Syria is a middle-income, developing country with an economy based on agriculture, oil, industry, and tourism. However, Syria's economy faces serious challenges and impediments to growth, including: a large and poorly performing public sector; declining rates of oil production; widening non-oil deficit; widescale corruption; weak financial and capital markets; and high rates of unemployment tied to a high population growth rate. In addition, Syria currently is subject to U.S. economic sanctions under the Syria Accountability Act, which prohibits or restricts the export and re-export of most U.S. products to Syria.
As a result of an inefficient and corrupt centrally planned economy, Syria has low rates of investment, and low levels of industrial and agricultural productivity. The IMF projected real GDP growth at 3.9% in 2009 from close to 6% in 2008. The two main pillars of the Syrian economy used to be agriculture and oil, which together accounted for about one-half of GDP. Agriculture, for instance, accounted for about 25% of GDP and employed 25% of the total labor force. However, poor climatic conditions and severe drought badly affected the agricultural sector, thus reducing its share in the economy to about 17% of 2008 GDP, down from 20.4% in 2007, according to preliminary data from the Central Bureau of Statistics. On the other hand, higher crude oil prices countered declining oil production and led to higher budgetary and export receipts.
Water and energy are among the most pervasive issues facing the agriculture sector. Another difficulty the agricultural sector suffered from is the government’s decision to liberalize the prices of fertilizers, which have increased between 100% and 400%. Drought was an alarming problem in 2008; however, the drought situation slightly improved in 2009. Wheat and barley production about doubled in 2009 compared to 2008. In spite of that, the livelihoods of up to 1 million agricultural workers have been threatened. In response, the UN launched an emergency appeal for $20.2 million. Wheat has been one of the crops most affected, and for the first time in 2 decades Syria has moved from being a net exporter of wheat to a net importer.
Damascus has implemented modest economic reforms in the past few years, including cutting lending interest rates; opening private banks; consolidating all of the multiple exchange rates; raising prices on some subsidized items, most notably diesel, other oil derivatives, and fertilizers; and establishing the Damascus Stock Exchange, which began operations in 2009. In May 2008, Damascus raised the price of subsidized diesel by 357%, and in January 2009 the price of fuel oil was raised by 50%. In addition, President Asad signed legislative decrees to encourage corporate ownership reform and allowed the Central Bank to issue Treasury bills and bonds for government debt. Despite these reforms, the economy remains highly controlled by the government. Long-run economic constraints include declining oil production, high unemployment and inflation rates, rising budget deficits, increasing pressure on water supplies caused by heavy use in agriculture, increasing demand for electricity, rapid population growth, industrial expansion, and water pollution.
The government hopes to attract new investment in the tourism, natural gas, and service sectors to diversify its economy and reduce its dependence on oil and agriculture. The government has begun to institute economic reforms aimed at liberalizing most markets, but reform thus far has been slow and ad hoc. For ideological reasons, privatization of government enterprises is still not widespread, but is in its initial stage for port operations, power generation, and air transport. Most sectors are open for private investment except for cotton mills, land telecommunications, and bottled water.
The Bashar al-Asad government started its reform efforts by changing the regulatory environment in the financial sector, including the introduction of private banks and the opening of a stock exchange in March 2009. In 2001, Syria legalized private banking and the sector, while still nascent, has been growing. As of January 2010, 13 private banks had opened, including two Islamic banks. Syria has taken gradual steps to loosen controls over foreign exchange. In 2003, the government canceled a law that criminalized private sector use of foreign currencies, and in 2005 it issued legislation that allowed licensed private banks to sell specific amounts of foreign currency to Syrian citizens under certain circumstances and to the private sector to finance imports. In October 2009, the Syrian Government further loosened its restrictions on foreign currency transfers by allowing Syrians travelling abroad to withdraw the equivalent of up to U.S. $10,000 from their Syrian Pound accounts. In practice, the decision allows local banks to open accounts of a maximum of U.S. $10,000 that their clients can use for their international payment cards. The holders of these accounts will be able to withdraw up to U.S. $10,000 per month while travelling abroad.
