How Gulf Engagement Could Shape Syria’s Reconstruction

September marked an inflection point in Gulf support of Syria’s transition and recovery. On September 7, the Saudi aid agency KSRelief led a large delegation of Saudi officials from the development, health, education, and aid sectors to Damascus, announcing  454 projects valued at $1.4 billion. These vital projects, spread across various regions of Syria, include rehabilitating sewage networks and water wells, providing cash assistance to orphanages, supporting wheat production, and rebuilding housing and schools.

The announcement follows an agreement earlier in the month between KSRelief and UNDP to rehabilitate bakeries across Syria, a move expected to significantly boost bread supplies for at least 1.4 million Syrians. More recently, KSRelief announced a major collaboration with the White Helmets (Syrian Civil Defense) on a large-scale debris removal initiative, which will help expedite the reconstruction of Syria’s ruined infrastructure.

This expansion marks not only an expansion of Saudi engagement in Syria’s recovery, but also a widening of priorities. Until September, foreign engagement in post-Assad Syria had been dominated by announcements of major infrastructure projects—ports, power plants, and the like. While important, these projects offered little relief for a population facing severe unemployment, food insecurity, and shortages in essential services.

These KSRelief projects indicate a new focus on immediate, urgent needs and provide a crucial model for other Gulf states to build on. Without first stabilizing Syria’s humanitarian situation, major investments in ports, energy plants, or similar infrastructure will likely fail. At the same time, this turn toward humanitarian development is only the first step. Sustainable economic recovery also requires progress on good governance and institutional reform.

Building Blocks for Broader Reform

Findings from this author’s several field trips to Syria since the fall of the Assad regime conclusively point to a natural starting point for the more holistic Gulf-Syrian cooperation required. Specifically, governance reform aimed at creating a functional investment environment. Foreign investors and members of the Syrian diaspora have made clear that many of the country’s foreign investment and commercial laws require further urgent revision, and that the judicial system is far insufficient. The Gulf can assist the Syrian government by supporting expanding and improving initial reforms to Syria’s investment laws, including increasing the presence of checks and balances against the increasingly centralized authority of the president over investment matters. While such centralization may be attractive to Gulf sovereigns, as it can facilitate very large investments—such as port or power networks—through personalized dealmaking, it is insufficient to ensure security for smaller Gulf companies and investors.

Successful reform of these priority areas would build investor confidence, attract new investment, and demonstrate the Syrian government’s seriousness about creating a business-friendly environment. Furthermore, it could generate momentum for the broader institutional reform required for a successful overall transition process. This momentum must target the rejuvenation of the judicial system, which is currently largely absent. A functional judiciary provides the essential structure for any investment laws to operate through with predictability—an imperative for economic activity. Without predictable laws and functioning courts, economic reconstruction is impossible, as investment and other commercial activity will not be adequately incentivised or protected. Furthermore, the absence of a robust rule of law allows for arbitrary decision-making and impunity for perpetrators, which directly undermines any efforts towards social cohesion—another crucial building block for a stable Syria and successful reconstruction.

Leveraging Gulf Influence

Syria’s strong desire for foreign investment provides the Gulf states an opportunity to use their diplomatic and economic influence to press for such a clear, predictable legal environment. This includes targeted reforms, adherence to international contracting and transparency standards, and robust protections for property rights.

Momentum for these reforms is already building. An August Saudi-Syrian investment promotion and protection agreement emphasized safeguards and a legal framework for investment, including constitutional guarantees and a Saudi-developed foreign investment protection framework. Syrian Central Bank Governor Abdulkader Husriyeh has also  announced plans for anti-money laundering and counter-terrorist financing (CTF) initiatives, alongside investor protection regulations.

The Future Investment Initiative (FII) in Riyadh at the end of October highlighted Saudi Arabia’s approach to linking  reform with investment. On day one, Syrian and Saudi economic, investment, and financial officials held their first roundtable, with Saudi Investment Minister Khalid Al-Falih describing the forthcoming investment-protection pact as a “historic step” towards channeling Saudi financing into Syria’s reconstruction. In other words, once the investment-protection regulations are finalized, Saudi funding—including the July pledge of more than $6 billion—could begin to flow. This sequencing from Riyadh is an appropriate use of leverage for the sustainability of Syria’s reconstruction.

Safeguarding Reform and Stability Through Gulf Cooperation

A key area for broader Gulf engagement in Syrian reform is encouraging Syria’s leadership to strengthen each ministry’s mandate, disentangling the executive branch from its stifling involvement in day-to-day bureaucratic tasks. This could be achieved by reestablishing a prime ministerial position to oversee, coordinate and empower the daily work of the government’s ministers. Moves such as centralizing authority of Syria’s new sovereign wealth fund under the executive branch are unwise. Such steps risk undermining the development of rule of law and a transparent economic system, which could jeopardize Gulf interests over the medium to long term by weakening state-building in Syria.

Diplomatic coordination by Damascus’ most trusted partners, coupled with their constructive engagement with the transitional Syrian government, is emerging as the key avenue required for advancing critical reforms. Utilizing their economic influence and political ties ultimately provides the Gulf states an opportunity to strengthen Syria’s institutions and help anchor long-term stability in Damascus—an outcome that promises lasting benefits for both sides.

The views and opinions expressed in this article are those of the authors and do not necessarily reflect the views of Gulf International Forum