Syria works to lure investments via incentives

DAMASCUS - Investments are usually the worst affected by crises. In Syria, investment has been hard hit by the prolonged crisis and the government is feverishly working to reinvigorate this vital sector through modernizing its investment laws and offering new incentives.

Syrian Prime Minister Wael al-Halqi has recently said that the size of foreign and internal investments has been enormously affected by the events, disclosing that investors have been directly receiving death threats to keep them off.

The 18-month crisis has hindered investment by all means, as murder, kidnapping and burning of facilities triggered off the closure of a big number of factories and the migration of businessmen to other countries after the simmering crisis turned gradually out of control.

The unrest in Syria, started in mid-March 2011, has forced many investors to suspend their ventures and others indefinitely delay the implementation of their projects.

With this dim picture, the Syrian Investment Body has decided to rearrange the internal investment house in a bid to make things more flexible and less sophisticated than they used to be.

Director General of the Syrian Investment Authority Abdul-Karim Khalil told local media that great efforts are being made to create a suitable climate for investment so as to lure investors via a series of facilitation in all domains once safety and security return.

Khalil revealed that the body is drafting a new legislation based on the previous investment law No 10, which was introduced in 1990, adding that the amendment will be more flexible so that investments in areas that urgently need improvement will be exempted from taxes.

Khalil is among those upbeat about investments in Syria despite the fact that the bloody events are continuing unabatedly. He stressed that crises often generate new chances, especially in terms of securing basic needs.

Despite the recent revelations about the size of losses in Syria, Halqi has insisted that the Syrian economy is "solid and will remain so."

In a recent interview with Tishrin daily, Halqi said that terrorist acts in his country have caused damages worth billions of Syrian pounds but the national economy was still solid-rock after 18 months of intranquility.

He said that the Syrian pound is still stable "and there are no fear of any depreciation," noting that the decline in growth pace over the past months is still "within its rational limits."

But the reality on street is that, on Wednesday, one U.S. dollar was exchanged for 73.5 Syrian pounds at the free market. Last week, it was around 70.50 pounds, while before the unrest, about 47 pounds.

Halqi said that in light of the economic sanctions imposed on the country a year ago, Damascus has opted to look to the East and boost its economic ties with its friendly countries like Iran, Russia, China and Malaysia that have opposed those sanctions. He meanwhile indicated that the country has relied on the system of tradeoff and payments (trading one commodity for the other) to ward off monetary inflation.

He also said that all food items are available to meet the people's requirements via the public and private sectors, in addition to the presence of a strategic storage of basic commodities.

Despite the backlash of "unjust" sanctions on oil derivatives, Halqi said "those oil derivatives are sufficient to meet all demands," adding that Syria has a reserve of cooking gas for another five months though confessing of the difficulty in transporting it to some provinces.

He indicated that the government subsidy of diesel is estimated at more than 300 billion pounds (over $4.4 billion) annually, adding that the government has recently decided to raise up the diesel price by 2 pounds to alleviate pressure on the treasury.

The governor of Homs has lately disclosed that losses in the central Syrian province have been estimated at up to 600 billion pounds (about $8.8 billion).

Halqi said concerned committees have recently put the number of losses in all Syrian provinces, except Homs and Aleppo, at 162 billion pounds (about $2.45 billion).