{"id":1755,"date":"2008-12-13T21:58:42","date_gmt":"2008-12-13T21:58:42","guid":{"rendered":"http:\/\/joshualandis.com\/blog\/?p=1755"},"modified":"2008-12-15T12:57:18","modified_gmt":"2008-12-15T12:57:18","slug":"economy-syria-avoids-recession","status":"publish","type":"post","link":"https:\/\/joshualandis.com\/blog\/economy-syria-avoids-recession\/","title":{"rendered":"Economy: Syria Avoids Recession"},"content":{"rendered":"
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Syrian chef Ahmad Zeidan prepares gourmet Aleppine dishes at the Mirage hotel in the historic city of Aleppo October 21, 2007. With silk road fame and cosmopolitan prosperity, today's Syrian city of Aleppo was the culinary capital of the Middle East before cultural and commercial decline took its toll. Syria is opening up its economy in the last few years after decades of nationalisation and state control and reviving interest in the city's cuisine. Picture taken October 21, 2007. REUTERS\/Khaled al-Hariri <\/p><\/div>\n

[Landis Comment]<\/strong><\/p>\n

The Economist<\/em> forcasts\u00a0that Syria’s real GDP growth will fall from 4.8% in 2008 to 3.6% in 2009, and recovering slightly to 4.1% in 2010.\u00a0<\/p>\n

The World Bank Report Provides a lower estimate for Syria’s GDP Growth. A bi-annual report by the World Bank has forecast growth of 2.5 percent in Syria\u2019s Gross Domestic product next year. Read<\/a><\/p>\n

The following\u00a0economic and political reports suggest that Syria is fairly well isolated from the world recession. For once, Damascus’ habitual reform footdragging paid off handsomely. The fact that\u00a0the long promised\u00a0stock market has yet to be launched has saved\u00a0Syrian businessmen money and headache.<\/p>\n

The terrible run up in commodity prices that threatened to force so many more Syrians into the poor house during the first half of\u00a02008 was largely reversed during the second half. The\u00a0recession has moderated the price of basic goods and inflation.<\/p>\n

The collapse of commodity prices has\u00a0a down side,\u00a0however. Oil price declines\u00a0will hit Syria’s government budget\u00a0hard, both because of\u00a0Syria’s own diminishing supplies\u00a0but also because of the smaller price. Less revenue will flow into the government coffers also because the Gulf countries, which do most of the foreign investing in Syria,\u00a0will hold tight to what money they have.<\/p>\n

Here is what the Economist predicts:<\/p>\n

\u00a0Export earnings will decline by 13% in 2009\u2013owing to the steep fall in oil prices as well as an easing in global agricultural prices\u2013but will grow by 5% in 2010 as cotton (which together with textile products represents about 15% of exports) and some other commodity prices strengthen slightly. We forecast reasonably good harvests over the outlook period, but if drought persists it will have a significant impact on wheat and other food exports. Oil production is increasing at a number of small fields but declining at the larger, mature fields. As a result, overall production will remain relatively flat, averaging 374,000 barrels\/day (b\/d) in 2009 and 376,000 b\/d in 2010.<\/p><\/blockquote>\n

WORLD BANK<\/strong><\/p>\n

Here is what the World Bank says about Syria in the latest “Doing Business” report<\/a> issued a few days ago.\u00a0<\/p>\n

“Syria was the second biggest reformer in business start-up in the region” but still ranks at 137 globally in “doing business.” Syria issued a new company law and commercial code that took registration out of the court, introduced statutory time limits and made using lawyers optional. But along with these reforms, Syria also made starting a business more difficult: a 33% increase in its minimum paid-in capital requirement.<\/p>\n

Forty-nine economies, of which 10 are in the Arab World, simplified start-ups and reduced costs. These are among the 115 economies\u2014more than half the world’s total\u2014that have reformed in this area over the past 5 years. The Arab economies reforming in this area are Egypt, Jordan, Lebanon, Mauritania, Oman, Saudi Arabia, Syria, Tunisia, West Bank and Gaza and Yemen…..<\/p>\n

The third most popular were reforms to ease trading across borders. Four Arab countries reformed in this area: Djibouti, Egypt, Morocco and Syria. In all 3 areas, administrative reforms increased efficiency and transparency….<\/p>\n

Who is reforming in 2007\/08?<\/p>\n

Syria introduced a new commercial code that simplified business start-up by abolishing the court and lawyers’ involvement in the registration process. At the same time, reforms in the tax directorate further simplified tax registrations for new business. The entry of private banks into the Syrian market sped up the issuing of Letters of Credit. This led to a reduction of 2 days in document preparation time for both exports and imports….<\/p>\n

Arab economies WHO reformed consistently IN the past 5 years<\/p>\n

Syria reformed 3 years in a row. It reformed in 3 areas: starting a business, trading across borders and paying taxes…..<\/p>\n

Starting a business<\/p>\n

Syria introduced a new commercial code that simplified business start-up by abolishing the court and lawyers’ involvement in the registration process, while reforms at the tax directorate further simplified tax registration for new business…..<\/p>\n

Syria’s business start-up reforms have not followed a straight path. In 2006, Syria reduced its stamp duty from 1.5% to 0.5% of capital. In 2007, it made business registrations more expensive by requiring Limited Liability Companies (LLCs) to publish their memorandum of association in the official gazette. In 2008, it passed a new law and commercial code, opening the door to electronic processing. Syria also tried to harmonize its laws with laws around the world. Furthermore, Syria’s 2008 reforms included detailed explanations of legal forms while abolishing of the concept of a “closed company” in order to encourage formation of LLCs. As a result, the following aspects of business registration were also reformed:<\/p>\n