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SYRIA

 
  
   

 

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Key Economic Data 
 
  2002 2001 2000 Ranking(2002)
GDP
Millions of US $ 21,900 19,500  17,896 64
         
GNI per capita
 US $ 1,130 1,040     950 131
Ranking is given out of 208 nations - (data from the World Bank)

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Area (sq.km)
185,180


Population
17,585,540

Capital
Damascus

Currency
 Syrian pound (SYP)

President 
Bashir al-Asad


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Background:
The Ba'ath Party and the rule of Hafez al-Asad
In many ways modern Syria has followed the familiar course of Arab nationalism during the 1950s inspired by the Egypt of Nasser and from 1958 to 1961 united with Egypt to form the United Arab Republic. Dispute over leadership dissolved that union quickly, and Syria would form the Syrian Arab Republic in 1961. In 1963 the Ba'ath Party seized power. The Ba'ath (renaissance or rebirth) party professed socialist inclinations and it was conceived by the two Syrian teachers the Christian Michel Aflaq and the Muslim Salah al-Din Bitar as an ideology to fight European colonialism in the 1930s. The Ba'ath is the same nominal party that has ruled Iraq from the same period in the 1960s until April 2003 when the rule of its most infamous exponent, Saddam Hussein was terminated by the Anglo-American invasion that began in March of that same year. It's important to recognize that, while the Ba'athist leaders described their seizure of power in 1963 as a revolution, it was in fact a coup carried out by a few military officers, and did not result, nor did it have the support of, a mass uprising of workers and peasants. 
The resulting regime was another military dictatorship. Bitar became the first president from 1963 to 1966 when a more radical faction seized power. A further coup in 1970 brought Hafiz al Asad to power. He ruled Syria until his death in 2000, when his son Bashir al Asad took over. The foundation of the party since the coup has rested with the Alawites, a Shi'i Muslim sect to which less than ten per cent of the Syrian population is affiliated. Asad therefore closed the circle of power to Alawites he could trust and co-opt letting few outsiders into the inner circle. The nominal use of the term 'revolution' to describe what was in fact a coup is crucial in understanding the importance the Syrian Ba'athist party under the Asad regime has placed on maintaining an extensive and repressive internal security apparatus and why reforms, economic and political, have been so difficult to implement. In a very similar approach to that of his neighbouring Ba'athist rival Saddam Hussein, Asad relied on a power group that was organized far more on a tribal or ethnic basis, rather than an ideological one. 

Regional Tensions: The Ottoman past, Israel and the USA
Internal problems have been compounded by the events of the region in which Syria has unavoidably become entangled even before the period of the European mandates in the 1920s and 30s that fuelled the rise of nationalist parties and ideologies. During the Ottoman Empire the area now occupied by Israel, Palestine, Jordan, Lebanon and the current Syria was part of the region known as Bilad-al-Sham. The repercussions of this legacy are still being felt. In 1860 there was a civil war that affected Damascus and the Lebanon involving Druze, Sunni Moslems, Maronite Christians and Jews - along with their European patrons engaged in bitter disputes that are still partially unresolved and that have contributed to fuelling inter-confessional tensions resulting in civil wars in Lebanon in the 1950s, 1970s and 1980s. At the end of World War I and the defeat of Ottoman Turkey, The British and the French divided the region of Sham and drew the boundaries of new states. The inter-confessional tensions acquired a trans-national nature and the region continues to endure a constant level of tension. While Syria has enjoyed generally good relations with Turkey, its neighbour to the north, it has engaged in wars against Israel four times on the battlefield maintaining a level of war readiness best described as a 'cold-war'. 18,000 Syrians still live in the territory of the Golan, a precious source of water and arable land, occupied by Israel in 1967. 
Moreover, Syria has had disputes with fellow Ba'athist Iraq to the east supporting Iran in the latter's costly war with Iraq from 1980 to 1988 and continues to occupy part of Lebanon in which it played an important military role. Syria's initial involvement in Lebanon was during the 1976 civil war when it supported the Christian Maronites. The 1982 Israeli invasion of Lebanon led by General, now Prime Minister, Ariel Sharon saw another round of military clashes between Syrian and Israeli forces. Meanwhile, as Iran's quiet ally in the war against Iraq, Syria also helped sustain the Shi'a faction represented by Hezbollah. In 1989, Syria endorsed the Charter of National Reconciliation, or "Taif Accord," a comprehensive plan for ending the Lebanese conflict negotiated under the auspices of Saudi Arabia, Algeria, and Morocco. More significantly, in May 1991, Lebanon and Syria signed the Treaty of Brotherhood, Cooperation, and Coordination outlined in the Ta'if Accord, which intended to establish the basis for Syrian-Lebanese relations. The Treaty's provisions have yet to be fulfilled. The Israeli occupation of south Lebanon until the spring of 2000, its frequent attacks on Hezbollah and other groups said to be operating in Lebanon and the second Intifada by Palestinians in the West Bank and Gaza territories have heightened Arab - Israeli tensions and precluded Syria's withdrawal from Lebanon. Syria also claims that the UN resolution 425, which called for Israel's withdrawal from Lebanon, also demanded its withdrawal from the Sheba farms in the Golan Heights. This territory is often used by Hezbollah to launch attacks against Israel and is at the heart of continued tensions between the three countries.

