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The Syrian Marshall Plan
Why Foreign Investors Are Pouring Money Into the Country's Economy
ADAM HEFFEZ is an MBA candidate at the Stanford Graduate School of Business. NOAM RAYDAN is a research associate at The Washington Institute for Near East Policy and the Arabic editor of the Institute’s Fikra Forum.See more by Adam HeffezSee more by Noam Raydan
Most people who look at Syria can’t help but see the tragedy -- the hundreds of thousands of deaths and billions of dollars of damage, including the flattening of the old city of Homs and eastern Aleppo. But some are starting to treat Syria as something else entirely: an investment opportunity. That might sound illogical, but it isn’t entirely without reason. The Syrian economy, having suffered years of ruin, offers early investors the chance to reap significant rewards in the long term.
The Syrian economy is in exceedingly dire straits. The majority of the country’s oil fields, once the economy’s lifeblood (along with agriculture), are under the control of the extremist group Islamic State in Iraq and al-Sham (ISIS), also known as Islamic State (IS), depriving the country of about $2 million a day. Meanwhile, the World Bank has estimated that the cost of rebuilding what has already been destroyed in Syria will be upward of $200 billion. The organization’s 2014 Doing Business report ranks the country last in the category of “dealing with construction permits,” which measures the procedural and financial barriers toward building a basic warehouse. In other words, turning a quick profit may seem like the last thing on Syria watchers’ minds.
But the motivations of Syria’s foreign investors -- consisting mostly of governments and companies from countries that are allied with Syrian President Bashar al-Assad -- are primarily political. They seem to have calculated that investments in Syria now will give them significant leverage in how the country is governed later, even if the investments don’t pay off in a strictly financial sense in the short term. In that, their plans bear a distorted resemblance to the Marshall Plan loans offered by the United States to Europe after World War II.