Economic reforms in Syria

DIW Weekly Report 7/2008, pp. 41-46

Syria is in the middle of an economic reform process. This is necessary because oil reserves are running out, which has caused the current account balance to become strongly negative. At the same time, underemployment is high and per capita income is stagnating. Subsidies and the number of public sector employees are too high – labour productivity, tax revenues and exports are too low. The shadow economy is flourishing. However, political and ideological “taboos” prevent a speedy implementation of reforms. The introduction of a value-added tax, the reduction of subsidies – especially for oil products -, the integration of refugees from Iraq, an improvement of relations with Israel or the privatisation of state-owned enterprises are not making progress. Finally, Syria lacks skilled workers to analyse, plan, implement and control the measures to be taken. Especially in this area, but also in trade, the international community and especially the EU can be supportive, while the Syrian government would gain trust among its own population, but also internationally, through more transparency in its reform measures.

PDF Download of this publication