Syria

Politics:

• Analysis

  Syria politics: Quick View - Opposition leader attends Arab League summit a

  Event

  Despite his recent resignation as head of the opposition Syrian National Coalition (SNC), Moaz al-Khatib has led the SNC's delegation to the Arab League summit in Doha, Qatar.

  Analysis

  The appearance of Mr Khatib will offer some reassurance about the future of the SNC, which has struggled to portray a unified stance amid internal bickering over the make-up of its new interim government. Indeed, it can be argued that its Arab League appearance was well timed, as it helps restore some of its lustre-not only was the SNC handed Syria's seat, but its version of the Syrian flag was also flown at the event.

  In his speech at the summit, Mr Khatib gave an impassioned call for more armed support (including anti-aircraft batteries) from both Arab countries and the West. He also alleged that the regime of Bashar al-Assad is receiving backing from thousands of Iranian and Russian fighters-although allegations of Iranian support are nothing new, the claim that Russian troops are actually participating in the fighting certainly is.

  As for Mr Khatib's own position, he downplayed his resignation as being merely a "normal" episode for any coalition. However, since he announced that he would step down, reports have circulated that he might consider reversing his decision. (The SNC itself has rejected his resignation, although it can hardly force him to stay in his post.) At the conference itself, the Guardian newspaper tweeted that Mr Khatib would withdraw his resignation if the SNC agreed to "broaden representation". Although the exact meaning of this comment was not expounded upon, it would appear to be a reference to Mr Khatib's concerns that the group is becoming dominated by the Muslim Brotherhood. For Mr Khatib to take such a stance at the summit is somewhat awkward, however: his delegation is being hosted by Qatar, which has been one of the most active backers of Syria's Muslim Brotherhood element.

  March 26, 2013

• Background

  Syria: Key figures

  Bashar al-Assad

  Mr Assad became president in June 2000, following the death of his father, Hafez al-Assad. He came to power with the promise of greater openness, reform and modernisation of the economy. Advocates of political reform have been ruthlessly suppressed, but the Syrian economy has opened up to a degree under Mr Assad's presidency; he was elected for a second seven-year term in 2007. Under his rule, Syria's relations with Western powers have deteriorated, and he has also antagonised the leaders of Saudi Arabia and Egypt, the most powerful states in the Arab world. However, in 2008 he made some progress towards repairing these relationships. In December 2000 he married Asmaa, a daughter of Fawaz al-Akhras, a London-based doctor from a prominent Damascene family. Asmaa Assad projects a modern Westernised image. She has given birth to two sons and a daughter.

  Asif Shawkat

  As the head of military intelligence, Mr Shawkat is one of the most powerful figures in Syria. He married Bushra al-Assad, the eldest daughter of the late president, despite initial objections from the Assad family.

  Rami Makhlouf

  A first cousin of Mr Assad, Mr Makhlouf is one of the most powerful businessmen in Syria. His principal asset is Syriatel, one of two mobile-phone companies that have been operating in the country on the basis of build-operate-transfer contracts since 2001.

  Farouq al-Sharaa

  Having served as a straight-speaking foreign affairs minister since 1984, Mr Sharaa was appointed vice-president in February 2006, with Walid al-Muallim, who led Syria's negotiations with Israel during the 1990s, succeeding him as foreign minister.

  Abdullah al-Dardari

  The appointment of Mr Dardari in June 2005 as deputy prime minister for economic affairs confirmed his status as the central figure in Syria's economic reform programme. In his previous post as head of the state planning commission, Mr Dardari had been an outspoken advocate of enabling market mechanisms to drive the Syrian economy and stimulate the higher growth necessary to improve living standards and reduce unemployment.

  The judiciary

  The Syrian judiciary is generally subservient to the requirements of the state, although the courts enjoy nominal independence, with a supreme constitutional court wielding ultimate judicial authority. Most cases with any political connection are handled under the umbrella of emergency security laws that have been in force since 1963. In March 2008 a law was passed envisaging the creation of specialised commercial courts, as part of the government's broader effort to modernise the economy.