The Two 'Gulf' Wars, Intifada II and the War on Terror
Escalating regional tensions exacerbated by the continuing intractability of the stalled Arab Israeli 'peace-process' and the USA's war on Iraq suggest that the Syrian presence in Lebanon will be extended indefinitely. However, when dealing with the United States, Asad has often adopted more strategic and pragmatic policies rather than ideological ones, confirming the need to insulate the party from popular tensions. Indeed, Asad's participation on the side of the American coalition during the 1991 Gulf War was a calculated gamble that paid off handsomely in terms of regional politics and international prestige - in the West. Syria's support was rewarded by considerable financial aid upwards of $2 billion from the USA and Arab oil producing states of the Gulf - who had, ironically, ignored Syria in the 80s for supporting Iran in the Iraq-Iran war - while also receiving a virtual blessing to pursue its interests in Lebanon. The important element that eluded it was the return of the Golan Heights, which are still occupied by Israel. In the mid 90s Syria's international prestige was heightened as it became clear that Syria's participation was crucial in any comprehensive Arab-Israeli peace arrangement.
The collapse of the Soviet Union also facilitated Syria's position in foreign policy orientation and it succeeded in securing better relations with the West and America during the Bush sr. and Clinton administrations. But, even as Bashir al Asad has taken steps to relax some of the Ba'ath party control while gradually shifting to a more liberal economic system, Syria has been relegated merely one step below 'Axis of Evil' status by the Bush jr. administration after the September 11th attacks and the so called War on Terror. Syria had provided assistance to the US in its pursuit of militant Islamic groups, but was opposed to Gulf War II as Syrian - Iraqi relations improved considerably in the last decade leading to the war. Syria even received oil from Iraq after re-opening a pipeline leading to the Mediterranean Sea, which was shut down in the tense period of the 80s decade. Moreover, the failure of the Arab - Israeli peace process has also relegated Syria to a less favourable geo-political position in the Americans' view and heightened tensions in the region of Sham, particularly in terms of allegations by Israel and the US that Syria continues to back Hezbollah, which is now also a fully recognized political party with representation at the Lebanese parliament. It seems that little has changed since Ottoman times. The political risks that Syria faces now are high as tensions between itself and Israel continue to increase, but there are also internal issues related to Bashir al Asad's gradual efforts to liberalize the economy as well as the political system.

The economy and economic liberalization efforts
Most analysts have conceded that during the 1950s Syria was one of the most rapidly developing countries in the Third World. Its economic growth was diversified and relied on one of the healthiest agricultural production systems in the entire Middle East that was even in the declining growth years of the 1980s, still capable of guaranteeing a high degree of self sufficiency in food supply. Few countries in the MENA (Middle East and North Africa) region can claim such an achievement. Syria was also industrializing at a better rate than Egypt and could also count on petroleum and natural gas resources. However, the frequent coups and political instability in the early decades of Syria's independence mismanaged the many advantages that it held over its neighbours, not least of which were a relatively strong supply of water and arable land. Ideological concerns led to the nationalization of most enterprises and the alienation of the business and economic establishment. Many of the Sunni capitalists fled to neighbouring Lebanon where they shifted their economic activity from capital intensive industry and agriculture to services and trade. 
The economy of Syria, then, has since the 1960s been characterized by varying degrees of state intervention designed to reduce regional and class disparities. This is crucial in understanding the Asad's regime's reluctance to adopt full liberalization measures and the ineffectiveness of reforms. As in any highly nationalized economy, reform presents severe economic as well as political challenges; Syria's situation is made all the more difficult as such reforms also have a delicate ethnic dimension. 

