SYRIA COUNTRY PROFILE
Key Facts
Location: Middle East, bordering the Mediterranean Sea, between Lebanon and Turkey
Capital city: Damascus
Total Area: 185,180 sq km
Population: 20,178,485
Currency: Syrian Pound
GDP: $98.83bn (2008 est.)
GDP Growth rate: 5.1 per cent (2008 est.)
Languages: Arabic (official); Kurdish, Armenian, Aramaic, Circassian widely understood; French, English also understood
Ethnic make-up: Arab 90.3 per cent, Kurds, Armenians, and other 9.7 per cent
Religions: Sunni Muslim 74 per cent, other Muslim 16 per cent, Christian 10 per cent
Introduction
The Syrian economy is a reforming economy and marked by increased growth, low levels of external debt and healthy foreign exchange reserves. Growth has picked up recently due to accelerated reform and new private investments. Since 2001 many laws have passed to liberalise and reform Syria’s trade, fiscal and financial systems. Private banks and insurance and money brokerage businesses are now operating in Syria, with a stock market expected in 2009. Income taxes have been cut markedly and a new investment law was passed in early 2007.
In mid-2005 the government adopted a 'market social economy' approach to guide reform and development. A five-year plan encompassing public and private sectors was launched in 2006. This outlined investment spending of SYP 1,800bn, 47 per cent to come from the private sector. The plan gave the private sector a large role in economic development as well as seeking to attract foreign direct investment, and find alternative revenue sources to oil.
Declining oil reserves have been impacting on export proceeds and tourism is being encouraged as a substitute for oil and source of foreign exchange. Subsidies are also being rationalised to reduce the pressure on the government budget.
Investment climate and opportunities
Syria is a relatively small UK Near East market. In 2008 the UK exported £93m of goods to the country. The Syrian economy grew an estimated 2.4 per cent in 2008 led by the petroleum and agricultural sectors, which account, between them, for about one-half of GDP. Higher crude oil prices countered declining oil production and led to higher budgetary and export receipts. Damascus has implemented modest economic reforms in the recent years, including cutting interest rates, opening private banks, consolidating the multiple exchange rates, raising prices on some subsidised items, most notably gasoline and cement, and establishing the Damascus Stock Exchange - set to begin operations in 2009.
President ASAD has signed legislative decrees to encourage corporate ownership reform, and allow the Central Bank to issue Treasury bills and bonds for government debt. Nevertheless, the economy remains mainly controlled by the government. Long-run economic constraints include declining oil production, high unemployment and inflation, rising budget deficits, and pressure on water supplies caused by heavy use in agriculture, rapid population growth, industrial expansion, and pollution.
Key sectors for exporters
Banking and financial services
Education
Healthcare
Oil and gas
Railways
Tourism and leisure
Sectors up-close
Oil and gas
The oil and gas Industry in Syria is currently enjoying exciting and challenging times. There are both up-and-down stream developments, aimed at fulfilling the requirements associated with increased demand related to rapid economic growth. This trend has been reflected through continued development in several untapped fields, along with the processing and marketing of oil. This has resulted in a newfound interest on behalf of several international companies and investors, who plan on investing in the region.
The industry overall holds very promising prospects. Gas output is increasing following the construction of several new gas processing plants. Also, refining is attracting interest from private investors and several new projects are under study and could increase the country’s refining capacity by 380,000 bpd in the coming years.
Healthcare
Syria is embarking on a major reform of its healthcare system. The Government recognises the role of the private sector and has looked to the UK as a model of provision. In Syria, the priorities are the design and construction of hospitals in the private and public sectors, healthcare administration, quality control systems, hospital management, nurse and technician training, the financing and costing of services, and information management systems. Key opportunities exist for UK consultants and designers of turnkey systems and medical cities, as well as for providers of specialist health services including cardiology and cancer, consultants on hospital renovation, quality control systems and health care information systems.
Banking and financial services
The Syrian financial sector performed extremely well in 2007 and, while prospects took a turn for the worse in 2008 and into 2009 with the advent of the global recession, long-term growth prospects in this key sector are very good.
Assets of the Syrian Banking Sector reached USD 34bn at the end of 2007, an annual increase of 12 per cent, while net credit facilities increased by a rapid rate - 25 per cent. Private sector banks were the key drivers behind this expansion as their total balance sheet increased by 60 per cent.
Beyond banking, all financial services witnessed major development including the first private money-changers allowed in Syria in four decades, the licensing of numerous brokerage firms, the significant increase in per-capita insurance expenditure, the peg of the Syrian Pound to the IMF’s SDRs and the set-up of the first Islamic banking and insurance institutions.
