Political unrest has stymied three major Gulf investment projects in Syria and harmed efforts to attract capital needed to boost the economy after decades of Soviet-style controls, business figures say. Two months of street protests against the autocratic rule of President Bashar al-Assad have hit many parts of the country, enduring despite a bloody military crackdown that human rights groups say has killed around 1,000 civilians.
"Syria looked like it was a stable country and like it was beginning to try and modernise," said Theodore Roosevelt IV, managing director of investment banking at Barclay's capital. But the grassroots upheaval suggests "the optimism that some people had about Syria seems to have been misplaced," he told Reuters on the sidelines of a business conference in Amman.
"What is happening in Syria now is disturbing for investors. You see a government repressing its own people." Roosevelt added that investors could look again if Syria emerged from the crisis with "strong civic institutions and a rule of law". The state-owned Qatar Diar real estate company has halted a central Damascus project with a planned built-up area of 2.5 million square metres. A smaller project that the company had started on the Mediterranean seafront near the city of Latakia, one of the protest hotspots, is now also at a standstill.
Fahed Darwish, head of Syria's Free Zones Investment Committee, told the al-Watan newspaper this week that the Diar project was "history Qatari Diar has left". Qatar, a US ally, has been one of the few large investors in Syria in sectors other than oil, along with the United Arab Emirates. Foreign companies, such as Total, still operate in Syria's small oil sector.
Drake and Scull, an international engineering firm based in the United Arab Emirates, said on Thursday it was halting work on a $28 million subcontract in Syria's central city of Homs, where tanks and troops were deployed to stamp out protests. "We hope that the political situation will become better," a company official told Reuters. Another Qatari firm, Qatar Electricity & Water Co has shelved plans to build two power plants in Syria.