COUNTRY NAME: Syrian Arab Republic
LAND AREA: 185,000 km2
POPULATION: 20,2 million (2009 est.)
LANGUAGE: Arabic, English, French widely spoken
CURRENCY: 1 Syrian Pound (SYP) = 100 Piastre; 1 EUR = 62.24 SYP (Nov. 2010)
MAIN CITIES: Damascus (capital), Aleppo, Homs, Hama, Latakia
NATIONAL DAY: 17 April – Indepence Day
TIME ZONE: Standard Time is GMT + 2
As part of Syria’s ambitious attempts to develop a dynamic, liberalised modern economy, it continues to adopt important reforms to open up, diversify its income streams, boost the efficiency of production and attract foreign investors. During the past few years, the country has seen the introduction of its first private banks and in March 2009 it marked the opening of the Damascus stock exchange. The global economic downturn has slowed down but not halted the country’s growth with most forecasts now predicting between 2%-4% growth in 2009, which compares with almost 6% in 2008. The IMF has estimated that real GDP growth will be 3%.
Agriculture remains one of the most important sectors of the economy and Syria’s main agricultural produce are wheat, barley, cotton, lentils, chickpeas, olives, sugar beets; beef, mutton, poultry, eggs and dairy. The country’s main industrial activities are in petroleum, textiles, food processing, beverages, tobacco, phosphate rock mining, cement, oil seeds processing and car assembly. The oil industry is becoming less important as the country moves further ahead with its drive to diversify and open up to investors. Official statistics put the country’s total workforce at over 5.5 million people. An important characteristic of Syria is its very young population profile with well above 60% of the total under the age of 25 and as many are well educated this is regarded as a significant “human resource” asset. Some 200,000 graduates have to be absorbed into the Syrian economy each year; many also choose to become self-employed while others look for work abroad mainly in neighboring Arab countries. Some 26% of the total workforce is employed in the agricultural sector which remains by far the greatest single employer followed by the industrial sector at nearly 16%; however, industry is strengthening and expanding at a steady rate as a result of ongoing economic reforms. The remaining 58% of the workforce is employed in the services sector, where areas like finance and tourism have been offering more employment opportunities.
Oil & Gas
The country’s oil reserves are gradually being depleted and by January 2009 reached 2.5 billion barrels, which is the equivalent of half Oman’s reserves and only 3% of Kuwait’s reserves, according to the Oil & Gas Journal. Syria is making efforts towards oil efficiency. However, natural gas production is seen as offering future opportunities as it seeks to benefit from its strategic location to become a transit hub for Egyptian, Iraqi and Iranian gas. Syria has also started to partner with international energy companies with a view to becoming a gas exporter, although at present all the gas it produces is consumed by the domestic market.
Agriculture saw some improvements in 2009 after the severe droughts that the country suffered in 2008. As rainfall levels picked up early this year, better crop volumes are expected in the current harvests. Wheat is a strategic crop whose output last year totaled 2 million tons but is expected to rise to around 3-4 million tons in the 2009/2010 harvest. Another strategic crop, cotton, had a slightly better performance in 2009. Cotton production is important for the country’s textile manufacturing sector which is the second largest export for foreign receipts and accounts for 15% of total exports.
The more export-oriented pharmaceuticals sector has been performing successfully recently with two of the country’s pharmaceutical companies receiving European Union certification to enable them to export their products into the EU market, joining four other companies already supplying these markets. Meanwhile, in terms of healthcare provision for Syrian citizens, the private sector is being encouraged to take a more active role in order to meet rising population demand and improve standards of care. New investment legislation is seeking to attract private foreign investors by enabling private specialist hospital projects.
Syria is becoming an increasingly appealing tourist destination, with European travellers beginning to visit in higher numbers. The impact of world recession on the sector’s growth has been negligible with the number of tourists entering the country in the first half of 2009 up by 9% on the same period in 2008 to reach 1.98 million, excluding Syrian expatriates, according to the Ministry of Tourism. It is thought that middle income Arab tourists, who make up an important portion of the total visitor numbers to Syria, have been relatively less affected by the crisis, while western tourists appear to be increasingly interested in visiting the country. The increase in US and European visitors is also seen as a success for the energetic advertising campaigns launched by the Tourism Ministry in recent years. As the sector continues to expand, one of the biggest challenges is to train a sufficient number of staff to handle the influx of visitors. At present, hospitality training in Syria delivers an estimated 700-800 staff each year, but an extra 50,000 will be needed if the country is to meet the forecast expansion of tourism in the next couple of years. The country’s hospitality infrastructure is in need of substantial upgrading and additional hotels and leisure facilities are required to meet the needs of the influx of new visitors. Fortunately the sector is continuing to attract investors and foreign firms, particularly from the Gulf, are showing increased interest in the investment opportunities in Syria. For example, the Kuwait investment company, MAK Group (or Al-Kharafi Group), started construction work on the $217 million Kiwan tourist project in downtown Damascus. This complex will include a five-star hotel with 500 rooms and suites, international business, entertainment, medical, sporting and shopping facilities, as well as a conference centre and a park. The construction work is scheduled to take no more than three years on a BOT basis. Furthermore, the Tourism Ministry unveiled 65 new sites with investment potential for development as tourist resorts at an estimated total investment valued at $2.9bn. All the projects are to be offered to investors and developers on BOT. These projects are expected to attract more foreign investors.
