Economic reforms in Syrian Arab Republic During the period 1990-2000

Moustafa El-abdallah Al Kafry

2022 / 3 / 29

According to the IMF, the imbalances in the economies of Arab countries are basically the result of inappropriate economic and social policies because these policies restricted private initiative and narrowed opportunities before the private sector. These policies furthered foreign investment away from national economy, they gave a free hand to the public sector which stepped into incompatible areas, they isolated national economy from international capitalist economy by interfering in fixing prices and wages, raising projectionist measures in favour of domestic industries in the face of foreign competition, spreading the umbrella of social protection over a wide sector of the people by subsidization, social insurance, profit sharing, thus undermining the incentive to work and produce.
Reform and restricting programs:
Hence the remedy proposed by the IMF by means of reform and restricting programs which aim at liberating the economy, in that it --function--s according to the free market economy and is structurally incorporated in the international capitalist system. The required task is to modify the overall demand standard in national economy and to reduce it in compliance with the overall supply standard. The more --dir--ect objective of the reform programs proposed by the IMF is to improve the situation of the balance of payments. The remedy is a pre--script--ion written by the IMF namely, to liberalize, the economy, reduce exchange rates, decrease public expenditures, and sell the public sector to the private sector and end subsidization.

The globalisation of the economy:
The globalisation of the economy is a tangible fact. International financial institutions such as the World Bank, IMF, and W T O have launched their reform policies and transformation to the market economy promoting the role of the private sector, and-limit-ing the public sector and the role of the State in economic activity. (With focus on the financial-monetary aspect considered being the core of the problem, after hang witnessed the complex crises of development in developing countries.
The privatisation:
Hence, this impulsive trend towards privatisation from outside does not necessarily express a rational requirement. That is, it was not the result of sound evaluation of the public sector’s performance and indication of its shortcomings that called for transferring its ownership to the private sector, assuming that the latter is more capable of achieving development. The issue requires to be studied in depth in order to learn the need for privatisation at the national level in different Arab countries.
The experts have stressed that economic reforms in Syria confirm that the country is moving towards modernization and market economy. “President Bashar Assad’s economic reforms will help Syria attract investment from Syrian expatriates and Arab investors in addition to foreign investments. This will provide new work opportunities,” Amalia Azouri said in a report about Syrian economy published in Beirut on February 2001. “Europeans are interested in investing in Syria. European Investment Bank resumed its activities in Syria last year”. Official records show that more than --$-- 47 million have been invested in Syria in 1999. The report revealed that the new laws that have allowed setting up private banks have encouraged investment in the country.
Large-scale economic and administrative reforms:
Syria s new President Bashar Al-Assad who took office on July 2000 has promised large-scale economic and administrative reforms. "We will encourage the individuals, the national and foreign companies to set up agricultural, industrial and tourist companies in Syria especially after the recent amendment of the investment law to give more incentives to investors." Syria s Minister of economy and foreign trade said that more effort would also be made to encourage and improve the marketing and exports to world markets and to concentrate on the non-oil exports.
(Syria s predominantly state economy is on a shaky footing because of Damascus’s failure to implement extensive economic reform. The main factor influencing economic policy in the near future is the new president’s, Bashar Assad, success´-or-failure in carving out a more solid power-base for himself and his supporters.)
Syria has been greatly helped by souring oil-prices over the last year, and has thus avoided an economic crisis. However, the need for a fundamental reworking of the political economy is imminent, and it is hoped that Syria will undergo structural economic and political reform under its new and reform-minded president. Given the success of President Assad s reforms, most areas in the country’s economy have good potential for growth and development.
- Gross Domestic Product:
Three broad economic sectors contribute to a nation s gross domestic product (GDP): the primary, secondary, and tertiary sectors. The primary sector includes the agricultural and mining industries--;-- the secondary sector includes manufacturing, construction, and public utilities--;-- and the tertiary sector includes transportation and communications, trade, financial services, government, and other services.
In terms of GDP, the largest sector in Syria is the services sector, which contributes 49.0 percent of GDP. Furthermore, the services sector and agriculture sector employ respectively 45.7 percent and 26.3 percent of the labour force. The dominant agricultural sector remains underdeveloped and vulnerable, with roughly 80 percent of agricultural land still dependent on rain-fed sources. Although Syria has sufficient water supplies in the aggregate at normal levels of precipitation, the great distance between major water supplies and population centers poses serious distribution problems. The water problem is exacerbated by rapid population growth, industrial expansion, and increased water pollution. Private investment is critical to the modernization of the agricultural, energy, and export sectors.
In terms of key economic indicators, Syria in 1999 had: Gross Domestic Product (GDP) of --$--US 39.7 billion (in 1995 --$--US), GDP per capita of 2,499 US--$--. Real GDP in Syria increased by 8.7 percent between 1995 and 1999, while the population increased by 11percent--;-- over the same period, real GDP per capita decreased from --$--2,554 to --$--2,499. This was mainly due to an economic recession in 1997 and 1998 caused by low oil-prices.
Table No.1 Syria Macroeconomic Activity Real GDP Per Capita
1995 1996 1997 1998 1999
Real GDP
(Millions of 1995--$--US) 36,542 37,200 37,635 39,683 39,703
Total Population
(Millions-Mid Year Average) 14.310 14.691 15.081 15.481 15.889
Real GDP Per Capita
(1995--$--US Per Capita) 2,554 2,532 2,496 2,563 2,499
Sources: US CIA World Fact book, IMF World Outlook, US Census Bureau International Data Base, UN Statistical Yearbook, Calculations
Global Ranking Syria in ESCWA Region 1999:
In terms of global rankings, this placed Syria 68 out of 191 countries in terms of GDP, 55 out of 191 countries in terms of population and 114 out of 191 countries in terms of GDP per capita. International institutional estimates indicate that GDP growth rates have been positive over the past four years. Mainly due to high oil prices, some analysts estimate a 2.5 percent growth for 2000 - 2001. Inflation has continued a downward trend from 15.4 percent in 1994 to a negative .8 percent growth rate in 1998, but went up again to 2.5 percent in 1999.
Recently, Syria tried to increase and develop its local industry and made remarkable strides, in this respect, at all levels. However, as a country seeking to develop its economy, Syria enjoys large amounts of ores and raw materials.
Faculty of Economics - University of Damascus
Table No.1 Global Ranking Syria in ESCWA Region 1999
Gross Domestic roduct
(Millions of 1995--$--) Population
(Millions) GDP Per Capita
Rank GDP Rank Population Rank GDP Per Capita
Syria 68 39,703 55 15.889 114 2,499
Sources: US CIA World Fact book, IMF World Outlook, US Census Bureau International Data Base, UN Statistical Yearbook, Calculations

Table No.2 Syria Main Mining & Quarrying Production
Industries Unit 1994 1995 1996 1997 1998 1999
Crude petroleum M3 000 32432 34277 33791 33177 33140 33320
Phosphate Ton 000 1202 1598 2188 2471 2494 2127
Salt Ton 000 100 111 72 119 178 104
Natural asphalt Ton 000 82 108 116 1115 154 114
Sand & gravel M3 000 23636 20636 21558 16277 18549 28040
Gypsum Ton 000 304 336 358 330 325 395
Stone M3 000 982 1358 1156 279 151 153
Marble blocks Ton 223930 226201 343019 341749 385575 455946
Marble panel & pieces M2 000 581 633 654 650 612 566
Resource: Statistical Abstract 2000, Central Bureau of Statistics, Damascus 2000 p. 176.
Modern Discussion