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SYRIA

NEWS REPORT 
  
  

 

In-depth Business Intelligence

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)

Books on Syria

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Area (sq.km)
185,180


Population
17,585,540

Capital
Damascus

Currency
 Syrian pound (SYP)

President 
Bashir al-Asad

 

Update No: 013 - (30/11/04)

Does Syria Have the Upper Hand in the Middle East Chess Game?
There is no doubt that Syria has been facing unprecedented pressure since the United States invaded Iraq in 2003. The reforms that President Bashir Al-Asad initiated at the beginning of his rule in 2000 were halted by the precarious security situation along its border with Iraq and rising tensions with Israel. Twice in 2004, Israel showed that it could attack Syria with impunity, while the international community strengthened by a UN resolution has been pressuring Syria to retreat from Lebanon. Syria is a protagonist in the Arab-Israeli conflict and the government of Ariel Sharon in Israel has, for all practical intent, reversed the Oslo accords, while whatever progress had been made during the Clinton administration until the breakdown of talks between Yasser Arafat and Yehud Barak in 2000. Two events have pushed Syria to offer substantial, yet strategic, concessions in November. It is easy to imagine that the Syrian government was not very pleased by the re-election of George W. Bush, as many fear that the hawks in his cabinet will gain more power in the second term. Colin Powell, who was considered to be the lone dove, whose wings were clipped however, has resigned giving way to Condoleeza Rice, the very adviser, who is widely reported to have immediately recognized the opportunity to invade Iraq afforded by the 9/11 attack on the WTC and the Pentagon. Ever since the invasion of Iraq, there has always been speculation over the possibility that the US would also seek to either invade Syria, or seriously undermine its government. Growing tensions between the United States and Iran over its alleged nuclear weapons development have added speculation that Iraq may only be a first stop for the United States in the Middle East. 
Moreover, Yasser Arafat has died. No other figure in the history of the recent Middle East, with the possible exception of Jamal Abdel Nasser of Egypt, has been so closely associated with the nationalistic aspirations of his people. Arafat had pushed Syria toward making some concessions over the Golan Heights as part of the Oslo peace accords. Syria was not happy that Arafat had engaged in peace negotiations with Israel independently forcing the then President Hafiz Al-Asad to pursue an independent accord with Israel over the latter's occupation of the Golan Heights. The combination of a perception of a greater US threat, symbolized by the rise of Condoleeza Rice as Secretary of State and the removal of what Prime Minister Sharon defined as an obstacle to peace, Yasser Arafat, have likely informed Syria's decision to make a renewed offer of peace with Israel. Syria made the offer through Terje Roed-Larsen, the United Nations special coordinator for the Middle East peace process, who announced that Syrian President Bashar al-Assad was ready to resume peace negotiations with Israel with no preconditions. In the peace process, which officially began at the Madrid conference in 1991, Syria stressed that any peace agreement with Israel would necessarily follow the latter's unconditional withdrawal from the Golan Heights. No peace agreement would be signed before that condition was met. The plan was based on a Land for Peace strategy. The Oslo accords signed unilaterally by Yasser Arafat, therefore, disrupted Syria's strategy as they were based on an establishment of peace before any actual withdrawal took place. Not surprisingly, the Israeli executive's response has been negative reiterating the refrain that Syria sponsors international terrorism (i.e. Hizbollah, which effectively forced Israel to abandon Southern Lebanon after almost 20 years of occupation). 
President Asad's offer may certainly be genuine, but it is also strategic and gives him the upper hand in the international public relations game. Asad is clearly appealing to international and Israeli public opinion, where Syria emerges all the more favourably given the rhetorical responses from the Israeli government, which appears reluctant to pursue peaceful alternatives with its neighbours. The official Israeli view is that Asad is not serious. For his part, Israeli observers have noted that Asad is well aware that he can make offers of peace without fear that these be suddenly implemented. Israel has already agreed to withdraw from Gaza, a decision that has angered many Israeli settlers in the occupied territories. Asad is buying time and cultivating a positive image with the West. Syria's image has been tarnished by recent calls for the withdrawal of troops from Lebanon. The calls were made by the United States and France and reached a peak during the Lebanese elections in September. Nevertheless, the popular and influential Israeli President Moshe Katsav urged the government to consider the Syrian offer of peace seriously, as he stated in an interview with the Israeli newspaper Maariv. Prime Minister Sharon declined to comment on the overture by president Katsav; however, the government appeared uninterested to consider discussions with Syria suggesting Syria is harbouring wanted terrorists from Hamas and other Palestinian groups. Nevertheless, Syria scored significant points in the all-important Middle East public relations game. Moreover, Syria quietly began to comply with demands from the International community that it leave Lebanon. By winter's end, it is expected that the vast majority of Syria's 13,000 troops will have left Lebanon. The Syrian foreign minister delivered this information personally to Secretary of State Colin Powell in Sharm el-Sheikh at the Iraq Conference held there on November 23rd. Syria will still deploy some troops to guard key radar installations and other strategic areas in accordance with the joint Syro-Lebanese defence agreement. Syria, nevertheless, noted that as its actions in Lebanon are aimed to comply with the UN Resolutions 1554, it expects Israel to follow suit by withdrawing from the Golan Heights as stipulated in resolutions 224 and 338. Syria's compliance with its UN stipulated obligations has ostensibly resulted from a desire to thwart any potential imposition of sanctions or even an invasion. The re-election of George W. Bush has doubtless raised fears that pending UN resolutions might serve as an excuse for interference. The European Union has maintained friendly relations with Syria, which has in turn shown very strong interest in slipping away from US pressure by embracing the Euro-Mediterranean Conference. Syria is still said to possess large numbers of chemical and biological weapons, which the European Union has classified as being "under international monitoring" affording Syria the possibility of maintaining them for the time being. Syria has relied on its relationship with the European Union to promote the sale of Syrian products. Syria has been urged by the EU to be a more active member of Euromed, and offered assistance in improving the quality of its products for the European market. The products envisaged for export are likely to be agricultural such as olive oil, milk and cheese and a number of projects in Syria have been funded by the European EU to that end. Textile products are also seen as a viable export from Syria. 

