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Abu Dhabi, UAESaturday 22 September 2018

Lebanese businesses eye opportunities in Syria

Though the Syrian government has not yet begun open bidding on public infrastructure projects, there is hope that Lebanon’s economy could benefit from any eventual reconstruction boom

A man walks along a street in the devastated Syrian city of Raqqa on January 9, 2018. Delil Souleiman / AFP
A man walks along a street in the devastated Syrian city of Raqqa on January 9, 2018. Delil Souleiman / AFP

Even before the guns fall silent, Lebanese businesses are eyeing a potential gold rush in Syria, a country badly in need of rebuilding after nearly seven years of war.

“Lebanese contractors are preparing themselves,” said Maroun Helou, the general manager of Abnieh Engineering and Contracting. “The president of the Syrian contractors’ syndicate is planning to come to Lebanon to discuss this. A lot of Lebanese companies are restoring their offices in Damascus.”

Mr Helou said his firm, which is responsible for a number of highly visible projects around Lebanon, including Middle East Airline’s new headquarters in Beirut, has already been contacted by a number of private companies in Syria and was preparing a bid on one project, a commercial tower in the coastal city of Tartous.

Though the Syrian government has not yet begun open bidding on public infrastructure projects, there is hope that Lebanon’s economy, which has suffered economically from the war in Syria, would also be a beneficiary of any eventual reconstruction boom.

“A lot of our banks already have a presence in Syria and our banking system is already well-developed,” said Raya El Hassan, who served as Lebanon’s finance minister from 2009 to 2011 and is now the head of the special economic zone in the northern city of Tripoli.

In a best-case scenario for Tripoli, which has suffered from decades of economic stagnation, the city’s proximity to the Syrian border and its port would make it a logistics hub for international corporations and contractors doing work in Syria. Construction of a rail line that would link Tripoli to Homs, Syria’s third largest city, is also under consideration.

Lebanese and Syrian contractors that spoke to The National said that Chinese firms have also been eyeing contracts in Syria. One Lebanese contractor who was recently in Homs to discuss possible work said the number of Chinese officials staying at one local hotel made him feel like he was “in Beijing”.

“We’re receiving a lot of interest from Chinese delegations, both public and private, who are eyeing Tripoli, and I think they have in mind how they can use Tripoli as a hub to service Syria reconstruction,” Ms El Hassan said.

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There are, however, many unanswered questions. When rebuilding does begin — which could be within months, rather than years — politics will inevitably play a role. Officially, Lebanon’s government has yet to normalize its relationship with Syria, and the international donor community also remains at loggerheads over which countries will fund much of the work.

“There is a lot of talk, but we need to know who will finance the reconstruction of Syria — that’s the real issue,” Mr Helou said.

American and European sanctions against the Syrian government mean it is likely that countries supporting Syrian president Bashar Al Assad in his fight against the rebels that seek to overthrow him will be the main beneficiaries of public reconstruction contracts. Representatives of EU nations as well as the US have said any financial contributions to reconstruction should be contingent on Mr Al Assad reaching a political deal with the rebels, and in the case of the US, such a deal must involve Mr Al Assad leaving office.

“I think the companies interested in Syria are Russian, Iranian and Chinese,” Mr Helou said. However, he envisions Lebanese companies having a large subcontracting role.

The prime minister of Lebanon, Saad Hariri, the son of a construction magnate whose family company helped build the presidential palace in which Mr Al Assad now resides, has come out in support of the position that reconstruction donations should be used to pressure Mr Assad into accepting a political solution to the conflict.

“When we talked about Lebanon being involved in the reconstruction of Syria, we were saying that we should start building the infrastructure in Lebanon, so companies that would like to go to Syria and do the reconstruction there can use the Lebanese expertise after the conflict ends,” Mr Hariri told a conference in Beirut late last year. “I believe that the EU position is the right position and will put pressure on the regime and on all countries to find a political solution.”

That position could make it difficult for Lebanese companies to work as primary contractors on Syrian government tenders.

“The prime minister is not willing to talk about normalisation of relations at this point, but that does not mean that the Lebanese private sector won’t have a problem exporting products and services to Syria,” Ms El Hassan said. “We will not optimise our role if the political situation stays as it is. But I don’t see the hurdle being addressed in the future.”

Mr Helou said Lebanese businesses would have to wait and see whether a new Lebanese government will remove the obstacle. “Nothing will be treated seriously before September 2018, because you have elections in May [for the Lebanese parliament] and then you have to form your government,” he said. Nonetheless, he remains optimistic. “There is a feeling of hope in Lebanon at all levels that 2018 will be better than 2017.”

Other businessmen seem to agree with him.

“We have been receiving some prospects — perhaps a franchise inside Syria,” said Yassin Yassin, a businessman based about 20km away from the Syrian border in the city of Tanayel, in eastern Lebanon. Mr Yassin’s current project is Homescape, a warehouse-style store that will stock building and home improvement materials that he describes as “similar to Home Depot in US”.

Eastern Lebanon’s economy has in particular has suffered from the conflict in Syria. The closure of Syria’s border with Jordan has meant farmers and manufacturers in eastern Lebanon have been forced to ship their goods to customers in the Gulf by sea rather than overland.

“It costs five times as much,” said Mr Yassin. He has plans to open a franchise of his new store in Jordan — a task that would be considerably easier if it were possible to transit through Syria.

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