Economical overview
Before the ongoing civil war, Syria had a
relatively diverse economy with well-developed
agriculture, good natural resources and strong
traditions in trade and business. However, large
sections of the population suffered from poverty and the
attempts to reform the economy were hampered by
corruption and powerful interests within the state and
the military.
The Syrian economic system is a mixture of a
centrally controlled social economy model economy and a
market economy with privately owned companies. Most
major industrial companies are state-owned, and the
state controls or has a large stake in strategically
important areas such as energy, mines, electricity and
water as well as the financial sector and most banks.
The state also determines the prices of important
agricultural commodities. The mainly privately owned
agriculture and smaller industries must also follow the
five-year economic plans drawn up by the state.
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Countryaah.com:
Major imports by Syria, covering a full list of top products imported by the country and trade value for each product category.
The centralized economic system has resulted in an
over-staffed public sector characterized by low
productivity, low wages and extensive bureaucracy where
corruption has flourished.
The state's strong dominance has persisted despite
the government implementing several economic reforms in
the 21st century to try to reduce the state's role and
facilitate both domestic and foreign companies to
operate. Tax relief was introduced for foreign investors
in 2002. One year later, the ban on private individuals
was lifted to hold foreign currency. In 2004, the first
private banks were opened and in 2009 a stock exchange
was opened in Damascus. However, the reform work was
slow and did not increase wealth for the majority of the
population, rather the gaps in society grew.
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Abbreviationfinder.org: Check this abbreviation website to find three letter ISO codes for all countries in the world, including SYR which represents the country of Syria.
Developments since 2011
Since the outbreak of the war in 2011, Syria's
economy has deteriorated very sharply as the country's
two main sources of income - oil exports and tourism -
have dwindled. Important oil fields have long been
beyond the control of the government. Some have
succeeded in regaining control of rebels, while some are
in those parts of the country that received Kurdish rule
during the war; the outcome is uncertain, although the
government has the stated goal of regaining full control
over the entire territory of Syria and carrying out
military operations with Russian support. In a report
for the Carnegie Middle East Center, in September 2019,
it was calculated that domestic oil production could not
cover more than a quarter of the country's needs.
Syria previously had potential as a tourist country,
thanks to its rich cultural heritage and determined
efforts to increase tourism. After 2000, a number of new
hotels were built, including many culturally
historically valuable private homes in Damascus and
Aleppo were transformed into exclusive hotels. Even many
of the most famous historical monuments are now war-torn
(see Culture).
An "de-industrialization" has occurred during the
conflict years when many of the country's companies have
been forced to close, go bankrupt or subject to
destruction and looting. Both skilled workers and
capital have moved the country and agriculture and
public sector share of GDP has risen sharply.
Oil and petroleum products were for a long time the
most important export goods; in the mid-2000s, they
accounted for about two-thirds of export earnings.
Otherwise, agriculture is responsible for the largest
revenues in the form of cotton, fruits and vegetables.
European countries have traditionally been the most
important buyers of Syrian oil, so when the EU in the
autumn of 2011 introduced a ban on buying Syrian oil
products, it was a tough blow. The United States has
applied financial sanctions against Syria since 2004.
Since 2011, further sanctions have been introduced
against leading people in the government and the army
and against companies and institutions.
In response to the Western sanctions, President Assad
declared that Syria could instead trade with countries
such as Russia, China, Iran and other Arab states. In
recent years, trade with Iran has increased sharply. The
Iranian government has given Assad's government loans
and export credits worth billions of dollars and signed
trade agreements that have been very favorable to Syria,
thus strengthening the government side. Trade agreements
have also been concluded with Iraq. However, this has
not been able to compensate for the loss of trade with
the EU. Total exports of goods were halved in 2011-2012
and have fallen sharply since then. Syria, which used to
be an oil exporting country (see Natural Resources and
Energy) now has to import oil. The same goes for cereals
and other foods.
Even before the war, subsidies of basic goods were a
costly item in the state's accounts. One of the
government's first measures when the unrest began to be
reported in 2011 was to raise wages and stop the
unpopular economic cuts. However, this policy became
difficult to maintain as government revenues declined
and war expenditures increased. The government has
therefore gradually been forced to cut subsidies,
despite popular dissatisfaction.
During the war, the informal economy has grown
sharply, with extensive smuggling along the country's
borders and between different areas of Syria, which have
come under various rebel and militia groups. Smuggling
also occurs on the government side. Large sections of
the population depend on assistance (see Social
conditions).
Added to this are the costs of reconstruction that
the war creates, well above what a war-torn economy with
large sections of the population on the run can do. It
is uncertain how much help can be expected from allied
states, especially Iran, which is under severe sanctions
from the United States.
A large number of new laws have been adopted during
the war years to facilitate the Syrian state's
compulsory redemption of land. Expropriation has been
carried out by tens of thousands of properties, selected
so that changes in ownership knock out supply and
settlement for the regime's opponents and make it
impossible for refugees to return. According to several
analysts, the neo-liberal orientation that the Assad
regime embarked on before the war years has been
deepened, so that the construction that takes place
benefits Assadlojala businessmen. One sign that the
regime is financially employed is that several wealthy
businessmen in December 2019 had their assets frozen by
authorities who claimed that the people were unjustly
enriched during the war years. Among those on edge with
the rulers are the president's well-known cousin Rami
Makhlouf, owner of Syria's largest mobile phone
operator.
Russian companies have had some benefits from the
Moscow government's support for Assad. This applies not
least to contracts for the extraction of phosphate.
FACTS - FINANCE
GDP per person
US $ 2,033 (2007)
Total GDP
US $ 40,405 million (2007)
GDP growth
5.7 percent (2007)
Agriculture's share of GDP
19.5 percent (2007)
Manufacturing industry's share of GDP
7.7 percent (2002)
Inflation
4.4 percent (2010)
Government debt's share of GDP
30.0 percent (2010)
External debt
US $ 4,654 million (2017)
Currency
Syrian pound
Merchandise exports
US $ 12,273 million (2010)
Imports
US $ 15,876 million (2010)
Current account
- US $ 367 million (2010)
Commodity trade's share of GDP
65 percent (2007)
Main export goods
oil, cotton, fruit, vegetables 1
Largest trading partner
Germany and other EU countries, Iraq. Lebanon,
Turkey, Saudi Arabia, China 2
- before the outbreak of war in 2011
2. before the outbreak of war in 2011
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