On enabling investment and financing reconstruction
How would you assess the current effectiveness of the capital market framework?
ISSA CHAMI: The framework is constrained by outdated regulations, weak legal infrastructure and institutional practices that do not align with the functioning of capital markets in open economies. The regulations date back to a period before major global advances in technology, financial inclusion and market structure, and in some cases were already problematic when introduced. Consequently, the market is largely limited to domestic retail investors, with very limited participation from strategic, institutional or foreign investors. Operationally, market infrastructure is weak; technology systems are outdated; and basic processes such as account opening, settlement and cross-border participation are cumbersome. These issues create high regulatory and operational risk for investors, which ultimately undermines liquidity, price discovery and the credibility of the market as a viable capital allocation mechanism.
What regulatory and legal reforms would have the most impact in modernising the capital markets?
CHAMI: Regulatory reform is the obvious starting point. Rather than attempting to reinvent the system, Syria would benefit from adopting well-established legal and regulatory models from successful regional and global markets. Common-law-based frameworks, or hybrid models used in leading financial centres in the Gulf, offer a practical blueprint, as they are already well understood by international investors and financial institutions. Simplifying regulations, reducing discretionary approvals, and clarifying the roles and responsibilities of different regulators – particularly by separating monetary policy from capital market oversight – would materially reduce friction. The goal should be to remove regulatory risk, rather than micro-manage products or institutions, while ensuring that core principles such as transparency, governance, capital adequacy and investor protection are enforced.
To what extent can capital markets contribute to financing reconstruction and private-sector growth?
CHAMI: Capital markets provide a mechanism to channel foreign and domestic savings into sectors with the highest economic and social returns. Equity markets support growth-oriented companies and enable privatisation in a transparent manner, while debt markets are essential for financing infrastructure, utilities and other capital-intensive projects that may not generate immediate equity-level returns. Access to bonds, sukuk (Islamic bonds) and private credit is important given the risk profile of a post-conflict economy, where de-risking mechanisms are necessary to attract investors. Importantly, capital markets also facilitate exits – through listings, secondary sales or fund structures – which are a prerequisite for long-term investment. Without liquidity and credible exit pathways, neither foreign investors nor local capital will commit to reconstruction.
Looking ahead in what ways do you see the role of capital markets evolving in Syria?
CHAMI: The outlook is optimistic, provided reform momentum continues. The broader trend towards economic openness, normalisation of external relationships and improved regional integration is positive for investor sentiment. While progress will not be linear and the environment will remain volatile, capital markets are likely to gradually re-emerge as a conduit for investment rather than a marginal financial channel. As confidence among investors improves, priority sectors are likely to include telecommunications, energy, real estate, health care, education and hospitality – sectors with both reconstruction relevance and strong long-term demand fundamentals. Capital markets can also support knowledge transfer and diaspora engagement by providing structured, regulated vehicles for investment. The key determinant of success will be whether reforms translate into tangible improvements in legal certainty, market access and operational efficiency.
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