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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)

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Bashir al-Asad

Update No: 015 - (31/01/05)

Russia Re-enters the Middle East Diplomatic Game
In January 2005 Syria continued to face strong US and Israeli foreign policy pressures; however, it also took important steps to obtain more diplomatic bargaining chips should the 'pressures' and accusations materialize. The US accuses Syria, one wonders on what evidence, of continuing to act as a base for Iraqi insurgents and threatening military strikes and additional sanctions. Israel has pressured the new Palestinian leader Mahmoud Abbas to shun relations with Damascus, while also actively campaigning against Syria's potential purchase of Russian armament. Syria has inevitably responded by strengthening its relations with Russia. Also by adopting a more compliant policy vis--vis its role in Lebanon in view of the UN resolution passed in the fall of 2004, demanding it restrict its political and military influence on its neighbour.
The recent election related violence in Iraq provided Bush administration hard-liners to consider launching selected military strikes at guerrilla training camps in Syria. Syria continues to be singled out as the principal crossing point for guerrillas entering Iraq by US commanders in Iraq, adding that former Iraqi Ba'ath officials are guiding and financing the fighters. At the end of the month, no such action had been taken - or at least it was not reported - but the threat serves as a further reminder that the US administration is sustaining its pressure on Syria. Apart from fighters, logistics and weapons, US officials contend that Syria is also serving as a financial transfer centre for funds used to finance the Iraqi insurgency - money apparently originating from Palestinian organizations operating in Syria. As the search for the widely publicized weapons of mass destruction in Iraq has been officially terminated, with no such weapons found, Syria is once more being suspected of harbouring Iraqi armaments of all varieties. During his very idealistic inauguration speech, President Bush did not mention Syria directly in his new list of countries short on democracy, so called 'outposts of tyranny'. Nevertheless Syria remains one of the main thorns in the region as far as his administration is concerned as U.S. Secretary of State-designate Condoleezza Rice reminded us when she warned Syria it faces new sanctions because of its suspected interference in Iraq and ties to terrorism. 

Iran or Syria?
However, Iran was mentioned in the speech, it is one of the 'outposts' under the watchful eye of Washington. Iran has been at the centre of speculation over which country the United States would target next for regime change thanks to an article by "New Yorker" correspondent Seymour Hersh, who provided significant evidence - denied by the White House - that the administration is seriously considering action there. Vice-President Dick Cheney hinted as much citing the potential involvement of Israel if the United States did not act to end the emerging Iranian nuclear program. There are also reports of US fighter jets flying missions within Iran in hopes of provoking ground control locks from radars, which would then be used by the US to identify targets. 
Does this means Syria's President Asad can sleep safe in the knowledge he has been spared? Not necessarily, because while the United States is suggesting that Iran's nuclear threat and proven ties to terrorism are causing concern to itself and its regional allies, Syria would inevitably be drawn into any US-Iranian conflict. Iran would no doubt use its influence on Hizbollah in Lebanon to intensify attacks across Israel's borders, while Syria's own Hizbollah connections - which the Israeli Prime Minister Ariel Sharon does not miss an opportunity to mention - and military presence in Lebanon would draw it into a conflict with the US and Israel. Syrian sources have also suggested that Iran and Saudi Arabia have agreed to help fund the Syrian arms shopping trip to Moscow. 

New Missiles
Syrian officials have not denied that President Bashir Asad's visit to Moscow was motivated largely by an intention to acquire advanced Russian weapons such as the SA-18 SAM missile system, the Kornet-E anti-tank weapon and an overall upgrade of Syrian artillery. The new Russian long range missile Iskander-E was also an item on the Syrian wish list. The weapons would be delivered quickly. Syria has without doubt been under pressure and President Bashar Assad has decided to acquire offensive and defensive weapons in 2005, ostensibly, to repel any U.S. or Israeli attack on Syria. Syrian sources claim that the Asad regime is expecting a large scale US attack on Syria in 2005 even as US based analysts are still sceptical that this might happen. Nevertheless, American officials have raised the matter of Russian arms sales to Syria to Foreign Minister Sergei Ivanov during his recent visit to Washington. Of course, the US strongly objects to any sale of weapons systems to Syria defensive or not. Syria would gain some negotiating power if it had the weapons, which would bolster its role in any Palestinian - Israeli peace deal. Russia and the United States are already at odds over Moscow's nuclear cooperation with Iran, accused by Washington of seeking to acquire illegal atomic arms. Israel, as would be expected, has lobbied vehemently against the Syrian arms purchase from Russia. Prime Minister Ariel Sharon told Russian President Vladimir Putin that Israel is opposed to having Moscow supply advanced SA-18 shoulder missiles to Syria. Sharon's complaint was expressed in a way highlighting Syria's influence in Lebanon suggesting that the missiles will find their way from Syria to Hezbollah, putting Israel Air Force planes and even civilian aircraft at risk. Sharon also noted that Syria and Hezbollah were encouraging terror against Israeli targets, both in Lebanon and through Palestinian terror organizations adding that Syria and Hezbollah are the main challenges facing the new Palestinian government. 

