The economic challenge of Syria

   

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The civil war raging for eight years in Syria has affected seriously the economy. The Syrian state's GDP has shrunk dramatically and while the Syrian Arab army restores the power of the Assad's regime internally, the need for the costly rebuild of the country arises. The Syrian government understands this and seeks to restore the economy.

Initially, internally the Syrian government aims to take advantage of the private initiative to make investments. It is no coincidence that it provides incentives to Syrian entrepreneurs to operate within the country. Also, with a range of other measures, it intends to strengthen the position of the Syrian pound by printing from the past year new currencies in order to channel them into the market. However, due to the non-definitive cessation of hostilities and the incomplete restoration of the sovereignty of the regime throughout the country, there is not much to be done by the government.

On the other hand, as far as economic diplomacy is concerned, the Syrian government's activity is remarkable. Initially, it strengthens its ties with Iran. In late January 2019, the Iranian vice-president met with the Syrian prime minister and signed 11 agreements and MoU's. Those involved Iranian investments in renewable energy, infrastructure, culture and housing, co-operation in the banking sector and broadly they established a long-term economic co-operation.

The Syrian side is also in contact with the Jordanian one. Jordan is interested in the reconstruction of Syria. The opportunities presented for investments in the construction sector are significant, while the raw materials produced in the country can be exported to the neighboring state. Also, via the port of Aqaba, Jordanian territory can act as a "gateway" for the introduction of various goods in Syria. Already, delegations from the two countries have met to arrange their future cooperation. Another important reason for the post-war reconstruction interest by the Jordanian government is that the budget will be lightened, since no funds will be channeled for the care of Syrian refugees.

An additional country that wants to help Syria and with which the Syrian regime has good relations is Belarus. The country's foreign minister has said he wants his country to help rebuild Syria and that it respects its territorial integrity. At the same time, in a meeting with the Syrian ambassador to Minsk, a bilateral political dialogue was decided.

An important development that demonstrates the success of Syrian economic diplomacy is also the fact that the UAE wishes to contribute on their turn to the rebuilding of the Arab state. It is not surprising that their embassy will re-open in Damascus, while a Syrian business delegation has had talks with other UAE businessmen for investments in agriculture, infrastructure and tourism sectors. Indeed, Syrian entrepreneurs are aware of the investment guarantees that the Assad’s regime gives. In addition, the Syrian interest is also centered on green development.

In conclusion

It is clear that the Syrian government towards the end of the conflict aims to establish good and cooperative relations with many countries in order to facilitate the difficult task of post-war reconstruction. The need for such actions is greater if it is taken into account that the West with EU and the US as “champions” is preparing to apply new sanctions that will totally hit the Arab country.

The measures, therefore, taken by the Syrian government also concern the internal matters and the economic diplomacy and so far have done well. There are many countries, including the BRICS, who seek to operate economically in the post-war Syrian territory.

Finally, on the question of whether Syria is a country offering investment opportunities, the answer is yes. However, the risk will be diminished in the near future that the end of the conflict, except for an  unpredictable event, is expected.   

Indicative Sources

Channel News Asia, Syria and Iran sign “strategic” economic agreement, 29 January 2019, https://www.channelnewsasia.com/news/world/syria-and-iran-sign--strategic--economic-agreement-11178330 (access: 10 February 2019).

Sarah Diaa, Gulf News, Syria in talks with UAE investors to rebuild economy after war, 2 January 2019, https://gulfnews.com/business/syria-in-talks-with-uae-investors-to-rebuild-economy-after-war-1.61560455  (access: 14 February 2019).

Belarusian Telegraph Agency, Belarus ready to help restore Syrian economy, 09 January 2019, https://eng.belta.by/politics/view/belarus-ready-to-help-restore-syrian-economy-117825-2019/  (access: 14 February 2019).

Samaha Nour, European Council on Foreign Relations, The economic war in Syria: why Europe risks losing, 11 February 2019, https://www.ecfr.eu/article/commentary_the_economic_war_on_syria_why_europe_risks_losing (access: 15 February 2019).

TheNational, Jordanians pin hopes on rebuilding opportunities in Syria, 11 February 2019,   https://www.thenational.ae/business/economy/jordanians-pin-hopes-on-rebuilding-opportunities-in-syria-1.825444 (access: 15 February 2019).

Maysam Bizaet, Al- Monitor, Race for reconstruction heats up as Syrian war winds down, 01 February 2019, https://www.al-monitor.com/pulse/originals/2019/02/iran-syria-cooperation-economic-agreements-trade-jahangiri.html (access: 15 February 2019).

Suleiman al- Khalidi, Angus McDowall, 02 October 2017, Reuters, Hard choices for Syrian industrialists in ruins of Aleppo, https://www.reuters.com/article/us-mideast-crisis-syria-economy-insight/hard-choices-for-syrian-industrialists-in-ruins-of-aleppo-idUSKCN1C71B8