It would seem that a large number of frontier markets are concentrated in the Middle East these days. Iran is a major energy trader with China and Russia; Dubai is opening movie studios in Hollywood; and Iraq is now exporting oil.
And now, Syria is becoming the next hot spot for Middle East opportunities.
President Bashar al-Assad has recently introduced new laws that make it easier for international companies to do business in socialist Syria. Al-Assad is quick to point out that these changes are economic only, and not political in nature, but economics commentator Jihad Yazigi told the BBC that it's a way for Syria to break its isolation:
"It's a circle. More investments improve political relations and political relations attract more investment [sic] and more investments."
More investments like Lafarge (LG:Paris) and Total (TOT:NYSE) teaming up after French President Sarkozy took a trip to Syria in early September. Lafarge will set up two cement factories, making it the largest foreign investor in Syria, and Total would extend its operations at the Deir Ez Zor oil block and sign a gas development deal.
Other European companies are investing in Syria, too. EADS (EAD:Paris) and Alstom (ALO:Paris) both have long-term deals in the country.
But more recently, Greece's biggest power plant builder, Metka (METKK:Athens)(0FC3:London IOB), won a $932.4 million deal to build a power plant in Syria. Metka will be partnering with Finmeccanica (FNC:Milan) of Italy who will be providing the power equipment.
These projects will provide much needed jobs to Syria, whose official unemployment number is 7.5% but whose "real" (i.e., independent) unemployment rate is more like 20%. Most jobs are provided by the government and are low-wage jobs.
A large chunk of the population still remains below the poverty line.
Jobs provided by foreign companies offer higher wages, and have helped to increase average salaries in the private sector. There are some bright spots in the Syrian economy that show the country is moving in the right direction.
Western fashion and the ever-present "cappuccino culture" have wormed their way into Syrian society, setting up shops right next to Old Town's spice shops.
For the most part, they are welcome... but in order for true economic success to take hold, Syria can not afford to overlook the lower classes. Foreign companies investing in Syria now that new laws are making more opportunities may just be Syria's ticket to the main stage.
And even though President Bashar al-Assad wishes only economic reform, Western partnerships, which will provide the much needed stimulus to Syria's economy, will require at least some political reform along the way.
