Economy expands 5.6%, Foreign Investment Up, Despite US Efforts to Keep Syria Poor

Investment in Syria to Rise 11%, Deputy PM Forecasts
By Massoud A. Derhally

Aug. 8 (Bloomberg) — Foreign direct investment in Syria will probably increase this year as oil-rich Arab investors put money into real estate, banking and tourism, ignoring U.S. sanctions, the country's deputy prime minister said.

Investment will rise 11 percent to $3 billion, Deputy Prime Minister for Economic Affairs Abdallah Dardari, 43, said in a  telephone interview from Damascus today.

“We are finding ways around'' the embargo, Dardari said. By “opening up for the private sector to come into Syria'' we are attracting increased investment. 

The U.S. imposed sanctions in May 2004, including a ban on trade transactions with the Commercial Bank of Syria, the country's largest bank, in an effort to halt exports to the country that is accused by President George W. Bush's administration of aiding militants in Iraq and pursuing weapons of mass destruction.

Foreign investment will continue to flow to the country, the third-largest non-OPEC oil producer in the Middle East, driven  primarily by Persian Gulf investors and Syrians living abroad, Dardari said.

That investment will help the economy expand more than 5.6 percent this year, compared with 5 percent in 2006, driven by tourism and exports, he said. Excluding the oil industry, gross domestic product will grow about 7 percent, he added.

Oil Wealth

The Syrian oil industry accounts for about a quarter of GDP, 10 percent of fiscal revenues and 40 percent of exports, according to a report released by Bank Audi SAL-Audi Saradar Group yesterday.

Syria's government aims to boost economic growth to 7 percent by 2010 by reducing paper work, easing state controls and attracting more investors, Dardari said. The ruling Baath Party, which came to power in 1963, began moving toward a market economy in the 1990s, allowing private banks and insurance companies to operate for the first time. In January, the country introduced a law that allows foreign
investors to own or rent land and to take profit out of the country in any currency.

“There is a move to make the country attractive for foreign investment,'' said David Butter, a London-based senior Middle East
analyst at the Economist Intelligence unit. “In some areas there has been some success and that's partly to do with the liquidity
in the Gulf and the interested of financial institutions seeking new horizons.'' 

Investment Projects

Emaar Properties PJSC, the Middle East's largest developer, said in 2005 that it plans to invest $4 billion in real estate projects in Syria.

National Bank of Kuwait, the Gulf state's biggest lender by  market value, said this week that it plans to operate a joint venture in Syria as it seeks to tap economic growth and continue its expansion outside the Persian Gulf.

Last week, Qatar National Bank SAQ, the Persian Gulf nation's  largest lender, said it plans to open a bank in Syria with three partners.

On Aug. 6, the government approved the central bank's decision to link the Syrian pound to so-called special drawing rights, certificates issued by the International Monetary Fund that represent a basket of currencies including the dollar, euro, yen and U.K. pound, Dardari said. The currency was fixed at 52.21 to the dollar for more than a year until July 11, since when it has been allowed to strengthen to 51.4.

The shift in policy will “reduce the impact of dollar exchange rate fluctuations with other currencies which will give more stability to the Syrian pound,'' Dardari said.

Syria is broadening its peg after the country's currency was  dragged lower against the euro by a 10 percent slide in the dollar last year, pushing up the cost of imports from Europe.

McCain, Obama clash over Syria question

Aug. 8 (UPI) — U.S. presidential hopefuls John McCain and Barack Obama found themselves at opposing ends of the diplomatic spectrum in dealing with Syria Wednesday.

McCain, a Republican senator from Arizona, called for a tough stand against Syria, while Obama, a Democrat from Illinois, urged talks.

Sooner or later, one way or another, Hezbollah must be disarmed and its patron in Damascus confronted, McCain wrote for a blog published by The Jerusalem Post. Syria's support of Hezbollah in Lebanon is a barrier to peace, McCain said.

But Obama called for bilateral talks with Syria, while insisting on our core demands.

The Bush administration's empty threats, he said, have merely gotten in the way of a productive relationship with Syria.

Other presidential contenders, including Sen. Hillary Clinton, D-N.Y., and John Edwards, a former Democratic senator from North Carolina, also posted comments on Syria on the blog.

Comments (6)

t_desco said:

This is the blog with all the candidates’ statements:

The Road to the White House: Which Assad to believe?
Jerusalem Post BlogCentral

August 9th, 2007, 9:00 pm


Syrian Nationalist Party said:

“……The Syrian oil industry accounts for about a quarter of GDP, 10 percent of fiscal revenues and 40 percent of exports, according to a report released by Bank Audi SAL-Audi Saradar Group yesterday…….”

These percentages are blatantly flawed. Can’t be 25% of GDP and 10 % of Baathist Government budget. more like 70% of it.

August 10th, 2007, 2:33 am


Akbar Palace said:

Articles the Editors here don’t want you to read:

Syrian rockets aimed at Tel Aviv

Long-range rockets already in place on Golan; is Syria preparing for war?,7340,L-3435543,00.html

Russian Navy to operate from Syria:,7340,L-3434145,00.html

August 10th, 2007, 11:19 am


ugarit said:

Interesting “accusations” about “The Daily Star” of Lebanon:

US pressures on Daily Star: More II

US Pressures on the Daily Star in Lebanon: More.

Pressures on the Daily Star: How the US government is Pressuring the Lebanese press

August 10th, 2007, 2:56 pm


Kamal said:

Typical rumor-mongering by As’ad AbuKhalil, and typical second-rate rumor-monging by Ugarit.

August 10th, 2007, 4:20 pm


Alex said:


There are two countries in the Middle East that no one can understand or predict .. Syria and Israel.

So all these wonderful articles from Israel about an accidental war this summer (which is almost over) are not too convincing.

Those who know Syrian officials can tell you that they don’t reveal their war strategies to the New York Sun newspaper.

If you are against war, support peace instead of complaining and warning.

August 10th, 2007, 5:55 pm


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