Report No. 806-SYR

Current Economic Position FILE COPYand Prospects ofSyriaOctober 31, 1975

Emena CP Il-C

Not for Public Use

Document of the World Bank

This document has a restricted distribution and may be used by recipientsonly in the performance of their official duties. Its contents may nototherwise be disclosed without World Bank authorization.

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Currency Equivalents

February 1974 to Date

U.S. $1 = SL 3.70

SL 1 = U.S. $0.27

Fiscal Year January 1 - December 31

TABLE OF CONTENTS

Page No.

MAPS

COUNTRY DATA

SUMMARY AND CONCLUSIONS .............................. i-iii

I. RECENT ECONOMIC DEVELOPMENTS ......................... 1

Production and Growth ................................ 1Resources and Uses ................................... 4

II. DEVELOPMENT PLANNING ................................. 6

III. PUBLIC FINANCE ....................................... 8

Revenues ........... .................................. 10Expenditures ......... ................................ 12

IV. MONEY, BANKING AND PRICES ............................ 13

Monetary Development ................................. 13Banking and Credit ................................... 14Prices . .............................................. 15

V. THE BALANCE OF PAYMENTS .............................. 16

Merchandise Trade .................................... 16Invisibles and Transfers ............................. 18The Capital Account .................................. 18

VI. PROSPECTS ............................................ 19

ANNEX - Development and Prospects of the Transport Sector

Statistical Appendix

This report is based on the findings of an economic mission which visitedSyria in March/April 1975. The mission was composed of Messrs. F.A. Atabani(chief), A. Zaman, B. Al-Bustany (General Economists), and N. Krogh-Pauison(Transport Economist).

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AREA POPULATION ansiTT185,108 il67.mIlo mi-92 75 Per kmtof arable lend

SOCIAL DADICAIVRS

ReAjfetencm CQWtcIj

031 PER CAPITA US$ (ATLA5 BASIS) /I 180 /ac 320 /b 370 380 /b 710

DEN)GRAPHICCr b rate t (per thsucand) 4.18 / 38 Id.a 38 hi1

Crude death. rate (per thouand) 7 L1Inan Mortality rate (par thion,an lives births) 35c13~. 116 13Lfe Wrpactancy at birth (years) 93 5.. 15 ~I 106 82

Oros. srgodr.c.tihn rate /S. 3.5 2.6 ee. 3.1. 1.9Populato rwtU aeL 3.3 3.3 3~, 2.5 2.1 ~ 2.6k?".Ilation growth rate - urban .5& 4..5'1 3 6 noAge structur (pareot.)

0-11lb1.6 .9 ~ 18 146 / 1.315-61. 19 .7A 539 50 / 5265 and o-er 5 1./ 1.3 4 5kg. dependency ratio 1.0 I.1 0. l0. 0.9Ecoonc dependency ratio ( 2.2 2511 217 .

Urb.. popaltio. as percent of total 37 /k 441 /b.k 38.7Li 4 n.1. 58 /n.Fceily plannit I W. of acceptors aamulatias (thous. Le. .8. ~ 18 8

Vo. of caers (% of married wmen) .. 8. LL 12 IL1

Tota labor force (thouaand) 1,100) 1,700 ~ 1,500 /. 1,500 ~ 570Percentage eaployad in agrisulture 1.7 54 61. 53 ~ 19Psou antags unemployed 9/ 5 9 6

Pecetofct,onl ir,coma raci,ed by hbi.sot 5% . .32 Z5 6 ugvParcent af national Income received by highest 20% .. . 0 55percent of national inom received by lowesrt 20% .. 3 4Percent of national ibome rremivd by lowest 4.% 10 .. 10 V

% owned by ceallest 10% of owners .. . 0.9

HEALTH AND RuffITOSb,pualtic" perpiystian 5,200 /x 3,850 2,220 5,950 1,4.70Population per nursing person. 4 ,160 1,880 ZL 730 1,050 ILPopulation per hospital bed 930 /z 1,010 690 1.10 sa 260

Per capita calorie eupply me % of requiremets 5 10 1-10 86 96Per capita protein mupply, tota (gramsa Per dayl)L6 74. 70 78 51. 70

Of which, animal nd psul 28 ~ 16 22 Ib 11. l 11Death rate 1-I. years / . . 15 Li 1.5 57a 8

1iijim ka Primary .chool enrollment ratio 65 88 III11 107 6 1l Adjusted secondary school enrollment ratio 16 39 a 28 20 LO.0fTears of .oholitig provided, first and aecond level 1 12 la4 13 12Vocational enrollment am I of geec. School enrollment 6 12. ~d I 31./h h/oeAdult literacy rate % 36 1. h 1.0 55 ss155 -A 69 r_gL

30ae,g. of p"r- per roo (urbaa) 2. 1.9 2.6 Z .1Plercentof occpIed watte without piped water 5861 60 ~ 31.Acomesst electricity (a. % of total population) 31 a i Li 21/ 98Percent of #ural population connected to electricity .& l 898

ivsleer per 1000 population 57 371. A 107 /a 7L 4 a 211 IfPaaeenger car. par 1000O population 1. 1 15 5 aSOactric power cowcumption (kit p.c.) 77183 31 1688 521Newsprint conjomption p.c. kg per year 0.2 0.01. 2.21.0.1

Notea, Figures refer either to tbe latet period. or t. cco-.c of maIcoeOa.Ln rtr. iyaeC c~the lat.est ye-ar. stateL periods refer~ in principle t. ~ dostribution by agea&. can~ Of natlovo1 prP..lotiOv.-the years 1956-60 or 1966-70; the latest yaar. to pr.in- ~ Protein atendards (rafluiramntcc) for .11 --~rtrw,- 4 00 ast-ciple to 1960 ond 1970. Ilshed by IBOL Economic Raoornh lervica pruo_ds fc- a xn,-o.

The Per Cepit fLa P s.timat. ir at ceknt pc-Ic. for Allowance of 60 grams of total prctair. par lay, end 20 gram ofy-or ,th."c tih., 1,96A,caied 'Led hy the Osse convere-o, eanimal and p,.Aee protein, of sh,ch 10 grano s'co.ld be accimaltchui q.e as tin 1972 Wor.d B-ord t. ii. protein. Theae standard, c-e osi.m.ht lowe than those of 1

L2 Average nueber of daughLaro per -n.cn of reprod-rtivs grano of tOtal protein and 23 gv-ac of -nt-.u protoir, as o-agee- average for th. .orld, proposad by ii) -n ins Thorm World )Ood

a Populatim grocti -ter, ocr for tbo 1-odeo ending 1n Sulrey.1960 ond 1970. /7oSe st,diea hava soggootod that condec'i rotor of .2nRatio of population, untder 15 and 65 and over to popula- ages I throo,gh 1. Wa ho csed usafirst a,po.nci,iir'tios of ages 15-61 for age depndency ratio and to labor malnutrtnllo.force of ages 15-61. for economic dependency ratio. /8 P.rew.tage enrolled of correspnding pop..Llon or school pgFi AO reference standarda reprae.-t phyaiological re- as defined for each country.qu.lremnt. for normal Activity and health, taking

C ompucted by appLying to tie 1970 figure the growth c-ats af GNPA/ap. inc resl ter- fror 1960 co 10cr; /1 1912;o 1965-70 UN1 estimate; 41 1965-70, ; Derived from saample socra,y estimateso (21.0,000 psr,oau), *.cludc.ng 17 eastern

prnvlncea; LL 1971; a~ AID estinata; & 1968; Li 1965-67; UI 1960-72; /k Cities, Mohafe.a.. cetersand fauctlk. centers; , Adelnitrtetive co-tsre of provinces an~d di at rli. ("vilayet, end "Kane" 0501tern);

a1956-66; n Over 10,000 population; /o 1966; Lt 1961. - Jun 1971.; Ls. 86 percet being IUDs; /c- 1961;o 15 yces and ove r; /t DioPOsbls income (Hcuseholds)j /u Par.onal dapo.uabie incose (Ho....holdo); ~ Inc c-t

aci outskirts; /. Covering 6.5 million hectareo of private land, excluding 0.8 million heotarro x. public vanrniup,and 2.1 sil-lion hectares of collective land; /x 19621 ~L Including aesistanct nrsec ard nidccivrn; /c Per.onoclin govmermet eecrvinese only; l/a- Government hospital establishmnets orly; lab 196L-66; /a. ogiotTred only;

/a Including WUNlA,i schools; , Exclucding 26 percent of private schools; let Drieniti.n -ot -avablli, /a Pvc-nooaio years old end Over who te the censusa taker that they con read sOd crite; lea Road sod rciLc; /.I 10 yoaroa,nd over; /.J 1961-62; L! Inside or outside; als Perentage of dwellings cciteLh iio 1;gh; log

olAbanon has been selected as anobjective country on the basis of the strong and concAooous -ounni, nociol, hlntorcu-land political tien which bind the two countries.

Page 2 of 3 pages

ECONOMIC INDICATORS

GROSS NATIONAL PRODUCT IN 1974L/ ANNUAL RATE OF GROWTH (%, constant prices)

US$ Mln. % 1960 -65 1965 -70 1974

GNP at Market Prices 5,995 100.0 8.5 5.5 12.7Gross Domestic Investment 913 22.9 1.5 10.6 45.0Gross National Saving V 1,140 28.5 7.0 -60.3Current Account Balance 227 5.7Exports of Goods, NFS 1,059 26.5 8.1 0.6 - 9.4Imports of Goods, NFS 1,329 33j3 0.0 4.6 43.1

OUTPUT, LABOR FORCE ANDPRODUCTIVITY IN 1973 1/

Value Added Labor Force3" V. A. Per WorkerUS$ Min. % Mln. % US$_

Agriculture 433 19.3 .86 50.5 505 38.5Industry 504 22.4 .19 11.2 2,650 200.0Services 1,309 58.3 .60 35.3 2,180 65.2Unallocated - - .05 3.0 - -

Total .__2,246 100.0 1.70 lOO.O 1,320 100.0

GOVERNMENT FINANCEGeneral Government

(S.L. Mln;) % of GDP1974 1974 1970-74

Current Receipts 4,293 29.6 25.0Current Expenditure 3,204 22.1 21.0Current Surplus 1,089 7.5 4.0Capital Expenditures 2,393 16.5 12.5External Assistance (net) 2,003 13.8 -

Nov. Nov.MONEY, CREDIT and PRICES 1970 1971 1972 1973 1974

(Million S.L.outstanding end period)

Money and Quasi Money 2,521 2,715 3,428 4,114 3,985 5.556Bank credit to Public Sector 2,790 3,210 4,016 3,677 3,492 4,958Bank Credit to Private Sector 551 570 578 653 694 735

(Percentages or Index Numbers)

Money and Quasi Money as % of GDP 39.2 36.5 38.6 43.7 4/

General Price Index (1963 - 100) | 115 120 131 136 .. 185-Annual percentage changes ins 4/

General Price Index 5. - 4.4 9.2 3.8 .. 36.0-Bank credit to Public Sector 26.6 15.1 25.1 -8.4 . 42.0Bank credit to Private Sector -7.6 3.5 1.4 13.0 . 5.9

NOTE: All conversions to dollars in this table are at the average exchange rate prevailing during the periodcovered.

