Enab Baladi – Jana al-Issa

The possibility of the Syrians returning to their country without restrictions following the fall of the ousted Assad regime on December 8, 2024, has created a desire for return and stability within the country. However, low economic and living conditions, along with a lack of job opportunities, continue to top the list of obstacles for most Syrians when making their decision.

As a way to avoid placing themselves in economic crises, many returning individuals, especially those who managed to gather small amounts of money during their long years of exile, are considering starting small investment projects to secure a reasonable income that cannot be obtained through any ordinary job in Syria today.

The decline in economic, commercial, and industrial activity over the past years has created a significant vacuum in local markets, making the establishment of any investment project currently contributing, even slightly, to improving this activity.

Agriculture first… Required sectors

Syrian entrepreneurs today are contemplating the creation of several projects, some of which are related to their expertise or what they are capable of managing and ensuring its success.

An abundance of projects in the same sectors may affect the profitability of investors and consequently reduce their contribution to supporting the country’s economy. Here, it is possible to study the situation in the country and what type of small projects it needs.

Political economist researcher Yahya al-Sayed Omar sees that in economics generally, and in business management in particular, there are no good or bad projects; every project is deemed good if success requirements are met, and vice versa.

The requirements, according to al-Sayed Omar’s clarification to Enab Baladi, involve choosing a project that suits the investor in terms of their experience and capital, and studying the project in terms of the availability of a market for its products and analyzing its financial indicators.

Regarding Syria, al-Sayed Omar stated that small and micro-projects are essential for both the state and individuals. It is crucial to focus on agricultural projects and some simple processing industries, as agricultural projects do not require large capital, and marketing the products can be done easily. Simple processing industries, such as producing organic fertilizer from agricultural waste, are also good in terms of ease of selling the output.

For his part, banking and economic expert Amer Shahda said that to date, there are no components or governmental structures to support small investments, considering that the overall market condition does not assist in small investment projects due to a significant decline in consumption.

Shahda explained to Enab Baladi that small investments are more prone to losses than large and medium-sized investments.

Regarding market needs, Shahda agrees with al-Sayed Omar that the most necessary sectors in the country currently are the agricultural sector, followed by livestock breeding, in addition to industrial supplement sectors such as producing cellophane bags or printing and manufacturing cardboard, among other industries that are utilized in local production and meet the raw material needs for processing industries in the market.

Currently, the success rate of this type of investment is not considered high because the overall economic situation does not aid in raising success rates, given low income levels that do not support consumption, and since exports are halted, this also impacts project success rates.

An unstable environment

Before making a decision to invest in a specific country, foreign investors must study and determine the risks of the investment climate in that country, as explained in a report published on the Investopedia site, which specializes in finance and investment.

The investment climate comprises the economic, financial, social, and political conditions in a country that influence the willingness of individuals, banks, and institutions to lend to private companies.

The investment climate is influenced by several indirect factors, many of which exist in Syria, such as poverty levels, crime rates, infrastructure, workforce participation, national security considerations, political stability, taxes, liquidity, financial market stability, rule of law, property rights, regulatory environment, government transparency, and government accountability.

Regarding the investment environment in Syria, researcher Yahya al-Sayed Omar believes it is still not stable, and there are several obstacles, including the sharp fluctuations in the value of the Syrian pound, which adversely affects cost and revenue calculations. Additionally, smuggling from abroad impacts investments, as it takes a significant share of the market. Moreover, the difficulty in providing energy sources, especially electricity, and ongoing high fuel prices increases production costs and thus affects revenues.

Expert Amer Shahda also confirmed that the elements of the investment environment are currently unavailable, including qualified personnel, the presence of banks, and stable internal and external political conditions, as well as a lack of demand for products in the markets.

To ensure successful investments, several aspects must be addressed according to Shahda, clarifying that as long as the government has announced a shift towards a competitive market economy, there should be regulations established for competition that lead to increased efficiency and transparency, along with providing production factors and developing human resources, and the need for government guarantees to create supportive environments for these small investments.

Inappropriate timing

Experts agree that the current time is not sufficiently appropriate to start small investments for several reasons.

Researcher Yahya al-Sayed Omar believes that those wishing to establish projects in Syria should wait some time until sanctions are completely lifted, energy availability in the state improves, and the pound stabilizes. Therefore, he thinks the current timing is not suitable for attracting foreign investment.

Economic expert Amer Shahda stated that before deciding to start investing, one must study the political, social, and legal situation in the country, which remains unstable at present; hence, he does not recommend undertaking such steps currently.

On February 20, the United Nations Development Program (UNDP) estimated in a report that Syria needs more than 50 years at least to restore the country’s economic levels to pre-war conditions if it achieves strong growth.

According to the report, 14 years of war have delayed economic and social progress in Syria by about 40 years, with the gross domestic product (GDP) of Syria decreasing by 50% and the poverty rate rising from 33% before the war to 90% currently, while the percentage of extreme poverty reached 66%.

The United Nations report indicated that the Syrian economy needs 55 years to return to its pre-war levels if current growth continues at 1.3%.