{"id":365,"date":"2007-08-29T15:22:40","date_gmt":"2007-08-29T15:22:40","guid":{"rendered":"http:\/\/joshualandis.com\/blog\/?p=365"},"modified":"2007-08-29T15:22:41","modified_gmt":"2007-08-29T15:22:41","slug":"the-uneven-pattern-of-liberalisation-in-syrias-key-services-sectors-by-oxford-analytica","status":"publish","type":"post","link":"https:\/\/joshualandis.com\/blog\/the-uneven-pattern-of-liberalisation-in-syrias-key-services-sectors-by-oxford-analytica\/","title":{"rendered":"“The uneven pattern of liberalisation in Syria’s key services sectors,” by Oxford Analytica"},"content":{"rendered":"

SYRIA: Government controls services liberalisation
<\/strong><\/font>Monday, August 13 2007
Oxford Analytica Ltd<\/p>\n

SUBJECT:<\/font><\/strong><\/font><\/strong> The uneven pattern of liberalisation in Syria's key services sectors.<\/font><\/p>\n

SIGNIFICANCE:<\/font><\/strong><\/font><\/strong> The government's determination to cherry pick the type and timing of liberalisation is most obvious in the field of services. Telecommunications remains largely closed to foreign and private sector investors, while the banking sector has made more progress.<\/font> <\/p>\n

ANALYSIS:<\/font><\/strong><\/font><\/strong> Syria's telecommunications sector remains largely closed despite the fact that a well-functioning telecommunications system is estimated to add up to two percentage points to GDP. It is also particularly important to the information technology (IT) sector, which is already significantly underdeveloped in Syria.<\/font> <\/p>\n

Telecommunication<\/font><\/strong>s<\/font><\/strong>. The telecommunications sector needs extensive investment:<\/font><\/p>\n

·      <\/font><\/font> Fixed line penetration is 18%, and, according to the International Telecommunications Union, internet penetration stood at 0.2% of the population in 2000 and increased to only 4.2% by September 2005. <\/font><\/p>\n

·      <\/font><\/font> There are two GSM providers operating under 15-year Build Operate Transfer (BOT) contracts, which pay 40% of their income to Syrian Telecommunication Establishment (STE). <\/font><\/p>\n

·      <\/font><\/font> A number of licences have been awarded to internet service providers (ISPs), but STE provides all other fixed-line communications. <\/font><\/p>\n

While Syria's low national income would undoubtedly limit investor interest, sale of STE could still bring in much needed revenues. In developing economies the telecommunications sector typically attracts the lion's share of foreign capital and Syria offers significant room for growth in both the fixed-line and mobile sectors. GSM provider Syriatel, which currently enjoys dominant market share, has reported a significant increase in 2006 operations (thereby increasing revenues to STE). STE's revenues will also be boosted when it follows through on its decision to establish a subsidiary mobile operator by 2009. It is also a good time to sell STE following a record 30% increase in income in 2006, up from 39.34 billion Syrian pounds (0.76 billion dollars) in 2005 to 51.7 billion in 2006.<\/font><\/p>\n

Financial secto<\/font><\/strong>r<\/font><\/strong>. By contrast, some of the most significant reforms have taken place in the financial sector, as the government seeks to establish a well functioning financial system in order to support the domestic private sector <\/font> <\/p>\n

1.     <\/font><\/strong> Bankin<\/font><\/strong>g<\/font><\/strong>. Since the ending of the state monopoly on banking, a few private banks have been set up. In addition to the specialised government banks, Syria's banking sector is now made up of private banks and banking branches in free zones. Private insurance companies were also established at the end of 2006 to compete with the one government-owned insurance company, so allowing for the growth of Syria's significantly underdeveloped insurance market. <\/font><\/p>\n