IMF-World Bank meetings to discuss restoring support for Syria, UN official says

Damascus: Officials will discuss major steps to restore support for Syria from the World Bank and International Monetary Fund at spring meetings next week, though sanctions remain a major obstacle to rebuilding the country, a UN official said on Friday.

Abdallah Dardari, assistant secretary-general for the UN Development Programme, told Reuters in Damascus that a roundtable on Syria hosted by the Saudi government and World Bank would take place on the sidelines of the annual meetings of the international financial bodies in Washington.

"It gives a signal to the rest of the world and to the people of Syria that you have these biggest financial institutions ready to support," he said.

Reuters reported last week that Saudi Arabia plans to pay off around $15 million in Syrian arrears to the World Bank, paving the way for millions of dollars in possible grants for reconstruction and other economic support to Syria. Sources have since told Reuters that the Saudis made the payments.

Dardari told Reuters that pay-off would allow the World Bank to support Syria through its International Development Association which provides funds for low-income countries.

"This is a big ticket item for Syria to negotiate with the World Bank. There's also the Special Drawing Rights at the IMF. Again, that's a big ticket item, in addition to all the policy and technical assistance that the Bank and the Fund can provide Syria," Dardari said.

Since former Syrian leader Bashar al-Assad was toppled last year after a nearly 14-year civil war, his successors have called on the international community to lift sanctions imposed against the country during his rule.

So far, most of those sanctions remain in place, with the United States and other Western countries saying the new authorities still need to demonstrate a commitment to peaceful and inclusive rule.

Sanctions

Syria has $563 million in Special Drawing Rights (SDRs) at the IMF. But using the funds requires approval by IMF members holding 85 per cent of the total votes, giving the United States, with 16.5 per cent of the votes, an effective veto.

Syria's finance minister, central bank governor and foreign minister are planning on attending the spring meetings next week, Reuters reported earlier this month.

It would be the first visit to the meetings by a high-level Syrian government delegation in at least two decades, and the first high-level visit by Syria's new authorities to the US Assad's fall.

Washington has handed Syria a list of conditions which, if fulfilled, could lead to some sanctions relief, Reuters reported last month. Dardari said that sanctions remained "a considerable obstacle" to Syria's growth trajectory.

"Syria needs tens of billions of dollars in investments and in technical assistance and so on, and that cannot happen with such heavy sanctions imposed on the country," he said.

"So even suspension of sanctions will not be sufficient. If I were an investor and I want to invest $100 million in a power plant, I cannot take the risk of sanctions resuming next year, so sanctions have to be lifted in a comprehensive manner.

Dardari said UNDP had secured a sanctions exemption from the US Treasury to mobilize up to $50 million to repair the Deir Ali power plant south of Damascus.

Three sources familiar with the issue told Reuters the World Bank is exploring hundreds of millions of dollars in grants to improve Syria's electricity grid and support the public sector.

Syria's central bank governor Abdelkader Husrieh told Reuters that his country wanted to be compliant with global financial standards but that sanctions were still "blocking the economy from going forward".

"We want to be part of the international financial system and hope that the international community will help us to remove any obstacle to this integration," he said.