One happy Damascus

Even the loudest advocates for Syria were shocked when President Donald Trump announced he would lift sanctions on Syria earlier this month. Ahmed al-Sharaa, Syria’s jihadist-turned-president, was a “good young attractive guy” with a “very strong past”, Mr Trump told reporters on Air Force One. A policy shift that some in Syria feared would take ages—if it took place at all—happened overnight.

The unexpected news lit up Damascus, the capital. Syrians have long struggled under one of the harshest sanctions regimes ever put in place. The euphoria that followed the ousting of the dictator, Bashar al-Assad, in December had ebbed months ago. Now optimism is back. Western banking apps began to flicker to life within hours of the announcement. dp World, an Emirati operator, unveiled an $800m deal to run the port of Tartus. “My phone rang continuously for 48 hours,” says a prominent Syrian banker.

Many are keen to do business in Syria. Yet lifting sanctions may be neither swift nor smooth. Mr Trump seems untroubled by the nitty-gritty of doing so. “I think the announcement took quite a few people by surprise in the administration…It’s still a work in progress,” says a congressional aide in Washington, DC. The Caesar Act is a key part of the sanctions edifice, a pile of punitive measures against the Assad regime. Mr Trump has pledged 180-day suspensions for provisions in the act. State-backed Gulf firms and private capital in the region may take heart, but it will not reassure Western institutions, which are inclined to be more cautious.

The president could scrap at least nine sanctions-related executive orders. So far, he has not. Meanwhile, a dysfunctional Congress will struggle to repeal Caesar provisions before next year—probably as a footnote in a must-pass bill, such as the defence budget. Marco Rubio, the secretary of state, has urged Congress to act, warning that waivers alone “are not going to be enough to attract foreign investment”. Meanwhile, hawks in Mr Trump’s administration who remain unconvinced by Mr Sharaa’s Damascene conversion from extremism may try to frustrate relief moves, some in Washington predict.

Reconstruction and trade will almost certainly be led by the Middle East. Commercial heavyweights in the Gulf are revving up for a return after nearly 14 years of war. Spinneys, a regional supermarket chain, is scouting sites; Zain, a Kuwaiti telecoms giant, has come in; and Saudi private capital is eyeing Syria’s derelict cement plants. “An economic boom is inevitable,” says a big car importer. Only weeks ago few would have dared such optimism. The telecoms minister is pushing for 5g. Plans are afoot to build a metro in Damascus and overhaul water and power infrastructure. The new Syria is not short on ambition.

Much hinges on money. Syria’s readmission to SWIFT, the world’s financial messaging network, is deemed crucial. Among finance types in Damascus, the consensus is that connectivity will resume within weeks, easing transfers and allowing Syrians around the world to send billions of dollars in remittances home. But without greater clarity, and further guidance from their governments, Western institutions will remain wary. “Syria’s financial system is a black box that nobody understands,” says Stephen Fallon, a banking and sanctions expert. “If I run a Western bank and I accidentally receive funds from terrorists, it’s me the American regulators will come after.” ■

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