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FOREIGN LOANS

EIB provides EUR 200 million to Deir Ali power plant

The European Investment Bank (EIB) is providing Syria with a 200m euro loan to part-finance the building of a 750-MW natural gas-fired combined cycle power plant in Deir-Ali, south of Damascus. Total cost of the plant is estimated at US$350m. The power plant will comprise of two 250-MW gas turbines and a 250-MW steam turbine.
The building of the plant is expected to take over 30 months. The loan will go to the Public Establishment of Electricity for Generation and Transmission (PEEGT). The PEEGT had issued an initial tender for the plant in November 2003 and due to weak responses it reissued it in March of this year. Ireland's ESB International (ESBI) was awarded the contract to evaluate bids to build the plant.
A signing ceremony took place in Damascus on that occasion with the presence of EIB's Vice-President, Mr Philippe de Fontaine Vive. The EIB justified its financing of this investment by the Bank's support to Syria's strategic decision to switch from oil-based to gas-based electricity generation.
The loan falls under the FEMIP (Facility for Euro- Mediterranean investment and Partnership) programme and is the largest ever provided by the EIB to Syria. It is the third such disbursement by EIB in Syria's electricity sector. Two former loans of 115m euro and 75m euro respectively had already been advanced by the EU lending institution. FEMIP was launched by the European Investment Bank (EIB) as an initiative to support private sector financing in the Mediterranean area.
The signing of this new agreement between EIB and the Syrian Government comes on line with the beginning of operations of the SME fund, a 40m euro credit line directed at Syrian SMEs to finance their capital needs, also part of the FEMIP programme. The fund is managed by DFC, a Spanish consultancy firm, which was awarded the 2m euro contract last June.


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