Businesses in Aleppo rebuild from scrap as security gains test Syria’s economic recovery

Key Concepts

• Post-Conflict Economic Recovery: The challenges of rebuilding an economy after prolonged conflict, specifically in Aleppo, Syria.
• Foreign Investment Hesitation: The reluctance of international investors and banks to engage in the Syrian market due to ongoing instability and risk.
• Local Manufacturing & Improvisation: The resourcefulness of Syrian businesses in utilizing limited resources and local expertise to produce competitive goods.
• Infrastructure Deficiencies: The critical need for infrastructure improvements, particularly the electricity network, to attract investment.
• Government Incentives & Pressure: The dual approach of the Syrian government – encouraging investment through incentives but also enforcing deadlines and potential land seizure.

Aleppo’s Economic Recovery: A Struggle for Investment & Local Resilience

The economic recovery of Aleppo, Syria, is significantly hampered by the continued reluctance of foreign investors and banks to commit capital. This hesitancy forces local businesses to rely heavily on improvisation and resourcefulness, utilizing salvaged materials and existing skills to maintain production.

A prime example is Allah Alcadi, a coach builder who demonstrates this resilience. He and his team are able to fully renovate vehicles – in one case, a Volvo bus – using primarily locally sourced materials and a skilled workforce. While acknowledging limitations in access to advanced machinery, Alcadi asserts their products “compete very strongly” with those from Chinese companies, and possess the potential to rival even German manufacturers if adequate equipment were available. He states, “We don't have advanced machines or equipment yet we're producing something that rivals I won't say German but Chinese companies. If the capabilities and equipment were available, we could make a very big difference.” This highlights the existing capability within Aleppo’s workforce, constrained by a lack of resources.

Infrastructure as a Key Obstacle

The Aleppo Chamber of Commerce identifies the complete renovation of the electricity network as the most pressing issue hindering business return. The lack of reliable power supply is a major deterrent for potential investors. The Chamber emphasizes the urgency of a decision regarding infrastructure investment, stating, “The decision is theirs. And I say the faster the decision, the greater the benefit.” This underscores the belief that swift action on infrastructure will yield significant economic gains.

Real Estate & Government Intervention

The report notes a substantial increase in rental prices within the industrial zone, rising from $25 per square meter to $100 per square meter in the year following liberation. This increase suggests a growing demand for industrial space, but also highlights the need for further investment to meet that demand.

However, the Syrian government is taking a firm stance to accelerate investment. Investors who have acquired land in Aleppo’s industrial area are subject to strict deadlines: 90 days to commence construction and 18 months to begin operations. Failure to meet these deadlines will result in the state reclaiming the land. This policy represents a deliberate attempt to force investment and prevent land speculation, demonstrating a willingness to actively manage the recovery process.

The Challenge of Investor Confidence

Despite the local manufacturing capabilities and government efforts, the core challenge remains persuading foreign investors that Syria represents a viable long-term investment. The report concludes by emphasizing that the issue isn’t a lack of “ability or knowhow” amongst Syrian businesses, but rather a broader lack of confidence in the country’s stability and future prospects.

As Bernard Smith, reporting for Al Jazeera from Aleppo, Syria, observes, the success of Aleppo’s economic recovery hinges on overcoming this investor apprehension.