Courtesy Reuters A man holds one thousand Syrian pound banknotes, with the picture of late Syrian President Hafez al-Assad.

The Syrian Marshall Plan

Why Foreign Investors Are Pouring Money Into the Country's Economy

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.

A more recent (and more local) example of this strategy is Iran’s investment in Lebanon after the Shia political party and militant group Hezbollah’s war with Israel in 2006. The London-based pan-Arab daily Asharq Al-Awsat reported that one day after the ceasefire, Hezbollah established a body to supervise the process of removing iron and cement from the rubble in order to “remelt” it. Companies under Iranian supervision took care of the process and succeeded in extracting scrap materials worth millions of dollars. To highlight Tehran’s leading role in reconstructing Hezbollah-controlled areas, “Iran’s Park” was built in Maroun al-Ras, a village in south Lebanon that overlooks Israel. According to a BBC report, the park is adorned with posters of Iranian leaders, including Husam Khos Navis, the late director of the Iranian reconstruction commission. In political terms, these investments paid off for the Islamic Republic. Media outlets, including the Lebanese newspaper Daily Star, quoted the head of Iran’s elite al-Quds military force, General Qassem Suleimani, declaring (in a 2012 conference on youth and the “Islamic Awakening” in Tehran) that, as a result of such economic interventions, “in south Lebanon and Iraq, the people are under the effect of the Islamic Republic’s way of practice and thinking.” In a speech delivered two years after the war, Hezbollah’s Secretary General Hassan Nasrallah affirmed that he is “proud to be a member in the party of velayat-e faqih [guardianship of the jurist],” a Shia religious system that currently commands deference to Ayatollah Ali Khamenei.

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