To attract investment and to ease access to credit, the government allowed investors in 2007 to receive loans and other credit instruments from foreign banks, and to repay the loans and any accrued interest through local banks using project proceeds. In February 2008, the government permitted investors to receive loans in foreign currencies from local private banks to finance capital investment. Syria's exchange rate is fixed, and the government maintains two official rates--one rate on which the budget and the value of imports, customs, and other official transactions are based, and a second set by the Central Bank on a daily basis that covers all other financial transactions. The government passed a law in 2006 which permits the operation of private money exchange companies. However, a small black market for foreign currency is still active.
Given the policies adopted from the 1960s through the late 1980s, which included nationalization of companies and private assets, Syria failed to join an increasingly interconnected global economy. Syria withdrew from the General Agreement on Tariffs and Trade (GATT) in 1951 because of Israel's accession. It is not a member of the World Trade Organization (WTO), although it submitted a request to begin the accession process in 2001 and again in 2004. Syria is developing regional free trade agreements. As of January 1, 2005, the Greater Arab Free Trade Agreement (GAFTA) came into effect and customs duties were eliminated between Syria and all other members of GAFTA. Syria's free trade agreement with Turkey came into force in January 2007. Syria is a signatory to free trade agreements with Jordan, India, Belarus, and Slovakia. In 2004 Syria and the European Union initialed an Association Agreement; the ratification process had not been finalized as of March 2011. Although Syria claims a recent boom in non-oil exports, its trade numbers are notoriously inaccurate and out-of-date. Syria's main exports include crude oil, refined products, rock phosphate, raw cotton, clothing, fruits and vegetables, and spices. The bulk of Syrian imports are raw materials essential for industry, petroleum products, vehicles, agricultural equipment, and heavy machinery. Earnings from oil exports as well as remittances from Syrian workers are the government's most important sources of foreign exchange.
Syria has produced heavy-grade oil from fields located in the northeast since the late 1960s. In the early 1980s, light-grade, low-sulphur oil was discovered near Dayr al-Zur in eastern Syria. Syria's rate of oil production has been decreasing steadily, from a peak close to 610,000 barrels per day (bpd) in 1995 down to approximately 379,000 bpd in 2008. In parallel, Syria’s oil reserves are being gradually depleted and reached 2.5 billion barrels in January 2009. Recent developments have helped revitalize the energy sector, including new discoveries and the successful development of its hydrocarbon reserves. According to the 2009 Syria Report of the Oxford Business Group, the oil sector accounted for 23% of government revenues, 20% of exports, and 22% of GDP in 2008. Experts generally agree that Syria will become a net importer of petroleum by the end of the next decade. Syria exported roughly 150,000 bpd in 2008, and oil still accounts for a majority of the country's export income. Syria also produces about 22 million cubic meters of gas per day, with estimated reserves around 240 billion cubic meters or 8.5 trillion cubic feet. While the government has begun to work with international energy companies in the hopes of eventually becoming a gas exporter, all gas currently produced is consumed domestically. Demand for electricity is growing at a rate of about 10% per year and is barely met by current generation capacity, and ongoing and planned projects are not expected to be sufficient to meet future demand.
Some basic commodities, such as bread, continue to be heavily subsidized, and social services are provided for nominal charges. The subsidies are becoming harder to sustain as the gap between consumption and production continues to increase. Syria has a population of approximately 21 million people, and Syrian Government figures place the population growth rate at 2.37%, with 65% of the population under the age of 35 and more than 40% under the age of 15. Approximately 200,000 people enter the labor market every year. According to Syrian Government statistics, the unemployment rate in 2009 was 12.6%; however, more accurate independent sources placed it closer to 20%. Government and public sector employees constitute about 30% of the total labor force and are paid very low salaries and wages. Government officials acknowledge that the economy is not growing at a pace sufficient to create enough new jobs annually to match population growth. The UN Development Program announced in 2005 that 30% of the Syrian population lives in poverty and 11.4% live below the subsistence level.
