Syria seeks investors as critics question sovereign fund transparency

Syria's authorities are trying to attract foreign investment for reconstruction and development projects, including new neighbourhoods, commercial towers and leisure sites, while critics question the transparency of a sovereign wealth fund central to the effort.

The proposals include the former army headquarters in central Damascus, prime real estate that was left abandoned after an Israeli strike damaged it last year. The country needs reconstruction after 13 years of civil war and decades of sanctions, but available funding is scarce.

Abdel Rahman al-Shaar, chief executive of investment facilitation firm ETT, said Syria was devastated and urgently needed reconstruction. Shaar said his firm had connected Damascus with investors in the Gulf, Europe and Asia. He said industry was currently the most attractive sector, followed by real estate and tourism.

President Ahmed al-Sharaa, while receiving French President Emmanuel Macron earlier this month, spoke of what he called great investment opportunities in Syria. The Syrian Sovereign Fund, created by Sharaa last year and run by another former jihadist, is at the centre of the government's effort to bring in foreign capital.

Sharaa and his government are trying to move away from the state-controlled economic system of the Assad family era. Under the ousted authorities, the state controlled strategic sectors as well as tourism and hospitality, while former president Bashar al-Assad's inner circle dominated economic activity. Abdel Rahman al-Shaar said the new authorities had sought to privatise the economy after taking over in 2024 and that most projects were now public-private partnerships.

In Damascus, advertisements in several districts promote residential complexes, hotels, entertainment venues and redevelopment of central areas. A booklet seen by AFP and distributed to Gulf investors at a recent meeting listed development opportunities including the former armed forces headquarters and part of the surrounding area facing Umayyad Square and the opera.

In early June, authorities announced a project with a Saudi company called Abyat Hills, aimed at creating about 20,000 housing units near Damascus. Bloomberg reported last week that Dubai real estate tycoon Mohamed Alabbar was planning two major housing and tourism projects worth at least $20 billion in Damascus and the coastal city of Latakia.

Economist Karam Shaar said more than 20 percent of memorandums of understanding signed by Damascus had taken actual steps toward implementation. But some architects voiced concern. Ahmad Salah, a coordinator of the Reclaiming Urbanism initiative, said the approach risked producing sterile city environments disconnected from residents' daily needs, with limited emphasis on sustainable or strategic investments that could structurally improve people's lives.

Experts also criticised the sovereign fund's lack of transparency. Karam Shaar called the fund the biggest test of Sharaa's transparency and economic governance and described it as a black box. Ahmad al-Riz of The Syria Report questioned the fund's structure and how state assets were being selected for foreign investment.

Riz said the identity of the fund's manager had not been officially announced. Several people who requested anonymity said they had met the fund's director, Abu Maryam al-Australi, a former jihadist whose surname means the Australian. Australi is sanctioned by Canberra and was close to Sharaa when the now-president led a jihadist group in northwest Syria.

Riz said Syria's finance ministry estimates the sovereign wealth fund's assets at $50 billion, while Syria's GDP in the current year's budget is estimated at about $33.7 billion.

The fund also manages confiscated assets from businessmen close to the former government. Among them is Mohammad Hamsho, who was sanctioned by the European Union and the United States. He reached a settlement with the new authorities and is resuming economic activities alongside relatives in Qatar. Karam Shaar said the move could support economic continuity, but also expressed concern it could lead toward crony capitalism.