Economic trends
GDP growth has been about 4% in the recent years. The growth of the Syrian economy has depended mainly on the production of hydrocarbons. The country is moving progressively from a strongly State controlled economy to a more liberal market where privatization plays an important part. At the moment, the liberalization of the economy concerns especially the banking and insurance sectors. Since 2008, private and Islamic banks have been authorized to operate in the country next to the six existing public banks. Henceforth, private banks have a dominating share in matters of flows; the exchange rate was standardized; the Syrian Pound (SYP) is no longer backed by the USD but by the SDR since July 2007. From this fact, the SYP has been stabilized at a high administered rate -doubtless over-valued- but it remains non convertible. Finally, the plan to create the Damascus Stock Exchange took shape. In spite of many postponements due to technical restrictions and the delay in legal compliance, the Damascus Stock Exchange opened in March 2009, with five quoting companies.
The financial crisis slightly affected Syria, in part because of US sanctions and also because the Syrian banking system is not integrated to the International banking system. The only major impact of the financial crisis in Syria has been the rise in inflation, which has caused an increase in prices. The country's poorest part of the population has also been faced to a higher cost of living.
Main branches of industry
Syria's economy is heavily dependent on agriculture. It contributes nearly 20% to GDP and employs one-third of the active population. The land under cultivation has increased by more than 50% since 1970, largely because of government incentives and more efficient use of irrigation methods. The principal crops include wheat, potatoes, sugar beet, and barley. Large numbers of poultry, cattle, and sheep are also raised.
The oil and gas sector is very important to the economy and contributes 65% to the country’s exports. The main industrial sectors are: petroleum refining, textiles, food-processing, chemicals, and state of the art technology. The manufacturing sector contributes 25% to GDP with the production of handicrafts such as articles of silk, leather and glass.
The service sector is well established (mainly tourism) and contributes more than 50% to GDP.
International trade
Syria is quite open to international trade. Free-trade agreements have been signed with Lebanon, Jordan, Morocco, Iraq, with Arab countries (GAFTA free trade agreement) and with Turkey (bilateral free trade agreement since 2007). However, the weak complementarity of regional economies has restrained the development of inter-regional synergies and the establishment of a more important economic integration.
Syria also started negotiations for an Association Agreement with the EU in October 2004, but final signatures are still pendinng. The share of foreign trade in the country’s GDP is nearly 70%. Its top three export partners are: Iraq, Lebanon and Germany. Syria mainly exports mineral fuels and oils, cotton, livestock, and cereals. The top three import partners are: Saudi Arabia, China and Egypt. The country mainly imports iron and steel, nuclear reactors, machinery, vehicles, mineral fuels and oils, plastics and chemicals.
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