The Reforms and Their Political Risks
Economic reform in Syria has been a gradual process that was actually begun with the ascension of Hafez al Asad to power in 1970. He relaxed some of the nationalization measures of the 1960s and fostered the emergence of a new business class based on state officials who were allowed to amass fortunes in exacting transaction fees from foreign companies wishing to do business in Syria. He also took a risk by inviting some of the Sunni capitalists and landlords, who left Syria in the wake of its nationalization, back, inviting them to invest in the important industrial, tourism, construction and agricultural sectors along with the government officials - mostly from the Alawite minority - as they accumulated wealth. Industry is very important in the Syrian economy accounting for 15% of the labour force and even in the recession in the 80s, Syrian GNP was still made up 18% by industrial manufacturing, while oil exports only accounted for 4% in a pattern which is the very reverse of the Gulf States.
The 1980s saw the first important efforts to implement market reforms. The Iran - Iraq war caused shortages in foreign exchange, while subsidized oil from Iran and budget spending cuts of 5% were unable to sustain the subsidies on which the distributive socialist pretensions of the government rested. Its greatest concern was to prevent a rise of the unemployment rate, while also blocking the rise of the Sunni capitalist class that dominated politics prior to 1958. By 1988, the Syrian pound was devalued by 70% to invite inflows of hard currency and mixed private - public sector enterprises in agriculture (a precursor of Britain's Private Finance Initiatives) were formed with the aid of twelve entrepreneurs. The measures worked, but the government used the extra revenues to re-invest in public enterprises and was then faced by having to import food after a long drought severely reduced agricultural output. 
Nevertheless, while these reforms appear rather typical on paper, it must be appreciated that Asad had to play a skilful balancing act in managing the tensions in the all important ethnic element of the equation. Inviting Sunnis to resume a role at the commanding end of the economy, even if limited, was an affront to the Alawite elite that relied on Asad. The revolt of the Muslim Brotherhood in Hama, which ended with the ruthless extermination of 20,000 of its inhabitants in 1982 by the armed forces, was largely a revolt by the Sunnis against the Alawite minority and was supported by the Sunni business middle class of Damascus. It was this continued threat of reprisal against Sunnis that also gave the government some room for reform. Hama had sent a clear message of what just how much dissent would be tolerated. The Sunnis were allowed to take part in the economy but only so long as the Alawites dominated. The balance that is needed in managing the ethnic tensions is a continuing factor in slowing the rate of reform today. 
Bashir al-Asad cannot move too rapidly in order not damage his Alawite basis of support, which is the only real support he can count on, given the nature of his succession and the continued reliance on a repressive security apparatus to sustain him. Asad the younger, a British trained ophthalmologist, was a reluctant choice as successor and lacks the political determination to engage the kind of massive violent reprisals that his father, a military man, showed with Hama. In many ways, Bashir al Asad is a prisoner of the strong minority that relies on the perpetuation of the Asad legacy for its survival. Reforms will, therefore, inevitably be gradual as he faces both the internal threat of dissent, from his own Alawite sect as well as from the Sunni majority, as well as the external one posed by increasing tensions in the region and continued threats from the United States.