1/ Preliminary estimates.L/ Incliding current transfers from abroad equivalent to US$424 millions.3! Total labor force; unemployed are allocated to sector of their normal occupation. "Unallocated" consists

mainly of unemployed workers seeking their first job.4/ December. to December.5/ GDP deflator.

not availablenot applicable

Page 3 of 3 pages

TRADE PAYMENTS AND CAP ITAL FLOWS

BALANCE OF PAYMENTS MERCHANDISE EXPORTS (AVERAGE 1972-74)

197197235 1974 US $ Mln (Millions US $)

Crude Oil 188 39.2Exports of Goods, NFS 482 604 1,059 Raw Cotton 136 28.3Imports of Goods, NFS 599 690 1,329 Textiles 48 10.0Resource Gap (deficit = -) -117 -86 -270 Wool 15 3.1

Industrial Products 15 3.1Interest (net) -7 -1 7 All other commodities 16.3Workers' Remittances 68 51 66 Total 480 100.0Other Factor Payments (net) - - -

Net Transfers 58 373 424 EXTERNAL DEBT, DECEMBER 51, 1974Balance on Current Account 2 337 227

US $ MlnDirect Foreign Investment - - -

Net MLT Borrowing Public Debt, incl. guaranteed 257.8Disbursements 30 67 118 Non-Guaranteed Private DebtAmortization 35 -40 -48 Total outstanding + Disbursed 257.8Subtotal - 5 27 70

Capital Grants - - - DEBT SERVICE RATIO for 1974-/Private Short-term Capital (net) 17 -27 20Other items n.e.i. -7 -21 -144 %

Increase in Reserves (+) 7 316 1732/Public Debt, incl. guaranteed 5.0

Gross Reserves2/ (end year) 135 481 835 Non-Guaranteed Private DebtNet Reserves 2/ (end year) -36 273 453 Total outstanding + Disbursed

Fuel and Related MaterialsImports 24 28 74

of which: Petroleum (..) (..) (..)Exports 52 77 434

of which: Petroleum ( 52) ( 77) (434)

RATE OF EXCHANGE IBRD/IDA LENDING, (April 50, 1975) (Million US $):

Ilbrough January 1973 IBRD IDAUJ.S. $1.00 = S.L. 3.82 (Official)U.S. $1.00 = S.L. 4.32 (Market) Outstanding and Disbursed - 9.9February 1973 to June 1975 Undisbursed 88.0 38-7U.S. $1.00 = S.L. 3.85 (Official) Outstanding incl. Undisbursed 88.0 48.6U.S. $1.00 = S.L. 4.05 (Market)July 1975 to January 1974U.S. $1.00 = S.L. 3.80 (Official and Market)S.L. 1.00 = U.S.$0.26 (Official and Market)February 1974 to DateU.S. $1.00 = S.L. 3.70S.L. 1.00 = U.S.$0.27

j Ratio of Debt Service to Exports of Goods and Non-Factor Services.

a! Published IMF data in International Financial Statistics (October 1975). Increase in Reserves in the balanceof payments differ slightly from differences in end-year Net Reserves, due to changes in the exchange rate.

not availablenot applicable

SUMMARY AND CONCLUSIONS

i. Since attaining independence in 1946, Syria has had several changesin regime which resulted in a shift of power from groups of landowners, tradersand industrialists to a rising class of officers, technicians, and civil ser-vants, as well as a shift of the economy from an essentially laissez-fairesystem to a largely publicly owned and regulated one. The Baath SocialistParty, the ruling party since 1963, provided substantial continuity of em-phasis on economic and social development policies which have, by and large,prevailed in spite of internal Government changes and tensions within theMiddle East. During the 1960s an agrarian reform was completed, with redis-tribution of land to large numbers of formerly landless peasants. In November1970 General Assad became President of the Republic and his regime has sincebeen characterized by a balance of firmness and cQnciliation in domestic pol-icies, economic pragmatism, a concerted search for a better defined role forthe private sector in a centrally regulated economy, as well as diversifica-tion of foreign economic relations. All these aims have been pursued graduallyand in spite of recent events in the Middle East, substantial reorientation ofeconomic policies and diversification of production have been achieved.

ii. The period of transition in the second half of the 1960s has hadfar reaching effects on economic performance as private initiative and invest-ment declined while public sector investment gained momentum only slowly.However, economic performance since 1970 has improved significantly, partlyas a result of favorable weather conditions which led to a substantial in-crease in agricultural production, and partly because the newly introducedeconomic policy measures which aimed at stimulating the private sector beganto take effect. The rising trend in output was interrupted by the severedrought in 1973 and the aftermath of the October war. In 1974 the Syrian eco-nomy almost completely recovered from the dislocation caused by the war andfrom the relative stagnation of the agricultural sector brought about by thedrought conditions of 1972/1973. As a result, GDP in 1974 increased by al-most 13 percent in real terms compared to just over 2 percent in the previousyear. Overall, real per capita income increased by over 5 percent per yearbetween 1970 and 1974. Economic growth in 1975 is expected to be good, withgrowth rates close to those achieved in 1974.

iii. Because of the size and importance of the agricultural sector, theSyrian economy remains highly vulnerable to fluctuations in agricultural out-put brought about by variations in the amount and timing of rainfall. However,the share of industry in GDP has grown substantially in recent years and in-dustry is emerging as a leading sector in the economy. National accounts es-timatew for 1974 indicate that both agriculture and industry accounted forabout 22 percent of GDP in constant 1963 prices, but because of the relativeincreases in industrial prices, value added in industry at current pricesamounted to 30 percent of GDP while that for agriculture reached 22 percent.With the expected growth in extractive industries, the share of the industrialsector may well exceed that of agriculture in the near future.

- ii -

iv. Total investment continues to increase both in absolute and rela-tive terms. Gross fixed investment increased from about SL 1.2 billion(about 16.7 percent of GDP) in 1971 to about SL 3.0 billion in 1974 (about20.5 percent of GDP), with the public sector accounting for about two-thirdsof the total. Though its share in total investment has remained about con-stant, private investment in absolute terms increased threefold between 1970and 1974. By far the larger part of investment was in industry and construc-tion. At the same time, domestic savings continue to grow and on averagefinance some 70 percent of total investment with net imports accounting forthe remaining 30 percent. However, with the growth of current transfers fromabroad, national savings which averaged about 29 percent of GNP over the pasttwo years, have substantially exceeded current domestic investment in recentyears.

v. Recently, there have been significant changes in absolute and rela-tive prices. The GDP deflator indicates a 37 percent increase in prices in1974 compared to under 6 percent per year average growth during 1970-73 per-iod. Indices of wholesale and retail prices, though less reliable, confirmthe rapidly emerging inflationary pressures in the economy as increased ag-gregate demand continues to generate pressures on domestic resources. Inspite of an improved external balance situation, import liberalization pol-icies have not so far been used effectively to increase the total supply ofresources. Growing inflationary pressures may pose serious problems for theSyrian economy in future and, if unchecked, they may reflect adversely on fu-ture growth prospects of the economy. A favorable balance of payments positionand a relatively high level of foreign exchange reserves would warrant a fur-ther liberalization of import regulations to increase the supply of goods andservices in an attempt to dampen inflationary pressure in the economy.

vi. Continued overall deficits have been the main characteristic of theSyrian Government budget in recent years. Domestic revenues have been slightlyhigher than current expenditures, so that a large part of development expend-itures has been financed through external project loans or through borrowingfrom the banking system. Since 1973, however, the situation has substantiallychanged as grants and aid from other Arab countries increased to such a levelthat Government recourse to the banking system to finance the overall deficitswas unnecessary. With an even higher level of public expenditures, the over-all budgetary deficit in 1974 was twice as large as that for the previous year,yet it was more than covered by an even larger amount of Arab grants and aid.

vii. Domestic revenues increased substantially in 1973 and 1974 mainlyas a result of the rapid growth of oil revenues. To the extent that the in-crease in income was not a result of higher taxes, their use in financing aneven higher level of public expenditure on domestic goods and services resultsin a net injection of extra liquidity in the economy which might lead to anintensification of the inflationary impact of the budget. This is even moreso since the share of tax and other non-oil revenues in total revenues hasbeen declining.

- iii -

viii. Government development expenditures are carried out in accordancewith the Third Five-Year Plan 1971-75. During the first three years of thePlan there were considerable shortfalls in total planned expenditures, mainlydue to weaknesses in project preparation and follow up procedures, as well assevere shortages of foreign exchange. More recently, however, a heightenedconcern with development issues, new procedures and reporting systems as wellas a considerable easing of the foreign exchange situation, have led to a con-siderably higher public sector investment, particularly for 1974, with an evenstronger performance anticipated for 1975. However, these improvements mighthave come too late to substantially increase the implementation rates of thecurrent Plan, which by the end of 1975 may not exceed 55-60 percent.

ix. Work on the Fourth Development Plan 1976-80 has already been ini-tiated. A preliminary framework has been prepared and more detailed work onthe Plan is expected to begin soon. Preliminary indications are that thestrategy of the forthcoming Plan may not differ substantially from that ofthe current Plan with heavy concentration of public sector investment on thedevelopment of agriculture, irrigation, as well as extractive industries,particularly oil and phosphates.

x. Syria's balance of payments, which had been in substantial deficitsince 1968, improved in 1971 when the deficit was reduced sharply, registereda small surplus in 1972 and very substantial surpluses in 1973 and 1974. Theimprovement initially reflected increased oil transit dues, current transfersfrom abroad and private capital inflow. In the last two years, large transfersfrom Arab countries have offset the widening trade deficit and resulted inoverall payment surpluses of SI, 1.2 billion in 1973 and an estimated SL 641'million in 1974. As a result, gross foreign international reserves increasedfrom the equivalent of US$135 million at the end of 1972 to US$481 million atthe end of 1973 and an estimated $835 million at the end of 1974, equivalentto over eight months imports at 1974 levels. With a satisfactory foreign ex-change position and increasing inflationary pressures, further liberalizationof import policies is warranted and can be expected.

xi. Future prospects for the Syrian economy are favorable and would begreatly enhanced if peace is restored to the area. The pragmatic outlookbrought about by the present Government and the recent changes in the direc-tion of economic policies are likely to make it possible for the private sectorto contribute effectively to the future development and diversification of theSyrian economy. Assuming that the Syrian authorities manage to keep currentinflationary pressures under control, GDP in real terms may be expected togrow by about 8.5 percent per year between 1975 and 1980 with investmentgrowing by about 10 percent per annum. Exports may grow by about 12 percentand imports by about 11 percent.

xii. However, the country will continue to need to borrow abroad to fi-nance development projects, particularly in the public sector. Syria's ex-ternal public debt amounted to $702 million by the end of 1974, and debt ser-vice payment on external public debt (excluding military) were estimated atabout $52 million, equivalent to 5 percent of exports of goods and non-factorservices at 1974 level. In view of the improved prospects and the relativelylow debt service ratio, Syria can service substantial additional debt on con-ventional terms.

I. RECENT ECONOMIC DEVELOPMENTS

Production and Growth

1. Since the attainment of independence in 1946, Syria has had severalchanges in regime which resulted in a shift of power from groups of landowners,traders and industrialists to a rising class of officers, technicians andcivil servants, as well as a shift of the economy from an essentially laissez-faire system to a largely publicly owned and regulated one. The Ba'ath So-cialist Party--the ruling party since 1963--has provided substantial con-tinuity of emphasis on economic and social development policies which have,by and large, prevailed in spite of internal Government changes and tensionswithin the Middle East. During the 1960's an agrarian reform was completed,with redistribution of land to large numbers of formerly landless peasants.In November 1970 General Hafez Assad became President of the Republic and hisregime has since been characterized by a balance of firmness and conciliationin domestic policies, economic pragmatism, a concerted search for a betterdefined role for the private sector in a centrally regulated economy as wellas diversification of foreign economic relations. All these aims have beenpursued gradually and cautiously and, in spite of recent events in the MiddleEast, substantial reorientation of economic policies and diversification ofproduction have been achieved.

2. The transition of the economy from a predominantly laissez-fairestructure to an incipient socialist one and the unavoidable political andadministrative instability of the transitional period have had far reachingeffects on economic performance. Private sector initiatives and investmentdeclined while public sector investment, particularly in industry and infra-structure, gained momentum only slowly. During the 1960's growth rates aver-aged between 4-7 percent per year with slower growth rates in the second halfof the decade. These were generally lower than warranted by the economicpotential of the country. Furthermore, there were (and still are) largeannual variations in aggregate output, due to the dependence of the economyon rainfed agriculture and the frequent incidence of drought conditions. Inrecent years, economic growth has also suffered from the effects of the June1967 and October 1973 wars in the Middle East. However, since the reorientationof economic policies in 1970 and as policy measures began to take effect, econ-omic growth has been substantial and real per capita income (at 1963 prices)increased by over 6 percent per annum between 1970 and 1974.

3. The rising trend in output was interrupted by severe drought in1973 and by the aftermath of the October war. The Syrian economy in 1974has almost completely recovered from the dislocations caused by the war(though some of the facilities, like the Homs desulphurization plant, arestill being repaired and may not be readv for production until the end of1975) and from the large drop of the agricultural production brought aboutby the drought of late 1972 and 1973. GDP~ in 1974 increased by almost 13percent in real terms, compared to just over 2 percent growth in the previousyear. Economic performance in 1975 is expected to be good, with growth ratessimilar to those achieved in 1974. Nevertheless, due to the size and import-ance of the agricultural sector, the Syrian economy remains highly vulnerableto fluctuations in agricultural output brought about by variations in the

- 2 -

amount and timing of rainfall. In recent years, however, the share of industryin GDP has risen substantially. According to provisional national accounts es-timates for 1974, both agriculture and industry accounted for about 22 percentof GDP at 1963 prices; but because of the relative increase in industrial pri-ces, particularly oil and phosphates, value-added in industry at current pricesamounted to 30 percent of GDP while that for agriculture reached 22 percent in1974. The table below summarizes the recent trends in economic structure.

RECENT TRENDS IN ECONOMIC STRUCTURE 1970, 1974 /1(As % of GDP at factor cost)

At 1963 Prices At Current Prices1970 1974 1970 1974

GDP (factor cost) 100.0 100.0 100.0 100.0

1. Agriculture 21.7 21.6 22.5 22.3

2. Industry 20.8 22.3 21.1 30.0

a. Mining 2.2 3.8 2.0 10.4b. Manufacturing 15.8 15.4 15.6 15.2c. Construction 2.8 3.1 3.5 4.4

3. Services 57.5 56.0 56.3 47.9

a. Government 13.7 16.0 11.9 9.8b. Other 43.8 40.0 44.4 38.1

/1 Since 1971 a large amount of data on the Syrian economy has been col-lected, but unfortunately not processed or analyzed so far. The mostimportant of these are the agricultural census, the Household expendi-ture survey and manpower surveys. When processed much more would beknown about the Syrian economy as well as the effects of land reformmeasures and income distribution. If this information is to be usefulfor policy purposes, its processing should be accorded the highestpriority in the work program of the Central Bureau of Statistics. Ifthis is not to happen soon, such valuable information will cease to bea policy aid and may only have historical significance.

