Country Report Syria March 2011

Outlook for 2011-12: Policy trends

The gradual liberalisation of Syria's centrally planned economy is expected to continue under the leadership of the deputy prime minister for economic affairs, Abdullah al-Dardari. However, the economic debate remains highly charged, and liberalisation will be hindered by opposition from influential officials. Some within the Baath party are concerned about the negative impact of reform on poverty, and the fear of unrest will probably strengthen their hand. Some members of the business elite benefit from the status quo and might also resist change.

The overriding policy challenge will be to offset the impact of the long-term decline oil production (despite a small increase in 2010), by developing other sectors of the economy, particularly those that boost export earnings. Moves intended to increase investment include offering infrastructure investment opportunities to private investors, expanding the Damascus Securities Exchange, relaxing foreign-currency restrictions and boosting bank lending. The introduction of Treasury bills in December 2010 is an indication that financial reforms are moving forward, albeit slowly. Plans to introduce a public-private partnership law to aid financing of investment projects have been announced. There are plans to cut government subsidies, particularly for fuel, although the government has also increased heating fuel allowances for state employees and approved means-tested cash benefits, partly to soften the impact of price rises.

© 2011 The Economist lntelligence Unit Ltd. All rights reserved
Whilst every effort has been taken to verify the accuracy of this information, The Economist lntelligence Unit Ltd. cannot accept any responsibility or liability for reliance by any person on this information
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