Syrian crackdown stamps on economic dream
By Una Galani
The author is a Reuters Breakingviews columnist. The opinions expressed are her own.
LONDON — Syria’s crackdown will stamp on its economic dream. Bashar al-Assad’s regime had an ambitious plan to quadruple foreign investment and boost tourism in order to drive growth in a poor country with dwindling oil. But the violent suppression of protestors will scare off both investors and tourists.
When George W. Bush was U.S. president, Syria was brought into an expanded “axis of evil”, which included countries like Iran. But until last month, Assad was having some success in normalising relations with the West. The United States recently appointed its first ambassador to the country in years. Assad jetted around Western capitals, portraying Syria as on the path to modernisation. There was even a glossy profile earlier this year of his photogenic wife in American Vogue.
Against that backdrop, Syria’s plans to improve infrastructure by attracting foreign direct investment worth $55 billion by 2015 — roughly equivalent to its entire annual GDP — looked plausible, even though current FDI is around just $2.5 billion a year. The same was true of Syria’s five-year goal to capitalise on its rich history by boosting tourism a further 40 percent to reach over 12 million visitors a year. Indeed, tourist numbers were up 40 percent last year alone.
This would have helped Syria achieve its growth target of 5 percent to 6 percent a year over the next five years. While that’s not much faster than in previous years, it would have offset the steady decline in oil related revenues, currently around 5 percent of GDP, and problems in agriculture — an even bigger pillar of the economy which, in a good year, accounts for as much as one quarter of GDP.
But the escalating violence in Syria has left the country’s economic plans looking more like a fantasy. While over 70 percent of visitors to Syria come from the Arab region — a chunk of tourism that may not be so easily frightened away — it was from Europe that Syria hoped to attract the bulk of new big-spending tourists. Equally, it was from the West that Syria aimed to bring in new investment. Every bullet fired makes that less likely.