Source: Statistical Annex, Table 2.3.

4. Although agriculture remains one of the largest sector in theSyrian economy, its average share during 1970-74 in GDP and employment hasremained at about 22 percent and a little over 50 percent, respectively. Yetoverall economic developments are still highly dependent on agriculturalproduction which fluctuates widely with rainfall (annual variations reaching' 30 percent). Provisional national accounts estimates show a 40 percentgrowth in agriculture in 1974 compared to a 30 percent decline in 1973. The

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agricultural recovery in 1974 was led by wheat and barley, the production ofwhich almost rose to the record levels of 1972. However, cotton productioncontinued to decline as a result of declining acreage of non-irrigated lands(Table 7.4 statistical appendix).

5. The influence of rainfall on agricultural production makes anyestimates of growth trends, even over a ten year period, extremely difficult.For most of the major crops there has been no statistically significantgrowth over the decade 1964-1974. However, the Syrian government has madea strong commitment to agricultural development and is attempting to reducethe wide fluctuations in output through the expansion of irrigation. Thedevelopment of the Euphrates basin and the research being carried out onsoil salinity and land reclamation are the corner stones of the Governmentattempts at increasing agricultural production. Thus despite the lack ofgrowth during the last decade the outlook for agriculture in Syria is muchbrighter. Although production will continue to fluctuate due to weatherconditions, real growth rate of at least three percent per year up to 1976is almost certain to be achieved (agricultural production in 1975 is expectedto be well above average), and could increase to about seven percent by theend of the decade.

6. The industrial sector (mining, manufacturing and construction) inSyria accounted for about 30 percent of GDP in 1974. The manufacturingsector accounts for about half of the value added in industry at currentprices, mining for about 35 percent and construction for the remaining 15percent. Value added in industry is estimated to have increased by about 25percent in 1974, as compared to an average growth of about 1 percent peryear during the previous two years. This reflects a rapid growth in manu-facturing (28 percent) and construction (24 percent) and a relatively slowergrowth in extractive, mainly oil and phosphates, industries (18 percent).The services sector (especially water, power, transport and communications)registered a marginal decline in 1974.

7. The share of extractive industries in GDP as well as their valueadded are expected to increase substantially over the next few years. Exportproceeds from oil increased from less than SL 130 million in 1970 to an es-timated SL 1600 million in 1974 as both production and prices rose, particularlyin the last two years. Crude oil production which was about 6.4 million tons in1974, is expected to reach 10 million tons by the end of 1975. Only a smallpart of this increase is expected to come from the new Jebisa field. Thisfield, located about 40 kms south of the town of Al-Hasaka in northeast Syria,has been connected by a 60 km spur line, with a throughput capacity of 3 milliontons a year, to the Tal'Adas-Tartus stretch of the main crude oil pipeline run-ning from the oil fields in northeast Syria to the Mediterranean. This fieldhas been prepared for production by Syrian and Soviet technicians and has in-volved the drilling of 30 wells and the construction of the requisite oil fieldfacilities including the gathering system as well as the pipeline. The field'srecoverable reserves are estimated at 18.6 million tons of oil (40.5°API, 0.62percent sulphur content) and 40.7 billion cu m of natural gas. The field,originally inaugurated in May 1975 is expected to produce about 400,000 tonsof oil during the remainder of 1975 or an average of about 12,370 barrels

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per day. At the same time exploration activities are progressing in conjunc-tion with foreign firms on a service contract basis. Such contracts wereconcluded with a Romanian firm (Rompetrol Co.) and a Yugoslav firm (INA-NAFTAPLIN) mostly in the northeastern corner of Syria. An oil explorationaccord between Syria and an American oil group for offshore exploration onthe Mediterranean was also signed recently. The accord calls for the oilgroup (made up of City Petroleum Company, Drillamex - a subsidiary ofAmerican Express Co. - and Tripco Petroleum) to invest up to $20 millionover six years in search for oil in 4,500 square kilometers off theMediterranean coast. The contract calls for a minimum expenditure on ex-ploration of $3 million in the first two years.

8. Meanwhile phosphate production increased from 270 thousand tonsin 1973 to 580 thousand tons in 1974. Phosphate production in 1975 is proj-ected at 1.2 million tons and current plans call for production to increaseto 4.5 million tons by 1980, of which 4.0 million will be for export and 0.5million for use in a triple phosphate fertilizer plant.

Resources and Uses

9. Data on total expenditure suffer from some basic weaknesses and arenot produced in a systematic way. Most of the problems arise out of thetreatment of the foreign sector. Nevertheless with some adjustments, theexisting data can be used to portray the basic trends in total expenditure.Available data indicate that the rate of investment recovered sharply in 1974as reconstruction projects were implemented. Gross fixed investment at cur-rent prices is estimated at about SL 3.0 billion, equivalent to over 20 per-cent of GDP in 1974. Two-thirds of gross fixed investment was by the publicsector, though private investment in absolute terms has increased from SL343 million in 1970 to an estimated SL 1 billion in 1974 (Table 2.2). Byfar the larger part of investment was in industry (42 percent) and constructio'n(20 percent). Domestic savings which continue to increase, have financed about70 percent of current investment, with net imports accounting for the remaining30 percent. With the rapid growth in current transfers from abroad, nationalsavings (including transfers) have substantially exceeded current domesticinvestment in recent years. In real terms, however, the share of net importsin total available resources has risen sharply as real domestic savings turnednegative in 1974 1/; but with sharply improved terms of trade, the share ofimports, at current prices, remains low. Public consumption in real terms isestimated to have been about the same in 1974 as in 1973, but growth inprivate consumption has been substantial. The following table summarizes theavailability and use of resources.

1/ W4hen terms of trade are taken into account, however, domestic savingsin real terms are positive.

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AVAILABILITY AND USE OF RESOURCES(As % available resources)

At 1963 Prices At Current Prices1970 1974 1970 1974

GNP (mp) 97.7 82.0 97.6 95.3Net Imports (g+nfs) 5.1 20.0 4.9 6.4Less: Net Factor Income -2.8 -2.0 -2.5 -1.7

Aggregate Supply/Demand 100.0 100.0 100.0 100.0

Consumption 86.5 85.7 85.1 78.2Private (68.0) (68.6) (67.6) (63.0)Public (18.5) (17.1) (17.5) (15.2)

Investment/i 13.5 14.3 14.9 21.8Private (4.0) (4.0) (5.1) (6.5)Public (9.3) (8.7) (9.6) (12.8)

/1 Does not add up: the residual being changes in stocks.

Source: Statistical Annex, Tables 2.1 and 2.2.

10. As indicated by the differences in trends in the national accountsat constant and current prices, there have been significant changes in ab-solute and relative prices. The implicit GDP deflator (Statistical AppendixTable 2.5) shows a 37 percent growth in 1974 compared to under 6 percent peryear average growth during 1970-73 period. Indices on wholesale and retailprices, though less reliable, confirm the rapidly emerging inflationary pres-sures in the economy as increased aggregate demand continues to generatepressures on domestic resources. It appears that, in spite of an improvingexternal balance situation, trade liberalization policies have not, so far,been used effectively to increase the total supply of resources.

11. While available employment statistics are not fully reliable,available evidence indicates a continuing trend towards decreasing unemploy-ment. The rate of open unemployment declined from 7.5 percent of the laborforce in 1971 to 4.5 percent in 1973 and an estimated 4.0 percent in 1974.However, these trends should be viewed in the context of a possible increasedemployment in the armed forces and sizeable migration to neighboring Arabcountries, a problem which has recently created considerable concern forSyrian authorities. But, it is not doubted that increased aggregate demandin the domestic economy has been a factor in reducing the rate of unemploy-ment. However, the whole question of manpower and employment takes on aspecial significance in a situation where inflationary pressures are begin-ning to build up at a fast rate. For, in the final analysis, even if the

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supply of other resources can be augmented by more liberal trade policies,manpower shortages can only be marginally relieved in this way, and mightconstitute an important factor in perpetuating existing inflationary pres-sures or creating new ones. Little attention has so far been given by Syrianpolicy makers to these aspects of manpower in a rapidly growing economy. Morethought, planning, and flexibility needs to be given to variables affectingmanpower and labor force, including the levels and structure of wages andsalaries as well as the training and educational aspects.

12. The immediate prospects for the Syrian economy remain good. Withfavorable weather conditions in 1974 and early 1975, GDP is expected to growby 10-12 percent in 1975, with industry, the emergent leading sector of theeconomy accounting for the larger part of this growth. Barring any unfavor-able developments in rainfall, agricultural production is also expected to beabove average for this year.

II. DEVELOPMENT PLANNING

13. Although experience with development planning in Syria dates backto the First Development Plan 1955-65, development policies since the mid-sixties have been shifted towards a heavy reliance on the public sector tomeet the investment targets. As a result of the changes in economic philo-sophy, the public sector share in total investment allocation during theSecond Plan 1966-70 rose to about 70 percent and 80 percent for the ThirdPlan 1971-75 which is currently being implemented. Despite the recent reor-ientation of economic policies and the active search for a defined role forthe private sector in a Socialist regime, the share of public investment inthe forthcoming Fourth Plan is not likely to decline substantially. Privateinvestment, though growing in absolute terms (from SL 343 in 1970 to SL 1billion in 1974), may continue to account for about one-third of total in-vestment.

14. Development expenditures are still being carried out within theframework of the Third Five Year plan. However, the Third Plan throughoutthe past four years has undergone substantial changes as projects that werenot fully identified were dropped and others that became feasible were incor-porated in the Plan. In spite of that, no new document has been publishedto formalize these changes. Government authorities maintain that the generalstrategy of the Plan with its emphasis on agricultural development, expansionof irrigation facilities and exploitation of the country's mineral resources,remains intact. In general, aggregate and sectoral growth targets indicatedin the Plan are also being maintained.

15. In the absence of revised investment targets, plan implementationcan only be judged in terms of the original investment targets set out inthe Plan document. During the first three years of the Plan period, publicinvestment reached about SL 2.4 billion (in constant 1970 prices) equivalentto about 38 percent of total public investment envisaged during the Plan

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period. The low implementation rates were due to weak project preparation,follow-up procedures as well as inadequacy of financial resources, partic-ularly foreign exchange. These significant shortfalls in plan implementationhave caused growing concern in the Syrian Government. After thorough analysisof the reasons for the poor implementation performance, new procedures de-signed to tighten the control and follow up of annual investment programs wereinitiated. Quarterly progress reports to be submitted to the Prime Ministerindicating the current position and highlighting any reasons for delays, havebecome mandatory. Serious attempts are being made to create and adequatelystaff planning units, at least in the major operating ministries. In somecases,e.g. the Ministry of Agriculture, this has met with success. Thesemeasures, together with a substantial improvement in the financial situationof the country, and particularly a more favorable balance of paymentsand for-eign exchange position, have led to a large increase in public sector devel-opment expenditures in 1974.

16. Public sector development expenditures in 1974 are estimated tohave increased to SL 2.4 billion, more than double the 1973 level (Table 5.5 -

Statistical Appendix). However, in real terms the rate of increase of devel-opment expenditures is somewhat over 70 percent. 1/ The largest increaseswere in investments in industry, mining and power, mostly directed to thereconstruction of plant and equipment damaged during the 1973 war. Invest-ment in transport and public works for the expansion of roads and railroadsto the northeast in an attempt to better service the most productive agricul-tural areas, also registered substantial increases. However, investments inagriculture and irrigation did not register a significant increase (even incurrent prices) and there are indications that the irrigation and land re-clamation work on the Euphrates valley have fallen substantially behind plannedlevels. Development expenditures in the services sector havebeen and continueto be high in relation to Plan allocation. Significant progress has been madein the fields of general education and health. Yet more needs to be done to'relieve the congestion in classrooms, and to do away with the dual shift inprimary and intermediate schools. Qualified teachers are in short supply andschool buildings are either inadequate or inappropriate. Many rural areasare still outside the reach of the school system. Similarly, despite signi-ficant progress in the field of health, the distribution of facilities andmedical care is uneven and many rural areas are far from medical facilities.

17. With the sustained concern of the Syrian government with developmentissues and the further improvement in the country's external payments position,as more aid and assistance from Arab countries is received, the recent trendstowards an improved performance of public sector investment are likely to con-tinue in 1975. More administrative improvements to ensure better projectidentification, implementation and follow-up are likely to be introduced.However, most of these might have come too late to substantially increasethe rate of implementation of the current Plan which, by the end of 1975, maynot exceed 55-60 percent. But such improvements may have a larger impact onthe forthcoming Fourth Development Plan 1976-1980, provided the foreignexchange position of the country remains strong.

1/ The investment deflator is about 22 percent for 1974 (StatisticalAppendix, Table 2.5).

