Syria is seeing more foreign investment from GCC states every year and the US sanctions are hardly having an impact on the economy, a report said.

Abdullah Dardari, Syria’s Deputy Prime Minister for Economic Affairs, was quoted by the Gulf News report as saying that the US has not managed to damp foreign direct investment.

"Sanctions have failed, especially when they are unilateral," he said.

Gulf inflow into Syria was about $750 million last year, reveal official records. It could have topped $2 billion annually over the last five years, he said.

GCC investments have helped the economy grow about 6 per cent this year, making up for Syria’s fall in oil output.

The US sanctions on the nation of 19 million in 2004 included trade sanctions.

He said Syria was battling rising inflation, fall in oil revenue, unemployment and poverty.

At the same time, the country’s non-oil exports shot up to $12.5 billion, against less than $1 billion in 2000, he said. This was due to a surge in demand for farm produce, cotton, textiles and pharmaceuticals.

The country has eased rules to encourage investment and allows foreign investors to buy or lease land as well as carry home their profits in the currency of their choice.