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Foreign Direct Investment (FDI)

Investmen t

FDI came to a near halt since the onset of the crisis, but FDI in Syria never represented a significant component of investment in the country. Some particularly motivated FDI entered the country during the crisis, coming mainly from Iran and Russia.

In the three decades before the crisis, FDI to Syria came mostly from Western companies, investing in the oil and gas sector, and to a lesser extent from Syrian expatriates and Gulf companies, who invested in the manufacturing, financial, real estate and tourism sectors.

Multinational investors did not come to Syria, except to the oil and gas sector; they contributed to the country’s foreign exchange proceeds and to the government budget revenues, but not much to job creation, as oil and gas are export-oriented enclave sectors. The flow of FDI to Syria amounted to US$ 1.5 billion in 2010, the year before the crisis, representing 2.8% of GDP and 13.2% of capital formation. The stock of FDI at the end of 2010 stood at US$ 15.0 billion, 87% which in the oil and gas sector (SCB study titled “Syria's 1st National FDI Report:  From Resource-Seeking to Efficiency-Seeking FDI”, which SCB prepared for the government and financed from UNDP).

FDI is lot likely to flow back to Syria until there is stability and until local investment becomes active, but foreign capital could come in as contractors’ capital to participate in reconstruction projects and as Official Development Assistance (ODA) capital.

Investmen t