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18. Wiork on the Fourth Development Plan has already been initiated. Apreliminary framework has been prepared for discussions by the politicalorgans in the country. Once the political leadership approves the generalframework and the policies implicit in it, the more detailed work on theFourth Plan will begin. Preliminary indications are that the strategy of theforthcoming plan may not differ substantially from that of the previous Planwith heavy concentration of investment on agriculture and irrigation as wellas extractive industries, particularly oil and phosphates. It is also ex-pected that a concerted effort will be made in the transport sector to breakthe existing bottlenecks and to provide an adequate road and railway networkthat will serve both national and regional needs.

III. PUBLIC FINANCE

19. The public sector accounts in Syria consist of the operations ofthe Central Government, public utilities, public sector enterprises and otheradministrative entities. Since the public sector is relatively large inSyria, the Government's economic and financial operations play a central rolein the economy and provide a general framework for economic activity of theprivate sector. State. control and ownership are particularly evident inextractive industries (oil and phosphate), public utilities, manufacturing,industry, external trade and a large part of the agricultural sector.

20. Continued overall-deficits have been the main characteristic ofthe Syrian Government budget in recent years (Statistical Appendix Table 5.1).During 1970-72, the magnitude of the deficit increased from SL 578 millionto SL 664 million, averaging 26 percent of total expenditure or little over8 percent of GDP. In contrast, the ordinary budget (current expendituresand domestic revenues) showed relatively small surpluses as domestic revenueswere somewhat higher than current expenditures. The larger parts of develop-ment expenditures in general were financed from a host of non-budgetary sources.During 1970-72, borrowing from the banking system was the main source of suchfinancing with the remaining part covered by external borrowing and aid. Since1973, the situation has substantially changed as grants and aid from other Arabcountries increased to the level that made recourse to the banking system notnecessary. Preliminary estimates for 1974 indicate a continuation of thesetrends. For despite the doubling of the magnitude of the deficit, it was morethan covered by an even larger amount of Arab grants and aid. Besides, ex-ternal borrowing increased substantially to reach SL 503 million compared toSL 73 pillion in the previous year. The proposed budget for 1975 envisages a35 percent increase in revenues but an 87 percent increase in total expenditurgs,hence an even larger overall deficit approaching over SL 4,650 million.

21. As the table below indicates, domestic revenues have increasedsubstantially in 1973 and 1974 when their level reached almost 30 percent ofGDP. Total expenditures on the other hand, grew even faster resulting in alarger overall deficit. The increase in total revenue resulted mainly from arapid growth of oil revenues following the rise in oil prices in the latterpart of 1973 as well as from an increase in pipeline transit dues (Statistical

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Appendix Table 5.4). To the extent that the increase in revenues was not theresult of higher taxes, their use to finance public expenditures on domesticgoods and services results in a net injection of extra liquidity in the econ-omy. But since there is no adequate breakdown of Government expenditure toenable a measurement of the import content of expenditure, it is not possibleto gauge the inflationary impact of the budget in the economy. However, thedeclining share of tax and non-oil revenues (see below) points to increasinginflationary pressures resulting from the public sector operations. Suchpressures could well be in excess of that indicated by the growth of overalldeficit as a percentage of GDP.

SUMMARY OF THE PUBLIC SECTOR BUDGET(millions of Syrian pounds)

1970 1971 1972 1973 1974/1 1975/2

Revenues 1,451 1,686 1,940 2,676 4,293 5,788% of GDP 22.6 22.6 21.8 28.4 29.6

Current Expenditures 1,286 1,470 1,735 2,242 3,204 4,595% of GDP 20.0 19.7 19.5 23.8 22.1

Development of Expenditures 743 850 936 1,098 2,393 5,851% of GDP 11.6 11.4 10.5 11.7 16.6

Total Expenditures 2,029 2,320 2,671 3,340 5,597 10,446

Overall Deficit 578 634 731 664 1,304 4,658% of GDP 9.0 8.5 8.2 7.1 8.9

Financing the DeficitExternal Borrowing 98 82 65 73 503Domestic Borrowing 481 341 503 -733Outside the Banking System (36) (24) (25)From the Banking System (445) (317) (478) (-733)Residual/3 -1 -211 163 1,324 1,500/4 1,750/4Memorandum Item/5 350 600

/1 Preliminary./2 Budget.Th Residual results mainly from the exclusion of transfers from the Arab

coVntries from budgetary accounts./4 Mission estimates based on discussions with Government authorities./5 Transfers of foreign aid to the budget.

Source: Tables 2.2 and 5.1, Statistical Appendix.

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Revenues

22. Budgetary revenues are derived from taxes (both direct and indirect),transfers from public enterprises and other non-tax revenues, and have aver-aged 24 percent of GDP during 1970-73. In 1974, they are estimated to havereached 30 percent of GDP. Total revenues have increaced at an annual aver-age rate of about 23 percent in 1970-73. By 1974, they are estimated to haverisen by 60 percent. All sources of revenues have grown steadily though thesharesof individual items in the total have fluctuated somewhat. The shareof tax revenues has shown a steadily declining trend and in 1974 was estimatedto have accounted for 35 percent of total revenues as compared to 46 percentin 1970. The share of transfers from public enterprises (which includes state-owned petroleum and phosphate enterprises) in total revenues increased from32 percent in 1970 to an estimated 53 percent in 1974. Non-tax revenuesaccounted for 21 percent and 13 percent in 1970 and 1974, respectively. Thebudget for 1975 envisages a large drop (to 23 percent) in the share of taxto total revenues and an equally substantial rise (to 66 percent) in theshare of transfers from public enterprises.

23. Tax revenues include taxes on net income and profits, property andwealth, and on production, consumption and other domestic transactions aswell as taxes on international trade. The ratio of tax revenues to GDP con-tinues to be low, averaging about 11 percent between 1970 and 1974 (Table 5.3).However, Syrian authorities maintain that in the context of a Socialist econ-omy, transfers from public enterprises to the Central budget are in the natureof additional taxes. Even if this is acceptable, it has to be recognized thattheir effects on the econmy are different from those of more conventionaltaxes particularly in view of the fact that most of these transfers originatein the oil sector, revenues from which accrue in foreign exchange and as suchconstitute a net injection into the income stream. Though taxes on net incomeand profits have increased in absolute terms from SL 161 million in 1970 to anestimated SL 298 million in 1974, their relative share in total tax revenuesdeclined from 24 percent to an estimated 20 percent during the period. Therelatively low level of receipts from this source is a reflection of a taxstructure characterized by generous deductions and exemptions particularly onincome from private business. Taxes on profits are unlikely to be increasedin view of the Government's current policy of encouraging private investmentand inflow of pr-vate foreign capital, particularly through the creation offree zones. The yield from personal income taxes has remained low and hasgrown only marginally in real terms. This can be partially attributed tolow levels and growth rates of wages and salaries, partially to the fact thattax administration and collection procedures are inefficient and outmoded, andmost recently perhaps the lack of incentive to exert a serious effort to raisetaxes as the need for such action declines with the increased availability offinancial resources from the oil sector as well as external aid and grants.

24. Taxes on property and wealth account for a small proportion of taxrevenues (between 3 to 6 percent since 1970), and their relative share inthe total has been declining. Taxes on production, consumption, and othertransactions account for about 26 percent of total tax revenues as an averagefor 1970-74. This share has declined from 29 percent in 1970 to 17 percent

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in 1974, probably due to the Government's price stabilization policy. Onthe other hand, taxes on international trade constitute the larger part oftax revenues (Table 5.3). Their share in the total tax revenues has increasedfrom 27 percent in 1970 to an estimated 38 percent in 1974. It is anticipatedthat this share will remain relatively high in the coming years as imports risewith trade liberalization policies.

25. Oil transit dues are the largest item in non-tax revenues. Theyaveraged 70 percent of non-tax revenues between 1970 and 1972, but after theSyrian-Iraqi agreement on transit dues their share increased to 85 percent in1973. However, as a proportion of total domestic revenues, their share de-clined from an average 25 percent during 1970-73 to 21 percent in 1974. Theagreement which Syria signed with Iraq in January 1973, expires at the end of1975.

26. At present, transfers from the public sector enterprises to thecentral budget constitute the major item of Government revenue. These trans-fers consist of the Government's share in after tax profits of the publicenterprises. They have increased from SL 471 million in 1970 to SL 2,254 mil-lion in 1974, mainly due to increased surpluses in the financial and bankingsectors, and more recently in the "power and fuel sector" which includesSyria's growing oil and phosphate industries (Table 5.4). And in view ofthe current and anticipated international prices for oil and phosphates,transfers from public enterprises are expected to continue to be the largestsource of Government revenues and hence of public savings. This is explicit-ly recognized in the 1975 budget which expects transfers from public enter-prise to reach SL 3,792 million compared to SL 2,254 million in 1974, an in-crease of 68 percent (Table 5.4).

27. At the present time, the Syrian authorities are not contemplatingraising the level of tax rates or increasing the tax burden. The levels andrates of growth of salaries and wages are low and the Government desires thatsalary and wage earners share to the largest extent possible in the benefitsof economic growth as it occurs. The policy of deliberately keeping wagesand salaries at a low level might have had reasonable justification in thepast. However, with growing demand for trained manpower in the Middle East,it is doubtful whether the current remuneration policies can be maintainedor are even desirable. It seems that a thorough review of the wages andsalary policies is called for, if Syria is to avoid severe shortages oftrained manpower. On the other hand, the Government is seeking to encouragethe growth of the private investments through a number of policies includingtax relief and exemptions for ploughed back profits. The same concern fordistributing the benefits of economic growth among the population may alsoimpose certain limits on the future increases on taxes on imports and exports.But much can be done to increase tax revenues particularly through improve-ments in tax assessments, as well as closing existing loopholes in the presenttax system. Realizing the importance of improving the efficiency of taxmachinery, the Syrian government has recently employed the services of aFrench consulting group to study the existing tax laws and tax administration.The group's report has already been submitted to the Government and is atpresent under discussion and evaluation. The Government is urged to give avery high priority to the study of this report and its recommendations.

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Expenditures

28. Total expenditures increased at an annual rate of 29 percent between1970 and 1974. Over the same period, development expenditures increased by33 percent reflecting the emphasis placed by government on public sectorinvestment. The share of development in total expenditures increased from37 percent in 1970 to 42 percent in 1974. This share is envisaged to riseeven higher in the proposed 1975 budget, reaching 56 percent of total ex-penditures.

29. Outlays on national security and defense accounted on the averagefor about 58 percent of current expenditures between 1970 and 1974. Defenseexpenditures as a percentage of GDP averaged 12 percent between 1970 and 1973andare estimated to reach 14 percent for 1974. Expenditures on GeneralAdministration and Social Services (education, health and social affairs)averaged 21 percent of total expenditures between 1970 and 1973. IHowever,their share in current expenditures declined from 23 percent in 1970 to 19percent in 1973 (an estimated 16 percent in 1974). The relative share ofcurrent expenditures on education, culture and information has declined form17 percent in 1970 to an estimated 13 percent in 1974. Current outlays oneconomic services (mostly administrative and economic organizations) averagedabout 17 percent of current expenditures between 1970 and 1973, but theirshare is estimated to have declined to about 14 percent in 1974. Since 1971,other expenditures increased from SL 205 million to SL 244 million in 1974;these are essentially allocations to the Ministry of Supply and Home Trade tobe used for price stabilization purposes. Their magnitude in the 1975 budget,however, is envisaged to reach SL 623 million (Table 5.2).

30. It has already been argued that the availability of financial re-sources to the Government, both as a result of higher oil and phosphate pricesand inflow of aid to Arab countries, has enabled the Government to substan-tially increase both its current as well as its development expenditures.Besides the possibility of generating inflationary pressures alluded to ear-lier, there are other inherent dangers in the present situation. Perhapsthe most important is that a large part of public sector expenditures isfinanced through official grants which without being permanent may generatelong-term demands on resources that could prove irreversible. A more cautiousapproach to expenditures, particularly current expenditures, and a muchtighter budgetary control may be needed if resource allocation problems areto be avoided in the future. This may necessitate a closer look a the struc-ture and operations of some of the public sector enterprises particularlythose that have, so far, been unprofitable and relied on the central Govern-ment support for their current operations.

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IV. MONEY. BANKING AND PRICES

Monetary Development

31. The period 1972-74 was characterized by a rate of monetary expansionsubstantially above that of the earlier years. While monetary expansion upto 1972 resulted from a rise in net domestic assets, mainly credit to theGovernment, in 1973 and 1974, it was brought about by large increase in for-eign assets resulting from the growth in official capital inflows and revenuesfrom the petroleum sector. These flows permitted the authorities to step upsharply budgetary expenditures while building up deposits with the bankingsystem. In 1974 an additional expansionary factor of substantial proportionswas an unprecedented increase in credit to public sector enterprises andagencies.

