Download Syria Enters Economic World

Tiffany Vidonish, Feng Wang,
Austin Windsor, Emily Waugh
 Over
the past few years, the overall
economy of Syria has been slowly growing.
In 2007, the GDP was 90.37 billion dollars.
 The
GDP growth rate was 3.3 percent and
they have an inflation rate of 5 percent.
 The
total labor force in the country is 5.12
million workers.
 Syria
has an unemployment rate of about 30
percent.
 The
government’s goal is to create a 7
percent growth rate to tackle the
country’s poverty and unemployment
levels.
 Syria
needs 12 million dollars in
investments each year and needs to
create 250,000 jobs a year to guarantee
the 7 percent growth rate.
 As
President, he has allowed more
freedoms in the areas of expression and
press.

One of his goals as President is to
modernize the economy which
previously had been mostly government
controlled and heavily reliant on oil
production.
 The
United States currently has sanctions
imposed on Syria by former President
George W. Bush.
 The most comprehensive sanction called
the Syria Accountability Act (SAA) of
2004 prohibits the export of most goods
containing more than 10 percent of
United States manufactured component
parts to Syria.

The United States Patriot Act was levied
specifically against the commercial bank
of Syria in 2006.
 The
first sanctions imposed in 2004 were
mainly because of Damascus’ alleged
support of terrorists groups Hezbollah
and Hamas.
 The
sanctions were also imposed due to
Syria’s resistance to Israel and from them
occupying the Golan Heights.
 Syria is also suspected of being involved
in the assassination of the Lebanon Prime
Minister in 2005.
 Due to this event, the United States
removed its ambassador in Syria.
With its recent move out of liberalization, Syria
has been compared to countries like the Czech
Republic, Poland, and Hungary.
 The Czech Republic’s communist government
came to an end in 1989, and there has been a
constant upward trend in the economy since.
 The three sectors that relate to the Czech
Republic GDP are industry, services, and
agriculture.
 Unlike Syria, the Czech government encourages
privatization at a maximum so their private
sector accounts for 80 percent of their GDP.

 The
main countries leading in foreign
investments in the Czech Republic are
Germany, Holland, and the United States.
 Since 1998, 14 foreign banks and 9
foreign branches of banks have been
opened in the Czech Republic.
 In the Republic, Citibank is the most
prominent foreign bank.
 They
now fund 10 private commercial
banks with restrictions that allow Syrians
to only transfer up to 1000 dollars in
foreign currency each month.
 With the liberalization of private
insurance companies and other financial
services since 2005, there have been
declarations that this capital will
transform Syria from “a socialist to a
social market economy”.
 While
the ownership of foreign investors
in banks has grown from 49 to 60 percent,
there has been controversy over the
amount that an investor must have to own
the majority of the bank.
 This act may result in more banks and
more investors being interested in
entering the Syrian banking sector.
 When
Bashar al-Assad became president
of Syria in 2000, new economic reforms
began, trying to transform the old
planned economy into a new social
market economy.
 This will represent a dramatic turnaround
in short period of time
 Basically, this new social market is
modernizing Syria’s economy, making it
more market.
 The
disruptive drought during these years
brought about tremendous loss for Syria’s
farmer, and also their GDP.
 In August, 2009, Syria’s cabinet agreed with
a draft law that would provide tax incentives
for companies if they invest in the
undeveloped eastern region.
 Besides, this draft law made clear that
investment projects located in the eastern
region of Syria would exempt taxes and fees
for 10 years.



Damascus Securities Exchange was opened in
March 2009. More than 15 companies were listed
by the end of 2009.
Syria regards it as a key milestone in the
President’s pledge to transform the statedominated economy into a socialist market
economy.
Though the state-owned insurance company
continues to hold the majority share with 41% of
the market, the share has declined steadily
In February, 2009, the Syrian government set up a
new minimum price requirements for clothing
imports, reduced fuel and electricity prices, and
raised tariffs on imported cotton.
 Tariffs have been reduced several times in recent
years; the average tariff fell to 14.5%, down from
20%.
 In February, 2009, the EU’s external relations
commissioner told reporters that the long-stalled
agreement with Syria stands a good chance of
being passed by the middle of this year.

