Country Report Syria July 2009

Outlook for 2009-10

• The president, Bashar al-Assad, is expected to remain in power in 2009-10 and, despite some tensions within the regime, there is no significant threat to his rule. Some limited domestic political reform is expected.
• Relations with the US and leading Arab states are expected to improve, albeit gradually, although much will depend on the outcome of the demonstrations in Iran and on whether Syria continues its close alliance with that country.
• The prospects for a resumption of meaningful peace talks between Israel and Syria that would lead to the return of the Golan Heights within the forecast period look poor, given Israel's hardline government.
• Syria's drive to increase investment and boost tourism will be undermined by the global economic downturn, with real GDP growth falling from 5.1% in 2008 to 2.1% in 2009, before recovering slightly to 3.8% in 2010.
• Inflation will decline sharply from its 2008 peak, to an average of 7.7% in 2009-10, as the global economic slowdown depresses commodity prices.
• The current-account deficit will widen to an average of US$1.2bn (2% of GDP) in 2009-10, largely because of an increase in the trade deficit.

Monthly review

• Syria does not appear to have interfered in the Lebanese general election, and its long-time opponents, the March 8th bloc, won a clear victory. However, the result may support Syrian rapprochement with the US and Saudi Arabia.
• Mr Assad was one of the first world leaders to congratulate Mr Ahmadinejad on his apparent victory in the Iranian presidential election, but neither he nor the Syrian media have commented on the subsequent unrest in Iran.
• The hardline stance taken by the Israeli prime minister, Binyamin Netanyahu, in response to the speech in Cairo by the US president, Barack Obama, does not bode well for a resumption of peace talks between Israel and Syria.
• The draft of a new and more Islamic personal status law has drawn heavy criticism from Syria's minority Christian and Druze communities, and it is unlikely to be passed in its current form.
• The Central Bank has granted foreign banks permission to establish representative offices in Syria, in an effort to attract international banks.
• In response to ongoing electricity supply problems, the government has initiated an emergency plan to install 20 18-mw generators in the five main cities; this follows tariff increases in May intended to curb consumption.
• The UAE-based Rotana has opened the Afamia Rotana in Latakia, the group's first five-star hotel in Syria, and is developing hotels in Homs and Damascus.

Source: Country Report

This report covers the following industry codes:
SIC Code: 37;60;49;39;53;70;48;2834;80;20;10
NAICS Code: 336;52;22;31;44;72;517;3254;62;311;212