US sanctions relief offers Syria hope, but hurdles remain
BEIRUT: Donald Trump's decision to lift US sanctions on Syria signals a major shift in the war-battered country's efforts to rebuild, offering hope of recovery but leaving significant obstacles in place. In Riyadh during a Middle East tour, the US president said he "will be ordering the cessation of sanctions against Syria in order to give them a chance at greatness". Syria's foreign ministry hailed the move as a "pivotal turning point", while Finance Minister Mohammed Barnieh said it would help bring in investment and restore key services. Barnieh said the decision would "help Syria in building its institutions, providing essential services to the people and create great opportunities to attract investment and restore confidence".
Jihad Yazigi, editor of economic publication The Syria Report, said US sanctions were "by far the most impactful" of all those imposed during former president Bashar Al-Assad's rule. Since ousting Al-Assad in December, Syria's new leadership has pushed for the lifting of Western sanctions. US measures cut Syria off from the global financial system for more than a decade, hampering trade and aid transfers. "The most immediate impact will be a facilitation of the transfer of funds from Gulf states and development aid in general to Syria," Yazigi said.
Financial transfers
A United Nations report in February said 90 percent of Syrians live in poverty and a quarter are jobless. Sanctions relief for the banking sector could open access to the US financial system and spur trade, investment and jobs, Yazigi said. The move would lead to "a facilitation of transfers in and out of Syria, and it's going to improve trade activity, it is going to improve investment, and it's going to generate a lot of business opportunities and employment", he added. As for the Syrian pound, which lost around 90 percent of its value during the war, the influx of US dollars could help strengthen the currency, according to the expert. Since the start of the civil war in 2011, the pound has plunged from 50 to about 10,000-12,000 against the greenback. But Yazigi warned the currency would remain unstable if the government prints money to raise salaries.
Challenges ahead
Syria still faces numerous challenges threatening its recovery. "The procedure for lifting sanctions is quite long, even with the presence of political willingness," said Syrian economic expert Karam Shaar. "It would still take months for these sanctions to be lifted because you're talking also about sanctions legislation, some of them are under acts as opposed to executive orders," he added. While executive orders can be reversed easily, acts require congressional action.
Sanctions relief is also but one step in the lengthy reconstruction path for Syria, which the UN estimates could cost more than $400 billion. The United Nations estimates rebuilding Syria could cost more than $400 billion. Around 1.87 million Syrians have returned to their home regions since Assad's fall, according to International Organization for Migration, but the UN body says lack of jobs and services is holding back wider returns.
Sanctions relief allows Syria to plan broader reconstruction, Yazigi said, but alone it is "not sufficient". "There simply aren't enough funds," he said, noting few countries were willing to pour in the tens of billions of dollars needed by Syria. In February, about 20 Arab and Western countries pledged support for Syria's transition at a Paris conference. Some Western countries have relaxed certain sanctions, but demand progress on rights, minority protections and the fight against terrorism before going further. — AFP
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