  The legislature

  The 250-member legislature (Majlis al-Shaab, or People's Assembly) is elected every four years. A fiery debating chamber before the Assad era, it is now in effect a rubber stamp for decisions of the presidential elite. In the most recent parliamentary election of April 2007 the composition of the Assembly did not change meaningfully, with the ruling coalition, the National Progressive Front (a ten-party bloc, which is dominated by the Baath party), winning 170 seats. The remaining 80 seats were won by independents. Under the constitution, parliament is sovereign, with the Council of Ministers (cabinet) forming the executive. In reality, since 1970 ultimate power has rested with the president and senior members of the intelligence services and army units controlled primarily by the Alawi religious community—to which the Assad family belong.

  Media services

  The Syrian media are largely controlled either by the state or the ruling Baath party. The state also retains a monopoly over broadcasting.

  Democracy index (for methodology, see Appendix)

  The Economist Intelligence Unit's 2008 democracy index ranks Syria 157th out of 167 countries and third-lowest among authoritarian regimes in the region (only slightly above Saudi Arabia and Libya). It also ranks among the lowest in the region in all but one of the categories that feed into the overall score, because there are few options for political participation, no meaningful elections and highly restricted civil liberties. Although its score in the political culture category is higher than most other countries in the region (on par with Tunisia and Morocco, and only exceeded by Israel and the Palestinian Territories), this is largely because the state is secular, whereas politics in most other states in the region is heavily influenced by the religious authorities.

  Democracy index
  	Overall score	Overall rank	Electoral process	Government functioning	Political participation	Political culture	Civil liberties	Regime type
  Syria	2.18	157	0.00	2.14	1.67	5.63	1.47	Authoritarian
  Overall and component scores are on a scale of 0 to 10; overall rank is out of 167 countries.

  Download text file (csv format)

  July 01, 2008

• Structure

  Syria: Political structure

  Official name

  Syrian Arab Republic

  Form of state

  Republic

  Legal system

  Based on the constitution of 1973

  Legislature

  250-member Majlis al-Shaab (People's Assembly) directly elected for a four-year term

  Electoral system

  Universal adult suffrage

  National elections

  Next presidential and legislative elections due in 2014 and 2016 respectively

  Head of state

  President, elected for a seven-year term. The president appoints the vice-president, the prime minister and the Council of Ministers. Bashar al-Assad, the current president, is also the commander-in-chief of the armed forces and the secretary-general of the Baath party

  Executive

  The prime minister heads the Council of Ministers, a large number of whom are drawn from the ruling Baath party and its partners

  Main political parties

  The ruling National Progressive Front includes the Arab Socialist Baath Party; Arab Socialist Party; Arab Socialist Unionist Party; Communist parties; Syrian Arab Socialist Union Party; Unionist Socialist Democratic Party; Union Socialist Party