32. The higher rate of credit expansion in 1972 was reflected in an in-crease of 26 percent in liquidity and 24 percent in net domestic assets, two-thirds of which financed the budgetary deficit in that year (Tables 5.1, 6.1and 6.2). Despite the increased level of transfers from other Arab countries,net bank financing to the public sector increased by more than 50 percent to.reach a record high of SL 478 million. In 1973, noticeable changes took placein the monetary situation caused mainly by a substantial inflow of officialArab capital. This influx helped finance continued budgetary deficits but atthe same time reduced public sector reliance on the banking system. As aconsequence, net domestic assets declined by 14 percent, the rate of liquidityexpansion slowed down to 20 percent, and there was a decline in net claims onthe central government by 40 percent. On the other hand, claims on publiceconomic sector increased by 28 percent in 1973 following an increase of 32percent in 1972 as well as an increase of 13 percent of claims on the privatesector following a one percent increase in the previous year.

33. Available data for 1974 indicate a noticeable escalation of mone-tary and credit expansion. In the 12-month period ended November 1974, netdomestic assets increased by 32 percent, claims on central government by 12percent, claims on public economic sector 75 percent, and liquidity by 39 per-cent. Credit to the private sector also increased but at a much slower rateof 6 percent. The increase in net claims on the public sector despite a con-tinued substantial aid inflow (estimated at SL 1,500 million in 1974) wasmainly caused by the large increase in credit extended to public sector enter-prises, whichrose from SL 1,679 million to SL 2,944 million between November1973 and 1974.

34. The sectoral distribution of credit indicates continued expansionduring the period 1972-74. Overall credit by specialized banks increased by25 percent in 1972 and 21 percent in 1973. In 1974, the large expansion ofeconomic activity is estimated to have resulted in a much faster rate ofgrowth of specialized credit of over 50 percent compared to the previous year(Table 6.3). The largest increase in credit during recent years has been tocommerce, followed by agriculture, industry, and construction respectively.

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More than two-thirds of specialized credit was extended to public sector-related economic activity, while the remaining part went to private and mixedsectors.

Bankingand Credit

35. Following a major reorganization in 1966 and 1967, all banks inSyria are government owned. At present the banking system is made up of theCommercial Bank of Syria, the Agricultural Cooperative Bank, the IndustrialBank, the Real Estate Bank and the Popular Credit Bank. All of these banksextend commercial credit and development loans and, with the exception of theReal Estate Bank, all accept deposits.

36. Monetary policy in Syria is determined by the Council on Money andCredit which regulates credit by establishing ceilings for each sector andeach bank. In recent years, however, monetary policy has been reviewed byan Economic Committee headed by the Deputy Prime Minister for Economic Affairs.The policy guidelines set by the Committee and the Council are implemented ona day-to-day basis by a Steering Committee composed of the Governor, theDeputy Governor, and senior officials of the Central Bank.

37. There have been a few changes in monetary policy in recent years.Interest rates on deposits were increased by 1 percent in 1970. In a furtherattempt to encourage savings and provide non-inflationary financing for theGovernment, a new Investment Certificate was introduced in March 1971. Inaddition, since 1970 Syrians and foreigners are permitted to operate accountsdenominated in foreign currencies provided that such funds had accrued fromoperations outside Syria. In the period 1972-74 there were no changes indiscount rates, reserve requirements, deposit or lending rates reflectingthe Central Bank's reliance on direct controls, mainly credit ceilings. The.discount rate to commercial banks is 5 percent while loans and disiounts tospecialized banks carry rates varying between 2-1/2 percent to 3-3/4 percent,while other lending rates range between 4 percent and 9 percent. Rates ontime and savings deposits range between 4 percent to 5-1/4 percent. In 1974,however, the overall ceilings on credit were abandoned and credit demandswere accommodated, provided credit was required for the buildup of stocks ofnecessities or the financing of productive projects.

38. Although credits of the specialized banks have increased at anannual average rate of about 18 percent between 1970 and 1972 (Table (.3), themajority of the lending has been on short-term maturities (Table 6.4). Long-term lending (more than five years) has been negligible. Short-term lendingby the Agricultural Cooperative Bank averaged 87 percent of its total lendingbetween 1970-72 while 78 percent of total credits of the Industrial Bank wereof short-term maturities over the sam.e period (Table 6.4). In 1973, however,credit extended on medium-term maturities increased noticeably, particularlyfor the Industrial Bank as it reached SL 35 million or 60 percent of itstotal credit for the year. Available data for 1974 indicate that the trendof specialized credit is moving towards longer-term maturities than has beenthe practice so far.

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Prices

39. Prices in Syria are subject to regulation and control. In additionto the determination of prices charged by the public sector, price controltakes two main forms. The Ministry of Supply and Home Trade regulates priceseither through direct fixing (mainly for essential cons pption goods) orthrough fixing mark-up rates (generally between 5 percent and 10 percent fornon-essential commodities). At present, price subsidies cover at least 15essential commodities. Adjustments in regulated prices are implemented whendisparities between the fixed price and the free market price of a certaincommodity become large enough to precipitate smuggling and black market ope-rations. Such a disparity developed in early 1973 and affected a number ofcommodities, particularly sugar and rice, and the Syrian authorities adopteda split pricing procedure. Rations at subsidized prices were prescribed atlevels just below the average per capita consumption of these goods. Anyadditional demand for these goods has to be satisfied at the much higher freemarket prices. While this procedure provides low income groups with essentialgoods, it tends to eliminate the incentive for illicit market operations.The magnitude of subsidies had increased quite substantially in recent years.

40. Existing price indices (both wholesale and retail) are inadequateand need substantial revision both in coverage and methodology. Since theydo not adequately reflect price movements, they have to be interpreted withgreat caution. However, they indicate that prices have been relativelystable between 1962 and 1972, increasing at a yearly average rate of 2.9percent (Table 9.1). More recently, however, the increase in Governmentexpenditure, reinforced by improved foreign exchange position and additionalexpenditures on reconstruction brought about considerable pressure on prices..Further pressure originated from the supply side through shortfalls in agri-cultural production and increases in the cost of imports in line with world-wide inflation. As a result, wholesale prices increased by 38 percent in1973. Prices of food items increased by 54 percent, building materials 23percent, manufactured products 17 percent, and raw materials 15 percent.Rising prices continued through 1974 as the wholesale index increased by about10 percent. Prices of food items decreased by 2 percent, building materialsincreased by 33 percent, raw materials 33 percent, and manufactured products48 percent.

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V. TIlE BALANCE OF PAYMENTS

41. Syria's balance of payments, which had been in substantial deficitsince 1968, improved in 1971 when the deficit was reduced sharply; registereda small surplus in 1972; and very substantial surpluses in 1973 and 1974.The improvement initially reflected increased oil transit dues, currenttransfers from abroad, and private capital inflow. In the last two years,however, large transfers from the Arab countries have managed to offset thewidening trade deficit and to result in overall payments surpluses. Thetable below summarizes recent developments in the balance of payments.

SUMMARY BALAiCE OF PAYMENTS(Millions of Syrian Pounds)

1970 1971 1972 1973 1974

A. Goods and Services (Net) -164 -258 -215 -137 -7281. Merchandise (net) -643 -907 -878 -982 -1657

a. Exports (845) (865) (1211) (1363) (2914)b. Less: Imports (-1488) (-1771) (-2089) (-2345) (-4571)

2. Services (net) 479 649 663 845 929B. Current Transfers (Net) 36 126 222 1416 1570C. Balance on Current Account -128 -132 7 1279 842D. Capital, etc. 5 143 70 - 334

1. Private, ST (net) n/a 150 65 -103 742. Public, M+LT (net) -23 -32 -20 103 2603. SDR Allocations 28 25 25 - -

E. Change in Reserves= increase) 194 50 -28 -1201 -641

F. Errors and Omissions -71 -61 -49 -78 -534

Source: Statistical Annex, Table 3.1.

Merchandise Trade

42. The recent movements in commodity prices, particularly the increasein oil and phosphate prices, have altered the structural composition, and tosome extent the direction, of Syrian trade. In 1974, crude oil emerged asthe principal Syrian export: accounting for 55 percent of total exports,compared to 22 percent for the previous years. Part of the higher share ofoil is also attributable to an incre'sed export volume (from 4.3 to 6.2 mil--lion tons). Next to oil, raw cotton and textiles accounted for 33 percentof 1974 exports, and were up 50 percent in value from 1973 levels, despitea small decline in the quantities exported. Exports of industrial products(mainly chemicals, glassware and metals), while still under 4 percent oftotal exports, almost doubled in volume and emerged as a significant export-able item. The structure of imports was more stable, altlhough the share of

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imported metals and metal products increased from 13 percent in 1973 to 19percent in 1974. The following tables summarizes recent trends in the compo-sition of trade.

COMPOSITION OF TRADE(as % of total values)

__ 1970 1971 1972 1973 1975

A. pS_rts

Consumer Goods 14.7 17.5 16.0 15.7 8.4Intermediate Goods 84.9 82.1 83.7 83.3 90.9Capital Goods 0.4 0.4 0.3 1.0 0.7

B. Imports

Consumer Goods 24.2 21.3 23.6 25.4 25.3Intermediate Goods 58.1 61.8 54.1 51.2 55.4Capital Goods 17.7 16.9 22.3 23.5 19.2

Source: The Central Bureau of Statistics.

43. Some changes have also taken place in the direction of Syrian trade,although, to some extent, the data reflect the impact of changing commodityprices. Western Europe is Syria's principal trading partner, followed by thesocialist countries. In 1974, almost half of Syrian exports went to WesternEurope (almost two-thirds to the European Common Market, ECM), and over 45percent of Syrian imports originated from there (over 80 percent from theECM). Exports to socialist countries amounted to 32 percent of total exports,while 21 percent of Syrian imports come from these countries. Up to 1972,the socialist countries have been Syria's principal export market, if tradewith Western Europe is decomposed into that with ECM and with other Europeancountries.

44. Syria's terms of trade have improved substantially in the lasttwo years, mainly as a result of increasing crude oil and phosphate prices,but also due to favorable cotton prices. Improved textile prices have af-fected both exports and imports, but, on balance, have affected Syria adverse-ly, as imports have exceeded exports. Nevertheless, the terms of tradeimproved by about 40 percent in 1974, following a 15 percent increase in 1973.Considering Fisher's indices, export prices increased 112 percent in 1974,while import prices increased 50 percent. (Statistical Appendix Tables 3.2-3.4).

45. Despite the decline in agricultural output in 1973, and the dis-ruption caused by the October war, export receipts rose slightly in 1973, re-flecting favorable export prices for cotton, wool, and crude oil. Neverthe-less, as imports grew by about 12 percent, the trade deficit widened to SL

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980 million, after having improved in 1972. In 1974, despite a growth of al-most 115 percent in export receipts, largely as a result of favorable exportprices, the trade deficit rose by 95 percent. The rapid growth in importsreflected very large imports of cereals in the wake of the drought of 1973,and large increase in imports of metal and metal products, and transport andother equipment. To a large extent, the increased imports of machinery andequipment reflected the reconstruction needs of the economy. Also, thehigher export volume of Syrian crude, reflected the damage to the Hioms refin-ery which resulted in its inability to refine Syrian crude, all of which wasexported; while domestic needs were met by refining imported Iraqi crude.

Invisibles and Transfers

46. The services account shows increasing surpluses, as a result ofincreasing petroleum transit dues, workers remittances, and receipts fromtravel and tourism. As restrictions on travel abroad by Syrians have beenrelaxed, payments on this account have risen from under SL 90 million in 1972to over SL 220 million in 1974. Workers' remittances declined to under SL200 million in 1973, but have recovered to over SL 240 million in 1974. Withthe large accumulation of foreign assets in 1973, interest receipts of almostSL 120 million in 1974 exceeded interest payments for the first time. Cur-rent transfers from Arab countries have remained high: rising from SL 1.4billion in 1973, to SL 1.6 billion in 1974.

The s.fp_pta, Account

47. After a substantial outflow of private short-term capital in 1973(of over SL 100 million) there was an inflow of around SL 75 million, asconditions were normalized. Disbursements on public medium- and long-termloans rose sharply in 1973, and again in 1974, with the result that the smallnet capital outflow that had taken place in recent years was reversed in1973, as net capital inflows of about SL 100 million was recorded in 1973, andof SL 260 million in 1974. 1/

48. With balance of payments surpluses of SL 1.2 billion in 1973 andan estimated SL 641 million in 1974, Syria has accumulated substantial reserves.Grossinternational reserves rose from the equivalent of US$135 million at end1972, to US$481 million at end 1973, and US$835 million at end 1974 (IMF datapublished in IFS). At end 1974, these gross reserves were equivalent to over8 months of 1974 imports.

49. Exchange and trade liberalization measures, which were initiated in1971, have been pursued increasingly in recent years. The exchange rate hasbeen adjusted periodically, and was unified in July 1973. Import licensingprocedures have been increasingly liberalized, to ease inflationary pressures.Arrears on import payments were initiallv reduced, and then abolished. Witha comfortable reserve position, and increasing inflationary pressures, furtherliberalization of exchange and trade policies is warranted and can be expected.

1/ These data are based on IBRD external debt files.

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50. Syria's reported external debt, including undisbursed, increasedsubstantially in recent years. Total public debt (excluding military debt)at the end of 1970 amounted to $204 million, rose to $441 million by theend of 1973, and reached $702 million by the end of 1974. Outstanding anddisbursed debt, however, rose much more slowly during the same period, from$166 million at the end of 1970, to $186 million at tile end of 1973 and $258million at the end of 1974.

