From new neighbourhoods and commercial towers to leisure developments, Syria's authorities are seeking to attract foreign investors through a sovereign wealth fund created by President Ahmed al-Sharaa that critics say lacks transparency.

The ambitious development proposals even include the former army headquarters in central Damascus, prime real estate left abandoned after an Israeli strike damaged it last year.

After 13 years of civil war and decades of sanctions, the country is in dire need of reconstruction, but money to do so is scarce.

"Syria is a devastated country with urgent need for reconstruction," said Abdel Rahman al-Shaar, CEO of investment facilitation firm ETT.

Shaar, who said his firm linked Damascus to investors in the Gulf, Europe and Asia, told AFP that industry was the most attractive sector at the moment, followed by "real estate and tourism".

Receiving his French counterpart Emmanuel Macron earlier this month, President Sharaa talked of the "great investment opportunities" in his country.

The Syrian Sovereign Fund, established by Sharaa last year and run by another former jihadist, sits at the heart of the country's attempts to bring in foreign capital.

The president and government are trying to move away from the state-controlled economic system that marked the Assad family's rule.

Under the ousted authorities, the state had a monopoly over strategic sectors as well as tourism and hospitality, with former president Bashar al-Assad's inner circle running the show.

Shaar said the new authorities had sought to privatise the economy after taking over in 2024.

"Things have changed now," he said, with most projects being public-private partnerships.

- Ambitious projects -

In Damascus, projects seem to be flourishing, with advertisements in various districts promoting residential complexes, hotels, entertainment venues and the redevelopment of central areas.

AFP saw a booklet distributed to Gulf investors in a recent meeting that detailed development opportunities including the former armed forces headquarters and part of its surroundings -- a site that faces the capital's famed Umayyad square and the opera.

In early June, authorities announced an ambitious project with a Saudi company, dubbed "Abyat Hills", which aimed to create around 20,000 housing units near Damascus.

Last week, Bloomberg reported that Dubai real estate tycoon Mohamed Alabbar was planning two major housing and tourism projects, worth at least $20 billion, in Damascus and the coastal city of Latakia.

According to economist Karam Shaar, "over 20 percent" of the memorandums of understanding signed by Damascus "have taken actual steps towards implementation".

But some architects expressed concerns about the developments.

"It is a speculative development model that risks turning cities into sterile environments increasingly disconnected from the everyday lives and needs of their inhabitants," Ahmad Salah, a coordinator of the Reclaiming Urbanism initiative, said, adding that there is "little real emphasis on sustainable or strategic investments... that can structurally improve people's lives".

- 'Black box' -

Experts have criticised a lack of transparency in Sharaa's sovereign fund, created to oversee investment projects and manage state assets.

"The biggest test to Ahmad al-Sharaa's transparency and economic governance, in my opinion, is the sovereign fund," economist Shaar said, calling it "a black box".

Ahmad al-Riz from economic publication The Syria Report said, "in addition to the lack of transparency in the fund's structure, on what basis are the state assets to be offered for foreign investment being selected?"

"The identity of the fund's manager has not been officially announced to this day," he added.

Several people who requested anonymity said they met the fund's director, Abu Maryam al-Australi, a former jihadist whose surname means "the Australian". 

Australi is sanctioned by Canberra and was close to Sharaa when the now-president led a jihadist group in northwest Syria.

"The ministry of finance estimates the sovereign wealth fund's assets at $50 billion... while Syria's GDP in the current year's budget is estimated at approximately $33.7 billion," Riz added.

The fund also manages confiscated assets from businessmen close to the former government.

Among them is Mohammad Hamsho, who was sanctioned by the European Union and United States. He reached a settlement with the new authorities and is resuming his economic activities alongside his relatives in Qatar.

Economist Shaar defended this move, saying it would help ensure "economic continuity".

But he also expressed concern that it could lead to a "path towards crony capitalism".

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