Syria has shed its image as a closed economy and is pushing to attract Gulf investment in the wake of the global financial crisis, Finance Minister Mohammad Al-Hussein said.

A Gulf economic recovery will help boost remittances and reignite interest in Syria, including agriculture and industry on top of large real estate projects, Hussein told Reuters after meeting the economy minister of the United Arab Emirates.

"Investors may have an old image of Syria. We now have banking and insurance facilities, transfers and capital movement," Hussein said.

"We expect these investments to rise with the Emirates moving past the global crisis," said Hussein, referring to official estimates that the economy in the United Arab Emirates will grow 3 to 3.5 percent this year.   

A Reuters poll in December indicated that growth prospects for the Gulf were improving, with rising oil prices and state  spending after the global downturn hit output in 2009.

The International Monetary Fund said the impact of the crisis on Syria was limited, with 5 percent economic growth in 2010 compared with 4 percent the previous year.

Foreign investment into Syria fell only 2.2 percent to $1.4 billion in 2009, according to latest United Nations data. Hussein acknowledged that Gulf appetite had waned during the crisis, although investors did not pull back from major projects.    

Syria has lifted several restrictions on private enterprise in the last 10 years as part of attempts to reverse the economic malaise that has gripped the country since the Baath Party took power in 1963, imposing Soviet-style policies and still active emergency law.
 
Encouraged by the new policies and cheap land offered by the government, Gulf conglomerate Majid Al-Futtaim Group began last year a delayed $1 billion project near Damascus, adjacent to a $500 million project by Emaar Properties.   

But several Gulf investors, including Saleh Kamel, head of the Dallah Al-Baraka conglomerate, have criticised corruption and what they described as Syrian government machinery that hinders foreign investment.   

US sanctions, which were imposed on Syria in 2004 for the government's support for militant groups, have also kept Western investors away and hampered the development of the oil sector.  

Hussein said that much of the problems are being solved "on the phone" with Gulf officials and that main impediments to investment are a thing of the past. "There are no major problems left. We work on solving obstacles," he said.

Hussein said a new holding company owned by the Syrian state that was set up through a special law last year with capital of $108 million will look for Gulf partners in projects. - Reuters