  Key ministers

  Prime minister: Wael Nader al-Halqi

  Awqaf (Islamic endowments): Mohammed Abdel-Sattar al-Sayed

  Communications & technology: Imad Abdel-Ghani Sabbouni

  Culture: Lubana Mashouh

  Defence: Fahad Jassim al-Freij

  Economy & foreign trade: Mohammed Zafar Mahbak

  Education: Hazwan Aloz

  Electricity: Imad Mohammed Deeb Khamis

  Environment (minister of state): Nazira Sarkis

  Finance: Ismail Ismail

  Foreign affairs & expatriates: Walid al-Muallim

  Health: Said Abdel-Salam Nayef

  Higher education: Mohammed Maala

  Housing & construction: Hussein Farzat

  Industry: Adnan Salakho

  Information: Omar Zuabi

  Interior: Mohammed Ibrahim al-Shaar

  Irrigation: Bassam Hanna

  Justice: Najim Hamad al-Ahmed

  Labour: Hassan Hijazi

  Local government: Omar Ibrahim Ghalawanji

  Petroleum & mineral resources: Suleiman Abbas

  Presidential affairs: Mansour Azzam

  Social affairs: Kinda Shammat

  Tourism: Hala Nasser

  Transport: Mohammed Ibrahim al-Said

  Central Bank governor

  Adib al-Mayaleh

  Head of State Planning Commission

  Amer Lufti

  March 20, 2013

• Outlook

  Syria: Key developments

  Outlook for 2013-17

  • In the face of a deepening insurgency, we expect the president, Bashar al-Assad, to be replaced as part of a broader bargain, probably involving the Baath party, the security services and-potentially-some opposition elements.
  • Although the Assad regime will retain control over the organs of state in the near term, its grip over the country will weaken further, with towns and possibly entire regions becoming in effect self-governing.
  • Syria will continue to face international isolation. NATO's Patriot missile deployment to the Turkish-Syrian border could be a prelude to establishing a no-fly zone, although Turkey argues that the move is only to protect its frontier.
  • The fiscal deficit will remain high in 2013, as tax revenue from businesses will be depressed owing to fighting between the regime and the opposition. The deficit is forecast to average 9.4% of GDP in 2013-17.
  • We estimate that the economy contracted by 18.8% in 2012, on the back of a near collapse in wheat and grain output. After a further contraction in 2013, the economy will recover slowly, as we do not expect a peace dividend.
  • We expect average inflation to reach 30% in 2013, elevated by shortages and the weakening pound, before easing thereafter as the security situation improves.
  • We expect the Syrian pound to weaken further in 2013, as foreign exchange will remain in short supply. The pound will continue to depreciate, albeit more gradually, falling to an average of S£90.7:US$1 in 2017.

  Review

  • Moaz al-Khatib, the leader of the opposition Syrian National Coalition (SNC), in February proposed details for a dialogue with representatives of the Assad regime. However, the tentative proposal has since been dropped.
  • An Iranian general, Hassan Shateri, has been killed in Syria, marking the first death of a senior Iranian commander in the war. Mr Shateri was widely reported to be a member of Iran's Islamic Revolutionary Guards Corps.
  • Rebel forces captured the Al Jarrah airbase, to the east of Aleppo, on February 12th, and the nearby town of Raqqa the following month, as part of a series of recent advances against the Assad regime.
  • Israel has attacked a convoy in Syria, which was suspected to be transporting advanced Russian missile batteries to Hizbullah, a Lebanese Shia political and military group backed by Iran and Syria.
  • Eleven of Syria's 12 privately owned banks have reported a profit for 2012, but results were flattered by the weakening Syrian pound.

  March 20, 2013

Economy:

• Background

  Syria: Economic background

  Real gross domestic product by sector
  (% share of GDP)
  	2003	2004	2005	2006	2007
  Agriculture	25.0	22.7	23.4	24.5	24.0
  Industry	28.3	30.2	29.1	28.1	27.9
  Services	46.7	47.1	47.5	47.3	48.2
  Source: Economist Intelligence Unit.

  Download text file (csv format)

  July 01, 2008

• Structure

  Syria: Economic structure

  Data and charts: Annual trends charts

  
  

  

  March 20, 2013

• Outlook

  Syria: Country outlook

  Syria: Country outlook

  FROM THE ECONOMIST INTELLIGENCE UNIT

  POLITICAL STABILITY: In the short term the regime of the president, Bashar al-Assad, will continue to battle for its survival against a deepening insurgency, which has seen a hotchpotch of rebel groups secure a swathe of territory running from Idlib province in the north-west, along the northern border with Turkey, and down the eastern border with Iraq (including the large town of Raqqa, taken by rebels in early March). However, the rebels' inability to retain territory in Damascus and make inroads into the regime's heartlands (notably in the Alawi areas near the northern port of Latakia) seems to have boosted Mr Assad's confidence, who in January made a defiant speech in Damascus in which he labelled his opponents extremists and stooges of the West. Yet, in reality, the rebels' numerical and military strength is gradually growing and, with the opposition Syrian National Coalition (SNC) winning diplomatic recognition across the region and the West as Syria's sole legitimate representative, the Economist Intelligence Unit expects the president to be removed eventually.

  ELECTION WATCH: Following a referendum on the new constitution in February 2012, a parliamentary election was held on May 7th 2012, which led, unsurprisingly, to a consolidation of power in the hands of the Baath party. The election was boycotted by the bulk of the opposition. Even though the new draft constitution does not contain Article 8, which stated that the Baath party was the leading force in the state and society, the president will retain substantial powers. The constitution imposes a two-term limit on holders of the presidency but does not do so retrospectively, thereby allowing Mr Assad to remain in power until 2028 (the presidential term is seven years, and the next presidential and parliamentary elections are due in 2014 and 2016 respectively). Mr Assad, in his speech in January, proposed a new national dialogue, which would culminate in a referendum on an updated constitution and another parliamentary election. However, given the opposition's rejection of the speech, the proposal is highly unlikely to be realised.

