DAMASCUS -- With Syria now being viewed as a path through to Hamas, Hezbollah and Iran, foreign diplomats from states once typically hostile to Damascus have become a common sight here in recent weeks.
Coming back into the limelight has given Syria political clout, and Damascus is now looking to take advantage of positive remarks in the international media to quench its bad image. Taking advantage of these foreign visitors, the Syrian government has stressed the message that it is serious to liberalize its economic system.
Since Bashar Assad became president in 2000, the government has gradually been working to resurrect Syria's economy following 40 years of haphazard socialist practices by announcing dozens of multi-million dollar projects.
In one of several ambitious projects, a 52-story twin tower development of offices and public space for Damascus city center is timetabled to begin in 2014 at a proposed cost of $320 million reported the Syria Report, an independent business newsletter.
Last week the Damascus Securities Exchange opened, albeit belatedly, marking "an important turning point in the Syrian economy," according to one Syrian politician. Five of Syria's largest companies including the Bank of Syria and Overseas, Arab Bank Syria and United Group, a media corporation, have gone public. The market will be open for trading two days a week.
Javier Solana's recent visit to Damascus was preceded by European Commission officials who were in Syria last December to sign off on an updated version of an Association Agreement with the European Union.
One step taken to generate revenue for the government was to eliminate a subsidy on diesel which brought the state $20 million extra for 2008, and also saw it meet a key stipulation set out in World Trade Organization membership rules, an organization Syria is hoping over join in the next 12 to 18 months.
Abdullah Dardari, the deputy prime minister for economic affairs believes reform of Syria's financial sector has been the government's greatest achievement thus far.
"We have put great efforts into banking and insurance operations and it's worked out well so far," he said in an interview.
Banking institutions from Lebanon, Jordan and the Gulf, many with international banking facilities, have sprung up in urban centers across the country and with internet coverage expanding (mobile internet 3G technology has recently been made available in major cities), online banking facilities are being set in motion. Tax exemptions to encourage businesses have been passed into law and 'Shabaab', an initiative to promote entrepreneurship, has been introduced into second-level schools, noted Dardari.
In addition, a range of natural landscapes including deserts dotted with ancient ruins, an untouched Mediterranean coastline and centuries-old castles mean Syria's potential as an inimitable, cheap and off-the-trail tourist destination is evident.
Yet, problems aplenty remain.
Many of Syria's major tourist attractions lack modern infrastructure. By International Labor Organization figures, unemployment stands at 10 percent but even Dardari acknowledges the actual figure is at least double that. The country's dated and crumbling public education system produces too few graduates to match demand in the workplace.
"Most businesses are thirsty for labor. It is not that the economy is not generating enough jobs, it is. But such businesses require a different set of skills and this, providing a competent workforce, is what we must pursue," said Dardari.
Foreign Direct Investment has increased exponentially but still lags behind international standards and in one of many such cases across the country, a project by the Kuwaiti AREF Investment group announced in 2005 has yet to begin.
For Syrians themselves, substantial 'wasta' (influence) is something that elevates a few elite while disheartening many. Last month Hassan Makhlouf, chief of Syria's customs and a distant relation of the ruling family was dismissed from his post, charged with graft and has since had 137 properties belonging to him and his family seized according to Al-Thawra, a state-run newspaper. The detention has been viewed as a symbolic move by the government to prove that in this new drive to reform the Syrian economy, no one is beyond reach.
Tangled bureaucracy is something that may scare off foreign investors. An employee at a business consultancy in Damascus said it ordinarily takes two years for a business to pass all licensing hurdles while for foreign companies, taking cash out of the country is carefully regulated.
Dozens of business-related decrees are issued by the president every year, but actual implementation is a different story and the Association Agreement with the European Union will not allow for Syrian agricultural products to enter the lucrative European market.
Dardari is clear that transforming Syria into a modern and business-friendly country is not something that will happen overnight and Syrians themselves will have little choice but to adapt.
"People will have difficulty in accepting the changing role of the government," Dardari said, "but the time of viewing the state as a mother is over."
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