by investing
in Syria
Iran is fast becoming one of the major overseas investors in Syria, with projects worth more than $800 million already in the works and other schemes in the pipeline for 2007. Over the past few years, Iran has invested heavily in Syria’s energy, construction, utilities and automotive sectors and has now added tourism developments to the list.
The strength of Syria’s economic ties with Iran was underscored at the end of 2006 during a visit by Iranian Foreign Minister Manouchehr Mottaki. While regional and political developments dominated his meetings with Syrian leaders, Mottaki found the time to address the economic side of the bilateral relationship.
Describing the level of economic links between Syria and Iran as determined and positive, Mottaki said that his government recognized the great potential for cooperation between the two countries and wanted to map out new strategies to expand on this even further.
Tehran sets no limits to the expansion of cooperation between the state and private sectors of Iran and Syria and is ready to provide facilities in this regard, he said.
Syrian Prime Minister Mohammed Naji Ottri was just as enthusiastic, saying that both countries wanted to make use of the potential of the other and were seeking to put in place further mutually beneficial projects for sustainable development.
Iranian investment growing
While in Syria, Mottaki paid a visit to one of the larger developments being carried out with Iranian assistance, a $200 million water management project in southern Aleppo. The cornerstone of the scheme is a 5.3 km tunnel with a radius of 5.4 meters to carry water from the Euphrates Dam to the farmlands on the Aleppo plain.
In what could be the largest Iranian investment to date in Syria, the two countries, along with Venezuela, announced in late 2006 that they had formed a consortium to build an oil refinery in Syria. The project, budgeted at $1.5 billion, foresees the construction of a refinery with the capacity of processing 140,000 barrels of oil per day.
Iran has a number of other projects in Syria, having recently announced plans to construct 50,000 housing units in the Adraa district outside of Damascus and establish an industrial zone near Hisya in central Syria. Elsewhere, work is nearly complete on a cement factory in Hamah, with production due to start in early 2007.
Another Iranian investment is set to start production by the beginning of 2007, with the first Iranian designed Samand cars rolling off the assembly lines at a new $60 million facility, a joint venture between Syria and the Iran Khodro Company (IKCO).
According to Mahdi Tashakkori, the project director, the first phase of production will see 10,000 cars built annually, rising to 30,000 when the plant goes to a full three shifts.
The project is part of the Iranian firm’s push to establish a wider sales and production base, Tashakkori said.
IKCO will coordinate the project within the framework of offering technical knowledge and production line machinery as well as the establishment of the project alongside with the development of National Samand’s brand in the Syria and Arab countries’ markets, he said.
An incentive for Syrians
An incentive for Syrian buyers of the Samand will be Damascus’s decision to drop sales taxes, thus putting the cars in the same price range as similar size imported saloons, an incentive that was also attractive for the plant’s Iranian investors.
Syria has also announced it would import 5,000 buses from Iran as part of measures to upgrade the country’s public transport network, with the first 1,200 vehicles to be delivered in 2007.
Tourism ventures are another area where Iran is keen to play a role in Syria. In late September, Iran’s Amiran Investment Group announced it was considering establishing a major tourism resort complex on Syria’s Mediterranean coast near Lattakia that would include hotels, chalets and associated facilities.
Both governments have said they want to see greater cultural ties and encourage pilgrimage tourism between the two countries as well as promoting the more traditional holiday tourism.
Meanwhile, with Damascus enacting new legislation and regulations to encourage foreign capital inflow and open up the country’s economy, Syria is becoming increasingly attractive to Middle East investors, with a number of Gulf states moving into the finance and banking sector.