 Syria
took steps to contact with EU from
other countries.
 Turkey: Syria already signed a free-trade
agreement with Turkey as a way of
improving investor relations and gaining
broader access to the EU market in 2007.
 Iran: They established a free-trade zone and
have used its relationship with the
embattled country to boost its profile with
the West as a possible go-between in the
nuclear dispute.
 In
financial industry, Syria is opening to
foreign banking investors currently.
 Reported by Yahoo news, Syria is offering
foreign investors a majority stake in its
private banks.
 This policy will definitely decrease the
obstacle for foreigners whose interest is
in investing Syria’s private banks.
 Syria
continues to plan on expanding
irrigation facilities, in particularly in the
western part of the country and along the
Mediterranean coast.
 There are also efforts to coordinate action
with international organizations to provide
relief for farmers and to preserve livestock
herds.
 This investment will have significant
influence on the production of fruits and
vegetables, which benefit to agricultural
field.
 Syria
is a country that has unique historic
and cultural legacy.
 UNESCO’s World Heritage List already
consists of 6 sites in Syria, and other
meaningful sites are underway.
 President Bashar implemented a new
program for tourism: By the end of 2020,
tourism is expected to contribute some $10
billion to Syrian GDP and provide around a
million new jobs.
 Syria
2010.
plans to join WTO by the end of
 It
also plans to develop new electricity
utilities based on solar power and other
alternative energies.
 Investors
who are interested in producing
and distributing electricity are
welcomed.





With the development of economic growth, more problems
emerge, such as inflation and budget constraints.
Syria continues to attract healthy levels of investment from
the Gulf and elsewhere during the global economic
slowdown.
These investments will certainly support the economic
reform, increase tax revenue, and broaden the government’s
income base.
Syria must shift away from oil. The government must also
develop and promote industries such as tourism to achieve
stronger economic growth in the medium to long term.
Syria must also deal well with corruption, and take a
deliberate approach to modernizing its economy.
Syria continues to attract healthy levels of
investment from the Gulf and elsewhere during
the global economic slowdown.
 Investment from foreigners will support the
economic reform, increase tax revenue, and
broaden the government’s income base.
 Syria must also shift away from oil. The
government must also develop and promote the
tourism industry to achieve stronger economic
growth in the long run/
 Syria must deal well with corruption, and take a
deliberate approach to modernizing its
economy.

 Malaysia
is interested in creating
commercial relations by increasing the
volume of trade exchange.
 They
already have large investment
projects in the works.
 The
Philippines believe working with
Syria will enhance their economic and
investment relations.
 They
are working on a joint partnership
with Syria to manufacture car parts.
 Indonesia
is looking to boost trade with
Syria.
 Turkey
is looking into investing in the
Eastern and Northern areas.
 In
addition to the 10 private banks
already opened, 5 more have applied to
open and are waiting on the green light.
 Iranian
projects range from car
manufacturing and a proposed $2 billion
industrial zone for Iranian businesses to
plans to overhaul urban transportation
systems.
 Reason: American
been banned.
 Iran
exports to Syria have
has invested over $3 billion and foresee
billions more in the future.
 U.S. International
Investment Group is
comprising 5 projects worth $40 million.
 These include:
 Food
 Engineering and chemical industries
 Fodder factory; creating 700 job
opportunities.
 U.S. needs
to lift sanctions on Syria to
create a better relationship for investors.
 Lifting
the sanctions would allow for more
goods to be imported into Syria; more
commerce.
 Allow
travelling to Syria and may help
tourism.
 Work
on conflict between Syria and
Israel dealing with Golan Heights.
 Involve
more investors to help Syria
emerge as an influential nation.
 Try
to limit influence from potentially
harmful countries like Iran.
 U.S. should
look into getting a branch of
Citibank into Syria to not only help their
economy, but ours as well.
 Have
these new banks be involved to an
extent in Syria’s government securities
and foreign exchange like in the Czech
Republic.
 Elect
a new ambassador to reside in
Syria.
 Investing
in Syria would be useful
because:
 They
can own a majority share in banks.
 U.S. investors
can earn a profit due to the
Syrian governments goal to improve the
 By
the U.S. investing, more companies
will be listed on the Damascus Securities
Exchange
A
lift in the sanctions will allow
Americans to be able to invest in these
companies, improve Syrian’s economy
and give Americans a return on their
investments.