna, marking the first documented case of repudiating odious debts.
2.Cuba:
Following Spain’s colonial rule, the U.S. successfully argued during the 1898 Treaty of Paris that Cuban debts, used to suppress its people, were odious and not binding.
3.Poland:
After World War I, Germany’s colonial debts imposed on Poland were nullified under the Treaty of Versailles in 1919.
4.Ecuador:
In 2009, Ecuador reduced its external debt by 67%, deeming it illegitimate and accumulated under corrupt regimes.
5.Argentina:
In 2000, the Argentine Federal Court declared all external debts incurred during the dictatorship (1976–1983) as odious and non-binding.
These examples highlight that odious debts are not just a theoretical concept but a practical mechanism for nations to escape the economic burdens imposed by corrupt regimes.