Saudi Arabia and Qatar payments will resolve Syria’s arrears and allow the World Bank and IMF to re-engage.
The World Bank says it will resume operations in Syria after a 14-year suspension after releasing more than $15 million in debt with financial support from Saudi Arabia and Qatar.
The US-based agency announced Friday that Syria no longer has an outstanding obligation to the International Development Association (IDA), a fund dedicated to low-income countries.
Earlier this week, Saudi Arabia and Qatar paid Syrian outstanding debts to around $15.5 million, paving the way for new involvement with international financial institutions.
“We are pleased that Syria’s arrears clearance will allow the World Bank Group to re-engage with the country and address the development needs of Syrians,” the bank said. “After years of conflict, Syria is on its path to recovery and development.”
The bank is currently preparing its first project in Syria. This focuses on improving power access. This is an important pillar for revitalizing important services such as healthcare, education, and water supply.
Officials said it marks the beginning of expanded support aimed at stabilizing Syria and promoting long-term growth.
US lifts sanctions in Syria
The bank’s announcement coincides with dramatic changes in US policy towards Damascus.
US President Donald Trump announced Tuesday that Washington will begin lifting sanctions imposed on Syria.
On Wednesday, Trump met Syrian President Ahmed Alshara on the sidelines of the GCC summit in Riyadh, marking a historic breakthrough in relations with the first such meeting with leaders of two countries in 25 years.
Secretary of State Marco Rubio confirmed that the exemption would be issued and relaxed restrictions on previously punished entities for dealing with the previous management of the current Bashar al-Assad, which fell in December.
“Sansions in Syria represent a fundamental turning point,” Economist and banking expert Ibrahim Nafi Kushji told Al Jazeera. “The Syrian economy could move from interaction with developing countries to integration with more developed economies, and significantly restructure trade and investment relations.”
The move represents a key moment in Syria’s reintegration into the global financial system after 13 years of civil war and isolation.
In April, a rare meeting was held in Washington involving officials from Syria, the IMF, the World Bank and Saudi Arabia. A joint statement issued later acknowledged the dire state of Syrian economy and pledged coordinated efforts to support its recovery.
The International Monetary Fund then appointed Syria as its first mission chief for over a decade. Ron Van Luden, who previously involved in the IMF business in Ukraine, will lead the fund’s new involvement.
Former IMF strategy chief Martin Muehleisen looked at the urgency of providing technical assistance to rebuild Syrian financial institutions. “These efforts can be funded by donors and the grants could be funded in kind,” he told news agency Reuters, adding that some support could begin within the next few months.
Al Assad fell after a lightning strike by opposition fighters led by Hay’et Tahrir Al-Sham armed group last December.
The new Syrian government is trying to rebuild the country’s diplomatic ties, including international financial institutions. We also hope that wealthy Gulf Arab countries will play a pivotal role in rebuilding the Syrian war-torn infrastructure and reviving its economy.
The government, led by interim president Al Shala, wants to give al-Assad loyalists privileged access to government contracts and moves away from the system that keeps key industries in the hands of the Al-Assad family.