| COUNTRY PERSPECTIVES
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SYRIA |
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Country presentation |
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Introduction |
Syria has opened up to the outside world only very recently, when Bachar El Assad became President in 2000. The previous period (1960-2000) was marked by a socialist, nationalised economy, with very directive production aimed at self-sufficiency. Since 2000, and especially since 2003, a number of major reforms, particularly in the financial sector, have led to an improved economic environment and growth is on the rise, up from 1.3 percent in 2002 to 3.8 percent in 2005 (the latest estimates mention a growth rate close to 2.9%). GDP came to US$ 26.2 billion in 2005, compared to US$ 20.3 billion in 2002.
Syria has adopted a prudent policy in the area of economic and administrative reforms, targeting a more conducive economic environment based on private sector involvement but with due attention to social balance. The State has started to modernise the country’s banking structure, revise the foreign exchange system, privatise a number of public companies, improve the business climate, and simplify customs formalities. Certain State monopolies will be opened to competition, notably in metallurgy, textiles, and dairy products. Special attention is also given to education and training.
Agriculture weighs heavily in the economy, employing 35 percent of the labour force. The government wants to modernise the sector, in particular by installing irrigation systems and improving water usage, which has been beneficial for cotton, the country’s second largest export. Industry accounts for only 10 percent of GDP and involves mainly extractive industries.
- Syria is the 29th world producer of oil, turning out 26 million tons. Oil accounts for 60 percent of export earnings (US$ 3.8 billion) and provides half of state revenues. However, oil reserves are likely to be depleted within 10 years.
- Natural gas is the object of considerable efforts by the authorities to substitute it for oil. Gas production is on the rise, thanks in particular to the pipeline connecting the port of Banias to Jordan and the gas initiative at Deir Ez Zor (managed by Total and Conoco).
- Phosphate reserves are estimated at more than 1 billion tons and nearly 75 percent of production is exported.
Manufacturing industries contribute less than 6 percent to GDP, mostly involving textiles (30 percent of manufacturing output and 15 percent of exports), agrofood and construction. |
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Challenges |
Syria is in the heart of a turbulent region: it shares borders with Turkey in the north, Iraq in the west, Jordan and Israel in south, and with Lebanon in the west.
The economy – for a long time under State control – is heavily dependent on the oil market.
Unemployment, which affects 25% of the population, mainly the youth, is another problem and the current growth does not make it possible to slow down this upward trend. |
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Strong points |
Numerous efforts have been made to attract foreign investors. ‘’Investment Law N°10’’, enacted in 1991, provides a significant contribution in that direction. By way of example, companies are exempted of profit taxes for seven years; another measure concerns the importation of machinery, equipment and vehicles which is tax free as well. Under a decree dated 2000, capitals can be repatriated.
It should also be pointed out that Syria opens up to neighbouring countries. Agreements have been signed with Jordan, Saudi Arabia, Iraq, Egypt… There is a free trade zone project in the region in 2005.
Syria has many assets: a deep-rooted trading culture, its geographical position, and its tourist potential. |
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References |
| Capital |
Damascus |
| Surface area |
185,180 km² |
| Population |
18,700,000 inhabitants |
| Languages |
Arabic, Circassian, Armenian, Aramaic |
| GNP (dollars) |
US$ 26 bn (2005) |
| GNP/per capita (dollars) |
US$ 1,418 – 3,847 in ppp. (2005) |
| Currency |
Syrian Pound (SYP)
1 EUR = 72.76 SYP – 1 US$ = 54.45SYP |
| Religion |
Muslims (90%), Christians (10%) |
| National holiday |
17 April (date of France departure in 1946) |
| Association Agreement with EU |
Signed on19/10/2004; still being ratified.
EU web site:
http://www.delsyr.cec.eu.int/
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| WTO membership |
Negotiations in progress |
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Sources: IMF, WDI 2006 and Consultations Article IV 2005, Country Report 05/355, October 2005. |
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