51. As of the end of December 1974, loans from governments amountedto $301 million or 43 percent of the total outstanding debt (compared to $271million or 61 percent in 1973), suppliers credits $236 million or 34 percent($131 million or 30 percent in 1973), and international organizations (allBank Group) $137 million or 20 percent (compared to $39 million or 9 percentin 1973). Further, a new category of debt (that of private banks) was intro-duced in 1974, with an amount reaching $28 million or 4 percent of totaloutstanding debt (Table 4.1).

52. The majority of loans from governments were from the USSR ($144 mil-lion or 48 percent), East Germany $53 million or 18 percent), People'sRepublic of China ($28 million or 9 percent), and Kuwait ($24 million or 8percent). Suppliers credits were highest from France ($88 million or 37 per-cent), followed by Federal Republic of Germany ($58 million or 25 percent),Sweden ($26 million or 11 percent), Italy ($23 million or 10 percent), theSpain ($16 million or 7 percent). Debt service payments on existing debtsamounted to about $52 million at the end of 1974 equivalent to about 5 per-cent of exports of goods and non-factor services at the 1974 level. In viewof the low debt service ratio and good export prospects, Syria can servicesubstantial additional debt on conventional terms.

VI. PROSPECTS

53. The pragmatic outlook to economic policies brought about by thepresent Government has already had far reaching effects in reshaping the eco-nomy and its performance. The gradual and phased reorientation of economicpolicies which was mainly designed to create a more open mixed economy and tofacilitate the inflow of private foreign capital and the repatriation of localcapital, as well as the relaxation of administrative control on trade andforeign exchanges, are beginning to take effect and bring about the desiredresults. Confidence of the private sector, both local and foreign, has signi-ficantly improved leading to a substantial increase in private sector invest-ment, from SL 343 million in 1970 to about SL 1 billion in 1974. More policymeasures designed to continue the reshaping of the economy could be expectedin the future, but particularly as part of the forthcoming Fourth DevelopmentPlan 1976-80. The Government's concern with the performance of the economyhas so far gone beyond the liberalization measures of the past four years.There is a genuine interest and awareness of the development issues facingthe country, and concern for the performance of the public sector, particular-ly the low plan implementation rates that have characterized the first threeyears of the current Five Year Plan. A concerted effort has been made in the

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past two years to improve the plan implementation and there is evidence thatsome improvements have been achieved in this direction. GDP growth reachedalmost 13 percent in real terms in 1974 and is expected to be around 10-12percent in 1975.

54. Prospects for the Syrian economy are favorable and would be greatlyenhanced if peace is restored to the area. The current development plan willcease to be operational at the end of 1975, but it is unlikely that most ofits targets will be achieved mainly due ot significant shortfalls in publicsector investment during the first three years of the plan. Work on theFourth Plan has already started. Although little is known about its generalframework and targets at present, its strategy is likely to be a continuationof the previous plan with heavy concentration of public investment in the de-velopment of agriculture in the high rain zones, land reclamation to achievemaximum utilization of the Tabqa dam, and the further development of the coun-try's mineral resources, particularly oil and phosphates. A substantial partof the public investment over the next five years is likely to be devoted toprojects that were initiated, but not completed, during the past five years.However, due to the measures already taken and those that will inevitablyaccompany the inauguration of the next plan as well as past achievements ininfrastructure and other basic facilities, plan implementation rates over thenext five years are likely to be much higher than those for the current plan.

55. Since most of the future public sector investments are likely tobe in long gestation projects such as the development of the Euphrates basin,economic growth in the short- and medium-term is likely to come from thefurther development of the country's mineral resources, particularly oiland phosphates. Oil production may rise from 6.5 million tons in 1974 toabout 10 million tons in 1975 and 15 million tons by 1978. Barring any newdiscoveries, oil production is likely to stabilize at that level. Pricesaveraging between $7-8 per barrel in 1974 may increase only marginally inconstant prices because of the quality disadvantages of Syrian crude oil anda possible loss of the country's locational advantege on the Mediterranean nowthat the Suez Canal has been reopened. Phosphatic production is expected toincrease from 0.6 million tons in 1974 to 1.2 million in 1975 and reach about4.5 million tons in 1980. Prices per ton, however, may be expected to decline(average price per ton for 1974 was over $40) in constant terms to between$25-30 by 1980. Private investment is likely to continue its recent upwardtrend. Significant private sector investment is likely to be in agriculture,particularly in irrigated horticultural crops, in small scale industries aniin the services sector.

56. . However, the increasingly evident inflationary pressures at presentmay adversely affect future growth prospects if firm and swift action is nottaken to deal with this comparatively new phenomenon. A more concerted taxeffort should be mounted and public exsenditure, particularly current expend-iture, be brought under firm budgetary control. Public sector enterprisesneed to be brought more under control and scrutiny and new guidelines, includ-ing sharply focused operating procedures, be adopted. Otherwise misallocationof resources and lower real growth rates may result.

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57. Assuming that the Syrian authorities mianage to keep the inflation-ary pressures under control, the following macroeconomic projections appearfeasible. Hlowever with the large fluctuations in agricultural output withweather conditions, year to year forecasts might be subject to wide marginsof error. For the following projections up to 1980, a GDP growth rate ofabout 10 percent for 1975 and 8.2 percent per year therefore (equivalent to8.5 percent per year on average which is the rate of growth actually achievedover the period 1970-74) has been assumed. Investments have been projectedto grow at 10 percent per year on average, resulting in the increase in in-vestment rate from about 23 percent of GDP in 1974 to about 25 percent in1980. Exports are projected at 12 percent per year, which is considerablyabove trend rates but may reflect more accurately the immediate export poten-tial of the country. Imports are projected at 11 percent per year which issomewhat below the 14 percent per year average during 1970-74 period. Inthe main, this reflects an expected decline in imports now that most of thedamage caused by the 1973 war has been repaired.

MACRO-ECONOMIC PROJECTIONS (1980)(constant 1974 prices)

1980Unit 1974 Absolute Growth Rate (%)

GDP (mp) ($ mln) 3,920 6,400 8-1/2/1Population ( mln) 7.1 8.6 3.3GDP per capita ( $) 550 740 5.1Domestic Savings ($ mln) 640 1,200 11Investment ($ mln) 910 1,600 10Exports (g+nfs) ($ mln) 1,060 2,100 12Imports (g+nfs) ($ mln) 1,330 2,500 11Net Factor Income ($ mln) 70 100 6.2Net Current Transfers ($ mln) 430 100

/1 10 percent in 1975.

58. 11owever, the country will continue to need to borrow abroad to financeits ambitious investment programs, particularly in the public sector, sincepublic sector savings, though growing, are unlikely to match projected publicsector investments. At the end of 1974, Syria's debt service payments on ex-ternal public debt (excluding military) was estimated at about $52 million,equivalent to about 5 percent of exports of goods and non-factor services, at1974 levels. In view of the improved prospects and the relatively low debtservice ratio, Syria can service substantial additional debt on conventionalterms.

ANNEXPage 1

DEVELOPMENT AND PROSPECTS OF THE TRANSPORT SECTOR

1. The two most important factors influencing the transport sector inSyria are the physical setting of the country, and the partition of the GreaterSyria after World War I. The coastal plain to the west, the narrow fertileplain in the center, the Euphrates basin in the north, and the desert to theeast, have determined the location of Syria's urban centers and its most im-portant transport corridors. North-south movement is limited to the centraland coastal plains, and the most important east-west movements take placealong the Euphrates river and the Beirut - Damascus - Baghdad axis. Thepartition of Greater Syria after World War I, and the superimposing of in-ternational boundaries on a transport system that had developed along a re-gional basis, made it necessary for Syria to undertake major constructionprojects, especially for railways, to realign its network to meet its ownneeds.

2. Highways are the most important mode of transportation in Syria.Of an estimated 1.5 million passenger-km in 1973, highways carried 94%, rail-ways 5%, and air 1%. Of an estimated 4.5 million tons-km (exclusive of crudeoil) highways carried 97%, railways 3%, and air a negligible amount. -Syriahas two ports on its Mediterranean coast; at present they handle mainly do-mestic trade. Civil aviation is of minor importance in domestic transport.There are a number of pipeline systems in Syria, mainly for transit transportof crude oil from Iraq and Saudi Arabia.

Highways

3. Syria's highway network comprises about 13,600 km 1/ of which about9,800 km are primary (international and national) asphalted roads, 1,400 kmare secondary (provincial) gravel roads, and 2,400 km are tertiary (feederand rural) earth roads. The Directorate General of Highways and Bridges(DGHB) under the Ministry of Communications is responsible for the design,construction and maintenance of the highway network. However, some second-ary roads are being built by the semi-autonomous government agencies respon-sible for major irrigation and power projects, and then transferred to theDGRB for maintenance.

4. The main highway routes are the north-south road from Jordan viaDamascus and Aleppo to Turkey; the east-west road from Latakia via Aleppo toDeir-Ea-Zor on the Euphrates river; and the east-west road connecting Damascuswith Beirut in Lebanon and Baghdad in Iraq. A major portion of these highwaysis being improved. In addition to these works the Government is presentlyconstructing a road connection between Sabaa Biar on the Damascus - Baghdad

1/ Excluding city and municipal streets and roads.

ANNEXPage 2

road to the phosphate mines, thus creating a direct road connection betweenthe port of Tartous and Baghdad of about 950 kilometers which is approximatelythe same distance as the road connection between Beirut and Baghdad viaDamascus.

5. Proposals for highway investment totaling about SL 2.4 billion(US$660 million equivalent) during the Fourth Five Year Plan (1976-80) havebeen submitted by the Ministry of Communications. These proposals aim atimproving and constructing about 5,300 km of road. The most important proj-ects, in approximate order of priority, are: (a) construction of a new roadAleppo-Manbij-Tall Tamir-Tall Kojak; (b) reconstruction of the Tartous-Latakia-Ar Riha road; (c) construction of two additional lanes between Sarageb andHama as well as Homs and Qtaife; this would result in the total highway con-nection Damascus-Aleppo becoming four lanes; (d) construction of a new roadconnecting Palmyra with Deir-Ez-Zor; and (e) improvement of the Raqqa-AbuKemal road. Although all the above mentioned projects would appear justifiedat some time, and although the priorities indicated seem reasonable, the Gov-ernment should carry out a study to determine the priority and standards ofall the individual road segments involved, under alternative assumptions of:(a) competition from the railroads under construction or planned in the maintransport corridors; and (b) the impact of competition from Beirut port onthe amount of domestic and transit traffic flowing through the ports ofLatakia and Tartous and thus on the requirement for highway transport in thecorridors to be served by the above projects.

6. In 1973, there were about 57,000 vehicles in Syria of which about61% were cars, 35% trucks and 4% buses. The number of vehicles has on averagerisen by about 4% between 1969 and 1973. Maximum single axle loads permittedare 13 tons. Until 1974, vehicle import was restricted by the Government;import quotas were based on demand studies made periodically by the Ministryof Communications. The volume of vehicle imports is now no longer deter-mined in advance and the requirements for obtaining import licenses have beenliberalized.

7. Most traffic is on the north-south roads connecting the urban cen-ters in the interior plain, and the coastal highway, as well as on the threetransversal roads: Lebanese border - via Damascus to the Iraqi border; Homs -Tartous; and Latakia - Aleppo - Deir-Ez-Zor. Truck traffic on the main roadnetwork is generally heavy with about 20% of the trucks having single axleloads in excess of 8 tons. Although overloadingexists, surveys carried outby the DGHB suggest that the problem is not serious.

8. Competition in the trucking industry is keen, especially in inter-national freight movements, as the Syrians must compete with truckers fromLebanon, Jordan, Iraq, Kuwait and Saudi Arabia. A number of bilateral agree-ments between Syria and its neighbors determine the routes by which transittraffic may cross Syrian territory.

ANNEXPage 3

9. There are two truck tariff rates in the country: one, unregulatedfor shipments by the private sector, and another for the public sector, reg-ulated by the Ministry of Communications. Rates paid by the private enter-prise shippers generally are higher than those paid by the public sector (byfar the largest operator of trucking services), which, until the revision inJune 1974, were too low for most hauls to yield a reasoi,able profit.

10. Revenues from road users come from import duties on vehicles andspare parts, taxes on gasoline and diesel oil, and vehicle registration fees;they are not earmarked for highway purposes, but are added to general Govern-ment revenues. It is estimated that revenues from road users more than coveractual expenditures on administration, maintenance, improvement and construc-tion of highways.

Railways

11. The Syrian railways consist of two systems of different gauges witha total length of 1,079 km. The narrow gauge (1.05 m) Hedjaz Railway systemof 307 km connects Damascus with Jordan to the south, and Lebanon to thewest. The standard gauge (1.435 m) Northern Railways system extends over772 km from Homs to Aleppo and the Turkish border, but the line extendingto the northeast region and Iraq is mostly in Turkish territory and is notfreely accessible to Syrian traffic. The Hedjaz and the Northern Railwayssystems are managed by separate administrations, both of which are controlledby the Ministry of Transport.

