Syria Economic Structure

Syria’s economic structure and politics are highly centralised. Since the rise of the Baath party in 1963, centralisation of the economy has been followed in accordance to the socialist ideologies of the party and its leaders.

The main source of foreign income for the Syrian economy is from the export of oil, estimated at 155,000 bbl/day in 2010. Other exports include crude oil, minerals, petroleum products, fruits and vegetables, cotton fiber, textiles, clothing, meat and live animals, wheat – estimated to total $10.13 billion.

Syria’s economic structure and politics are highly centralised. Since the rise of the Baath party in 1963, centralisation of the economy has been followed in accordance to the socialist ideologies of the party and its leaders.

The main source of foreign income for the Syrian economy is from the export of oil, estimated at 155,000 bbl/day in 2010. Other exports include crude oil, minerals, petroleum products, fruits and vegetables, cotton fiber, textiles, clothing, meat and live animals, wheat – estimated to total $10.13 billion.

Between 1990 and 1995 major oil discoveries and economic reforms were taken by the Syrian government.

In 2003 the Syrian economy suffered when the allies invaded Iraq leading to significant drop in the number of tourists and a stop in the flow of cheap Iraqi oil and commissions received from Saddam’s regime which was also a main source of income for Syria during the UN embargo, thanks to the Oil for Food program and through smuggling. The economy shrank 2.14% in that year.

Syria’s economy then recovered in 2004 following high oil prices in the international market and a rebound from the Iraq crisis, growing 6.719%. It grew consistently 4% – 5% until 2010, managing a decent showing during the Great Financial Crisis.

Syria’s GDP (on a Purchasing Power Parity basis) was US$105.324 billion in 2010.

This makes Syria No. 65 in world rankings according to GDP (PPP), US Dollars in year 2010. In 2011, GDP is forecasted to reach US$112.56 Billion.

Forecasters believe that Syria will see improved growth over the next few years, in the 5% to 6% range annually.

Syria’s economy faces the challenges of lack of investment due to its government and lack of required reforms to enable investments. Syria also suffers a high unemployment rate that is put at 9.2 percent in 2010 by the IMF. Other groups believe this is understated, however, with some estimating that it is as high as 20%.

Depleting oil reserves is also a problem for Syria, as well as water supplies affected by pollution and public and external debt which makes up 98 percent of its GDP.  Syria also has $21.55 billion in external debt which is equivalent to 45percent of its income. Such debts and their servicing charges place a constraint on the Syrian economy.

They also reduce Syria’s ability to acquire new loans from international credit agencies.   

The Arab Uprisings of 2011 have reached Syria too, starting with protests – and the killings of protesters – in the southern town of Daraa.

If these protests affect the stability of the closed Syrian Ba’athist regime, then all bets could be off in the short term.