Syria's Economic Woes to Continue
Government needs to do more to counter the effects of global recession.
Syria's Economic Woes to Continue
Government needs to do more to counter the effects of global recession.
Experts warn that Syria faces a tough year ahead, as the country struggles with a severe drought, declining oil production and the ongoing impact of the global financial crisis.
They say countries like Syria which rely heavily on foreign trade are particularly vulnerable to the effects of the economic downturn.
“Syria is not an island isolated from the world, and it could be one of the countries hardest hit by the economic crisis because economic growth had been slowing for the past few years before any outside factors came into play,” said Ilyas Najma, an economics professor at the University of Damascus.
“Any international recession is going to affect us because of our dependence on importing and exporting.”
Exported items account for 70 per cent of Syria’s gross domestic product.
A recently released study by the Ministry of Economy and Foreign Trade predicted that the global credit crunch could cause a 30 per cent drop in foreign trade. It also predicted a spike in the prices of goods and services in the country.
According to the World Bank, Syria can expect economic growth of 2.5 per cent in 2009 – just half of last year’s rate.
Lower levels of oil production in the country look set to continue over the coming year, say experts.
“The decrease in crude oil production will continue to lessen revenues and have a remarkably negative impact,” said Abdul Qadir al-Nayal, secretary of the Syrian Association of Economic Sciences.
Syrian crude oil production last year was nearly eight per cent down on 2007, he said.
Economists fear that industry, real estate and tourism could all suffer in the coming months.
“Scores of factories have closed down in Aleppo in recent months,” reported Al-Iqtisadiyah, an economic weekly.
And as the world’s largest economies battle recession, fewer tourists are expected to visit Syria, said Munir al-Hamash, director of the Damascus-based General Association of Economic Research.
Najma said many real-estate projects had been put on hold or abandoned altogether.
Meanwhile, the Ministry of Finance announced that only 20 out of the 260 state-owned companies had made a profit in the last year.
In addition to the fallout from the international financial crisis, the country is also suffering from a severe drought, which is damaging its agricultural industry. The government told the United Nations Office for the Coordination of Humanitarian Affairs, OCHA, in October that roughly one million people working in agriculture were at risk of losing their jobs and livelihoods as a result.
The UN found that up to 59,000 livestock farmers had lost almost all their herds, and a further 47,000 have lost 50 to 60 per cent of their animals.
Observers warn that a great deal of investment would be needed to revive the ailing economy.
Abdullah al-Dardari, deputy prime minister for economic affairs, said that Syria will need 14 billion US dollars in investment over the next two years to ensure the economy grows at the target rate.
To help spur growth, the regime has taken steps to support industry by lowering fuel and electricity prices and creating an organisation to develop exports.
“The government also needs to [stop] smuggling and tax evasion,” noted al-Nayal. “Banks must be monitored more closely and the trade deficit must be narrowed by curbing unnecessary [imported] goods.”
Economic researcher Dawood Heido believes the government also needs to rethink its plan to phase out subsidies for all petroleum products over the next five years,
“They should concentrate on providing enough food for the people at prices and terms that fit with their purchasing power,” he said.
(Syria News Briefing, a weekly news analysis service, draws on information and opinion from a network of IWPR-trained Syrian journalists based in the country.)
They say countries like Syria which rely heavily on foreign trade are particularly vulnerable to the effects of the economic downturn.
“Syria is not an island isolated from the world, and it could be one of the countries hardest hit by the economic crisis because economic growth had been slowing for the past few years before any outside factors came into play,” said Ilyas Najma, an economics professor at the University of Damascus.
“Any international recession is going to affect us because of our dependence on importing and exporting.”
Exported items account for 70 per cent of Syria’s gross domestic product.
A recently released study by the Ministry of Economy and Foreign Trade predicted that the global credit crunch could cause a 30 per cent drop in foreign trade. It also predicted a spike in the prices of goods and services in the country.
According to the World Bank, Syria can expect economic growth of 2.5 per cent in 2009 – just half of last year’s rate.
Lower levels of oil production in the country look set to continue over the coming year, say experts.
“The decrease in crude oil production will continue to lessen revenues and have a remarkably negative impact,” said Abdul Qadir al-Nayal, secretary of the Syrian Association of Economic Sciences.
Syrian crude oil production last year was nearly eight per cent down on 2007, he said.
Economists fear that industry, real estate and tourism could all suffer in the coming months.
“Scores of factories have closed down in Aleppo in recent months,” reported Al-Iqtisadiyah, an economic weekly.
And as the world’s largest economies battle recession, fewer tourists are expected to visit Syria, said Munir al-Hamash, director of the Damascus-based General Association of Economic Research.
Najma said many real-estate projects had been put on hold or abandoned altogether.
Meanwhile, the Ministry of Finance announced that only 20 out of the 260 state-owned companies had made a profit in the last year.
In addition to the fallout from the international financial crisis, the country is also suffering from a severe drought, which is damaging its agricultural industry. The government told the United Nations Office for the Coordination of Humanitarian Affairs, OCHA, in October that roughly one million people working in agriculture were at risk of losing their jobs and livelihoods as a result.
The UN found that up to 59,000 livestock farmers had lost almost all their herds, and a further 47,000 have lost 50 to 60 per cent of their animals.
Observers warn that a great deal of investment would be needed to revive the ailing economy.
Abdullah al-Dardari, deputy prime minister for economic affairs, said that Syria will need 14 billion US dollars in investment over the next two years to ensure the economy grows at the target rate.
To help spur growth, the regime has taken steps to support industry by lowering fuel and electricity prices and creating an organisation to develop exports.
“The government also needs to [stop] smuggling and tax evasion,” noted al-Nayal. “Banks must be monitored more closely and the trade deficit must be narrowed by curbing unnecessary [imported] goods.”
Economic researcher Dawood Heido believes the government also needs to rethink its plan to phase out subsidies for all petroleum products over the next five years,
“They should concentrate on providing enough food for the people at prices and terms that fit with their purchasing power,” he said.
(Syria News Briefing, a weekly news analysis service, draws on information and opinion from a network of IWPR-trained Syrian journalists based in the country.)
