Syrian business exodus gains pace
By Abigail Fielding-Smith and Simeon Kerr | Financial Times,
BEIRUT — Arab countries have found an unlikely new source of foreign investment in the midst of the region’s turmoil: Syrian businessmen who have given up on their war-torn country and are looking to do business with their neighbors.
After waiting it out for a long time, many in Syria’s business class are coming to the conclusion that the conflict “is going to be a long-term crisis,” said Awni al-Rushoud, head of the Jordan Investment Board. “We are trying to facilitate all tools for them.”
The Syrian civil war has claimed at least 60,000 lives and contributed to a climate of instability across the region. With the war-ravaged economy estimated to have contracted by about a fifth last year, some businessmen are looking for new places to invest close to home.
Syrian small and medium-sized enterprises in areas such as textiles and food processing are estimated to have been worth several billion dollars before the start of the uprising nearly two years ago.
Because of the small scale of individual investments, their low leverage and, in some cases, their experience of relocation owing to arbitrary economic shifts during the regime of Hafez al-Assad in the 1990s, the country’s businessmen are “quite fleet of foot,” said David Butter of the Royal Institute for International Affairs.
Although Syrians have been quietly moving their businesses and money abroad since the start of the country’s uprising, economists say the process has been accelerating in recent months as violence has engulfed the commercial centers of Damascus and Aleppo.
“The whole region has Syrians going and investing,” said Jihad Yazigi, editor of the Syria Report business newsletter.
The Jordan Investment Board alone registered more than 100 million dinars ($140 million) of Syrian investment in the last two months of 2012.
Cash-strapped Egypt also is potentially well-positioned to gain from a Syrian business exodus. Some Syrian businesses went there in the 1990s, taking advantage of the country’s reasonable cost of living, low labor costs, textile industry knowhow and lack of visa requirements.
Samir Seifan, a Dubai-based economist affiliated with the Syrian opposition, estimates that more than 1,000 Syrian businessmen are living in Cairo.
Egypt’s Ministry of Industry and Foreign Trade announced last month that it had set up a unit specifically to engage with Syrian businessmen and was seeking to create a “Syrian industrial area.” Hatem Saleh, the industry and foreign trade minister, in January met with Syrian businessmen who asked for a reduction in shipping taxes to help them relocate equipment from Syria.
Not all of the capital fleeing Syria is going to businesses. Real estate agents say Syrians have been significant purchasers of Dubai properties as the market recovers from its 2008 crash.
Sheikh Mohammed bin Rashid al-Maktoum, the ruler of Dubai and prime minister of the United Arab Emirates, this week said that about $8 billion had flown into the country from Arab Spring states. But he denied that his country had benefited from the revolutions, arguing that the tourism hub of Dubai would have received more investment if there had been no unrest.
— Financial Times
Kerr reported from Dubai; Amro Hassan in Cairo contributed to this report.