DAMASCUS Syria is counting on the draw of its historical sites and unspoiled terrain to boost the number of tourist arrivals by some 25 percent to four million by 2005, Tourism Minister Qassim Muqdad said on Wednesday. "We have all the elements needed for a successful tourism industry that satisfies all kinds of tourists -- the sea, the sun, the desert and more than 33 ancient civilizations that left a huge number of archaeological sites," he told Reuters in an interview. Muqdad said 3.1 million tourists visited Syria in 2000, up from some 2.9 million in 1999, and spent around $500 million. He said the country's tentative steps to reform its command economy, in which most enterprises are state controlled, gave incentives to investors. A better tourist infrastructure would in turn draw visitors including faith tourists to mosques and churches, as well as Syria's bazaars, oriental baths and sites like the desert city of Palmyra. Syrian President Bashar al-Assad has eased restrictions on hard currency transactions, bringing the exchange rate in government bank deals in line with the rate of 49/50 Syrian pounds to the dollar that prevails in the black market. Legislation allowing the establishment of private banks was passed this year, but there have been few concrete steps toward undoing the socialist legacy of the ruling Baath Party's 31 consecutive years in power. Muqdad said Western tourists were arriving in larger numbers, in addition to the 2.2 million Arab tourists who came in 2000, and said the country would iron out kinks in hotel pricing that deter foreign visitors. Foreign tourists who are not part of package deals complain that five-star hotels charge them up to $200 per night, about twice the rate for Syrians and citizens of neighboring Lebanon. "We have been carrying out studies to make it easier for all tourists to be able to afford to stay in hotels in Syria. Even now a tourist can get a clean single hotel room for $10 in Damascus, but we want to make it even better and more affordable," the minister said. He said tax holidays and other incentives had drawn investors, leading Syria to grant 58 licenses for touristic development, including 29 for hotels in 2000. Muqdad said work on a $100 million hotel complex in the heart of Damascus, expected to be completed in 18 months, was evidence that investors were keen to tap Syria's tourist potential.