As US sanctions were imposed or tightened on two of Syria's biggest businesses on Wednesday, signs pointed to a new level of political pressure on the Syrian regime from the Gulf, which could have ramifications for major GCC investments in the country.
The US Treasury toughened its line on Syriatel, the country's biggest mobile operator, and the Commercial Bank of Syria, the country's biggest commercial lender. Americans are now "generally prohibited from engaging in commercial or financial transactions" with either company; Syriatel was named for its connection to top regime business figure Rami Makhlouf, while the Commercial Bank of Syria was targeted for its connection to "proliferators of weapons of mass destruction."
The naming of Syriatel was new, but for the Commercial Bank of Syria, the announcement follows a 2006 Treasury Department ruling (PDF) that isolated the bank for similar concerns.
The new US sanctions added to the growing isolation of the Syrian regime, which is losing friends fast. Most significantly, Gulf countries, led by Saudi Arabia, have begun a vocal campaign against the regime - a move that could spell trouble for major Gulf investment projects in the country.
Since Saudi Arabia's King Abdullah released a statement condemning the violent crackdown on protesters and recalling his ambassador to the country, the heat has intensified. Kuwaitis even took to the streets - reportedly in their thousands - to protest outside the Syrian embassy. Such demonstrations are rare, even in Kuwait where the political discourse is more lively.
And as criticism of the Syrian regime becomes politically acceptable - even encouraged - in the Gulf and its state media, major Gulf investors in the country could come under pressure.
Qatar's investments there already look to be over for the time being as the Qatari government was first to burn its bridges with Syria. But major UAE corporates have yet to blink - Dubai property developer, Emaar, has made no statements regarding its extensive projects in the country, while Majid Al Futtaim, the Dubai-based shopping mall developer, has confirmed it is going ahead with its big retail and residential property development on the outskirts of Damascus. That may all change as the GCC stance solidifies.
"Heightened pressure on the Assad regime from Gulf Cooperation Council (GCC) states will erode Assad's power. By remaining largely silent during Syria's crackdown, GCC governments had until now provided Assad with some measure of diplomatic support," Eurasia Group said in a recent note. "The GCC states' reversal likely precedes a coordinated international upsurge of diplomatic and economic pressure."
Coverage of Syria - FT Tilt