Another sector offering considerable investment potential is telecommunications, which is undergoing restructuring. At the end of 2008, a new law was drafted to establish an independent regulatory authority for the sector which is currently dominated by two main fi rms, Syriatel and MTN. It will issue licenses, assign spectrum and frequency as it regulates and opens up the sector to competition. The mobile sector, with a third operator expected to be launched in the coming months, is seen as most dynamic with a penetration rate of 36% and an estimated 7.1 million users by the end of 2008. In comparison, fixed line penetration was about 18% and had 3.8 million subscribers. Internet use is also expanding at a rapid rate and recent steps that are likely to enhance its use include a new law in February 2009 to recognise electronic signatures in business and other electronic dealings. Outsourcing of ICT services in Syria is seen as a potentially important new sector of the economy. The country has seen the successes that have been achieved in this regard in places like India and Egypt. The Gulf States in particular are viewed as potentially important customers for outsourcing services such as consultancy, implementation and customisation and, with new private sector business encouraged to set up in the context of market liberalisation, ICT outsourcing is seen as offering tremendous growth potential for Syria. Some call centre outsourcing in Syria already takes place, but the size of this sector remains limited at present.
Banking & Financial Sector
Syria enjoyed continuing expansion of the banking sector in 2008 and total deposits achieved a growth of 3.6% in the fourth quarter of the year and by 2.5% in the first quarter of 2009. The country’s banking sector is well regulated and conservatively managed by the Central Bank, which has served the sector well in the face of recent global financial upset. Syrian banks had little or no investments in toxic assets which inflicted so much damage elsewhere. The breakdown of deposits by currency shows that both local currency and foreign currency grew similarly last year. Foreign currency deposits continued to account for about 20% of total deposits and grew by 16.4% in 2008, while local currency deposits progressed by 15.5% over the same period, Bank Audi Syria reported in July 2009. Banks are continuing to enhance their branch networks in their drive to seize on the lucrative opportunities offered by Syria’s emerging financial services sector. Total bank branches rose from 348 at year-end 2007 to 374 at yearend 2008, according to Central Bank statistics. Private banks have been responsible for almost all the new expansion as they sought to offer their clients a broader range of retails and commercial banking products. Harsher financial conditions have not prevented new banking ventures from being concluded. For example, Fransabank Syria officially launched operations in the country in spring 2008, becoming the tenth conventional private bank in the country. In addition, a Syrian-Iranian commercial bank, Banki, a joint venture between the Commercial Bank of Syria and Iran’s Bank Saderat obtained a preliminary license from the authorities. Bank of Jordan, Lebanese owned Bank Al Sharq and the Qatar National Bank (QNB), through an affiliate, all recently entered the market. QNB-Syria, a private Syrian- Qatari bank, launched an IPO of 34% of its total equity with subscription ending on 10 August 10 2009. Other conventional and Islamic banks from the region are all preparing to apply for licenses and start operations later in 2009. Damascus hosted the 4th conference of Islamic banks and financial institutions on 1 June under the title “Islamic Banking, investment opportunities and challenges of competition” which saw the participation of some 800 central bank governors, directors and chief executives of Islamic, commercial and investment banks from about 20 Arab and foreign countries. Governor of the Central Bank of Syria Adib Mayaleh pointed to the importance of Islamic banking and stressed that “as a supervising authority, we aim to achieve financial balance and stability, improving a clean banking sector that works in accordance with the international standards and practices,” SANA news reported. He also stated that Islamic banks had an important role to play to help develop the banking sector, to assist economic growth and to finance essential projects in Syria. Foreign banks have recently been allowed to open a representative office in the country, a move regarded as another step towards the further modernisation of the country’s banking sector. The opening of the Damascus Securities Exchange (DSE) on 10 March 2009 was a significant step towards formalising the economy and offers great potential for growth. The stock exchange is initially to be divided into two markets, a “regular” market and a “growth” market. Companies that list will follow transparency rules on disclosure of information on their performance, which should encourage banks to increase lending to individuals and corporations. The DSE is monitored by the Syrian Commission on Financial Markets and Securities.
Source: Austro-Arab Trade Directory 2011.
The mentioned data are subject to modification. No responsibility is taken for the correctness of the details provided.
Last modified: 28 January 2011