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Yahoo
14-05-2025
- Business
- Yahoo
'Too good to be true': investors eye Syria after Trump sanctions move
By Timour Azhari and Karin Strohecker DAMASCUS/LONDON (Reuters) - An end to U.S. sanctions on Syria is expected to mark a new era for an economy devastated by 13 years of war, opening the way for investment flows from the Syrian diaspora, Turkey, and Gulf states that back the new government. Business executives, Syria's finance minister, and analysts told Reuters they anticipated an influx of capital into the bankrupt economy once sanctions are lifted in line with President Donald Trump's surprise announcement, notwithstanding the many challenges still facing the deeply-fractured nation. Billionaire Syrian businessman Ghassan Aboud told Reuters he was making plans to invest, and expected other Syrians with international business ties to be doing the same. "They were scared to come and work in Syria due to the sanctions risks ... This will completely disappear now," said Aboud, who lives in the UAE. "I'm of course planning to enter the market, for two reasons: I want to help the country recover in any way possible, and second, the ground is fertile: any seed planted today can result in a good profit margin," he said, outlining a multi-billion dollar plan to boost Syrian art, culture and education. The lifting of sanctions would radically reshape an economy already set on a new course by Syria's new rulers, who have pursued free-market policies and shifted away from the state-led model adopted during five decades of rule by the Assad family. The United States and other Western powers imposed tough sanctions on Syria during the war that spiralled out of protests against Bashar al-Assad's rule in 2011. Washington kept them in place after he was toppled in December, as it formulated its Syria policy and monitored the actions of the new administration led by interim President Ahmed al-Sharaa, a former al Qaeda commander. Saudi Arabia and Turkey, which both support Sharaa's government, had urged Washington to lift the sanctions. Saudi Arabia's foreign minister said on Wednesday there would be many investment opportunities once that happens. The conflict has turned many urban areas to rubble and killed hundreds of thousands of people. More than 90% of the 23 million Syrians live below the poverty line, U.N. agencies say. 'There's a real chance for a transformational change in Syria and the broader region," said Timothy Ash, senior sovereign strategist for emerging markets at RBC BlueBay Asset Management. Turkish firms and banks are expected to benefit from the lifting of sanctions, said Onur Genc, chief executive officer of financial group BBVA, whose group comprises Garanti BBVA, the second-largest private bank in Turkey. "For Turkey, it's going to be positive because there's a lot of reconstruction needed in Syria. Who's there to do that? The Turkish companies," he told Reuters. "The lifting of the sanctions would allow the Turkish companies to go there now much better, and the Turkish banks to be able to finance them - so it will help," he said. Turkey strongly backed Syria's opposition during the war, which decimated a diverse and productive economy. It more than halved between 2010 and 2021, official Syrian data cited by the World Bank in 2024 showed. However, this was likely an underestimate, the bank said. 'NATIONWIDE CONSTRUCTION SITE' Syria's pound has strengthened since Trump's announcement. Currency traders said it was hovering between 9,000 and 9,500 to the dollar on Wednesday, compared to 12,600 earlier this week. Before the war in 2011, it traded at 47. Syrian Finance Minister Yisr Barnieh told Reuters that investors from the United Arab Emirates, Kuwait and Saudi Arabia, among others, had been making inquiries about investing. "Syria today is a land of opportunities, with immense potential across every sector—from agriculture to oil, tourism, infrastructure, and transportation," he told Reuters. "We call on all investors to take this opportunity." Watching footage of Trump meeting Sharaa in Riyadh on Wednesday at his Damascus office, Karam Bechara, general manager of Shahba Bank in Syria, described excitement in the business community. "It's too good to be true," he said. "We're on the right track now internationally unless something happens in Syria that derails the process,' he said. Syria remains fragile. Some armed groups have yet to turn their weapons over to the government, Kurdish autonomy demands are a point of friction, and sectarian violence has left minorities afraid of Sharaa's rule, despite his promises of protection and inclusive governance. Israel opposes Sharaa, saying he remains a jihadist, and has bombed Syria repeatedly. Jihad Yazigi, editor of a leading newsletter on Syria's economy, Syria Report, said the U.S. decision was transformative because it sent "a very strong political signal" and opened the way for its reintegration with the Gulf, international financial organisations, and Syria's big diaspora in the West. Imad al-Khatib, a Lebanese investor, said he had accelerated his plans to invest in Syria after Trump's announcement. Together with Lebanese and Syrian partners, he carried out a feasibility study for a $200 million waste sorting plant in Damascus two months ago. On Wednesday morning, he sent a team of specialists to Syria on Wednesday to begin preparations. "This is the first step ... and larger steps will follow, God willing. We will certainly work to attract new investors because Syria is much larger than Lebanon," he told Reuters. (Additional reporting by Suleiman al-Khalidi in Amman; Libby George in London; Laila Bassam and Tom Perry in Beirut; Writing by Tom Perry, editing by Deepa Babington)
