Neighbours Lebanon and Syria both started 2025 under new leadership widely viewed as a potential turning point after years of conflict and crisis.
Almost 18 months on, while both are still struggling to recover, their trajectories are strikingly divergent: Syria appears to be edging towards renewed economic engagement, while Lebanon is still mired in a cycle of financial, political and security paralysis.
In Lebanon, basic expectations remain unfulfilled: a metro instead of endless traffic jams; electricity without power cuts; a phone call that does not cut out mid-sentence; a second airport to ease pressure on a country stretched thin.
But in Syria those same ideas are emerging as investment opportunities.
Over the past months, Damascus has been quietly repositioning itself as one of the region’s most unexpected economic openings – not as a country that has recovered, with poverty still widespread, inflation high and infrastructure heavily damaged, but as a market seeing the return of investment interest earlier than many had anticipated.
“Investors today are looking less at immediate economic conditions and more at whether a country appears to be entering a phase of predictable political consolidation,” Imad Salamey, professor of Middle East and International Affairs at the Lebanese American University, told The National.
“Syria is benefiting from expanding Arab normalisation, strong Turkish engagement and growing US acceptance of regional reintegration. This has created rising confidence that the Syrian regime is no longer facing existential uncertainty.”
Reconstruction pitch
Across Syria, officials and investors are reviving plans that would have been unthinkable only a few years ago.
In February, Saudi Arabia announced a major investment package in Syria spanning energy, aviation, property and telecoms. The kingdom also launched an investment fund committing 7.5 billion Saudi riyals ($2 billion) to develop two airports in Aleppo.
Saudi budget airline Flynas and the Syrian Civil Aviation Authority signed an agreement to establish Flynas Syria. Riyadh has become a leading backer of Syria’s leadership and reconstruction push.
These announcements came after the US moved to ease sanctions on Syria in December, after high-level diplomatic engagement earlier in the year, including a meeting between President Donald Trump and Syrian President Ahmad Al Shara in Washington.
Sanctions imposed during the Bashar Al Assad's rule were a major obstacle to Syria’s economic revival after a 14-year civil war had killed around 500,000 people, devastated infrastructure and displaced millions.
Other Gulf countries are also playing a growing role. Qatar and the UAE have stepped up exploratory engagement, alongside Turkish, European and American firms assessing entry points. Much of this is structured as direct investment rather than loans.
“Syria has enormous investment opportunities in both the public and private sectors, as the country begins a process of redevelopment,” said Nasser Saidi, president of Nasser Saidi and Associates and former Lebanese economy minister.
“The World Bank estimates an initial $216 billion for reconstruction in Syria, which in my view is an underestimate. Full reconstruction will require significantly more financing, which will have to come from external sources given Syria’s limited resources.”
On the coast, from Tartus to Latakia, proposals are circulating to transform the Mediterranean shoreline into a logistics and trade hub. In November, DP World began operations to develop the Port of Tartus under a 30-year concession agreement with the Syrian government.
In energy, plans include creating multiple gas facilities and solar power plants aimed at stabilising electricity supply in a country where power cuts have been routine for years.
TotalEnergies, QatarEnergy and ConocoPhillips this week signed a deal with the Syrian Petroleum Company to launch a technical review of offshore Block 3 near Latakia.
In telecoms, digital infrastructure investment is being discussed. Saudi group stc signed an agreement in February to implement the Silklink project, intended to position Syria as a strategic data corridor linking Saudi Arabia to Turkey, Europe and Asia.
Mohamed Alabbar, founder of Emirati property developer Emaar, is also planning to invest as much as $18 billion in Syria in various projects.
“In my real estate business, I think it’s an amazing opportunity,” Mr Alabbar told The National in Damascus this week during the first Syrian-Emirati business forum. “Cities like Latakia or Damascus have not had real estate expansion for years and I think it is the right time to come in. I am very positive about everything I see in Syria.”
The country is also re-emerging in discussions about regional connectivity at a time of shifting risk calculations.
