Syria

Politics:

• Analysis

  Syria politics: The fire is getting closer

  Syria crisis: The fire is getting closer

  The rebel opposition is steadily gaining diplomatic and military ground, but bad habits and divisions within are causing mounting anxiety

  AFTER a period of relative stalemate, the rebels seeking to topple President Bashar Assad and his regime have, in the past month, made further gains across the board. They have been steadily winning territory, including on the outskirts of Damascus, the capital. The Syrian National Coalition, the opposition umbrella group that got together under watchful American eyes in Qatar in mid-November to replace the ailing Syrian National Council, has been given a hefty diplomatic boost in terms of recognition. Perhaps most important, rebel politicians are trying harder than ever to gain influence, if not direct control, over the myriad fighting factions. And Mr Assad is showing increasing signs of desperation, bombing a hostile Palestinian district on the edge of Damascus and firing SCUD missiles at towns and districts held by the rebels near Aleppo, Syria's second city, half of which is in rebel hands.

  On December 12th ministers from more than 100 governments, meeting in the Moroccan city of Marrakesh, recognised the coalition as the Syrian people's legitimate representative. This will help them get more cash and diplomatic clout.

  Meanwhile the governments of Turkey, Qatar and Saudi Arabia, which, unlike their Western counterparts, have backed the rebels with guns, have been fashioning rebel groups into a new body, the Supreme Military Council, through which arms can more efficiently be funnelled. The 30-man body includes some of Syria's most powerful commanders: Abu Issa of Saqour al-Sham, a group that has done well in the north-west; Abdulkader Saleh of Liwa al-Tawheed in Aleppo; and Abu Azzam of Farouq al-Shamal, which has been effective near Homs, Syria's third city. "Our council will hopefully be the nucleus of a new defence ministry for any transitional government formed by the Syrian National Coalition," says a man from Saqour al-Sham.

  Opposition backers hope that co-operation between the civil coalition and the military council may provide a basis for taking over national institutions, should Mr Assad and his regime crumble, or for negotiating a political solution, if he hangs on but is forced to parley to stay alive.

  Negotiation still looks unlikely in the near future, since the rebels are on a military roll, yet the regime is still entrenched in its strongholds. Attempts by the UN's envoy, Lakhdar Brahimi, to bring the Americans and Russia, the regime's main ally, to an agreement whereby Mr Assad would step down, perhaps by March, while the rebel coalition leads a transition, still look fruitless. Hopes were raised when a Russian official suggested that Mr Assad was on the way out, only for another Russian the next day to deny vigorously that the Kremlin would ever dump its protégé.

  Some European governments are pondering whether to drop the ban against arming the rebels. France, which has been keenest to boost the rebels in every way, has been frustrated by the reluctance of America to step up intelligence-sharing or to increase lethal aid, even covertly. But the Americans, especially, remain wary of sending weapons without knowing where they will end up. The Free Syrian Army, which claimed to be an umbrella group for all the fighters, is now just a clutch of generally secular groups whose power is dwindling as better-armed and -organised Islamists gain weight.

  Regional military councils, whose goal was to unite fighters in Syria's 14 provinces, have been struggling to assert themselves, since private donations through personal networks still let independent-minded units ignore the councils. Neither they nor the coalition will gain momentum unless outsiders, particularly Western governments, are willing to back them wholeheartedly.

  Though rebels have been closing in on Damascus, sneaking into ever more suburbs around the edges, they admit they have been losing a lot of men as the regime's forces fight back. Mr Assad's people still control the city centre, despite the occasional bombing. All his elite units are intact. The rebels are wary of launching an assault too early without better weapons.

  Those who deride the West's timidity say that, as the war drags on, extremists are getting the upper hand among the rebels and that sectarian atrocities, for instance against Mr Assad's fellow Alawites, will increase. The national coalition's head, Moaz al-Khatib, has criticised the American administration's recent decision to designate as terrorists Jabhat al-Nusra, a jihadist group linked to al-Qaeda that has proved effective as a fighting force. In sum, Mr Assad still looks doomed. But no one is expecting the rebels meekly to submit to a civilian authority or to settle differences amicably among themselves.

