Syria’s international credit rating has been raised by the Organization for Economic Co-operation and Development (OECD) for the first time in over a decade. The report, issued earlier this month, raised Syria’s risk rating by one level from 7 to 6.
The OECD regularly rates credit risk – the likelihood that a country will service its external debt – on a scale of 7 to 0. Among the 181 economies surveyed by the organization, Syria was the only country to see an improvement in its credit rating, a positive sign of the country’s historically protracted path towards fuller integration into the global economy.
"Syria’s rating is still low and this does not mean Syria has become a country whose business environment has improved tremendously," Jihad Al-Yaziji, publisher of the business newsletter Syria Report, told The Media Line.
"But it shows an overall improvement in the Syrian business environment after several years of changes to the investment, commercial and consumer legal and regulatory environments."
The OECD also reported a significant increase in the ease of starting a business in Syria, bumping up the Arab republic to 124th place from last year’s 171 among the 181 economies surveyed.
The organization boosted Syria’s overall "Ease of Doing Business" rank by eight and reported noticeable improvements in the ease of cross-border trade, employing workers and registering property in Syria.
"What’s important is that the efforts of the government are starting to pay off," Al-Yaziji explained. "Over the past few years a big chunk of Syria’s foreign debt was wiped out and GDP has grown steadily. Private banks and insurance firms have been allowed into the country and you can now import almost anything into Syria. None of this was the case 10 years ago."
Al-Yaziji added that, "It’s still not very easy to launch a business in Syria, but the process has improved tremendously. One of the new incentives, for example, is that a business in Syria can now be owned entirely by foreigners. This is not the case in many other Middle East countries."
The OECD puts the current cost of launching a business in Syria at 18.5 percent of the country’s per capita gross national income (GNI), about $1,760 at current levels.
Among the challenges of starting a business taken into consideration by the OECD are cost, time, the number of steps entrepreneurs can expect to face and the minimum capital required as a percentage of GNI. The average rate for other countries in the region is 41%.
"Syria still has a lot to do to become competitive in its capacity to attract foreign investment," Al-Yaziji said. "But we are improving tremendously."