12. In 1973 the two systems produced a total of 132 million tons-km and70 million passenger-km; of this the Northern Railways accounted for 97% offreight traffic and 66% of passenger traffic. Conditions for the existingrail system in the country are difficult; the disconnected track, the differ-ent gauges, the low traffic volumes and decreasing operating efficiency haveall led to operating deficits on both systems. Most of the present rollingstock is inoperative or obsolete and the same is true of traction equipment.

13. The Government is presently implementing a long term railway improve-ment and construction plan which eventually will provide the country with anational railway network connecting the sea ports with the main centers ofproduction and consumption in Syria, Iraq, Jordan and Turkey. When completed,the railway network will amount to about 2,500 km of which about 1.900 km willbe new lines, and will consist of three main lines: the first connecting theport of Latakia with Aleppo, Deir-Ez-Zor, Qamishlie and Iraq; the second mainline will connect the port of Tartous with Homs, the phosphate mines south ofPalmyra, and Deir-Ez-Zor; and the third line will connect Aleppo, Homs andDamascus with Turkey in the north and Jordan in the south. Average trainspeed will be 100 km/h for freight trains and 140 km/h for passenger trains.All traction equipment will be diesel powered. At present, the 745 km lineconnecting Latakia with Aleppo and Qamishlie in the northeast is being con-structed with assistance from the Soviet Union; about 540 km have been com-pleted and the remainder is expected to be completed by end 1975. The maincommodities to be transported by this railway line would be wheat, barley

ANNEXPage 4

and cotton, all of which are major crops grown in northern Syria. Since pro-duction of most of these crops is dependent on rainfall, annual and seasonalfluctuations in demand for transport of these products could be evened outby establishing a storage and silo system which would allow freight transportto be spread more evenly over the year, reduce peak demand for freight carcapacity and increase the utilization rate of railway equipment.

14. Since handling and storage of agricultural bulk productsare essen-tially identical for rail and road, the railway line from Latakia to Hasakemay compete successfully with road transport both on the east-west dominanthaul, where rail has the advantage as a bulk carrier; and on the west-eastback-haul for some commodities by charging only marginal transport costs. Inaddition, the railway probably could attract some freight traffic from regularhighway carriers, if it operated its own truck fleet as a feeder service tostorage points and stations.

15. To serve the phosphate mines near Palmyra, the Government intendsto construct with Soviet assistance a railway line from the mines to Homs,where it would join the recently constructed railway line to the port ofTartous. When completed, the line is expected to carry the total phosphateproduction, which is anticipated to increase from its 1974 level of 0.6 mil-lion tons to 4.5 million tons in 1980. At the same time the Government isplanning the construction, with Soviet assistance, of a railway line connect-ing Homs to Damascus and reconstruction of the lines connecting Homs withAleppo and Akani.

16. In order to establish location of storage points and stations,freight car and traction requirements, frequency of trains, and tariffs fortransport of various categories of goods and passengers, the Government shouldcarry out a detailed origin-destination traffic survey, as well as a detailedanalysis of highway and potential railway transport costs, including costs offeeder services and terminal costs. And since all the three above mentionedlines will serve different markets, they will also serve the same basic trans-port corridors as the main highway network. It is recommended, therefore,that the future administration of the railways, be established in such a way,that each line be allowed some autonomy in pricing its services so as to beable to respond to fluctuations in traffic and competition from highwaytransport.

Ports

17. The partition of Greater Syria left Syria without deep-water portsand therefore dependent on the port of Beirut. To channel foreign tradethrough national facilities, two port,,; were subsequently developed in Latakiaand Tartous. Each port is administered by an autonomous port administrationunder the Ministry of Transport.

ANNEXPage 5

18. The port of Latakia presently handles about 1.3 million tons an-nually of which 1 million tons is import and about 300,000 tons exports.Main import commodities are sugar, iron, chemical and manufactured commod-ities which together account for about 62% of total imports; main exportproducts are wheat and cotton, which together account for about 70% of totalexports. Present facilities in the port consist of about 1,950 m quay, withdepth along quays varying from 3 m to 9.5 m. The present capacity of theport is estimated at about 1.5 million tons annually, and is expected to beexpanded to 3 million tons annually by 1978. The total estimated cost ofcivil works is SL 250 million, of which about SL 175 million are local costsand the remaining is SL 75 million foreign exchange cost. After expansion,the port will have about 5,500 m quay with depth along 3,500 m quay varyingfrom 10 m to 13 m.

19. The port of Tartous presently handles about 800,000 tons annuallyof which 520,000 tons are imports and 280,000 tons are exports. Main importcommodities are sugar, iron, and manufactured products, which together accountfor about 73% of total imports. Main exports are cotton and phosphate whichtogether account for more than 90% of total exports. Present facilities inthe port of Tartous consist of 800 m quay with depth along quays varying from4 m to 10.5 m, as well as a phosphate handling pier. The present capacity ofthe port is estimated at about 1 million tons annually, and is planned to beexpanded to 2.5 million tons annually by 1978. After expansion the port willhave 3 piers with a total length of 3,000 m and a depth along quays varyingfrom 3 m to 14 m.

20. Operations in both general cargo ports appear to be efficient. Theports do not disclose their annual budgets and financial results. In additionto the two general cargo ports, there is a petroleum terminal at Banias, whichpresently exports about 30 million tons of crude oil per year.

21. At present both general cargo ports handle little transit traffic,but after their expansion both Tartous and Latakia are expected to attract asubstantial part of the interregional traffic through Mediterranean ports,probably at the expense of Beirut. But since the distances between the threeports are small, about 150 km between Beirut and Tartous and 90 km betweenTartous and Latakia, the hinterlands of the ports would probably overlap toa large degree, thereby increasing the competitive importance of turn-aroundtime, tariff structure, special services and facilities. The Government shouldthrough an origin-destination survey establish the hinterlands for the portsof Beirut, Tartous and Latakia and through a comparative study of the tariffsand services offered by the three ports establish the services and commoditiesfor which the ports of Tartous and Latakia each may have a relative advantage.

ANNEX

Page 6

Civil Aviation

22. The country has one international airport at Damascus and threedomestic airports at Aleppo, Deir-Ez-Zor, and Qamishly all of which receiveregular services. In addition to these airports there are landing facilitieslocated at Latakia and Palmyra as well as at the pumping stations on the pipe-line between Homs and the border with Iraq. The Directorate General of CivilAviation under the Ministry of Transport is responsible for the administrationof all civil airports in Syria.

23. Air transport operations in Syria are centered on the new airportin Damascus, completed in 1969. It can accommodate the largest aircraft inservice. Traffic on Damascus Airport has increased from 350,000 passengersin 1969 to 460,000 passengers in 1973 or 7% annually, and air freight fromabout 1,600 tons in 1969 to about 2,600 tons in 1973 or 13% annually. Traf-fic on domestic airports have decreased from about 60,000 passengers in 1969to about 35,000 passengers in 1973, partly due to the Middle-East war andpartly due to competition from highway transport. Domestic air freight isnegligible. The Directorate General of Civil Aviation estimates traffic onDamascus airport in 1980 at about 1.4 million passengers and 10,000 tons offreight, which would mean annual growth rates of about 21% for freight and17% for passengers. Considering the present very low traffic levels atDamascus airport, such growth rates, although optimistic, might be realizedprovided that peace and rapid economic progress will prevail in the region,No estimates are available for future traffic on domestic airports.

24. The national airline, Syrian Arab Airlines, is owned by the Govern-ment, and operated as an autonomous commercial enterprise under the controlof the Ministry of Transport. The airline provides limited internationalservices to Arab, European and some Asian cities using four Super Caravelles,and two Boeing 707. In 1973, the airline carried 150,000 passengers on in-ternational routes and about 35,000 passengers on domestic routes. Passen-ger-kms flown amounted to about 290 million on international routes and about16 million on domestic routes. Passenger load factors were 59% on interna-tional routes and 57% on domestic routes.

25. The airline has contracted for three Boeing 727 and two Boeing 747to be delivered in 1976 at a total cost of US$103 million. In addition tothese aircraft, the airline must purchase auxiliary equipment for about US$45million. Finance for these equipment acquisitions will be provided by theGovernment. When the new aircraft is delivered, the airline plans to ex-pand its route network in Eastern Europe, as well as to increase frequencieson existing routes. The Boeing aircraft manufacturing company is presentlyassisting the Syrian Arab Airlines in studying possible route networks andimproving operational efficiency and cost control. In addition to its airoperations the airline plans to build a combined headquarters and hotel withabout 300 rooms in Damascus over the coming 3 to 4 years at a total estimatedcost of SL 628 million.

ANNEXPage 7

Oil Pipelines

26. Two major international crude oil pipelines run through Syria. Thepipeline system from the Kirkuk fields in Iraq via Iloms to the terminals atTripoli in Lebanon and at Banias in Syria consist of three separate pipelineswith a total annual capacity of about 55 million tons; throughput in 1973amounted to 52.8 million tons, to Homis and from there 29.2 million tons toBanias and 22.4 million tons to Tripoli, with the remaining 1.2 million tonsbeing refined at Homs for domestic consumption. The Government is consideringincreasing the annual capacity of the trans-Syrian pipeline system by 10 mil-lion tons. The Trans Arabian Pipeline Company (Tapline) pipeline from theAbu Hadriya fields in Saudi Arabia to the terminal at Saida in Lebanon con-sist of one pipeline with an annual capacity of about 25 million tons; through-put in 1973 amounted to 20.1 million tons. Operation of the Tapline was dis-continued early April 1975, due to a dispute over prices and freight rates.

27. In January 1973 a new oil transit royalty agreement was concludedbetween Syria and Iraq. This agreement replaced the previous agreement be-tween Syria and the Iraq Petroleum Company of July 1971, and provides fortransit dues amounting to US$0.41 per barrel of crude oil loaded in Baniasand US$0.30 per barrel of crude oil to Tripoli; total transit dues in 1973is estimated at about US$136.5 million. The agreement is stipulated to re-main in effect until end 1975.

28. In addition to the international crude oil pipelines, Syria's Gen-eral Petroleum Company has two domestic pipeline systems. One system con-sists of one crude oil pipeline from the Karachok fields in north-east Syriavia Homs to the terminal at Tartous with a total annual capacity of 15 milliontons; throughput in 1973 amounted to 5.5 million tons to Homs and 4.3 milliontons from Homs to Tartous, the remaining 1.2 million tons being refined atHoms for domestic consumption. The other system consists of three oil prod-uct pipelines connecting the refinery at lioms with Aleppo, Latakia and Damascus,each with an annual capacity of 350,000 tons. Throughput is not disclosed.

29. Syria's crude oil export facilities and its refinery at Homs weredamaged during the Middle-East War in October 1973, but have now been almostfully repaired. Current annual refinery capacity is about 2.6 million tonsof crude oil; actual production in 1973 was about 2.4 million tons of crudeoil. An ongoing refinery expansion program, with Romanian technical and fi-nancial assistance, is expected to increase annual capacity to 5.2 milliontons by 1978.

Transport Policy and Coordination

30. The Government's transport policy aims at improving road and railtransport so that each mode can play its particular role in serving the trans-port needs of the country. For highways, the policy is to modernize theprimary network composed largely of roads built over 30 years ago. For rail-ways, the policy is first to link the fertile areas of the north and north-eastern areas, where most of the country's agricultural export products are

ANNEXPage 8

grown, with the port of Latakia; second to connect the phosphate mines withthe port of Tartous; and third to connect the main population centers witheach other, as well as with the port of Tartous and with the neighboringcountries.

31. Three ministries are responsible for administration of the trans-port sector: the Ministry of Communications for roads; the Ministry of Trans-port for highway transport, railways, ports and civil aviation; and the Min-istry of Industry for pipelines. The Ministry of Transport was establishedin 1974 to coordinate policies for the various modes of transport, but it isyet too early to know the extent to which it will control the agencies underits jurisdiction.

32. Until 1974, entrv into the road transport industry was effectively

limited by the annual vehicle import quota established by the Ministry of Com-munications, and the regulations for obtaining import licenses. With theabolition of the quotas and the relaxation of the import license requirements,entry into the road transport industry has become easier. Users are free toselect the mode that best suits their requirements, and there is no adminis-trative allocation of traffic between modes. Road transport is, however,subject to a degree of regulation, for instance in route limitation fortransit traffic, but the extent to which such regulation is either effec-tively enforceable or is economically damaging has not been established.

33. With the rapid expansion of both the highway and railway networksa study should be undertaken to ensure that users and other beneficiariesfrom the transport services bear the operating costs of the infrastructurecosts of each mode, through appropriate tariffs and taxes.

34. Trucking rates appear adequate at present, but the justificationof the two-rate system presently in force should be reexamined. Rail tariffsappear adequate for the present low level of operation, but a detailed re-examination will be needed when the northern line is completed and the rail-road's share of movements in the northern part of the country has increased.The feasibility study included in the World Bank's financed second highwayproject may include an analysis by consultants of possible road-rail compe-tition in northern Syria.

