While Bush made no secret of his desire to see regime change in Damascus, Obama placed his bet on conciliation and a diplomatic rapprochement. Washington did not publicly support Iraqi Prime Minister Nouri Al Maliki’s accusation that Syrian intelligence’s Iraqi protégés massacred 100 civilians in a horrific bombing in Baghdad that gutted the foreign and finance ministers. Obama sent Senator Mitchell to Damascus to brief President Assad on the latest tortuous twist in the Israeli-Palestinian peace process, eased economic sanctions against Syria and even mandated Central Command general’s to discuss a joint force to police the Iraqi border.

The economic rationale for closer Syrian-American relations is compelling. Syria’s Baathist socialist, central-planning models has failed a nation that was once the trade entrepot of the Islamic world. The influx of 1.5 million Iraqi refugees has devastated Syria’s fragile economy and public finances. The government’s decision to freeze fertiliser and diesel subsidies has triggered a vicious inflation spiral.

Syria’s economy is also militarised after six decades of hostilities with Israel, with government spending on the armed forces estimated as high as ten per cent of GDP. Even though Syria settled its Cold War era debts to the former Soviet Union, Poland, the Czech Republic and Slovakia, the government has only managed to attract a billion dollars last year in foreign investments, primarily from the Gulf States and the EU. With an embryonic consumer culture, symbolised by Dior advertisements, Internet cafes and glitzy shopping malls in the heart of Damascus and Aleppo, coupled with rising inflation, one of the youngest, fastest growing populations on earth and 25 per cent unemployment rates, Baathist Syria is an economic time bomb.

Just as the risk of economic collapse compelled Anwar Sadat to fly to Jerusalem to address the Israeli Knesset and negotiate an American brokered peace in the late 1970’s, Dr Bashar Al Assad can well conclude that the calculus of regime survival could well argue a peace deal with Israel, whose strategic payoff could well include billions in Saudi petrodollars, American financial patronage and even the return of the Golan Heights. If economics and the Sinai was enough to flip Sadat from the Soviet embrace on the path to Camp David, Barack Obama could well nudge history fast forward with an epic Syria-Israel peace deal over the Golan Heights.

No Syrian President can risk the path taken by Sadat at Camp David or King Hussein at Oslo because the regime’s entire legitimacy, its Baathist ideological DNA, is based on its alleged faithfulness to the Palestinian cause.

Yet Dr Assad, like his father, is no ideologue but a student of the sort of subtle, cold blooded real politik whose preeminent proponents were Machiavelli, Count Metternich, Von Clausewitz and Dr Henry Kissinger.

The Syrians even encouraged dissident Fatah Colonel Abu Musa’s revolt against Yasser Arafat and sponsored Abu Nidal’s assassinations of several PLO ambassadors in Western Europe in the 1980’s. Syrian national interest and the pitiless logic of regime survival, not calcified Baathist ideology, invariably determined the policies of Hafez Assad. Dr Bashar is no different.

Syria’s willingness to engage with the West is evident in Hamas’s statement that it would accept Israel’s 1967 borders in exchange for a Palestinian state with its capital in East Jerusalem, even though it falls short of US and EU criteria to recognise the Zionist state without preconditions. Syria appointed ambassadors to both Beirut and Baghdad, a powerful signal that the Greater Syria irredentism of the past is now over. Yet Syria refused to renounce its strategic alliance with revolutionary Iran, forged in 1980 to checkmate the regional ambitions of Saddam Hussein and Sadat’s unilateral peace treaty with Israel.

President Assad paid his sixth visit to Iran and congratulated Ahmadinijad on his re-election even as rioters were shot on the streets of Tehran. Iran has delivered ballistic missiles and long range rockets to the Syrians. The Syrian government has also refused to end its support for the “resistance axis” of Hezbollah, Hamas, Islamic Jihad and the Popular Front for the Liberation of Palestine (PFLP). A shrewd merchant of the geopolitical souk like his late father, Dr Assad will not abandon his Persian card without solid, unequivocal security guarantees from the US and EU. Nor will the Israelis return the Golan to Syrian tank brigades. A reservist army is vulnerable to a surprise armoured attack, as Israel discovered in the October 1973 war. A peace deal with Syria will, sadly, remain beyond Obama’s grasp.

Matein Khalid is an investment banker based in Dubai. For feedback, write to opinion@khaleejtimes.com