Syrian Economy

The Syrian economy is in the beginning stages of a transformation period. While still highly centralized, recent economic liberalization measures have led to a revitalization of entrepreneurial activities in the private sector. With the hallmark investment code, Law #10, enacted in 1991, foreign investment has begun to trickle into the country and Syrian expatriate capital is beginning to return.

The new economic liberalization initiatives has led to increased growth of the economy. In 1992, Syria’s GDP grew by nearly 10%. This trend continued in 1993 and 1994, registering a 5% and 5.2% increase respectively. It is estimated that the economy grew by 5.8% in 1995 and will continue to grow at this healthy rate into 1997 and beyond.

Although economic reform measures have been implemented slowly, earlier reforms have stimulated the private sector. The simplification of trading procedures, the expansion of a wider range of industry projects available to private companies, the easing of foreign exchange dealings, and the reduction of state intervention has helped to encourage private sector development. Investment Law # 10 has greatly facilitated the establishment of new projects, particularly in small-scale manufacturing and service sectors. The tourism sector holds great potential and many new joint ventures between the public and private sectors have become more common in recent years.

The Syrian private sector has much to offer that the public sector cannot, a higher degree of efficiency, work incentives, and better training and salaries. This may lead those in the public sector to transfer to the private sector, thus helping to slim down bloated public sector enterprises. Moreover, due to a wide range of regional and international contacts, the private sector also has greater access to international capital markets in order to finance new projects. The return of the younger generation educated abroad should help to improve Syria’s economic management. Many are seeing new potential for economic growth as reform measures are initiated. Influenced by the experiences in market-oriented societies, this generation may change how business is conducted.

Syria is primarily an agricultural country, and most workers engage in crop farming or herding for a livelihood. The country has about 5 million hectares (about 12.4 million acres) of arable land and about 8.3 million hectares (about 20.5 million acres) of permanent meadows and pastureland. Much of the tilled acreage is irrigated, but extensive areas lie unused for lack of water. Irrigation is necessary even in many regions that receive substantial annual rainfall, because most of the rainfall occurs during the winter rather than during the growing season. Much of the acreage under cultivation suffers from soil exhaustion because of insufficient use of fertilizers and failure to rotate crops. A major irrigation project in the Euphrates River valley is designed to bring an additional 640,000 hectares (1.6 million acres) under cultivation.

The estimated annual national budget in the early 1990s included about $5.4 billion in domestic revenue and $7.5 billion in expenditure, including capital expenditures of $2.9 billion.

For More Information About Syria's Economy go to the Syrian Economy Website at http://www.syrecon.org.  Or contact the proper Ministry.