Syria and Iran have signed a deal to ease bank transfers between the two countries, with Damascus looking towards reconstruction as the country emerges from a brutal eight-year civil war.
The deal was one of several concluded during a visit to the Syrian capital Damascus by an Iranian delegation that included Vice President Eshaq Jahangiri. Jahangiri yesterday praised the economic agreements, stating that they would "reinforce the relationship between Iran, Syria and Iraq in the fields of transportation, energy, healthcare and culture."
Later speaking at an Iranian-Syrian business forum in Damascus, the vice president added that banking transactions between the two countries were set to take place "very soon".
The news was well received by Syrian and Iranian investors. Mohammad Saeed Shahmiri, an executive with the Iranian company Saab Niroo which specialises in building infrastructure, said his firm was interested in projects in and around Damascus but described the banking issue as the "most important problem".
"We hope if they solve this problem immediately we can start the project here," Shahmiri told Reuters at the forum.
Keyvan Kashefi, chairman of an Iranian-Syrian chamber of commerce, said Iran and Syria had not had strong banking ties in the past few years.
"This issue was constantly raised by the private sector of both countries," he said. "It was announced today that some agreements have been reached. And the banks of the two countries can now help businessmen and industrialists with financial exchanges and this problem of ours will be solved."
Iran's support has been crucial to turning the Syrian civil war in favour of President Bashar Al-Assad in recent months. As much of the fighting in the country winds down, Al-Assad has looked to secure funding for the reconstruction of Syria – estimated to cost some $350 billion. Syria's state-owned and 14 private banks have sustained major losses during the war and do not have the liquidity to invest seriously in reconstruction. Deposits in private commercial banks have plunged – recorded as $3.5 billion in 2016, down from $13.8 billion in 2010, according to the World Bank.
Still facing sanctions from many Western countries – including the US, Europe and UN – the Syrian government has appealed to allies Russia and Iran, who have supported the regime's brutal crackdown on civilians. According to Syrian state media, Iran has already committed to build a 213 billion-Syrian pound ($412 million), 526 megawatt power plant at the coastal city of Latakia and a gas pipeline from Baniyas – another coastal city to the south – to fuel it. The project is expected to be finished in three years.
However Tehran is facing economic challenges of its own following the renewal of US sanctions by US President Donald Trump last year. Whilst Iran has been awarded several construction and telecoms contracts as a reward for its support during the war, its ability to effectively contribute to Syria's restoration remains uncertain.