Yahoo
14-05-2025
- Business
- Yahoo
Explainer-Syria's economy: The devastating impact of war and sanctions
By Karin Strohecker, Libby George and Marc Jones LONDON (Reuters) -U.S. President Donald Trump has said he will lift long-standing sanctions on Syria that severed the country from the global financial system under toppled former President Bashar al-Assad. The European Union and Britain have already lifted some of their sanctions, but if Washington now goes ahead with a wholesale removal it will pave the way for others to follow. Below is a round-up of the current state of Syria's economy and how 14 years of civil war, ending with Assad's fall in December, reshaped trade and government finances. WHAT IS THE STATE OF SYRIA'S ECONOMY? The World Bank estimates Syria's economy is worth around $21 billion - that is roughly on par with Albania and Armenia, which both have more than 20 million fewer inhabitants than Syria. Official Syrian data shows the economy more than halved in size between 2010 and 2022. The World Bank believes even that is likely to be an underestimate given that nighttime light emissions - a proxy for overall economic activity - indicated an even sharper 83% contraction between 2010 and 2024. Syria was reclassified as a low-income country in 2018, with more than 90% of its near 25 million population living below the poverty line, according to UN agencies. WHAT HAS HAPPENED TO SYRIA'S CURRENCY? Syria's economic turmoil worsened in 2019 when neighbouring Lebanon, with which it has extensive economic and financial ties, also descended into crisis. Damascus then introduced a plethora of exchange rates for different transactions to safeguard scarce hard currency. Following the new government's takeover in December, the central bank pledged to adopt an official unified exchange rate for the Syrian pound. It also appointed Maysaa Sabrine as central bank governor - making her the first woman to head the bank in its more than 70-year history. On Wednesday, the exchange rate was at 11,065 pounds to the dollar. That compares to black market rates of around 22,000 around the time of Assad's fall last year and just 47 to the dollar in March 2011 when civil war engulfed the country. HOW MUCH DEBT DOES SYRIA OWE? The government has stated its owes between $20 billion and $23 billion mostly in bilateral loans, although it could be considerably higher given it may face claims from Iran and Russia for between $30 billion to $50 billion. Leading sovereign debt lawyers say those Assad-era obligations could be struck off as "odious" war debt — debt incurred without the consent of the Syrian people or for their benefit given much it went to funding arms for the Assad government. The composition of Syrian obligors - such as the government, central bank, state-owned enterprises, or commercial organisations - also needs to be pinned down, a recent Peterson Institute report adds, as different types of debt may need to be treated differently when restructured. WHAT ARE THE CENTRAL BANK'S RESERVES? The central bank only has foreign exchange reserves of around $200 million in cash, sources previously told Reuters, a huge drop from the $18.5 billion that the International Monetary Fund estimated Syria had before its civil war erupted. It also holds nearly 26 tonnes of gold too, worth over $2.6 billion at current market prices. The new government has said it expects to retrieve up to $400 million of its frozen assets to help fund reforms, including recent sharp increases in some public sector salaries. Western governments froze the assets during Assad's rule, but the exact value and location of them now, and how quickly they could get repatriated, remains unclear. Switzerland has said some 99 million Swiss francs ($118 million) worth are currently in banks there. The Syria Report newsletter also estimates that 163 million pounds worth ($217 million) are in the UK. HOW HAVE WAR AND SANCTIONS AFFECTED TRADE AND THE ECONOMY? Dwindling oil and tourism revenues decimated Syria's exports from $18.4 billion in 2010 to $1.8 billion in 2021, according to the World Bank. The pressured government finances prompted it to pay for some key imports with illicit cash from sales of an addictive amphetamine-like stimulant commonly known as captagon, or from fuel smuggling, experts say. Captagon production became the most valuable economic sector, with World Bank last year putting the total market value of the drug originating from Syria as high as $5.6 billion. WHAT ARE THE ENERGY CHALLENGES? In 2010, Syria exported 380,000 barrels per day (bpd) of oil. This source of revenue all but evaporated after the civil war began in 2011. Various factions - including Islamic State and Kurdish fighters - seized oilfields. While the latter