Betting on Syria’s Assad staying in power

In mid-December, the U.S. State Department's point man on Syria, Frederic Hof, described the government of President Bashar al-Assad as 'the equivalent of a dead man walking." On February 6, President Barack Obama followed up by saying the fall of the regime was not a matter of if but of when.

He gave no timeline, unlike Israeli defense minister Ehud Barak who predicted months ago that the Assad regime would fall "within weeks." Since that wishful thought, hundreds have died in ruthless government crackdowns on dissidents and the death toll in the 11-month uprising climbed past 5,000, according to the United Nations. Politicians now shy away from the risky business of predicting dates for an end to the widening conflict.

Not all bets are off, though. There are punters wagering money on the fall of the house of Assad on Intrade.com, a Dublin-based online exchange that allows traders to bet on politics and other current events. Like other markets, the exchange's odds are based on the collective opinion of traders. On February 9, Intrade gave a 31% chance to Assad being out of office by the end of June and a 58% chance that he would be out by December 31, 2012.

Before you scoff on prediction markets, it's worth noting that the Intrade market favorites, according to the company, won the electoral vote in all states in the 2004 U.S. presidential elections and market participants correctly anticipated the capture of Saddam Hussein in 2003. That year, the U.S. Defense Advanced Research Projects Agency (DARPA) announced plans to set up an online market where investors would have traded futures in Middle East developments including coups, assassinations and terrorist attacks. Congressional opposition sank the idea.

Some experts on Syria expressed deep pessimism over an early end to the Syrian bloodshed even before the Chinese and Russian vetoes of a United Nations Security Council resolution that provided for Assad to hand over power to a deputy, withdraw troops from towns, stop the killing of dissidents and begin a transition to democracy.

Joshua Landis, a Middle East scholar at the University of Oklahoma who runs the blog Syria Comment, wrote a week before the  February 4 Security Council vote that the Assad government was likely to last well into 2013. He argued that there was no sign that the Syrian army, most of whose officers belong to Assad's Alawi sect, was turning against the president. The regime had a good chance of surviving as long as the Syrian military leadership remained united, the opposition fragmented, and foreign powers stayed on the sidelines.

Assad clearly saw the Russian and Chinese vetoes as a green light for ever bloodier crackdowns. Syrian government forces swiftly stepped up artillery barrages of the city of Homs, an opposition stronghold. Bashar follows in the footsteps of his late father, Hafez, who ordered the centre of the city of Hama flattened 30 years ago this month to crush a revolt against Alawi minority rule. Estimates of the number of people who died in tank and artillery bombardments range from 10,000 to 40,000.

Gilded exile?

Hafez's brother Rifaat, who oversaw the massacre and earned the nickname "butcher of Hama," lives in comfortable retirement in London. In the unlikely case that Bashar would agree to step down, the prospect of him following his uncle into gilded exile is very remote. Who would take him?

While there has been a chorus of condemnation of the Syrian government's replay of history, the United States and its Western and Arab allies have ruled out military intervention and some of the options now being discussed sound like prescriptions for the kind of long and bloody civil war that wrecked Lebanon in 16 years of fighting between factions armed and financed by outside sponsors.

As Uzi Rabi, chairman of Tel Aviv University's Middle East department, put it during a recent visit to Washington: "Syria is going through a process of 'Lebanization.'"

The Assad government is backed by Iran and armed by Russia, whose foreign minister, Sergei Lavrov, in a splendid display of hypocrisy, has complained that weapons from NATO countries were being smuggled to anti-Assad forces across the borders with Turkey and Iraq. In Lavrov's version of events, the weapons go to "armed extremists who are using peaceful demonstrations to provoke Syrian government violence."

The government vastly outnumbers and outguns the motley band of army defectors and civilians-turned-insurgents known as the Free Syrian Army. Judging from reports of its hit-and-run raids and attacks on military checkpoints, it lacks coordination and is no serious threat to the Syrian armed forces. But the armed dissidents give Assad a pretext to hang tough.

Which brings us back to online future contracts. Intrade offers one on Assad being out of power "by midnight ET, June 30." The other is by midnight Dec. 31. Perhaps it's time to bet on December 2014.

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Bernd Debusmann is a Reuters Columnist.