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Key Economic Data 
  2003 2002 2001 Ranking(2003)
Millions of US $ 21,517 21,900  19,500 67
GNI per capita
 US $ 1,160 1,130     1,040 130
Ranking is given out of 208 nations - (data from the World Bank)

Books on Syria

Update No: 073 - (21/01/10)

Is War or Peace on the Horizon?
France’s president Sarkozy - said the Arab ‘al-Hayat’ newspaper - believes that there may be another war in the Middle East in 2010. The fact that Sarkozy was speaking to Lebanese prime minister Hariri, when he proffered the gloomy prospect, suggests that Lebanon, and possibly Syria may be involved while the trigger will be Iran, as Israel may attempt to destroy its nuclear facilities in a pre-emptive strike. Should Israel go ahead with this alleged plan, the Lebanese Hezbollah militia and Syria might be drawn into the conflict as well. The Israeli minister without portfolio, Yossi Peled, an army general, believes that it is only a matter of time before Israel and Hezbollah resume hostilities. Peled advised that in case a conflict does break out; Israel would hold both “Lebanon and Syria as responsible”. The direct result of this statement has been that Lebanon and Syria have been on ‘high alert”. The Israeli prime minister, Benjamin Netanyahu, has not corroborated Peled’s comments, stating, “Israel is not seeking any conflict with Lebanon,". Some Israeli analysts suggest that waging a war against Hezbollah without striking Syria as well would ensure another loss – as it was in 2006. Israel wants to control Hezbollah’s lines of supply, which it alleges are in Syria. An Israeli military analyst told the Jerusalem Post’: “Any future strike at Hezbollah that does not take into account its status as a client of Syria is unlikely to land a decisive blow,” implying that Syria supplied weapons to Hezbollah during the 2006 war.

How will the United States react to these musings?
The stall in peace talks, whether over Palestine or Syria, has been one of the biggest disappointments of the Obama administration so far. After the fanfare of the speech at Cairo’s al-Azhar university last spring, Israel has been able to continue its settlement policy unabated, despite occasional very weak calls for a hiatus in construction of new settlements, from the prime minister’s office, which are never enforced. As for Syria, the Obama administration has improved ties, but it still maintains it on the list of terror sponsoring countries. Moreover, the State Department has taken far too long to appoint an ambassador to Syria. Ironically, just as Peled was discussing the high potential for war with Lebanon and Syria in 2010, the United States remembered its diplomatic commitment to Syria.

Five years after president G.W. Bush recalled its ambassador to Syria after Syria became the prime suspect for the murder of former prime minister Rafiq al-Hariri in February 2005; the White House has finally appointed a new ambassador to Syria. The special US Middle East envoy George Mitchell has already discussed the appointment with president Bashar Asad during a visit to Damascus in mid January. Syria has not formally accepted the appointment yet, but rumors suggest the new ambassador to Damascus will be Robert Stephen Ford, who has until now served at the US embassy in Baghdad as deputy ambassador. Ford’s appointment is timely and it suggests that the Obama administration may be ready to start pulling some diplomatic levers to re-launch Middle East peace talks in which Syria will have an important role. Ford is said to be an expert in Middle East issues and he speaks Arabic; he has also served in Algeria before Iraq.

Suggestions of wars involving Israel and Syria, and the complete normalization of US-Syrian diplomatic relations may finally help bring the United States to put its weight behind an Israeli-Syrian dialogue.

In 2008, Syria and Israel held talks brokered by Turkey, but the Bush administration did not push the process, which waned after the election of Benjamin Netanyahu who trashed the talks, centred on the return of the Golan Heights. The Israeli ‘Cast Lead’ offensive in Gaza in early 2009, hardly made the atmosphere for reconciliation more conducive.

The US special envoy George Mitchell has certainly hinted that the Obama administration has become more interested in promoting a process leading to the normalization of relations between Israel and Syria. Mitchell is not going to ‘revolutionize’ the approach; he promotes reviving the Turkish mediated talks, and also spread some of the responsibility for ending hostilities on Israel itself; Mitchell said that Israel has to "declare frankly" its intention to pursue peace. It is a seemingly mild request, but it suggests that the US intends to pursue a more balanced course of action. Nevertheless, over the course of 2009, Turkey has made important moves in spreading its influence throughout the Middle East. Apparently, tired of waiting for the EU to open its doors, Turkey has discovered a ‘Young Turk’-like nationalist feeling bent on promoting its influence and ties in the areas that once made up the Ottoman Empire.

Syria has strengthened ties with Turkey, taking advantage of the rapidly eroding ‘friendship’ between Israel under Netanyahu, and Turkey in 2009. Turkey’s prime minister Erdogan has criticized Israeli policy openly and warned Israel that it should be careful about rescinding an ally such as Turkey in the Middle East. Therefore, even as Israel may reject Turkish mediation, the United States has arrived in Syria just in time to all but impose the talks and Turkey, as their mediator. Syria has conditions for resuming the talks; it demands Israel’s commitment to relinquish all of the Golan in accordance with the relevant UN resolution 497, which rejects Israel’s forcible acquisition of the land. Israel, meanwhile, might resume talks without preconditions. There are some major obstacles to the resumption of talks in the Israeli cabinet; the minister of foreign affairs, Avigdor Lieberman, said he would reject Turkey’s mediation, because of the latter country’s strong criticism of Israeli actions against Palestinians in Gaza and in the ‘settlements’. Lieberman went so far as to ask Netanyahu to recall the Israeli envoy to Ankara. Of course, Syria understands that the US offer of support means that it may have to re-consider the scope of its ties to Iran and Hezbollah.

It is unlikely that president Asad would cut all ties to Teheran; in fact, there are no indications he is ready to cut any ties, certainly not before Syria has managed to secure the entire Golan back. While Asad is president, there are powerful political and military interests that demand nothing less than the full return of the Golan. However, Syria has already started to show that it is willing to make some concessions to the Americans. Syrian security forces have arrested two Syrians charged with having conducted or organized attacks in Iraq. Iraqi media reported that the two men were caught “while trying to supply bombs to an armed group” in Iraq. Ever since the first weeks of the US invasion of Iraq, Syria has faced allegations of failing to control the flow of people at the border, which the United States has often accused of being too porous. In the last months of 2009, Iraqi government officials accused Syria of backing the terrorists who organized simultaneous attacks in Baghdad last December 8, killing 127 people.
Financial Sector Reforms

The diplomatic momentum in Syria could be matched by some significant financial and economic reforms. In January, Syria’s central bank took steps to promote foreign banks investing and announced two key financial sector reforms intended to encourage large foreign banks to investing in the country by raising the amount of non-Syrian share ownership of local banks from 49 to 60%. The central Bank also wants private banks to raise their minimum capital almost tenfold. The government wants money to vastly improve its capacity to finance infrastructure improvements and other projects. While the latter requirement will prompt some banks to shut down, it will enable the world’s largest banks to enter the Syrian market. Citibank and HSBC are among the banks that have or could establish branches in Syria, though the minimum capital requirements may make that proposition riskier. Moreover, President Asad appointed a new minister of the economy, Lamia Assi, a woman who has spent much time in the Far East and who has developed an appreciation for the more free-market style policies of the Far Eastern emerging economies.


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