MEED: What led to the decision to establish Syrian-Qatari Holding? What is it about Syria that is attractive to thecompany’s investors?

Hassan Mukayed: SQH was established with one aim: introducing leading and pioneering projects to the Syrian market, thus contributing to the increase in the number and quality of new investment opportunities in Syria and supporting the country’s already rapidly developing economy. It is the concrete expression of commitment of both Syria and Qatar to join forces and invest in various industries, with a focus on the sectors that the country is in most need of developing, such as power generation, healthcare and agro-business. SQH’s projects are all in line with its founding mission: supporting the country’s economic growth and increasing the welfare of the Syrian people. Syria has an excellent geographical position, a young and fast growing population and very low levels of personal, corporate and national debt, and it is in a good position to achieve significant medium-term economic growth.

What benefit does the Qatari Investment Authority (QIA) backing provide?

QIA has a proven track record of investing in a variety of top infrastructure projects in all regions of the world. Through SQH, they provide Syria with invaluable access to international expertise, commercial networks and markets, and project finance. Syria and SQH also benefit from the experience and knowledge that QIA has accumulated over a number of years. More-over, QIA as a 50-per-cent equity stakeholder in SQH (through its fully-owned subsidiary Qatar Holding) is expected to invest significant amounts of foreign currency in Syria, thereby improving the balance of payments, and contributing to economic growth and job creation in Syria.

Which areas of the Syrian economy do you expect strongest growth in?

As Syria continues to renew and expand its infrastructure, we expect strong growth in related sectors such as power generation, water treatment, transport and telecommunications. In addition, we expect the fledgling private financial services sector to continue its rapid expansion, adding breadth and depth to the services currently on offer. Last, but not least, Syria has also committed to build on the potential in the tourism and leisure sectors, where significant growth is very likely in the coming years.

In what new areas do you plan to invest in the future?

It is early to talk about any new investments today. We are presently concentrating on delivering the industrial and infrastructure projects that we have: these are two 450MW power plants, a state-of-the-art medical city, and a fully integrated dairy farm. We will continue to invest in these sectors, and we will additionally look to expand our investment activities to encompass strategic sectors that we have identified such as renewable energy, wastewater treatment, transport (roads, rail, airports), and industrial production facilities (phosphate fertiliser, cement).

How important is the Syrian economic reform programme? Can Syria be considered a true free marketeconomy now?

After a period of relative government control and central planning, Syria has successfully embarked on a programme of liberalisation and modernisation that has resulted in significant levels of growth. Creating a favorable investment climate has been a prime concern of the Syrian government. The market entry challenges that investors previously faced have been addressed by a concerted move to modernise the administrative procedures required, partly through the establishment of the ‘one-stop shop’ at the Syrian Investment Agency.

In addition, certain privileges and incentives have been granted to investors through new investment legislation, such as Law No 8 of 2007, which, among other things, offers investors the necessary flexibility in employing expatriates. Furthermore, Syria has been proactively addressing the demand for basic utilities, such as water and electricity, which are necessary for investments in some industrial sectors. A number of initiatives have already been announced aimed at developing the appropriate infrastructure.

Another main objective of the Syrian reform policy is to establish markets on which goods are traded freely, without state intervention. The government will limit its activities to creating framework conditions and providing a favourable business environment.