Syria - The Economic Base.
Yet Finance Minister Muhammad al-Hussein on March 15, 2009, said Syria's banks were secure but the industrial, transport and tourism sectors were affected by the global financial crisis. In February 2009 he had warned that 2009 was likely to be a "difficult" year for the economy.
Syria, one of the Middle East's few wheat-exporting countries, has suffered a third drought in three years. Agriculture accounts for some 20% of GDP, although this has been declining steadily, and directly employs 19% of the work-force. FAO's representative in Damascus Abdullah bin Yehia in March 2009 warned that the rains by then had been better than in 2008 but were still far below average. The global climate change is having a negative effect on Syria's agricultural sector, once the main-stay of the country's economy.
The drought has affected more than 250,000 farmers who depend on rain-fed agriculture in the north and east of the country. In the west, closer to the Mediterranean, where many use irrigation to water crops, rain-fall in recent months has been sufficient. But there are worries for the years ahead.
Bin Yehia in March 2009 said: "The requirements to support the people affected by the drought are beyond the country's capacity". He added that the government in 2008 did what it could but a UN emergency appeal had fellen short of what had been needed. The FAO was able to supply seed only for 10,000 people to plant in the 2009 season.
Bin Yehia then said: "Even under the best-case scenario, the crops will be well below average, and the farmers in the rain-fed areas will need significant assistance because this is the third year that the crops are likely to be below average".
The agricultural crisis and falling oil income have hit Syria as Assad's regime is struggling to forge ahead with its transformation from a centrally planned, command economy to a "social market economy". Syria in 2008 received only $700m in foreign direct investment (FDI) but did not even match that in 2009.
Moreover, Syrian workers in the GCC region are sending less cash back to their families. There are more than 500,000 Syrians employed in the GCC region. It was feared in March 2009 that, even if 10% of them returned, that would have been big enough to cause a serious unemployment crisis.
Syria on March 10 took a step towards developing itself as a modern market economy by launching The Damascus Securities Exchange (DSE), which was to trade six listed firms as part of its move to attract investment and develop the country's commercial sector and private businesses. The government hopes the exchange will grow quickly, offering domestic companies the chance to raise money for expansion and providing institutional and retail investors with opportunities to diversify.
The six companies which then listed as planning to be traded were Banque Bemo Saudi Franci, a JV of Lebanon's BEMO of the Obaji family and a French bank; Bank of Syria and Overseas, a branch of Lebanon's Banque du Liban et d'Outre-Mer (BLOM); United Group for Publishing, Advertising and Marketing; Arab Bank-Syria, a branch of the Amman-based Arab Bank; al-Ahlia Company for Transport; and Bank Audi-Syria, a branch of Lebanon's second largest financial institution, Banque Audi. Another four companies in 2009 had applied for listing in the DSE. The DSE in March 2009 said it was hoping to list 15 companies by end-2009; but since then, the actual number of listed companies has been lower. Then brokerages have been given membership to operate on the floor of the DSE.