Syria has made progress in easing its heavy foreign debt burden through bilateral rescheduling deals with its key creditors in Europe, most importantly Russia, Germany, and France. Syria has also settled its debt with Iran and the World Bank. In December 2004, Syria and Poland reached an agreement by which Syria would pay $27 million out of the total $261.7 million debt. In January 2005, Russia forgave 73% of Syria's $14.5 billion long-outstanding debt and in June 2008, Russia’s parliament ratified the agreement. In 2007, Syria and Romania reached an agreement by which Syria will pay 35% of the $118.1 million debt. In May 2008, Syria settled all the debt it owed to the Czech Republic and Slovakia.
Economy (2010 projected)
GDP*: $59.4 billion.
Real growth rate*: 5.0%.
Per capita GDP*: $2,664.
Natural resources: petroleum, phosphates, iron, chrome and manganese ores, asphalt, rock salt, marble, gypsum, hydropower.
Agriculture: Products--wheat, barley, cotton, lentils, chickpeas, olives, sugar beets, and other fruits and vegetables; beef, mutton, eggs, poultry, and other dairy products. Arable land--33%.
Industry: Types--petroleum, textiles, pharmaceuticals, food processing, beverages, tobacco, phosphate rock mining, cement, oil seed extraction, and car assembly.
Trade: Exports (2008 est.)--$13.6 billion: crude oil, minerals, petroleum products, fruits and vegetables, cotton fiber, textiles, clothing, meat and live animals, wheat. Major markets (2007)--Italy 22%, France 11%, Saudi Arabia 10%, Iraq 5%, Egypt 4%, Jordan 4%. Imports (2008 est.)--$17.2 billion f.o.b.: machinery and transport equipment, electric power machinery, food and livestock, metal and metal products, chemicals and chemical products, plastics, yarn, and paper. Major suppliers (2007)--Russia 10%, China 8%, Saudi Arabia 6%, Ukraine 6%, South Korea 5%, Turkey 4%.
*according to International Monetary Fund (IMF) statistics
The Syrian constitution vests the Arab Socialist Ba'ath Party with leadership functions in the state and society and provides broad powers to the president. The president, approved by referendum for a 7-year term, is also Secretary General of the Ba'ath Party and leader of the National Progressive Front, which is a coalition of 10 political parties authorized by the regime. The president has the right to appoint ministers, to declare war and states of emergency, to issue laws (which, except in the case of emergency, require ratification by the People's Council), to declare amnesty, to amend the constitution, and to appoint civil servants and military personnel. The Emergency Law, which effectively suspends most constitutional protections for Syrians, has been in effect since 1963.
The National Progressive Front also acts as a forum in which economic policies are debated and the country's political orientation is determined. However, because of Ba'ath Party dominance, the National Progressive Front has traditionally exercised little independent power.
The Syrian constitution of 1973 requires that the president be Muslim but does not make Islam the state religion. Islamic jurisprudence, however, is required to be a main source of legislation. The judicial system in Syria is an amalgam of Ottoman, French, and Islamic laws, with three levels of courts: courts of first instance, courts of appeals, and the constitutional court, the highest tribunal. In addition, religious courts handle questions of personal and family law.
The Ba'ath Party emphasizes socialism and secular Arabism. Although Ba'ath Party doctrine seeks to build pan-Arab rather than ethnic identity, ethnic, religious, and regional allegiances remain important in Syria.
Members of President Asad's own minority sect, the Alawis, hold most of the important military and security positions, while Sunnis (in 2006) controlled ten of 14 positions on the powerful Ba'ath Party Regional Command. In recent years there has been a gradual decline in the party's preeminence. The party also is heavily influenced by the security services and the military, the latter of which consumes a large share of Syria's economic resources.
