Tackling Economic Reform

By Ford, Neil | The Middle East, March 2005 | Go to article overview

Tackling Economic Reform


Ford, Neil, The Middle East


Syria's President Bashar Al Assad promised widespread political and economic reform when he succeeded his father in 2000. But four years on, although there has been limited liberalisation in the banking sector, the pace of progress seems to have slowed. With the main source of national income in decline and millions more Syrians preparing to enter the job market, the government faces an uphill task in improving the country's economic fortunes, but there are some positive indicators, as Neil Ford reports.

ONE OF SYRIA'S GREATEST CHALLENGES is to encourage the growth of other sectors, whilst managing declining oil revenues. Syria has never been one of the region's largest oil powers, but its sizeable hydrocarbon wealth has allowed Damascus to use its oil revenues to prop up the economy as a whole.

Minister of oil, Ibrahim Haddad, insisted until relatively recently that output could break the record 600,000 barrels a day (b/d) level but the Ministry of Oil has now reported oil production has fallen below the psychologically significant 500,000 b/d level to around 475,000 b/d.

Despite the closed nature of many parts of the Syrian economy, foreign companies are very active in the oil sector. Shell, PetroCanada and the state-owned Syrian Petroleum Company (SPC) are partners in Al Furat Petroleum Company (AFPC), the country's biggest producer.

The country's second biggest producer is SPC, which has also formed a joint venture with French firm TotalFinaElf, the Deir ez Zor Petroleum Company (DZPC).

UNCERTAIN DIRECTION

It is difficult to predict the future direction of oil production. Output from existing fields is undoubtedly in decline but a large number of exploration deals were agreed in 2003 and these could yet yield new discoveries. However, some commentators, including the former oil minister, Matinos Habib, have claimed Syria will become a net oil importer within the next decade. This would have a massive impact upon the economy given that oil accounts for 70% of total export income, while oil revenues generate around half of all government income.

Some progress towards economic liberalisation is being made through the creation of the Greater Arab Free Trade Area (GAFTA). The Area, which covers most Arab League states, came into being on 1 January 2005 but it will take time before it has any real impact.

Rather than initially targeting traditional IMF style goals such as the privatisation of communications, power and water utilities, GAFTA is currently focusing on reducing the role of the state in manufacturing. Syrian companies to be affected will include the many food and drink manufacturers that form part of the Ministry of Industry-affiliated General Organisation of Food Industries. Meanwhile state monopolies on mineral water production and television manufacture are also being lifted. Entrepreneurs are likely to take advantage of the changes--which also include the lifting of import restrictions on goods from other GAFTA states--to set up joint ventures with state-owned companies.

One of the most successful state-owned enterprises is the Syrian Arab Electronic Industries Company (Syronics), the only Syrian parastatal to have received an ISO quality certificate to date. Although Syronics will now have to compete with television manufacturers across the Arab world, the company is hopeful that production will rise because it will be able to market its products abroad and set up joint ventures with foreign manufacturers.

BANKING REFORM

A series of announcements in the latter part of 2004 indicated some progress is being made in the banking sector. In November, the European Investment Bank (EIB) revealed it is holding talks with the Syrian state-owned Industrial Bank on setting up a joint venture, aimed at providing backing for industrial and manufacturing enterprises. New legislation to permit foreign insurance companies to compete with the Syrian Insurance Company (SIC) is also expected of this year. …

The rest of this article is only available to active members of Questia

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Buy instant access to cite pages or passages in MLA 8, MLA 7, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

(Einhorn 25)

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Note: primary sources have slightly different requirements for citation. Please see these guidelines for more information.

Cited article

Tackling Economic Reform
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Help
Full screen
Items saved from this article
  • Highlights & Notes
  • Citations
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

matching results for page

    Questia reader help

    How to highlight and cite specific passages

    1. Click or tap the first word you want to select.
    2. Click or tap the last word you want to select, and you’ll see everything in between get selected.
    3. You’ll then get a menu of options like creating a highlight or a citation from that passage of text.

    OK, got it!

    Cited passage

    Style
    Citations are available only to our active members.
    Buy instant access to cite pages or passages in MLA 8, MLA 7, APA and Chicago citation styles.

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

    1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

    Cited passage

    Thanks for trying Questia!

    Please continue trying out our research tools, but please note, full functionality is available only to our active members.

    Your work will be lost once you leave this Web page.

    Buy instant access to save your work.

    Already a member? Log in now.

    Search by... Author
    Show... All Results Primary Sources Peer-reviewed

    Oops!

    An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.