Bringing Globalization to Syria
Political risk is doubtless very high. Meanwhile, support from the Gulf States is declining and the unemployment rate, which Asad's father was so concerned in reducing, is now estimated at 25% to 30%. The political and likely military tensions in the region mean that military spending will be sustained and even increased in order deal with the multiple threats. This will free up even less money for social welfare support, which would in political terms allow Bashir al Asad to consider increasing the rate of market reform. A solution to this problem could come in the form of greater foreign involvement in the Syrian economy while increasing efforts to integrate it in the global economy. In other words bring Syria into globalization. Regional efforts promoted by the European Union such as the Mediterranean free trade zone which has been proposed for 2010 are welcome by Syria.
Indeed, Syria maintains very good relations with Italy and Spain, two countries that are sure to play a very significant role in a more open Syrian economy. Hoping to generate foreign investments, Bashir al Asad has announced the privatization of the banking sector in 2002 ending forty years of the exclusively government run financial system. The problem remains, nevertheless, that the legal system is not designed to protect the accumulation of capital; there being no mechanisms in place to protect it institutionally. Any serious effort to invite foreign investment will have to address this fundamental lack of financial structures, which is currently keeping Syria out of the fold of globalization. 
The current instability of the region may also play to Syria's advantage in terms of restructuring the financial system. Lebanon's advanced financial services and its long trading traditions have long played a role akin to what Hong Kong has done for China. In the eventuality that Lebanon became fully absorbed by Syria as part of a regional re-stabilization that also include a peace treaty between Israel and the Arabs, the economic prospects for Syria and the region would improve dramatically. The chances of this happening in the short term are extremely slim, barring a miracle - in a region long famed for this type of phenomenon - but for the time being such hopes merely reflect how many and how obstinate the obstacles are to balanced and sustainable economic growth. 

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Update No: 009 - (26/07/04)

