On August 9, 2026, Syria and Russia signed a memorandum of understanding which resolved the fate of Russian military bases in Khmeimim and Tartus. The bases will be converted into joint training centres, and control of the civilian infrastructure will be transferred to Damascus. News reports have heralded a “compromise” and a “new chapter”. This is all true, but it’s not the whole truth, as, in our view, the truth lies elsewhere—in the realm of debt and currency clearing.
Debt, not bases
The public debate unfolded as if the military bases themselves were the primary subject of the negotiations. Meanwhile, the issue of the military presence was merely a visible part of a much broader framework, at the centre of which was the issue of Syrian sovereign debt to Russia.
These are obligations that arose under the Soviet currency clearing system, when arms and equipment deliveries were settled not in hard currency but through bilateral settlements, creating gigantic paper obligations, mostly in the form of identical loans extended by the central banks of both sides and repaid in national currencies, although the accounts were held in foreign currency. By the early 2000s, Syria’s total debt to Russia was estimated at approximately $13-14 billion. In 2005, as part of its overall policy of settling Soviet debt obligations, Russia wrote off approximately 73% of this amount; the remaining amount, approximately $3.6 billion, was due for repayment within ten years.
After 2011 and the outbreak of the civil war, payments effectively ceased, and since 2015, with the deployment of Russian military forces, new obligations related to operational support, deliveries, and technical assistance have been added to the old clearing debt. The exact estimate of the total debt remains a subject of interagency disagreement, but it amounts to several billion dollars, the legal status of which is unclear.
Such debts cannot be treated as an accounting figure. They are underpinned by international obligations, issues of currency regulation, fiscal and monetary policy, and the state's financial reputation—and this is where the interests of various agencies inevitably diverge.
The state as a field of coordination
In the public consciousness, the state is typically perceived as a single entity acting on the basis of an abstract “national interest”. A serious political economy analysis, however, demands that we abandon this model. Any major foreign policy decision is the result of a complex balance between state institutions, each with its own rationality and powers. Common conspiracy theories—secret collusion, hidden agreements, betrayal by negotiators—turn out to be not only an oversimplification but also a misrepresentation: in reality, most foreign policy decisions are the result of a lengthy and contentious process of interdepartmental coordination, not someone’s ill will.
In the case of the Syrian negotiations, the interests of the Russian Presidential Administration and the Security Council, the Government, the Ministry of Foreign Affairs, the Ministry of Finance and the Treasury, the Ministry of Economic Development and the Ministry of Industry and Trade, law enforcement agencies, Rosoboronexport, industry enterprises, and the Bank of Russia were all simultaneously present. The Ministry of Defence and the General Staff viewed the bases as an operational necessity and a Mediterranean foothold. The Ministry of Finance was concerned about the budgetary implications and the accounting of liabilities on the contractors’ balance sheets. The Ministry of Economic Development and the Ministry of Industry and Trade assessed trade prospects. The Ministry of Foreign Affairs acted on political considerations. The Bank of Russia defended the foreign exchange clearing system, the stability of mutual settlements, and existing financial obligations.
These positions were agreed upon through interagency working groups chaired by the relevant Deputy Prime Ministers and through the Security Council on issues affecting the military presence. The final directive for the negotiating delegation represented a rather painful compromise, in which every word was the result of months of haggling. It was the quality of this internal Russian coordination, not the progress of the negotiations in Damascus, that determined their outcome for Russia.
The role of the Bank of Russia
Russian public discourse traditionally underestimates the role of the Central Bank in foreign economic policy. Meanwhile, in matters affecting currency clearing and international settlements, the Bank of Russia inevitably becomes a key player in shaping the state's position, as the consequences of such decisions extend far beyond foreign policy and affect the very foundations of the monetary system.
In the case of Syria, the Bank of Russia consistently insisted that the cleared debt was not subject to write-off or restructuring under the previous schemes. This position was based on simple logic: debt is an asset reflected in the relevant balance sheets, and its treatment is determined by the Central Bank's regulations, not by the political expediency of the moment. The Bank of Russia viewed the debt not as a burden, but as a tool—the basis for a new model of relations in which military presence is not an end in itself, but a consequence of economic logic.
It was this position that ultimately prevailed in the preparation of the directives. As a result of the agreement, the Ministry of Finance and the Ministry of Economic Development received not debt forgiveness, but the conversion of the bases into joint training centres—a formula that preserved the military department's face but transformed the relationship from a unilateral presence to a level of bilateral cooperation. Financial logic adjusted the initial negotiating position in its favour.
***
The signed memorandum is not simply an agreement on bases, but a precedent for institutional cooperation. It demonstrates that a state's foreign policy is not the will of an abstract centre, but the result of competing rationalities within the state itself. The monetary logic of the Bank of Russia proved more resilient in this case than the coercive logic of the defence bloc or the budgetary logic of the Ministry of Finance.
Russia is leaving Syria in a different state from when it entered. And the main lesson of this story is not that the bases have been converted into training centres, but that the war over the negotiating directive was won long before the delegation sat down at the table—in the Moscow offices where it was decided who owed whom and on what terms.