signed deals with U.S. companies, sanctions made other legitimate exports difficult. The loss left Syria reliant on energy imports - mostly from allies Russia and Iran. Rachel Ziemba, senior adviser on sanctions with risk consultancy Horizon Engage, said the roughly 1-3 million barrels of fuel per month Syria had been getting from Iran stopped in late December as Tehran pulled back. HOW HAS AGRICULTURE SUFFERED? Conflict and drought reduced the number of farmers, damaged irrigation and cut access to seeds and fertilizers. Agricultural production sank to record lows in 2021 and 2022, with wheat alone falling to a quarter of the around four million tonnes per year pre-war. Syria imported around one million tonnes of cereal annually from Russia. Flows paused when the government changed but resumed last month. Ukraine has also signalled willingness to supply wheat, but it is unclear how Syria could pay. ($1 = 0.7931 pounds) ($1 = 0.8387 Swiss francs) (Compiled by Marc Jones; Editing by Toby Chopra)
Zawya
06-05-2025
- Business
- Zawya
Global debt hits record of over $324trln, says IIF
Global debt rose by around $7.5 trillion in the first three months of the year to hit a record high of over $324 trillion, data from a banking trade group showed on Tuesday. The Institute of International Finance (IIF) said China, France, and Germany were the largest contributors to the global debt increase, while debt levels declined in Canada, the UAE, and Turkey. "While the sharp depreciation of the U.S. dollar against major trading partners contributed to the increase in the USD value of debt, the Q1 rise was more than quadruple the average quarterly increase of $1.7 trillion observed since the end of 2022," the IIF said in its Global Debt Monitor. The global debt-to-output ratio continued to slowly crawl lower, standing just above 325%. However, in emerging markets the ratio hit a record high at 245%. Total debt in emerging markets rose by over $3.5 trillion in the first quarter to a record high of more than $106 trillion. China alone accounted for over $2 trillion of the rise according to the IIF. China's government debt to GDP is at 93% and expected to hit 100% before the end of the year. (Reporting by Rodrigo Campos, editing by Karin Strohecker)
Yahoo
06-05-2025
- Business
- Yahoo
Global debt hits record of over $324 trillion, says IIF
By Rodrigo Campos NEW YORK (Reuters) -Global debt rose by around $7.5 trillion in the first three months of the year to hit a record high of over $324 trillion, data from a banking trade group showed on Tuesday. The Institute of International Finance (IIF) said China, France, and Germany were the largest contributors to the global debt increase, while debt levels declined in Canada, the UAE, and Turkey. "While the sharp depreciation of the U.S. dollar against major trading partners contributed to the increase in the USD value of debt, the Q1 rise was more than quadruple the average quarterly increase of $1.7 trillion observed since the end of 2022," the IIF said in its Global Debt Monitor. The global debt-to-output ratio continued to slowly crawl lower, standing just above 325%. However, in emerging markets the ratio hit a record high at 245%. Total debt in emerging markets rose by over $3.5 trillion in the first quarter to a record high of more than $106 trillion. China alone accounted for over $2 trillion of the rise according to the IIF. China's government debt to GDP is at 93% and expected to hit 100% before the end of the year. (Reporting by Rodrigo Campos, editing by Karin Strohecker)
Reuters
06-05-2025
- Business
- Reuters
Global debt hits record of over $324 trillion, says IIF
U.S. dollar banknotes are seen in this illustration taken May 4, 2025. REUTERS/Dado Ruvic/Illustration Purchase Licensing Rights , opens new tab NEW YORK, May 6 (Reuters) - Global debt rose by around $7.5 trillion in the first three months of the year to hit a record high of over $324 trillion, data from a banking trade group showed on Tuesday. The Institute of International Finance (IIF) said China, France, and Germany were the largest contributors to the global debt increase, while debt levels declined in Canada, the UAE, and Turkey. The Reuters Tariff Watch newsletter is your daily guide to the latest global trade and tariff news. Sign up here. "While the sharp depreciation of the U.S. dollar against major trading partners contributed to the increase in the USD value of debt, the Q1 rise was more than quadruple the average quarterly increase of $1.7 trillion observed since the end of 2022," the IIF said in its Global Debt Monitor. Advertisement · Scroll to continue The global debt-to-output ratio continued to slowly crawl lower, standing just above 325%. However, in emerging markets the ratio hit a record high at 245%. Total debt in emerging markets rose by over $3.5 trillion in the first quarter to a record high of more than $106 trillion. China alone accounted for over $2 trillion of the rise according to the IIF. China's government debt to GDP is at 93% and expected to hit 100% before the end of the year. Reporting by Rodrigo Campos, editing by Karin Strohecker Our Standards: The Thomson Reuters Trust Principles. , opens new tab Share X Facebook Linkedin Email Link Purchase Licensing Rights
