Former Chancellor Schroeder Puffs Syrian Economy: So Does IMF

The Syrian economy is being fluffed by former German chancellor Gerhard Schroeder. He is calling for greater investment from both the Arab world and the West in Syria. After attending last week’s second Syrian-Emirati economic forum, the Schroeder has been hot on the Syrian economy. "Arabian Business," an Emirati magazine which boasts Massoud Derhally as a correspondent, has two stories talking up economic growth and investment in Syria. Here is one, "Syrian Dream." Here is another, "Syria moves forward." It comes as no surprise that Emaar Properties, one of the world's largest real estate developers and an Emirate firm, has just signed a major contract in Damascus. A few typical paragraphs, quoting Schroeder reads:

“I am confident that with the Syrian course of modernization gathering momentum, European investors will become more courageous.”

The change in the Syrian economy is already visible in terms of the numbers: whereas in 2000 the growth rate was negative at minus 1%, today it stands at 4.5%. In the non-oil sectors it is as high as 5.5%. Significantly, private investment in the country has soared by 25% over the past twelve months.

Schroeder says: “The economic data is very positive and foreign investors especially from the Arabic region are very active here.

“I think that if the economic reform process, which the government has started is continued, there will also be more investors from Europe.

The IMF is also rather upbeat, suggesting Syria is on the right track for growth. The Syria Report leads its issue this month with

The IMF estimates that non-oil GDP grew 5.5 percent last year (hence the declarations of Abdallah Dardari in that sense in the last few weeks –Read Economy shows signs of robust growth in spite of doubts over government statistics) and expects it to grow by slightly more than this figure in 2006. Overall, the report is positive towards the Syrian Government’s economic policy and admits that “there has been a momentum for reform to improve the overall business climate, including through a noteworthy simplification of the tax system and substantial improvement in the regulatory framework for the tourism sector. Outdated business laws and commercial codes are being revised, and the legal and regulatory framework to launch a securities market is being laid out. Overall, government interference is declining and private entrepreneurship is on the rise.”

Of course, after giving these rosy forecasts for the economy, each commentator lists the things that must be changed before really healthy growth can be achieved, such as releasing civil society from its straight jacket, creating an independent judiciary, combating corruption, etc.