Country Report Syria October 2009

Summary

The president, Bashar al-Assad, is expected to remain in power in 2010-11, 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 rapprochement will be overshadowed by heightened tension between the US and Iran, Syria's closest ally.
It is unlikely that Israel's hardline government will seriously negotiate to return the occupied Golan Heights during the forecast period, but Israel and Syria may both have an interest in being seen to resume indirect talks.
As the global recession ends, Syrian real GDP growth will rise to 3.7% in 2010 and then 4.5% in 2011.
Inflation will rise to an annual average of 7.1% in 2010-11 as global commodity prices increase slightly and VAT is introduced, although it will remain well below its 2008 peak.
The current-account deficit will narrow slightly to an average of US$1.4bn (2.2% of GDP) in 2010-11, largely because of an increase in the non-merchandise surplus from booming tourism.

In response to criticism from the Iraqi government, Mr Assad has displayed the strength of Syria's relationship with regional powers, including Turkey and Saudi Arabia, visiting the latter for the inauguration of a university.
Although EU officials have indicated a desire to sign the long-delayed free-trade Association Agreement with Syria, concerns about human rights and, in particular, Syria's alleged nuclear programme, are still delaying it.
During a visit by Mr Assad to Istanbul, it was announced that Syria and Turkey were waiving visa requirements for each others' nationals. This comes at a time when bilateral trade is strong, particularly Turkish exports.
Nazim Bahsas of the Syrian Telecommunications Establishment has said that its monopoly over fixed-line services will continue for several years after a proposed new law, expected next year, liberalises the industry.
New data from UNCTAD show that foreign direct investment into Syria increased by 70% in 2008 to US$2.12bn. The liberalisation of access to foreign currency was cited as a major driver for this increase.

Source: Country Report

This report covers the following industry codes:
SIC Code: 48
NAICS Code: 517