Syria quickens the pace of financial sector reform
The country’s banking reforms are going well and attracting regional interest. But western banking groups remain largely excluded because of Bush-era sanctions. Are they missing out on an incipient boom market? Nick Lord reports from Damascus.
BATOUL RIDA LEANS forward in her seat. "It has been so exciting," she enthuses."Five years ago there was nothing here. It was virgin territory." Rida, resplendent in a turquoise headscarf, is a splash of colour in the otherwise utilitarian offices of the Central Bank of Syria. She is employed by GTZ, a German technological cooperation company, and is seconded to the central bank as a reform expert.
For Rida and other reform-minded Syrians, the changes to the country’s banking system are perhaps the most visible evidence of the economic changes in the years since president Bashar Al-Asad took over from his father. Five years since they started, the banking reforms have recently moved to a new level of intent.
In mid-January, the central bank increased the limit on foreign stakes in privately owned Syrian banks to 60% from the previous 49%. Foreign groups can now take majority control, albeit with a 40% stake owned by Syrian nationals. The previous limit of 49% is thought to have dissuaded many international groups from investing.
Privately owned banks in Syria were authorized in 2001, shortly after Asad took power. Allowing private ownership was one of the key moves in trying to free up the economy from its state-controlled, Baathist past.