  December 22, 2012

• 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-Halki

  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: Mohammed al-Jleilati

  Foreign affairs & expatriates: Walid al-Muallim

  Health: Said Abdel-Salam Nayef

  Higher education: Mohammed Maala

  Housing & construction: Safwan al-Assaf

  Industry: Adnan Salakho

  Information: Omar Zuabi

  Interior: Mohammed Ibrahim al-Shaar

  Irrigation: Bassam Hanna

  Justice: Najim Hamad al-Ahmed

  Labour & social affairs: Jasem Zakariya

  Local government: Omar Ibrahim Ghalawanji

  Presidential affairs: Mansour Azzam

  Petroleum & mineral resources: Said Huneidi

  Tourism: Hala Nasser

  Transport: Mohammed Ibrahim al-Said

  Central Bank governor

  Adib al-Mayaleh

  Head of State Planning Commission

  Amer Lufti

  December 05, 2012

• 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 regime will retain control over the organs of state, its grip over the country is highly likely to weaken, with towns and possibly entire regions becoming in effect self-governing.
  • Syria will continue to face international isolation. If NATO deploys Patriot missiles on the Turkish-Syrian border, this could be a prelude to establishing a no-fly zone, although Turkey maintains that they are 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 fiscal deficit is forecast to average 9.6% of GDP in 2013-17.
  • We forecast that the economy will contract in 2013, owing to the impact of the conflict on domestic demand and exports. Growth will be modest over the remainder of the forecast period.
  • We forecast that average inflation will remain high in 2013 (at 18.2%) but will be lower than in 2012, as global commodity prices and shortages ease. Inflation will follow commodity price changes, averaging 14.1% in 2013-17.
  • The Syrian pound is forecast to weaken further in 2013, as foreign exchange will remain in short supply. The pound is forecast to strengthen slightly only in 2017, when it will average S£85.2:US$1, compared with S£74.4:US$1 in 2013.

  Review

  • The Syrian opposition has come together to form a body called the National Coalition of Opposition and Revolutionary Forces, which will be led by Ahmed Moaz al-Khatib, a former imam of Umayyad Mosque in Damascus.
  • Syrian rebels have made advances both in the east of the country-by capturing a military base near Deir al-Zor-and in Damascus, where they have seized a helicopter base just outside the city.
  • Turkey has formally asked NATO to deploy Patriot air defence missiles on its border with Syria to defend itself against a Syrian attack. The request has gained the support of the German minister of foreign affairs.
  • Inflation rose by 39.5% year on year in August, according to new data released by the Central Bureau of Statistics. The rise corresponds closely to the increase in prices of food and beverages, which have a 42% weighting in the index.
  • The Central Bank has banned foreign-exchange sales by banks and licensed moneychangers for personal use, following a depreciation of the pound.

  December 05, 2012

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

  
  

  

  December 05, 2012

• 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 spread to the two largest cities in the country: Damascus, the capital, and Aleppo. Attacks on military installations have increased since the rebels' bombing of the national security building in Damascus in July. The rebels have captured a military base in Al Mayadeen, near Deir al-Zour, and have also seized a helicopter base near Damascus. While the rebels have been able to hold on to captured areas in the east of the country, they have struggled to do so in Damascus, where the full might of the Syrian army is concentrated. Mr Assad has, as a result, lost control of parts of northern Syria and some border posts on the borders with Turkey and Iraq. His increasingly tenuous grip on power has been further undermined by the establishment of a unified opposition body, the National Coalition of Opposition and Revolutionary Forces (NCORF). The body was formed in November following talks in Doha, Qatar, and includes the main opposition Syrian National Council (SNC) as well as other opposition forces. However, unifying the military command under one umbrella will be a challenge given the number of loose opposition groups scattered around the country. The Economist Intelligence Unit expects the president to be removed as part of a broader bargain, probably involving elements within the Baath party and the security services, as well as, potentially, a number of former regime figures in the armed opposition, the Free Syrian Army (FSA). However, there will be more bloodshed leading up to Mr Assad's removal. In addition, such a shift in leadership will probably fall well short of wholesale "regime change". Until this occurs, though, the regime will seek to alleviate the pressure on itself by pointing to the increasingly armed nature of the opposition-and to a rising number of bomb attacks on civilian targets, often involving suicide bombers-as part of a broader effort to portray its opponents as terrorists and criminals.

  ELECTION WATCH: The government has initiated limited political reforms, but these have been undermined by violence. Following a referendum on the new constitution in February 2012, a parliamentary election was held on May 7th, which led, unsurprisingly, to a consolidation of power in the hands of the Baath party. The National Unity List, comprising the Baath party and nine other loyalist political parties, won 167 out of 250 seats in parliament. However, the election was boycotted by the bulk of the opposition and in reality was little more than a sideshow. 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).

