The Turkish government intends to open its first government bank inside the Syrian territories, which is “Agriculture”, in a move that is described as being economic and strategic dimensions at the same time, and a turning point in financial relations between the two countries may constitute more than a decade of tension and conflict in light of the ousted Assad regime’s rule.
The importance of this step for Syria is that it may contribute to stimulating the economic cycle in the northern and northwestern regions, facilitating the movement of funds and transfers, as well as supporting small and medium enterprises, and contributing to rebuilding confidence in the banking system.
This initiative, which is likely to be followed by the opening of other Turkish, governmental and private banks, comes in light of the increasing need for reliable banking channels after the collapse of the official banking system. The first branches are expected to include the cities of Aleppo and Damascus, before expanding the rest of the Syrian governorates.
Obstacles and positives
But this step may face multiple challenges, the most prominent of which is the unstable legal environment in Syria, and the absence of a unified legislative framework that guarantees the work of foreign banking institutions safely, in addition to the risks of exposure to economic sanctions imposed on the country, according to observers.
Economic analyst Younis Al -Karim confirmed that talking about the opening of a branch of the Turkish “Agriculture” bank in Syria is still within the framework of expressing desire, without any official announcement from the bank or from the Turkish Ministry of Finance, noting that the implementation of such a project faces many fundamental obstacles.
Al -Karim said, in his interview with Al -Jazeera Net, that the international sanctions imposed on the Syrian Central Bank represent a major obstacle to any external banking activity, as any bank entering the Syrian market may be exposed to heavy financial sanctions or fines.
He added that the economic environment in Syria is still unstable, with the continued internal conflicts in multiple regions, which makes it difficult to establish a sustainable and safe banking activity.
However, the generous saw that the declaration of desire from the Turkish side is not without positive references, as it reflects the existence of a clear political and economic support from Ankara to the Syrian government, and it can also be a factor of reassurance to Turkish, Arab and foreign investors, given that Turkey does not provide such steps unless it has a conviction that things are heading towards a degree of stability.
He also pointed out that this step will benefit when implementing a wide segment of Syrian merchants residing in Turkey, especially those who have existing bank accounts in the “Agriculture” bank, as it can open up prospects for them to expand their trade activities between the two countries more easily and at lower remittances.
But the Turkish readiness to open banks raises multiple questions about the legal and banking readiness required to ensure the success of this step, in the absence of clear legal and institutional stability in Syria.
The financial and banking expert, Dr. Firas Shaabu, believes that the opening of Turkish banks in Syria is not so easily, as it takes a package of legislation and organizations, in addition to a sufficient time to establish a sound banking legal structure.
Shaabu explained, in his interview with Al -Jazeera Net, that the Syrian banking system is still fragile and suffers from legislative chaos, and it is in urgent need of a clear and organized legal framework to ensure the work of financial institutions effectively.
Shaabu asked about the willingness of Turkish banks to deal with the local currency, or even about their desire, which puts question marks about the possible mechanism of their work, in addition to the need to clarify whether it will work as a reserve destination for the Syrian Central Bank, or within an independent financial system.
The effectiveness of the “Swift” system
Analysts link the work of Turkish banks in Syria and the need to activate the global financial “Swift” system that stops in Syria as a result of the continuous economic sanctions on Damascus, despite the fall of the Assad regime.
Turkish analyst and researcher Abdullah Suleimanoglu believes that the establishment of a Turkish bank in Syria at the present time “will not be feasible”, given the continuation of Western sanctions imposed on Damascus, and the ineffectiveness of the global financial transfer system “Swift” inside the Syrian territories.
Suleimanoglu said, in his interview with Al -Jazeera Net, that “investing in a Turkish bank inside Syria does not seem to be current, despite the enthusiasm of Turkish investors to enter the Syrian market, especially in the fields of energy and transportation,” noting that the presence of a bank can facilitate these investors to transfer money into the Syrian interior.
He stressed that the Syrians residing in Turkey who have bank accounts can also benefit from facilitating the transfer of their money from Türkiye to Syria, which may contribute to stimulating the commercial and industrial movement within the country. But he added that there are “legal and security obstacles” still exist.
As for the alternatives, the Turkish researcher saw that the experience of the Turkish BTT Foundation in northern Syria was largely successful, as it contributed to solving many of the problems of financial transfers among humanitarian organizations and companies, despite noting that the financing of projects across Turkey is still costly.
