Syria took a small but significant step toward rejoining the international banking system with the announcement on Thursday that the country had completed its first electronic transfer in 14 years with a Western bank.
The transfer, to a European bank earlier this week, was considered a sign that despite the escalating tensions in the Middle East, a few green shoots were emerging in the effort to foster renewed economic life in Syria after its devastating civil war.
“This step represents gradual progress toward reintegrating the Syrian financial system into global financial channels,” Abdulkader Husrieh, the governor of Syria’s Central Bank, said in a statement on Thursday confirming the transaction.
Symbolically, reactivation of the SWIFT system, the acronym for the global network for electronic transfers between banks, was one of the first concrete steps to indicate that Syria was moving beyond an extended period of isolation from the international financial community.
Syrian banks were cut off from the international system through sanctions imposed soon after the ruling Assad regime began its long, brutal crackdown against Syrian pro-democracy demonstrators in 2011, which led to a 13-year civil war. The government of President Bashar al-Assad of Syria was ousted in December, when rebels took the capital, Damascus.
“This transaction marks the beginning of a new era for Syria,” said Jassem Ajaka, a Lebanese economic expert. “This first SWIFT order symbolizes the end of sanctions and Syria’s return under the umbrella of the international community.”
Until now, any foreign business executive wanting to invest in Syria, or even to pay any local staff members, needed to cart around stacks of cash. Syrians are forced to pay for everyday items like bread using plastic bags full of bank notes because the currency is almost worthless.
Analysts noted that there were still many steps ahead in terms of restructuring the banking system, which was in state hands over the decades that Syria was a centrally planned socialist economy. Western banks are demanding numerous changes, including regulations to combat money laundering and to counter terrorism financing.
In a Zoom meeting on Wednesday with American bankers, Mr. Husrieh promised to implement such steps. With international financial exchange pathways now open, access to American banks is the next phase, he said in his Thursday statement. Given that electronic transfers are now available, it also means that for the first time since the war, Syrian banks can earn returns on external accounts that will no longer be constrained by sanctions, Mr. Husrieh said.
A decision by American banks to begin exchanges with the Syrian banking network is considered a key goal toward fostering reconstruction and development.
President Trump last month temporarily lifted some sanctions against Syria for at least six months. Aside from the removal of sanctions, business leaders considering investing in Syria also are looking for a more business-friendly environment when it comes to issues like repatriating profits or independent courts.
The war between Israel and Iran has also had a dampening affect on the investment climate in general in the region. Although Syria is removed from the fighting, some debris from downed Iranian missiles has fallen on the country. Most international airlines have canceled their flights into Damascus, or diverted them to the northern city of Aleppo.
Still, the first electronic transfer was “big, because that means banks have started to trust the Syrian banking system,” said Ayman Abdel Nour, a Syrian opposition politician, about the first new electronic transfer. “We want all the European banks to join, and soon we hope the U.S. banks will join too because that is the biggest sector in the world.”
The first transaction involved an Italian bank because numerous Italian businesses have been in Syria recently exploring the vast need for construction materials, like tiles, as Syrians begin the daunting task of rebuilding, said Mr. Abdel Nour.
More than one-third of Syria’s entire housing stock has been either damaged or destroyed, according to United Nations figures, with estimates of reconstruction costs starting at $250 billion.
Neil MacFarquhar has been a Times reporter since 1995, writing about a range of topics from war to politics to the arts, both internationally and in the United States.
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