  INTERNATIONAL RELATIONS: The EU arms embargo on Syrian oil imports will continue to have a detrimental impact on the economy. With the civil war set to continue in 2013, the probability of harsher sanctions is high. Facing increased Western pressure, Syria will continue to rely on Russia and China to veto any resolution authorising force or international sanctions against it at the UN Security Council. However, the ongoing conflict in Syria, together with the simultaneous worsening humanitarian situation, may eventually prompt more forceful direct action from Turkey and the West.

  POLICY TRENDS: The government will struggle to deal with the slowing of economic activity caused by the unrest and the impact of sanctions. Since the unrest, the policy of gradually liberalising Syria's centrally planned economy has been abandoned. Government income will continue to be diminished by the decline in oil revenue following the imposition of the EU embargo on imports of Syrian oil. In addition, the US sanctions on the Syrian financial sector will make it more difficult for Syria to finance imports. The country will increasingly look to Iran and its allies for financial support through barter deals and direct financial assistance. This reliance on outside help is likely to increase as the conflict gets bloodier. With the country's balance-of-payments position deteriorating rapidly, the Central Bank of Syria will continue to intervene in the market to control the depreciation of the Syrian pound against major foreign currencies and will impose further foreign-currency restrictions.

  ECONOMIC GROWTH: Having contracted by an estimated 18.8% in 2012, the economy is forecast to shrink by a further 4.4% in 2013. Intense fighting in Aleppo and Damascus will continue to disrupt economic activity and the agricultural sector will continue to suffer from a lack of equipment and fertiliser. Russia and China are likely to prevent a further tightening of UN sanctions in 2013, although unilateral sanctions will probably be intensified. Growth will continue to be restrained as long as Mr Assad stays in power, and, even if he goes, uncertainty surrounding the transition will deter investment, at least initially. Business activity will also remain affected by sanctions imposed by the Arab League and Turkey, which has suspended its free-trade agreement with Syria. Private consumption will recover only slightly in 2014 and will continue to grow only modestly over the remainder of the forecast period as civilians struggle to pay for basic goods in the face of high inflation and a continued decline in the Syrian pound. We forecast that growth will pick up in 2014 as violence on the ground eases, although a less helpful base effect will see it decline in 2015. We forecast that growth will average 3% in 2014-17. We therefore expect that by 2017 the economy will still be substantially smaller in real terms than it was in 2011.

  INFLATION: Inflation surged in 2012 (reaching 48.1% year on year in September), owing to higher foodstuffs costs in particular (in part reflecting supply disruptions). With the civil war set to persist throughout most of 2013 and fuel costs rising (after the recent subsidy cut), we expect average inflation to remain elevated this year, at an average of around 30%, exacerbated by the continued depreciation of the Syrian pound (which will contribute to rising import costs). However, we expect inflation to fall to 12.2% in 2014 as security improves and the rate of depreciation of the pound slows (on the back of recovering oil output). With the Central Bank's foreign-exchange reserves remaining low, we expect the depreciation of the currency to persist; this, combined with further subsidy reductions and a less helpful base effect, will push consumer price growth back up, to 14.8% in 2017.

  EXCHANGE RATES: The Syrian pound will continue to decline against the US dollar and other major currencies in 2013 owing to the EU embargo on imports of Syrian oil, which will remain in place as long as Mr Assad retains power. Sharply lower oil exports, coupled with a reduction in tourism and a substantial decline in foreign investment, will worsen the existing shortage of foreign exchange. The Central Bank governor, Adib al-Mayaleh, in October said that foreign-exchange reserves had fallen by less than 10%. However, we estimate that the depletion of Syria's foreign reserves has been more substantial, given the embargo, and they will only begin to recover after some sort of resolution to the crisis. The official rate of the Syrian pound is forecast to weaken, to an average of SP74.4:US$1 in 2013, and to weaken further in 2014-17, although the rate of depreciation will slow as the economy gradually recovers. The gap between the official rate and the black-market rate (which was trading at almost SP100:US$1 at the end of 2012) has widened markedly recently, but we expect the gap to narrow considerably after 2014 as the situation calms in Syria and oil output recovers.

