Despite the intensity and persistence of the conflict that has virtually devastated every element and institution of peace, development and human dignity in Syria, there still exists opportunities for gradual and progressive restoration through more strategic negotiations and actions that could mobilize domestic as well as incentivize private resources for sustainable development. Experience has proven that political negotiations for a peace deal is not feasible, this paper therefore presents an ambitious yet realistic, proposal that recommends the creation of “economic and humanitarian corridors” selected with utmost attention to criteria that considers economic potential and capacity to guarantee security.

1. RUNNING HEAD: Financing for development in Syria 1
Introduction.
Despite the intensity and persistence of the conflict that has virtually devastated every
element and institution of peace, development and human dignity in Syria, there still exists
opportunities for gradual and progressive restoration through more strategic negotiations
and actions that could mobilize domestic as well as incentivize private resources for
sustainable development. Experience has proven that political negotiations for a peace deal
is not feasible, this paper therefore presents an ambitious yet realistic, proposal that
recommends the creation of “economic and humanitarian corridors” selected with utmost
attention to criteria that considers economic potential and capacity to guarantee security.

2. Financing Syria’s development 2
Financing development in Syria.
Despite the intensity and persistence of the conflict that has virtually devastated
every element and institution of peace, development and human dignity in Syria, there still
exists opportunities for gradual and progressive restoration through more strategic
negotiations and actions that could mobilize domestic as well as incentivize private
resources for sustainable development.
In the last six years,
Syria has witnessed a conflict
that claimed over 250,000
lives, displaced over 11 million
people and left a state of
social, economic,
environmental and
infrastructural ruin (British
Broadcasting Corporation
[BBC], 11 March 2016). Unfortunately, the international community’s intervention have at
best secured feeble political and humanitarian solutions (BBC, 11 March 2016). The media
is therefore riddled almost daily, with depictions of suffering, starvation, murder, torture,
rape, poverty and helplessness, and the world has continued to watch helplessly.
The year 2016 birthed a new vision for sustainable development that seeks
simultaneously to consolidate the gains as well as address the challenges created by the
millennium development goals that came to an end a year earlier (United Nations, 2015).
This vision has also introduced innovative financing concepts and approaches that makes
possible the vision to enlist countries in conflict on the pathway towards economic, social
and environmental development (World Bank Group, n.d.). Currently, Syria’s economy

3. Financing Syria’s development 3
cannot sustain any form of meaningful development and is predicted to contract by an
average of 3.9% annually from 2016 to 2019 (Business Insider, June 9 2016). The country has
lost income from destruction to infrastructure that support major contributors to its
economy particularly oil (which accounted for 50% of its exports and about 30% of the
government's revenue in 2010), manufacturing and agriculture and now relies mostly on
international donor support to thrive (Business Insider, June 9 2016).
Regardless, the current social, economic and political climate does not make
investment in these sectors attractive as risks outweigh potential returns. The risks are
evident by perennial war and conflict, poor transport infrastructure, destroyed refineries,
weak institutions especially those that govern peace and justice, macroeconomic instability
that accrue from dissatisfaction with a dictatorship government (World Bank Group, 2011;
Business Insider, June 9 2016).
The united nations in collaboration with critical stakeholders need to remain
altruistic as well as channel more systematic, strategic, realistic, and timely political, social,
economic and environmental efforts in the quest to place Syria firmly back on the path of
recovery. Experience has proven that political negotiations for a peace deal is not feasible
between pro and anti-government forces, as each side has remained resolute in their
ideology and conditions for peace (BBC, 11 March 2016). The Islamic state has also
capitalized on this stance to aggravate the situation by colouring it with religious and ethnic
sentiments (BBC, 11 March 2016).
Political negotiations remain inevitable; however, it should focus on creating
humanitarian and economic corridors: in designated locations around the country, identified
based on a consensus criteria. These corridors will be made as secure as possible using
missile defence systems and relevant technology innovations and enforced by a joint peace
keeping force constituted by interested countries irrespective of political interest. Their

4. Financing Syria’s development 4
locations will be given unrestricted access to humanitarian services and supported to thrive
economically, all to mitigate human migration to surrounding and other countries of the
world currently struggling to manage the influx (BBC, 11 March 2016).
A key criterion for the selection of corridors will be their economic potential which
amongst other things will consider the feasibility of resuscitating associated infrastructure
and ease of export. Early developmental priorities within these corridors, relevant for a
conflict-ridden country will comprise setting up local governance structures and having them
focus on key urban development, agriculture and energy projects (World Bank Group
[WBG], 2016). Beyond this, there will be need to create initiatives that could provide
sustainable funding that support the livelihoods of displaced persons and wean them from
the unpredictability of donor contributions. Such initiatives will include creating and
supporting the growth of local cooperatives and have them become the key thrust of
economic revival.
These are capital intensive projects and will need to be funded through grants and
highly concessional loans which Syria is entitled to as a result of its conflict status.
Multilateral and bilateral financial institutions through which donor support is coordinated
and disbursed retain the credibility to provide the requisite technical and financial support
needed by the Syrian government to mobilize domestic as well as incentivize private
investments as well as tie them to inclusive and sustainability targets (WBG & International
Monetary Fund [IMF], 2015). Private participation makes for more prudent and efficient
management of resources; however, their interest is motivated by risk versus return
considerations. Therefore, multilateral organizations have a responsibility to develop
bankable projects that could restore macroeconomic fortunes and smaller projects to be
undertaken by cooperatives that restore individual fortunes (WBG & IMF, 2015).

5. Financing Syria’s development 5
Multilateral agents have a responsibility to support the deployment of risk mitigating
instruments to incentive private sector investments. Some of which include insurance;
guarantees; crowd funding; public private partnerships; creating enabling legal and policy
environment; reasonably open trade policies; sound monetary and exchange rate policies;
predictable investment framework and rule of law; clear and consistent regulatory and
administrative processes; support systems that encourage open competition, functional
labour markets, entrepreneurship and innovation; standardization of contracts and
documentation; provide information about the financial, economic, environmental, legal and
technical risks through feasibility studies (WBG & IMF, 2015).
Innovative risk staggering strategies will be useful to pique the interest of a growing
pool of potential financing – institutional sources such pension, insurance and sovereign
wealth funds that have longer term financing capacity suitable for infrastructural
development (Ehlers, 2014). However, like private investors, institutional investors are
looking for a quick return and therefore will prefer to invest at the operational phase of
infrastructural development (Ehlers, 2014). The risk associated with project preparation and
construction could therefore be staggered across other organizations with higher risk
appetites. For instance, project preparation could be funded by venture capital
organizations, multilateral grants and concessional funds as well as non-governmental
organizations – funded from bilateral and philanthropic sources (Ehlers, 2014). The riskiest
phase, which is construction of the project could be resourced through crowd funding using
infrastructure equity and bonds as well as multilateral financing, international remittance
bonds and domestic public resources (Ehlers, 2014).
Eventually, as cooperatives thrive, there will be need to strengthen a tax system that
can audit and track financial flows, ensure prudent public expenditure and curb illicit financial

6. Financing Syria’s development 6
flows not only to increase domestic fiscal space but also to ensure that every dollar counts
(World Bank Group, 2015).
In conclusion, it should however be noted that the success of this ambitious
intervention is predicated on the collective commitment of major global stakeholders to
ensure that regions of the country delineated as “economic and humanitarian corridors” are
selected with utmost attention to criteria that considers economic potential and ability to
guarantee security.

7. RUNNING HEAD: Financing for development in Syria 7
References
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