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Editorial: Syrian reforms remain too limited to attract FDI
Real estate news By Jihad Yazigi
Oct 22, 2007
Foreign Direct Investment grew last year to record levels in Syria, according to the latest report from the United Nations Conference on Trade and Development. Total FDI reached USD 600 million, an annual increase of 20 percent. This is good news and this is mainly the result of the numerous economic reforms adopted in the last few years and of the large cash flows in the hands of Gulf investors.
However, behind this rosy picture, several indicators are more worrying. Although Syria’s FDI grew in 2006, it remained well below regional competitors. Lebanon, for instance, which faced a ferocious Israeli aggression, managed to attract almost five times more investment (USD 2.8 billion) than Syria. Jordan, Egypt and Turkey attracted between USD 3 and 20 billion each. More significantly, FDI directed at these three countries grew between 87 and 105 percent last year. Why, therefore, does Syria continue to fare so poorly? Well, two other economic reports, also recently released, contain part of the answer.
The first, Doing Business 2008, is a publication from the World Bank that classifies countries according to the ease of doing business in them. In 2008, Syria ranked only 137 out of 178 countries. In the Arab World it ranked 13 out of 17 countries listed. Only 2 war-torn countries (Iraq and Sudan) as well as Mauritania and Djibouti fare worse. More worryingly, in 8 out of the 10 indicators that are used to compute the index used in the report Syria did worse last year compared to the previous one. The second, the Corruption Perception Index is a publication from a NGO, Transparency International that ranks countries according to the level of corruption of their public sector (including the Government) as it is perceived by members of the business community. In the period covered by the report (2006-2007) Syria ranked last in the Middle East (if war-torn Iraq is excluded). In other words, Syria was perceived to be the most corrupt country in the Middle East. More worrying is the sharp fall in Syria’s ranking in the world, from 70th two years ago to 138th last year.
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