Syria begins economic reform

President Bashar promised reforms when he took office

Syria's parliament has unanimously approved a law allowing private banks to be set up for the first time in nearly four decades.

The law is part of a major economic reform plan aimed at liberalising the economy, promised by Syrian President Bashar al-Assad who took office in July.

Under the bill, foreigners will be able to own up to 49% of these banks.

A senior official has said dozens of foreign banks are thought to be interested in starting business in Syria.

Officials said the government was ready to accept applications from local and foreign banks and business-people who are interested in setting up fully private or joint private-public banks in Syria.

Private banks were abolished in 1963, when the government took complete control of the banking sector.

Political reform

The Syria government first announced the economic reform package in December last year.

Besides reintroducing private banks, it said it would unify the exchange rate to reflect the free market rate and set up a stock exchange.

Correspondents say President Bashar al-Assad - who took over in July 2000 - is moving cautiously in the face of demands for both political and economic change in Syria.

But they say the new president appears to be prioritising economic over political reform.

December's annoucement came in the wake of criticism from an outspoken member of parliament, Riad Seif.

Mr Seif accused the government of failing to introduce fundamental economic and political reforms, and called for an end to cronyism and corruption.