Syria is divided administratively into 14 provinces, one of which is Damascus. A governor for each province is appointed by the president. The governor is assisted by an elected provincial council.
Principal Government Officials
Vice President--Farouk al-Shar'a
Vice President--Najah al-Attar
Prime Minister--Muhammad Naji al-Utri
Minister of Foreign Affairs--Walid al-Mouallem
Ambassador to the United States--Imad Moustapha
Ambassador to the United Nations--Bashar al-Ja'fari
Syria maintains an embassy in the United States at 2215 Wyoming Avenue, NW, Washington, DC 20008 (tel. 202-232-6313; fax 202-234-9548). Consular section hours are 9:15 a.m.-3:15 p.m., Monday-Friday. Syria also has three honorary consuls: 1022 Wirt Rd., Suite 300, Houston, TX 77055 (tel. 713-622-8860; fax 713-622-8872); 3 San Joaquin Plaza, #190, Newport Beach, CA 92660 (tel. 949-640-9888; fax 949-640-9292); and P.O. Box 2392, Birmingham, MI 48012-2392 (tel. 248-519-2496; fax 248-519-2399).
Officially, Syria is a republic. In reality, however, it is an authoritarian regime that exhibits only the forms of a democratic system. Although citizens ostensibly vote for the president and members of parliament, they do not have the right to change their government. The late President Hafiz Al-Asad was confirmed by unopposed referenda five times. His son, Bashar Al-Asad, also was confirmed by an unopposed referendum in July 2000 and May 2007. The President and his senior aides, particularly those in the military and security services, ultimately make most basic decisions in political and economic life, with a very limited degree of public accountability. Political opposition to the President is not tolerated. Syria has been under a state of emergency since 1963. Syrian governments have justified martial law by the state of war that continues to exist with Israel and by continuing threats posed by terrorist groups.
The Asad regime (little has changed since Bashar Al-Asad succeeded his father) has held power longer than any other Syrian government since independence; its survival is due partly to a strong desire for stability and the regime's success in giving groups such as religious minorities and peasant farmers a stake in society. The expansion of the government bureaucracy has also created a large class loyal to the regime. The President's continuing strength is due also to the army's continued loyalty and the effectiveness of Syria's large internal security apparatus. The leadership of both is comprised largely of members of Asad's own Alawi sect. The several main branches of the security services operate independently of each other and outside of the legal system. Each continues to be responsible for human rights violations.
All three branches of government are guided by the views of the Ba'ath Party, whose primacy in state institutions is assured by the constitution. The Ba'ath platform is proclaimed succinctly in the party's slogan: "Unity, freedom, and socialism." The party has traditionally been considered both socialist, advocating state ownership of the means of industrial production and the redistribution of agricultural land, and revolutionary, dedicated to carrying a socialist revolution to every part of the Arab world. Founded by Michel 'Aflaq, a Syrian Christian and Salah al-Din Al-Bitar, a Syrian Sunni, the Ba'ath Party embraces secularism and has attracted supporters of all faiths in many Arab countries, especially Iraq, Jordan, and Lebanon. Since August 1990, however, the party has tended to de-emphasize socialism and to stress both pan-Arab unity and the need for gradual reform of the Syrian economy.
Nine smaller political parties are permitted to exist and, along with the Ba'ath Party, make up the National Progressive Front (NPF), a grouping of parties that represents the sole framework of legal political party participation for citizens. Created to give the appearance of a multi-party system, the NPF is dominated by the Ba'ath Party and does not change the essentially one-party character of the political system. Non-Ba'ath parties included in the NPF represent small political groupings of a few hundred members each and conform strictly to Ba'ath Party and government policies. There were reports in 2005, in the wake of the June Ba'ath Party Congress, that the government was considering legislation to permit the formation of new political parties and the legalization of parties previously banned. These changes have not taken place. In addition, some 15 small independent parties outside the NPF operate without government sanction.