Concerns over maritime chokepoints, particularly the Strait of Hormuz, have revived interest in overland trade corridors linking the Gulf to the Mediterranean. These include pipelines, rail networks and transport corridors.
“Syria’s geographic position and its geostrategic importance have been highlighted due to the war in the Gulf,” said Mr Saidi. “With the Strait of Hormuz blocked, the Gulf is looking for new corridors for its trade, both imports and exports, with access to the Mediterranean through Syria and Turkey gaining strategic importance in the coming months and years. Trade corridors are being reconfigured.”
This could mean that Syria is being repositioned, in some investor calculations, as a potential transit bridge connecting Asia and Europe.
Lebanon: proximity without momentum
Lebanon and Syria have long been economically intertwined.
For decades, Lebanon functioned as Syria’s financial and commercial gateway, with its banking system, ports and services sector acting as an interface with regional and global markets. Syria, in turn, provided Lebanon with its overland route to Jordan, Iraq and the Gulf. That system collapsed after the civil war began in 2011.
Lebanon lost its land trade route. Exports declined, transport costs rose and the economy absorbed the shock of nearly one million Syrian refugees arriving, adding pressure to an already fragile system.
When Lebanon’s financial crisis erupted in 2019, many economists linked the collapse to decades of corruption and structural mismanagement compounded by regional instability.
Today, Syria continues to face fragility, with vast reconstruction needs and unresolved humanitarian challenges, but it is attracting capital attention.
“Lebanon, by contrast, remains viewed as a contested arena between Iran and Israel, creating far less confidence for investors despite the historic economic interdependence between the two countries,” said Prof Salamey.
“The unresolved security situation, uncertainty surrounding Lebanese-Israeli dynamics and the continued role of Hezbollah reinforce fears that instability could quickly escalate. Ironically, Syria’s improving regional position may eventually help Lebanon by reintegrating it into a broader Arab economic agenda focused on development rather than remaining trapped primarily within the dynamics of Iranian-Israeli confrontation.”
Iran-backed Hezbollah has fought two wars with Israel since 2023. The conflicts triggered widespread destruction and deepened the country’s economic crisis. A ceasefire announced last month has failed to hold, with Israel persisting with strikes across Lebanon, especially in the south.
“Lebanon continues to be bogged down by the enormous destruction from the continuing war and the unresolved financial meltdown of 2019,” said Mr Saidi. “Investment is seen as high-risk with low geopolitical leverage. Without a clear economic road map and International Monetary Fund-backed reforms, Gulf capital will remain on the sidelines.”
Lebanon’s economy is estimated to have expanded by 3.5 per cent in 2025 after contracting by 7.1 per cent in the previous year, according to World Bank data, while Syria’s economy grew between 2 and 4 per cent last year after expanding by 0.9 per cent in 2024.
Lebanon’s Minister of Economy Amer Bisat told The National in February that investor confidence had been “lost very quickly” during the crisis years.
In a separate discussion, Minister for Technology and Artificial Intelligence Kamal Shehadi revealed to The National that Lebanon was set to unveil a Gulf-backed investment in its digital sector. Days later, the war – which had technically never fully stopped because of continued Israeli ceasefire violations – resumed.
In January, Khalaf Al Habtoor, head of Dubai conglomerate Al Habtoor Group, said he had cancelled all planned investment in Lebanon due to continuing instability, and would sell all his properties and investments in the country.
Analysts say another difference lies in how decisions are made. In Syria, decision-making is centralised, while in Lebanon, power-sharing structures often slow or stall decisive actions.
Some have also highlighted Syria’s stated intent to avoid direct confrontation with Israel as a factor in its shifting risk profile. Foreign Minister Asaad Al Shibani said this week his country wants “calm and stable” relations with Israel.
“There is a prevalent perception in both investment and political circles that opposing Israel exposes a country to risks investors do not want,” said global financial markets strategist Amro Zakaria.” Syria seems to have shed that perception, while Lebanon has not.”
