Following 38 years of tight state control, in a move to encourage foreign investment, last week, the Syrian parliament authorized the creation of private banks. The new law allows foreign participation in private banks, that will still be overlooked by Syria’s central bank.
President Bashar al-Assad is first to approve the bill before it comes into effect. The bill is expected to boost the Syrian economy, which has been slow-moving for over 20 years. Syria, with a population of 17 million, nationalized its banking sector in 1963 following the takeover of the Baath party.
Syrian officials have said that approximately 50 foreign banks, most from neighbouring Arab countries, have showed interest in entering the Syrian market.
Syria’s strict banking laws have lead many Syrians to invest their money abroad, particularly in neighboring Lebanon, in Jordan and Cyprus. This has lead to a serious shortage of capital needed to finance businesses or development projects in the country.
Syrian banks—with the exeption of the central bank—have merely $12 billion in assets, though experts estimate that Syrians invest tens of billions of dollars outside the country. Syria is in dire need of foreign investments mostly due to the fast growing population that is forcing it to create at least 200,000 additional jobs every year. — (Albawaba-MEBG)
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