The Ba'ath Party dominates the parliament, which is known as the People's Council. With members elected every 4 years, the Council has no independent authority. The executive branch retains ultimate control over the legislative process, although parliamentarians may criticize policies and modify draft laws; according to the constitution and its bylaws, a group of 10 parliamentarians can propose legislation. During 2001, two independent members of parliament, Ma'mun al-Humsy and Riad Seif, who had advocated political reforms, were stripped of their parliamentary immunity and tried and convicted of charges of "attempting to illegally change the constitution." Seif was released from prison in early 2006, but was detained and sentenced to prison again in January 2008.
The government has allowed independent non-NPF candidates to run for a limited allotment of seats in the 250-member People's Council. Following the April 22-23, 2007 parliamentary elections, the NPF strengthened its hold on parliament, with the number of non-NPF deputies shrinking from 83 to 80, ensuring a permanent absolute majority for the Ba'ath Party-dominated NPF.
There was a surge of interest in political reform after Bashar al-Asad assumed power in 2000. Human rights activists and other civil society advocates, as well as some parliamentarians, became more outspoken during a period referred to as "Damascus Spring" (July 2000-February 2001). Asad also made a series of appointments of reform-minded advisors to formal and less formal positions, and included a number of similarly oriented individuals in his cabinet. The 2001 arrest and long-term detention of the two reformist parliamentarians and the apparent marginalizing of some of the reformist advisors in the past 10 years, indicate that the pace of any political reform in Syria is likely to be much slower than the short-lived Damascus Spring promised. A crackdown on civil society in 2005, in the wake of Syria's withdrawal from Lebanon, and again in the late winter and spring of 2006, coupled with the early-2011 mobilization of security forces to prevent protests and demonstrations have reinforced the perception that any steps toward political reform were likely to be halting and piecemeal at best.
In October 2008, 12 members of the Damascus Declaration National Council were sentenced to 2-1/2 years in prison. The Damascus Declaration is a civil society reform document written in 2005 and signed by a confederation of opposition parties and individual activists who seek to work with the government to ensure greater civil liberties and democratic political reform. The government has shown no hesitation in suppressing those who advocate for human, legal, or minority rights.
Although Internet access is increasing and non-political private media is slowly being introduced, the government continues to ban numerous newspaper and news journal publications from circulating in the country, including Al-Hayat and Al-Sharq Al-Auwsat (both Saudi owned). It has recently allowed access to previously blocked websites, including YouTube.com, Amazon.com, and Facebook.com, but since many computer users in Syria had already learned to circumvent these restrictions, the move is largely cosmetic.
Type: Republic, under authoritarian military-dominated Arab Socialist Ba'ath Party regimes since March 1963.
Independence: April 17, 1946.
Constitution: March 13, 1973. Since 1963, Syria has been under Emergency Law, which effectively suspends most constitutional protections.
Branches: Executive--president, two vice presidents, prime minister, Council of Ministers (cabinet). Legislative--unicameral People's Council. Judicial--Supreme Judicial Council, Supreme Constitutional Court, Court of Cassation, Appeals Courts, Economic Security Courts, Supreme State Security Court, Personal Status and local levels courts.
Administrative subdivisions: 14 provinces.
Political parties: The National Progressive Front, an umbrella organization for several parties permitted by the government including the Arab Socialist Renaissance (Ba'ath) Party; Socialist Unionist Democratic Party; Syrian Arab Socialist Union or ASU, Syrian Communist Party (two branches); Syrian Social Nationalist Party; Unionist Socialist Party; and other parties not legally recognized but quasi-tolerated, generally considered opposition-oriented but enfeebled and reluctant to challenge the government. There are also several illegal Kurdish parties.
Suffrage: Universal at 18.
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