Europeans are reluctant to invest in Syria… Giving the Priority for the refugees return

More than a year into the new political landscape in Damascus, Europe’s position on economic engagement in Syria remains cautious. While most European capitals have opened diplomatic channels with the new government, they still classify Syria as an insecure country, a characterization that has direct implications for the decisions of major corporations, which have so far been merely observing the scene from afar.

In a reading of the current investment landscape, a London-based economic researcher believes that investment in Syria today has two main dimensions: political and feudal.

The country still lacks an attractive environment for traditional productive investments, which explains the concentration of announced projects in limited sectors such as oil, real estate, and transportation, which are often classified within the framework of the rentier economy.

Interestingly, the investments announced so far are concentrated in a quadrilateral bloc that includes Qatar, Türkiye, Saudi Arabia, and the United States.

In this context, the information reveals that there is a clear political preference, as the Syrian Civil Aviation Authority recently preferred to contract with Western companies to provide ground services at Damascus airport, ignoring an offer made by a Syrian investor through his international company.

In the energy sector, information indicates that Gulf Sand is close to resuming its oil contracts, which have been suspended due to the war years.

Significantly, real European productive investment is still completely absent from the scene, a reality that could change drastically if future European investments are granted monopoly privileges that revive their traditional role in the Syrian market.

Before the outbreak of the war, Syrian-European economic relations were at their peak, almost culminating in the signing of a historic partnership agreement at the end of the first decade of the millennium, had Damascus not postponed the signing at the last moment.

In 2010, EU exports to Syria amounted to about $4.5 billion, accounting for 26% of Syria’s total imports.

On the other hand, Europe’s imports from Syria amounted to $4.57 billion, representing 37% of Syrian exports.

Italy was at the top of the European partners with a trade volume of $2.8 billion, followed by Germany ($2.2 billion) and France ($830 million).

On the investment front, major names emerged in the Syrian market, such as Shell and Gulf Sand in the oil sector, France’s Lafarge in cement, France’s Bell in dairy, Switzerland’s Nestlé, and Austria’s Fempex.

With the outbreak of the war and the imposition of Western sanctions, economic relations have fallen to historic lows, with Syria’s imports from Europe in 2022 not exceeding 9% of their level in 2010, while Syrian exports to Europe fell to only 0.6%.

Despite the political transition at the end of 2024, which has been welcomed by Europe, restoring economic momentum seems far-fetched.

A civil society activist explains the reality of the European position, stressing that the priority of European delegations visiting Syria is to address the refugee issue first, before any discussion of economic cooperation.

The Europeans are focused on two main goals: the first is to deport unwanted refugees to Syria, and the second is to prevent the flow of new waves of refugees.

European concern about renewed migration, as instability continues, overshadows any long-term investment calculations.

Between legitimate European caution and Syria’s ambition to open up, the fate of economic relations remains pending the resolution of the refugee equation first, and sufficient security and investment guarantees to restore European companies to their lost confidence in a market that promised to be a strategic partner on the shores of the Mediterranean.