Syria Economy and Energy

By | December 17, 2021

Until the beginning of the conflict, Syria was a modest producer and exporter of oil, although in the last five years it had faced the constant decline of production, developing other sectors of the economy. However, the oil, gas and phosphate industry represented the main economic resource together with the agricultural sector, which accounted for 21% of GDP.and contributed to exports of agricultural products, cotton and textiles. Tourism represented another important resource, while financial services were gaining increasing importance until 2011 (in 2009 the Damascus Stock Exchange began operating after 46 years of closure), telecommunications and commerce. The link with the Soviet Union influenced the Syrian planned economy until the early 1990s. Since then, a process of liberalization and privatization had been initiated. However, the debate had been heated within the Ba’th party and the reforms had progressed slowly. In the banking sector, the first private bank opened in 2004, followed by others, but the Syrian Central Bank has continued to constrain its budget and business strategies in some respects. In the oil sector,Cnpc) had been important in increasing production levels. Syria had attracted fewer foreign investments than other Middle Eastern countries, due to inadequate infrastructure and widespread corruption. The country had applied for membership of the World Trade Organization (WTO) in 2001, but had only managed to obtain observer status in 2010. next year, a growth of 4%. Before the start of the conflict, the economic system was still relatively closed, although the country had trade relations with its neighbors Iraq, Turkey, Lebanon and Egypt, but also with China and the European Union (Germany and Italy first and foremost) – Syria’s first trading partner with $ 5.4 billion in trade in 2009 (equivalent to 23% of Syrian trade). On the other hand, trade with the United States was limited by sanctions. According to UNDP data from 2005, 30% of Syrians (more than 5 million) lived in poverty, while 11% in extreme poverty. This figure is also linked to limited water resources and the impact of phenomena such as drought and desertification, which have negative consequences on agricultural production and contribute to the process of ‘urbanization of poverty’. The GDP per capita amounted to about $ 3,200 before the war, was already among the lowest in the Middle East. Certainly misery was among the causes of the revolt.¬†For Syria economics and business, please check businesscarriers.com.

Syria produced modest quantities of oil: 400,000 barrels a day in 2009, which collapsed to 20,000 in 2013 when most of the fields fell into the hands of the rebels. Previously it was a very limited production compared to its neighbors in the Persian Gulf and the decline would have made the country a net importer in the future. To compensate for this factor in the energy mix, the country planned to increase gas production (about 7 billion cubic meters in 2009), having reserves of 280 billion cubic meters. Syria is located in a strategic position for the transit of gas: this would have been of great advantage. In 2008 the connection in Syria of the Arab Gas Pipeline (coming from Egypt) was opened and there were plans – all blocked – to deepen regional cooperation with the expansion of gas pipelines to Turkey, Iraq and Iran. Under a 2009 agreement with Turkey, with the opening of the Syria-Turkey section of the Arab Gas Pipeline, Syria could have imported nearly one billion cubic meters of gas. The goal would have been to become a transit state for Egyptian, Iraqi, Iranian and potentially Azerbaijani gas, thereby deriving more revenue and increasing its gas availability.

However, the slow process of economic and infrastructural modernization was drastically interrupted by the civil conflict that destroyed much of the industry and infrastructure. In particular the fall of the major oil fields and refining infrastructure in the hands of the rebels of the Islamic state before and then made these target sites of the coalition bombing anti- Is, causing almost total destruction. According to the United Nations Commission for Economic and Social Affairs of West Asia, the cost of reconstruction is more than 80 billion dollars, of which 28 only to rebuild 1.2 million houses equipped with infrastructure.

Such an effort would also entail problems from the point of view of finding raw materials; almost 30 million tons of cement a year would be needed – more than three times the amount the country needed before the start of the conflict – to produce which would require more than a billion cubic meters of water, a precious resource and scarce in Syria. According to the 2013 Carnegie Endowment for International Peace report, industrial facilities and infrastructure are also unusable. The official figures for 2013 spoke of an inflation of 68%, but in reality the rate is much higher. At the end of 2013, the European Union allocated a record amount of 147 million euros to support the populations victims of the conflict.

Syria Energy