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DAMASCUS: The lack of a diplomatic breakthrough in the Syrian conflict has not stopped speculation over which parties get to rebuild the country when it ends.
There are potential fortunes to be made — more than $100 billion, according to the World Bank.
But the Syrian regime puts the cost of reconstruction at $195 billion, and UN special envoy Staffan de Mistura estimates the eventual cost to be at least $250 billion.
The Damascus Center for Research and Studies (DCRS) last year said $250 billion would cover only 30-45 percent of reconstruction costs.
The regime cannot foot the bill. Syria’s gross domestic product (GDP) has plummeted from $60 billion in 2010, before the start of the war, to $15 billion in 2016. The national budget for 2017 was just $5 billion.
In 2010, the Central Bank had $21 billion in foreign currency reserves. In 2016, it had only $1 billion. Deposits in private banks have lost 75 percent of their value.
In 2014, three years into the war, the UN Relief and Works Agency (UNRWA) said even if Syria’s GDP grew 5 percent on average each year, it would take about 30 years for the economy to return to its pre-war level. That timescale has grown even longer since.
The task of rebuilding will be monumental. According to the World Bank, between a fifth and a third of the country’s housing has been damaged.
Aleppo and Homs — Syria’s second- and third-largest cities, respectively — have been reduced to rubble.
According to the UN, one in three schools are damaged or destroyed, and fewer than half the country’s health facilities are functioning.
Foreign investment will be essential, but for many potential investors, so will political change.
Western multinationals had a very small presence in Syria even before the war. But Western governments have said funding for reconstruction is unlikely to be forthcoming without political change.
That leaves those who have supported Bashar Assad: Russia and Iran. Damascus has already allowed Russia to develop offshore gas fields in the Mediterranean, but reconstruction appears to be a task that Moscow is not keen to take on alone.
In January, Vladimir Chizhov, Russia’s representative to the EU, chastized the bloc for failing to allocate funds for reconstruction, but then conceded that Moscow had not decided on a sum either.
Armand Cucciniello III, a former American diplomat and adviser to the US military, told Arab News: “Russia and Iran will likely get the biggest shares of contracts that permit foreign investments and shareholders.
“We see Russia expanding its naval bases in Syria — it just signed a 50-year lease contract that will have Russian ships on the Mediterranean.”
Neither American nor European firms are likely to get contracts, Cucciniello said — a conclusion apparently shared by the Syrian Foreign Ministry and expatriates.
Last September, a ministry official said: “The door is open for initiatives and efforts of all countries that did not play a role in the aggression against Syria.”
Analysts say China and Brazil are also in the running for big contracts. China, the world’s second-biggest economy, hosted the First Trade Fair on Syrian Reconstruction Projects last July.
Qin Yong, vice president of the China-Arab Exchange Association, revealed at the fair that his country pledged $2 billion toward rebuilding Syria.
But Kevin Newton, CEO of Newton Analytical — which provides analysis on the Islamic world to insurers and investment firms — believes that China will insist on certain ground rules.
“If China does choose to take an active role, it will likely make its presence felt across ethnic and religious groups, as it has done elsewhere,” he said.
“I’m basing the assumption of China acting across the board on how Beijing is acting in South Sudan, where it has called all players — including the Sudanese government in Khartoum — together and insisted on a way forward for Chinese firms.”
But Lebanon could benefit by providing a good logistics and transport hub for the foreign businesses.
“Lebanese banks have maintained a footprint in Syria throughout the war, even though they scaled down their operations,” Marwan Barakat, group chief economist at Lebanon’s Bank Audi, told the Financial Times.
“They remain well-placed to participate in the reconstruction of Syria when the opportunity arises.”
But Newton said infighting among Lebanese politicians may well limit the country’s ability — and desire — to regain its past status as an entrepot for Western investment, even though Lebanon would benefit greatly from a stable Syria.
India is unlikely to be welcomed to the reconstruction effort, after Bouthaina Shaaban, Assad’s political and media adviser, last year referred to the “public disappointment over Prime Minister Narendra Modi’s visit to Israel.”
Whichever country’s firms end up with the lion’s share of the building bonanza that is likely to follow the end of the war in Syria, they will have to contend with corruption.
The wartime economy has benefited government cronies. UN sources say the economy is basically run by four warlords with “no competition.” The result is that Syria now ranks 173rd out of 176 countries for corruption.