  EXTERNAL SECTOR: We expect the current-account deficit to contract in 2013 as the trade deficit narrows, reflecting lower import costs as the government cuts back on spending. Oil production, however, is forecast to remain close to 2012 levels as the conflict continues into 2013. Our forecast for a slow rise in oil production from 2014 onwards is based on the assumption that the conflict on the ground will ease and Syria will manage to find some alternative, Asian buyers--albeit ones that will buy Syrian crude at a deep discount--until sanctions are lifted. Production is forecast to average 153,000 barrels/day (b/d) in 2013 but to rise to 240,000 b/d in 2017 (roughly equivalent to local refining capacity). Non-oil exports are also set to remain far below their 2010-11 levels, although earnings will recover slowly from 2015 onwards as new markets are found. However, the current-account deficit will remain sizeable as export earnings stay depressed.

  March 25, 2013

• Forecast

  Syria: 5-year forecast summary

  Outlook for 2013-17: Forecast summary

  Forecast summary
  (% unless otherwise indicated)
  	2012a	2013b	2014b	2015b	2016b	2017b
  Real GDP growth	-18.8	-4.4	3.3	2.7	2.7	3.1
  Oil production ('000 b/d)	163.0	152.5	197.5	223.8	230.0	240.0
  Gross agricultural production growth	-21.0	-5.0	5.1	6.5	3.0	3.3
  Consumer price inflation (av)	37.0	30.2	12.2	13.4	14.5	14.8
  Government balance (% of GDP)	-14.7	-13.2	-11.0	-8.9	-7.4	-6.3
  Exports of goods fob (US$ bn)	5.0	4.3	5.0	6.3	7.0	7.9
  Imports of goods fob (US$ bn)	10.1	9.1	9.9	10.7	11.6	12.7
  Current-account balance (US$ bn)	-5.2	-4.5	-4.4	-3.8	-3.7	-3.6
  Current-account balance (% of GDP)	-11.0	-8.8	-7.8	-5.9	-5.1	-4.3
  External debt (year-end; US$ bn)	8.2	8.4	9.1	9.9	10.9	11.8
  Exchange rate S£:US$ (av)	65.0c	74.4a	78.7	83.1	87.6	90.7
  Exchange rate S£:US$ (end-period)	78.4c	69.2a	89.9	81.2	93.4	90.6
  Exchange rate S£:¥100 (av)	81.5c	93.0a	84.8	87.9	89.9	94.0
  Exchange rate S£:€ (av)	90.5c	95.6a	104.6	109.1	110.4	114.4
  a The Economist Intelligence Unit estimates. b The Economist Intelligence Unit forecasts. c Actual.

  Download the numbers in Excel

  Download text file (csv format)

  March 20, 2013

View detailed map

Country Briefing

Land area

185,180 sq km

Population

22.9m (2010 estimate)

Main provinces

Population in millions, 2010:

 Damascus (capital) area: 4.48

 Aleppo: 4.74

 Homs: 1.76

 Hama: 1.59

 Hassakah: 1.47

 Idlib: 1.46

Climate

Subtropical on coast, arid in the centre, cold winters in the highlands

Weather in Damascus

Hottest month, August, 18-37°C (average daily minimum and maximum); coldest month, January, 2-12°C; driest month, August, zero average rainfall; wettest month, January, 43 mm average rainfall

Languages

Arabic, French, some English

Religion

Sunni Muslim (72%); Alawi Muslim (14%); Christian (12%); Shia Muslim and Druze minorities

Measures

Metric system

Currency

Syrian pound (S£) = 100 piastres

Time

GMT plus two hours

Fiscal year

January 1st-December 31st

Public holidays

The dates of Islamic holidays are based on the lunar calendar and are therefore approximate. Mawlid al-Nabi (the birthday of the Prophet, February 4th 2012); Eid al-Fitr (August 19th); Eid al-Adha (Feast of the Sacrifice, October 26th); Islamic New Year (November 15th)

New Year's Day (January 1st); Revolution Day (March 8th); Mother's Day (March 21st); Easter (April 4th); Orthodox Easter (April 5th); Independence Day (April 17th); Labour Day (May 1st); Martyrs' Day (May 6th); October Liberation War (October 6th); Christmas Day (December 25th)

January 15, 2013