Syrian - Iraqi Rapprochement
The appointment of the new Iraqi interim Prime Minister, Iyad Allawi, demonstrated not only the questionable nature of the US handover of sovereignty to Iraq but the extent to which Syria has become incapable of guiding its future. The American occupation in Iraq has limited Syria's ability to implement the reform process initiated by Bashir al-Asad early in his administration while relegating its foreign policy to finding ways of averting potential US and Israeli military, and diplomatic action. Certainly, Syrian diplomats have eagerly sought to build relations with Europe, China and strategic neighbors such as Turkey. The latter shares a concern over the future of Iraq's Kurdish population, as both states fear that an independent or even federal province of Kurdistan in Iraq would fuel Kurdish separatism in their own bordering Kurdish regions. Iraq's President Allawi's first weeks in office have seen him focusing on security issues. Inevitably, the new government has not changed tune from the American one that bore it. The official story holds that Iraqi rebels are being supported by armed groups infiltrating from Iran and Syria. However, Iyad Allawi has tried to soften relations between Syria and Iraq. Syria and Iraq were rivals for Baathist leadership for most of the history of these countries during the era of Saddam Hussein. In the mid to late 90's, the two countries embarked on a policy of rapprochement based on bi-lateral commerce, but relations had soured again in the post Saddam period. Allawi has been visiting neighboring states in July including Syria holding talks with the Syrian Prime Minister Naji el Otri, who assured Iyad Allawi that Syria was opposed to any cross-border infiltration. Syria and Iraq also reached an agreement in principle on the return of Iraqi assets, worth between $500 million and $ 1 billion in frozen accounts in Syrian banks since the toppling of Saddam Hussein's regime. Syria and Iraq, have not shared full diplomatic relations since 1980, when Syria was actively supporting Iran against Iraq in the ensuing conflict between them. 
The Syrian government's disposition to discussing diplomatic relations with Iraq - even as it strongly objected to the US led war there - may be seen as an attempt to win some lucrative reconstruction contracts for Syrian companies in Iraq - or Syrian labor. Nevertheless, while some economic advantages would likely be gained by such a move, Syria's motivations may have more to do with survival. Ever since the toppling of Saddam Hussein in April of 2003, there have been rumors of a United States military led regime change action in Syria. The United States has never satisfactorily denied these charges, while remaining silently complacent at Israeli strikes in Syrian territory as well as Syrian controlled Southern Lebanon. Quite simply, the Syrian government fears that the US has a wider agenda to redraw the map of the Middle East region using Iraq as a base. Syrians have also expressed concerns over persisting tensions with Israel, suggesting that Israel had a presence in Iraq and was somehow fomenting violence there. Allawi denied this during a joint news conference. Although Syria long harbored anti-Saddam Hussein groups in the 80's and 90's, it has held a suspicious view of Allawi's interim government. The latter's visit to Damascus has strong diplomatic importance and might serve as a first and significant step toward reassuring Syria that the US has no plans to invade Syria - at least in the short term. The diplomatic relations would be undersigned by a joint agreement on controlling the Syrian-Iraqi border. The US repeatedly has accused Syria of allowing or not doing enough to stop infiltration of fighters through the Syrian border to Iraq to fight coalition forces. Syria, for its part, always denied the accusations and stressed that it lacked the capability of policing the border with its eastern neighbor.
US Sanctions
While, Syria and Iraq have seemingly decided to seek common ground, the United States continues to impose the sanctions President Bush announced - belatedly - on May 11. The sanctions were imposed in retaliation for Syria's refusal to abandon weapons of mass destruction, the diplomatic catch phrase of the current times. However, and not surprisingly, the head of the UN nuclear watchdog the International Atomic Energy Agency said in there was no evidence Syria was trying to build banned weapons. He said, "We have no proof that Syria is trying to engage in nuclear activities in violation of the nuclear Non-Proliferation Treaty" in an interview Wednesday with Egyptian state television. For his part Syria's Ambassador in Washington, Imax Mustafa, dismissed the harmful effects of American economic sanctions imposed on Syria, saying that these sanctions have only political harm and Syria is able to surmount them. The ambassador hinted that the sanctions are hurting Syria's efforts to liberalize its economy and suggested that Syrian savings have been converted from US Dollars to Euros. Syria will maintain its stand vis--vis the United States, especially when it comes to the pursuit of an Arab peace agreement with Israel, in which it sees a US position, which is excessively susceptible to Israeli pressures and interests. In this regard, the Syrian ambassador indicated that Syria would be mobilizing resources to present a more effective image of its interests through the media, hinting that this has been a notable failure of Arab states. The ambassador also betrayed Syria's fears that the US is still considering military action against it in discussing the Syria Accountability Act. 
As for Israeli - Syrian tensions, the assassination of Ghaleb Awali, one of the main security figures in the Hizbullah party in Beirut's Mu'wad area. The United States had tried to mediate, or more accurately moderate tensions suggesting there was no evidence linking Tel Aviv to the murder. The United States also did not miss the opportunity to express the need for halting violence "and controlling" the Hizbullah Party which is classified by Washington as a terrorist organizations. Israel took the opportunity to finger Syria and Teheran repeating the refrain that Damascus and Tehran are still arming Hizbullah and threatening that it would launch a substantial and painful military action against Syria. Meanwhile, the Lebanese government filed a complaint to the UN against Israel because of its attacks against South Lebanon after Israeli warplanes carried out a series of raids at the outskirts of Eita al-Shaab border town in southern Lebanon. The fighting extended on the ground where Hizbullah fighters and Israeli soldiers exchanged fire across the border. Two Israeli soldiers and one Hizbullah member were killed. Israeli-Syrian tensions and the Iraqi situation are becoming more inter-dependent and the Shiite cleric Muqtada al-Sadr delivered a critical speech in Kufa in which he criticized the Iraqi Prime Minister Iyad Allawi for being an American and Zionist puppet, adding that he, al-Sadr, would not permit attacks against Syria and Lebanon. Therefore, while Iraq and Syria have initiated a period of potentially more fruitful cooperation, the American occupation in Iraq has only served to fuel more tension and made it more difficult to find solutions. On one side, the lack of a constructive and balanced American policy on the Arab - Israeli conflict has exacerbated Syria's precarious relationship with Israel. For its part the United States has still not done enough to reassure Syria - and the world - that it does not have further military ambitions in the region. 

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AGRICULTURE

Syria asks the EU to develop agriculture

Minister of Agriculture recently called upon the European Commission to extend help to Syria in the field of developing the agricultural sector due to the current climate conditions Syria is passing through, Syrian Arab News Agency reported. 
During his meeting with Head of the Euro-Mediterranean Social and Economic Committee, Giacomina Casina, Minister Adel Safar, said Syria had a big willingness to widen ties with the European Union. 
"We appreciate the European Commission support to Syria in the field of economic and administrative development. It is significant to extend more aid to the region in the field of agriculture because of the dry conditions that it sometimes suffers from," the Minister said. 
He noted to the importance of the agricultural product quality and goodness holding all parties responsibility of modern technology implementation in this regard. 
The European side voiced readiness to extend all backing and aid in this domain as well as helping to find ways and means of liberating products in the appropriate way. 
"We will increase the agricultural sector appropriations and work to train in the field of packing and all steps related to prepare the product," the European committee said.

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