Dear friends,
For Syria, this week was a series of historic firsts.
First came President Trump’s declaration on Tuesday that the US will be lifting sanctions on Syria, which have been crippling its post-war economy.
Then came a 30-minute-meeting between Trump and jihadist-turned-president Ahmed Sharaa in Riyadh on Wednesday, the first meeting between the leaders of America and Syria in 25 years.
President Trump later praised Sharaa to reporters on Air Force One as a “young, attractive guy. Tough guy. Fighter.”
Superlatives aside, the moves are a reversal of a decade of US policy rooted in a regime that is no longer there and a new government surrounded by questions.
Here, in Syria, the steps were met with jubilation.
Within minutes after Trump said his administration would lift crippling sanctions on Syria, celebrations and song erupted across Damascus Tuesday evening.
The Syrian lira strengthened against the US dollar by a whopping 30% in 24 hours.
Syrian telecom company MTN sent out free 500 MB of phone data to all its customers.
Others were passing out sweets in the streets.
Something else was also in the air: hope.
After five months of a tenuous transitional period, the lifting of Assad-era sanctions felt as if finally Syria turned a new page, putting a period and a full stop onto the last 14 bloody years.
As one factory-owner told me, “with the sanctions lifted, we can finally take off.”
One woman cheering and waving the new Syrian flag in Damascus’ Umayyed Square told me “this is the second liberation day.”
What It Means
The State Department had previously conditioned lifting sanctions on a series of good-faith measures by Syria’s new Islamist-dominated government towards pluralism, inclusivity, respect for human rights, democracy and protection of minorities.
Trump, encouraged by Saudi Arabia, Turkey and Qatar, took a different approach: giving everyday Syrians relief from sanctions to allow for an economic recovery that prevents violence and instability.
Lifting the layers of sanctions placed over Syria the past two decades will not be easy; Congressional action is required to lift the bulk of CAESAR sanctions, which impose the severest restrictions.
But the political will and lifting of additional executive actions placed on Syria will provide sorely needed relief to Syrians and give encouragement to regional countries, companies and investors who have so far been reluctant to deal with Syria for fear of falling afoul of US sanctions.
It will also throw a lifeline to Syrian businesses and industries, which have been managing to struggle along.
The most important measure: lifting sanctions on Syria’s central bank and banking system and allowing Syrians to once again use SWIFT codes.
The sanctions have prevented citizens and companies alike to wire money along clear and legal channels.
Up until now, businessmen, traders, and factory-owners have been sending tens of thousands of dollars through intermediaries and black market money changers to countries to receive raw materials and import items—sometimes that money is stolen and the goods never materialize.
They have then had to rely on importing goods through Jordan or Lebanon.
The additional shipping and illicit money transfers have added 15-35% cost of doing business in Syria.
Meanwhile, re-linking Syria to the global financial system will encourage Syrians to put money into Syrian bank accounts, easing a monetary shortage and liquidity crisis in the country.
What I’m Watching
I am currently watching for which countries and companies will take advantage of the new opening in Syria being offered by Trump.
Gulf states, particularly Qatar and Saudi Arabia, have expressed interest in investing in certain sectors in Syria, ranging from telecoms to hotels to residential projects.
Turkey, meanwhile, is looking to play a key role in Syria’s private sector.
At a SINEX Syrian Industrial Expo in Damascus this week, a large showcase of local industries and Syrian know-how, Turkish companies rented out two entire wings and scouted economic opportunities in the country.
One Turkish company taking stock of the situation was SETA Celik, a contracting company that carries out infrastructure work and builds mines, refineries and factories
“There are many opportunities,” a SETA Celik manager told me, “there are many damaged factories, destroyed infrastructure across the country. The needs are endless and there is a role for all of us.”
While regional countries’ interest is clear, it remains to be seen if and when American and European companies will be willing to take the plunge and invest in a critical country that sits between Europe and the Arab world, between the Mediterranean and the Arab Gulf.
What I’m Hearing
I am hearing that the US opening towards Syria is encouraging Washington’s allies in the Middle East to solidify ties with Damascus.
One such move was the formation of a security alliance of Jordan, Turkey and Syria. This new alliance will focus both on tackling terrorism and strengthening Syria’s stability.
During a meeting of the three countries’ foreign ministers this week, they put a joint statement criticizing Israel’s expansionist push into Syrian territory since Assad’s fall.
Jordanian Foreign Minister Ayman Safadi said the three countries “will continue our efforts until Israel withdraws from all Syrian territory and ceases its interference in Syrian affairs.”
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