  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 into 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 expected maintenance of a low-level insurgency 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 Syrian oil imports. In addition, 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. Reports that Iraq is supplying 60,000 tonnes/month of fuel oil to Syria highlight the difficulties the regime is facing in producing its own fuel, but also suggest that it is finding ways to ameliorate a difficult economic situation. This reliance on outside help is likely to increase as the conflict turns 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: Syria's economy is estimated to have contracted by 15.2% in 2012 as private and government consumption and export volumes have been hit severely by the conflict. The deterioration will continue into 2013, with the economy forecast to shrink by 1%. Intense fighting in Aleppo and Damascus will continue to disrupt economic activity and thereby restrict growth. 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, but even if he goes, the absence of a credible political leader will continue to deter investment. Business activity will also remain affected by sanctions imposed by the Arab League and Turkey, which has suspended its free-trade agreement with Syria. In addition, Syrian refugees continue to flee to neighbouring countries to escape the violence, depressing consumption further. Private consumption will rise only slightly in 2014 and will continue to rise 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 (until 2016). We forecast that growth will pick up from 2014 onwards as unrest on the ground eases (although it will continue to fluctuate). We forecast that growth will average 2.7% in 2014-17. In real terms, we therefore expect that by the end of the forecast period the economy will be much smaller than it was in 2011.

  INFLATION: Inflation will ease in 2013 as global commodity prices, including food prices, fall. However, it will remain in double digits (averaging 18.2% in 2013, down from 33.7% in 2012) as the Syrian pound continues to depreciate (owing to a shortage of foreign currency) and the US dollar strengthens (as concerns over the euro zone continue into 2013). This will keep import costs high. However, we expect inflation to fall to 10% in 2014 as global commodity prices continue to fall and the rate of depreciation of the Syrian 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 accelerate again in 2015-16; this, combined with further subsidy reductions, will push consumer price growth back up, to 14.5% in 2016. Even though the Syrian pound will strengthen slightly against the dollar in 2017, higher commodity prices will continue to push up inflation to an average of 14.8% during that year.

  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 Syrian oil imports, which will remain in place as long as Mr Assad retains power. The embargo has substantially reduced Syria's oil exports, which, coupled with a reduction in tourism and a decline in foreign investment, will worsen the existing shortage of foreign exchange. The Central Bank governor, Adib al-Mayaleh, was quoted in the Financial Times in early October as saying that foreign-exchange reserves had fallen "only in a small way. We haven't yet used 10%". However, we estimate that the depletion of Syria's foreign reserves has been more substantial, given the embargo and the fact that the Central Bank has been using its foreign-exchange reserves to prop up the Syrian pound. We expect reserves to continue to decline sharply to just under US$3bn at the end of 2013 (equivalent to 3.2 months of import cover). From 2014 onwards, reserves are forecast to rise, albeit gradually, averaging US$3.5bn in 2014-17, on the assumption that there will be some sort of resolution to the crisis. The Syrian pound is forecast to depreciate to an average of SP74.4:US$1 in 2013 and to weaken further in 2014-16, by an average of about 5.6% a year, before picking up again in 2017, when it is forecast to reach an average of SP85.2:US$1.

  EXTERNAL SECTOR: The current-account deficit is forecast 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 spills over 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 160,000 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. In contrast, the non-merchandise account is likely to strengthen from 2014 onwards, as lower income debits (reflecting a drop-off in profit repatriation by foreign oil companies) and rising current transfers credits offset weak services credits (as tourism remains depressed). Nonetheless, we expect the current-account deficit to remain large, at an annual average of 7% of GDP in 2013-17.

  December 01, 2012

• 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	-15.2	-1.0	2.3	2.5	2.7	3.2
  Oil production ('000 b/d)	163.0	160.0	197.5	223.8	230.0	240.0
  Gross agricultural production growth	-8.0	1.0	3.6	3.5	3.0	3.3
  Consumer price inflation (av)	33.7	18.2	10.0	13.1	14.5	14.8
  Government balance (% of GDP)	-13.6	-13.2	-11.1	-9.9	-7.2	-6.8
  Exports of goods fob (US$ bn)	5.0	4.2	5.1	6.4	7.0	7.9
  Imports of goods fob (US$ bn)	10.1	9.1	10.0	10.8	11.6	12.8
  Current-account balance (US$ bn)	-5.2	-4.6	-4.4	-3.8	-3.7	-3.6
  Current-account balance (% of GDP)	-10.9	-9.8	-8.6	-6.6	-5.6	-4.5
  External debt (year-end; US$ bn)	8.9	9.6	10.6	11.3	11.9	13.1
  Exchange rate S£:US$ (av)	65.0	74.4	78.7	83.1	87.6	85.2
  Exchange rate S£:US$ (end-period)	78.4	69.2	89.9	81.2	93.4	77.7
  Exchange rate S£:¥100 (av)	82.0	90.0	90.7	93.4	95.1	93.2
  Exchange rate S£:€ (av)	83.5	93.9	98.5	102.8	110.4	107.3
  a Economist Intelligence Unit estimates. b Economist Intelligence Unit forecasts.

  Download the numbers in Excel

  Download text file (csv format)

  December 05, 2012

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)

March 02, 2012