Enter Russia
Although Russia initially denied the possibility of Russian armament sales to Syria, it has also made its case that it should not face such restrictions and all indications are that Presidents Putin and Asad did conclude an agreement for the purchase of at least part of the equipment on the Syrian armed forces' wish list. However, Asad's visit to Moscow is far more significant than an artillery refurbishment. Indeed, Russia significantly reduced Syria's debt cancelling billions of dollars worth of loans owed to the Soviet Union. The Chairman of Syrian State Planning Commission Abdullah Dardari said that Syrian foreign debt stands at less than 10% of GDP enabling Syria to obtain better financing terms when obtaining loans from abroad. The agreement also means that Russia is starting to resume the diplomatic and economic role once held by the Soviet Union in the region. Russia and Syria also signed agreements for cooperation in the nuclear field made possible by the 1999 intergovernmental agreement on cooperation in the field of peaceful use of nuclear power. While the nuclear power assistance remains doubtful- especially while the nuclear capabilities of Iran are at the center of a growing crisis, Russia will no doubt help Syria refurbish its electricity generating facilities. President Asad also signed an agreement in Moscow for Russian companies to participate in some Syrian pipeline projects. The Russian companies Stroitransgaz, Tatneft, SoyuzNefteGaz and Uralmash will be the likely parties, which will extend their operations in Syria. 
Syria, categorically rebuffed by Washington and Jerusalem, has unsurprisingly re-established links with its former superpower ally gaining access to new weapons and technology, while Russia will use Syria as a base to strengthen its links to the region. In fact, in a joint statement, which heralded a greater role for Russia in the Middle east diplomatic quagmire, President Asad renewed its call to Israel to resume peace negotiations between the two sides unconditionally in Moscow, while President Putin stressed that neither Syria nor the Palestinians should face any pre-conditions to peace negotiations. Syria has also bolstered its relations with other Eastern European countries reaching settlements of debts it had with the Czech Republic and Slovakia, the remains of Syria's loans from the former Czechoslovakia. 
In other significant foreign relations overshadowed by the Iraqi elections and the emerging Iran story, Syria has hinted that it might start withdrawing from Lebanon as early as the spring. This is the implication considering that the Speaker of the Lebanese Parliament, Nabih Berri, said that Syria did not wish to interfere in the Lebanese elections in the spring. This is very likely a move on the part of Syrian officials to avoid any overt interference in Lebanese internal affairs in light of UN Resolution 1559 and to reduce foreign pressure on the matter. France has objected to the Syrian presence in Lebanon, while the United States use this presence as political leverage in maintaining sanctions and pressure on Syria.



Syria signs US$14m oil deal with Tunisian company

Syria signed a US$14m contract on December 23rd with a Tunisian company for oil and gas exploration in central Syria, Deutsche Presse-Agentur (dpa) reported recently, citing an official statement. The 25-year contract stipulates the Tunisian HBS International Ltd will drill five oil wells and conduct geological and geophysical surveys over 8 years in Raqqa province, northeast of Damascus. The contract also provides for the Tunisian company to conduct earthquake three-dimensional surveys. Syria currently produces about 600,000 barrels of oil daily.



Ukraine, Syria discuss raising level of transport ties

Volodymyr Koval, the Ukrainian ambassador to Syria, has met with Syrian Transport Minister, Makram Ubayd, UNIAN News Agency reported. 
UNIAN learnt from the press service of the Ukrainian Foreign Ministry that during their meeting they discussed stepping up cooperation between the two countries in the field of transport, in particular, the possible participation of Ukrainian companies in tenders for the building of railways, modernization of rolling stock and railway transport equipment.
Ubayd gave a high assessment of the retraining of Syrian civil aviation experts in Ukraine and expressed interest in setting up training courses in higher education establishments in Ukraine for experts who work in other fields of transport. 
Koval and Ubayd also noted the need to create a Ukrainian-Syrian working group for cooperation in the transport sector.

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