PRIVATE SECTOR EAGER TO ENGAGE VISITING

C O N F I D E N T I A L DAMASCUS 000226 SIPDIS SIPDIS STATE FOR NEA/ELA, NEA/PPD, NEA/PI, IIP/SEG; NSC FOR SINGH/GAVITO E.O. 12958: DECL: 03/31/2018 TAGS: ECON EFIN EINV PPD SY KCOR SUBJECT: PRIVATE SECTOR EAGER TO ENGAGE VISITING ENTREPRENEUR REF: DAMASCUS 199 Classified By: Charge d'Affaires Michael Corbin for reasons 1.4(b,d) -------------- SUMMARY -------------- ¶1. (C) From March 25-27, Post hosted Mr. Chuck Mills, CEO of Salera Capital, as a visiting State Department speaker. Despite lacking official approval from the Ministry of Culture, audiences from all strata of the Syrian private sector turned out for Embassy-scheduled events. While younger audiences focused more on the "how to" aspects of starting a small business, established businessmen sought Mills' opinion on the state of the U.S. economy, the global impact of a weak U.S. dollar, and the pros/cons of opening a stock exchange in Syria. Somewhat surprisingly, the subject of U.S. economic sanctions against Syria only surfaced at one event with agents of U.S. companies in attendance. While avoiding political topics, Mills responded to sanctions complaints by saying that he wouldn't invest in Syria even if there were no sanctions due to the rampant corruption. He also described the potential perils to developing economies from a poorly regulated stock exchange where major shareholders could manipulate stock prices. Mills' interactions with the Syrian private sector revealed Syrians' eagerness to engage American business people. Post leveraged this interest to assemble good-sized audiences in venues not previously open to us. We were able to convey the message that Syrian businesses are paying a price for Syria's regional policies and that the business community has an advocacy role. We continue to believe the Syrian business community represents an agent of change and that we can use its desire for engagement to promote our message. End summary. -------------- -------------- SYRIANS INTERESTED IN BROAD SPECTRUM OF ECON TOPICS -------------- -------------- ¶2. (C) Younger audiences at private business colleges queried Mills on the common characteristics of successful entrepreneurs, while middle-aged business people were interested in how U.S. entrepreneurs obtain access to capital (from business incubators to "angel investors") and develop individual business plans. More sophisticated members of the business elite sought Mills' opinion on the pros/cons of launching a stock exchange in Syria, the state of the U.S. economy, and the global impact of a weak U.S. dollar. From a policy perspective, professional economists were interested in the U.S. regulatory environment for small business development, and what resources the U.S. government made available to help entrepreneurs. A common theme Mills heard from all audiences was the need to provide better training (for both blue and white-collar employees) to prepare the Syrian workforce to take advantage of the increasing role the private sector is playing in Syria's economy. Somewhat surprisingly, the subject of U.S. economic sanctions against Syria only surfaced at one event with agents of U.S. companies in attendance. -------------- SPEAKER GIVES SYRIANS STRAIGHT TALK -------------- ¶3. (C) Speaking with the candor of a private citizen, Mills' "tough love" answers resonated with Syrian audiences. In response to public policy questions, he explained that all G8 nations recognize the contribution of small and medium enterprises (SME) to GDP, and consequently provide a favorable regulatory environment for them to flourish. He shared his own experience in receiving help from the Small Business Administration in drafting his first business plan, and in later running the State of Virginia's Department of Business Development Assistance. He also explained the lobbying process that small businesses use to shape the U.S. regulatory environment. Regarding the much-touted proposal to launch a Damascus Stock Exchange, Mills used the example of the UAE to warn Syrian investors of the danger in devaluing their companies -- and driving out G8 investors -- by allowing major shareholders to manipulate stock prices. He also explained the increased overhead and risk business owners must accept by "going public," which was clearly counter-intuitive to the Syrian audience's preconceptions. When several of agents of U.S. companies complained that USG sanctions discouraged foreign investment, Mills countered that he wouldn't invest in Syria even if there were no sanctions due to rampant corruption -- a rationale the businessmen seemed to begrudgingly accept. -------------- -------------- PROGRAMMING POSSIBLE, DESPITE "UNIQUE" ENVIRONMENT -------------- -------------- ¶4. (C) Although Post requested permission for Mr. Mills' program from the Ministry of Culture, permission was not granted by the time he arrived (and was eventually denied the week after the program had occurred). Notably, the lack of an official blessing did not dissuade private institutions and influential businessmen from participating. The director of one private business college, the Marketing and Management Center (MMC),is a former Minister of Administrative Development and Minister of State for Parliamentary Affairs. Another venue, the Orient Center, is an MFA-supported foreign policy "think-tank," but several well-connected businessmen and economic analysts felt comfortable attending a roundtable discussion with Mills there. By offering a private U.S. citizen speaker to non-governmental institutions, such as MMC, the Orient Center, and the Syrian Enterprise and Business Center (SEBC),we established channels to previously untested entities, increased our profile with the private sector, and expanded our business contacts. -------------- COMMENT -------------- ¶5. (C) Post used the Mills visit to test our theory that political space exists for engaging the Syrian private sector (reftel). While politicized business organizations, such as the Chambers of Commerce and Industry, are not permitted by the SARG to have contact with the Embassy, our positive experience with private colleges and politically-connected business elites indicates that we have just scratched the surface of available venues to get our message out that (a) there is an economic cost to Syria's regional policies; and (b) business people should be a positive force for change in Syria. Consequently, we believe that additional programming targeting Syrian private sector interests would be an important part of our overall strategy to pressure the regime. CORBIN