35. Port tariffs are generally somewhat lower than those charged atBeirut for corresponding services. A detailed reexamination will be needed,however, when the port expansion program is completed and the roles of thetwo ports in relation to each other and to Beirut has been established.

STATISTICAL APPENDIX

TableNumber Title

1.1 Population, Manpower, Labor Force and Employment, 1970-19731.2 Labor Force by Sector and Status of Employment

2.1 Summary National Income Accounts at 1963 Prices2.2 Summary National Income Accounts at Current Prices2.3 Sectoral Composition of Gross Domestic Product2.4 Gross Fixed Capital Formation by Sectors and by Assets2.5 Implicit Deflators

3.1 The Balance of Payments3.2 Commodity Composition of Exports3.3 Commodity Composition of Imports3.4 Indices of Export and Import Prices and Quantities3.5 Direction of Trade3.6 International Reserves

4.1 Estimated External Public Debt as of December, 19744.2 External Public Debt as of December 31, 1974

5.1 Consolidated Public Sector Finances5.2 Budget Expenditure by Functional Classification5.3 Budget Ordinary Revenues5.4 Transfers of Public Enterprises to the Budget5.5 Public Investment During the Third Five-Year Plan, 1971-75

6.1 Monetary Survey6.2 Factors Affecting Changes in Money Supply6.3 Credits of Specialized Banks6.4 Loans Advanced by the Industrial and the Cooperative Agricultural Banks6.5 Balance Sheet of Central Bank of Syria6.6 Interest Rate Structure

7.1 Area of Land by Use, 1972-737.2 The Development of Agricultural Production Compared with Annual Plans,

1971 -747.3 Exports and Imports of Main Agricultural Commodities, 1964-747.4 Cotton Yield, Area and Production, Irrigated and Unirrigated, 1961-737.5 Major Fruits and Vegetables; Area and Production 1964/5 and 19747.6 Controlled Producer Prices for Major Agricultural Commodities, 1965-747.7 Controlled Internal Farm Prices and World Prices, Selected Commodities,

1974

Statistical AppendixPage 2

TableNumber Title

8.1 Index of Industrial Production8.2 Production of Selected Industries8.3 Construction8.4 Highway Network, 1963-19738.5 Registered Motor Vehicle Fleet, 1963-19738.6 Railway Track and Rolling Stock, 1963-19738.7 Railway Traffic, 1963-19738.8 Port Traffic, 1969-19738.9 Airport Traffic, 1963-19738.10 Pipeline Throughput, 1969-1973

9.1 Wholesale Price Indices

Table 1.1: POPULATION, MANPOWER, LABOR FORCE AND EMPLOYMENT.1970-1973

(Numbers in 000's)

1970* 19711 1 9 7 2 L/ 19731/

Population

Total 6,305 6,500 6,712 6,950Of which:Palestinian refugees 180 186 193 199

Manpower2

Total 4,039 4,216 4,364 4,576

% of population 64.1 64.8 65.0 65.8

Labor Force

Total 1,571 1,646 1,715 1,689

% of manpower 38.9 39.0 39.2 36.9

Employment

Total 1,470 1,522 1.634 1.612

Rate of unemployment 6.4 7.5 4.7 4.5

*Population Census

1 Population sample surveys.2 Population 10 years of age and over.

Source: Central Bureau of Statistics

Table 1.2: LABOR FORCE BY SECTOR-'AND STATUS OF EMPLOYMENT /

1960 1970 1971 1972 1973Numbers % of Numbers % of Numbers % of Numbers % of Numbers % ofin 000 Total in 000 Total in 000 Total in 000 Total in 000 Total

Agriculture 519 46.0 752 48.0 926 56.0 925 54.0 857 50.7

Manufacturing, Miningand Quarrying 129 11.0 199 13.0 184 11.0 189 11.0 181 10.7

Building and Construction 58 5.0 115 7.0 78 5.0 106 6.0 96 5.7

Electricity, Gas, Waterand Sanitary Services 7 0.7 8 1.0 7 1.0 19 1.0 8 0.5

Commerce 89 8.0 145 9.0 149 9.0 141 8.0 159 9.4

Transport. Communicationsand Storage 39 3.3 64 4.0 48 3.0 65 4.0 67 4.0

Services 160 14.0 224 14.0 200 13.0 228 13.0 280 16.6

Other 140 12.0 5 - 1 - - - - -

Seeking work for the first time _ 59 4.0 53 2.0 42 j_ O 41 2.4

Total Labor Force 1,140 100.0 1,571 100.0 1,646 100.0 1,715 100.0 1,689 100.0

1/ Including unemployed persons seeking employment in the various sectors.Data for 1960 and 1970 is based on the population censuses of those years. 1971, 1972, 1973 data arebased on labor force sample surveys conducted in those years. The two set of figures are not necessarilycomparable.

Source: The Central Bureau of Statistics

Table 2.1: SUMMARY NATIONAL INCOME ACCOUNTS AT 1963 PRICES(Millions of Syrian pounds)

1970 1971 1972 1973 19741/

GNP (mp) 5,780 6,362 7,005 7,117 8,020NNP (mp) 5,528 6,085 6,739 6,793 7,677Depreciation 252 277 266 324 343

Net Factor Income (NFI)!V 164 178 218 179 193

GDP (mp) 5.616 6,184 6,787 6,938 7,827GDP (fc) 5,145 5,654 6,009 6,060 6,756- Agriculture (1,117) (1,148) (1,471) (1,045) (1,460)- Industry (1,068) (1,179) (1,185) (1,202) (1,507)- Services (2,960) (3,327) (3,353) (3,813) (3,789)Net Indirect Taxes 21 411 440 594 647 578Discrepancy in GDP (fc)v 60 90 184 231 493

Consumption 5,115 5,705 6,184 6.850 8,380Private S 4,024 4,483 4,757 5,170 6,707Public 1,091 1,222 1,427 1,680 1,673

Investment 800 1,097 1,170 826 1,401Gross Fixed Investment 788 932 1,012 963 1,241- Private ( 237) ( 304) ( 412) ( 393) ( 393)- Public ( 551) ( 628) ( 600) ( 570) ( 848)Change in Stocksl- 12 165 158 -137 160

Resource Balance -299 -618 -567 -738 -1954

Exports (g + nfs) g 1,341 1,528 1,566 1,710 1,549Less: Imports (g + nfs) -1,640 -2,146 -2,133 -2,448 -3,503

National Savings 701 796 1,027 1,659 658Domestic Savings 501 479 603 159 -653- Private 6 ( 379) ( 380) ( 515) ( 105) ( -354)- Public 6 ( 122) ( 99) ( 88) ( 54) ( -299)NFI + Transfers / 200 317 424 1,500 1,311

1/ Current price data deflated by the implicit GDP (mp) deflator.(Also, this does not include subsidies.)

/ GDP(fc) is underestimated by this amount, because the estimate isbased on subtracting the undeflated value of net indirect taxes fromGDP(mp).

S/ Current price data deflated by the implicit deflator for gross fixedinvestment.

g/ Balance of Payments figures from Table 3.1, deflated by export andimport price indices constructed from the data of Tables 3.2 and 3.3,reported in the Note to Table 3.4. In keeping with IBRD/UN pro-cedures, exports of goods was deflated by the export price index,while exports of (non-factor and factor) services, as well as imports(of goods, non-factor and factor services), were deflated by theimport price index. Current Transfers from abroad were also deflatedby the import price index.

|/ Derived residually.SJ Aggregate domestic savings were decomposed into private and public

savings in the same ratio as those at current prices.

Source: Central Bureau of Statistics and IBRD estimates

iote tro 'able 2.1

1. -,D? (fc) and GDP (mp) were recorded as in Table 2.3, at 1963prices. Indirect, Taxes, however, were deflated by the implicit GDP(Gmp) deflator, given in -able 2.5. Since the implied increase in GDP(fc), which is calculated residually, could not be allocated to thesectors, it was recorded as a statistical discrepancy.

2. Gross fixed investment, both private and public, at 1963 prices,was provided by the Central Bureau of Statistics. The figures for changesin stocks at current prices, from Table 2.2, were deflated by the implicitdeflator for gross fixed investment, given in Table 2.5.

3. Exports and imports at 1963 prices were estimated as follows.Price indices for merchandise exports and imports were constructed fromdata in Tables 3.2 and 3.3, respectively; and are given in the Note toTable 3.4. In keeping with current IBPR procedures data from Table 3.1on merchandise exports were deflated by the export price index, whileexports of non-factor services, imports of goods, and of non-factorservices were deflated by the import price index. Net factor income fromabroad and current transfers from abroad, were also deflated by the importprice index. The deflated values (at 1963 prices) are as follows:

1970 1971 1972 1973 1974

Export ( oods) 862.0 799.2 980.1 841.9 833.2Exports (nonfactor services) 478.5 728.5 585.8 868.5 716.1Imports (goods) 14T71.3 1955.0 1947.2 2187.1 3255.8Imports (nonfactor services) 169.1 190.9 185.8 260.6 247.5Net Factor Incone 164.1 178.5 218.1 179.4 193.1Net Current Transfers 36.0 139.1 206.3 1320.7 1117.9

4. Public consumption at 1963 prices was provided by the Central Bureauof Statistics. Private consumption was derived residually.

5. Estimates of GNP and NNP at 1963 prices were derived, using data onnet factor income and depreciation in 1963 prices, respectively. The latterwas provided by the Central Bureau of Statistics.

6. Aggregate dornestic savings were decomposed into private and publicsavings in the same ratio as those at current prices.

Table 2.2: SUMMARY NATIONAL INCOME ACCOUNTS AT CURRENT PRICES

(Millions of Syrian pounds)

1970 1971 1972 1973 19741/

GNP (mp) 6,599 ,7610 9,125 9,607 14,781

NNP (mp) 6,324 7,316 8,789 9,233 14,368

Depreciation 275 294 336 374 413

Net Factor Income (NFI) 166 162 234 193 271

GDP (mp) 6,433 7,448 8,891 9,414 14,510GDP (fc) 5,962 6,917 8,113 8,536 13,439- Agriculture (1,344) (1,587) (2,298) (1,647) (2,990)

- Industry 2/ (1,259) (1,491) (1,687) (1,914) (4,012)

- Services 2/ (3,359) (3,839) (4,128) (4,975) (6,437)

Net Indirect Taxes3' 471 531 778 878 1,071

Consumption 5,758 6,402 7 8,142 12,154

Private 4,571 5,036 5,909 6,090 9,773Public 1,187 1,366 1,580 2,052 2,361

Investment i,oo5 1,465 1,851 1'6o ,375Gross Fixed Investment 990 1,245 1,601 18 2,989- Private ( 343) ( 437) ( 696) ( 768) (1,000)

- Public ( 647) ( 808) ( 905) (1,098) (1,989)Change in Stocks 15 220 250 -265 386

Resource Balances' _-00 -419 -449 -329 -999

Exports (g + nfs)A 1,329 1,525 1,840 2,295 3,919

Less: Imports (g + nfs)=' -1,659 -1,944 -2,289 -2,624 -4,918

National Savings/ 877 1,334 1,857 2,880 4,217

Domestic Savings 675 1,046 1,402 1,272 2,376- Private ( 510) ( 830) (1,197) ( 858) (1,287)- Public / ( 165) ( 216) ( 205) ( 434) (1,089)NFI + Current Transfers fom Abroad 202 288 455 1,608 1,841

1/ PreliminaryS/ Transit dues on petroleum included in services.S/ In fact, gross indirect taxes, as estimates of subsidies are not

available./ Based on balance of payments data of Table 3.1.sJ Including net unrequited transfers, estimated as in Table 3.1.

/ Based on public finance data of Table 5.1.

Source: Central Bureau of Statistics and IBRD estimates

Table 2.3: SECTORAL COMPOSITION OF GDP (FC)(Millions of Syrian pounds)

1969 1970 1971 1972 1973 1974

At Constant 1963 Prices

GDP (fc) 5,023 5,145 5.654 6 009 6,060 6,756

Agriculture. Forestry andFisheries L,_66 1,117 1,148 1,471 1 045 1,460

Industry 995 1,068 1,179 1,185 1,202 1,507Mining and quarrying 65 113 145 165 218 257Manufacturing 778 809 845 837 814 1,039Construction 152 146 189 183 170 211

Services 2 662 2.960 3,327 ,353 3e814 3,780Electricity, gas and water 69 83 92 107 133 112Transport and communication 530 612 765 605 893 826Trade: wholesale and retail 665 693 721 716y 624 629Finance and Insurance 107 120 130 155 159 174Ownership of dwellings 335 347 359 371 381 394Government 595 704 815 918 1,108 1,081Other services 361 401 445 481 515 573

At Current Prices

GDP (fc) 5,962 6,917 8,113 8,536 13,439

Agriculture, Forestry andFisheries 1,344 1,587 2,298 1,647 2,990

Industry 1,259 1,491 1,687 1,914 4,012Mining and quarrying 119 199 290 294 1,399Manufacturing 928 1,011 1,087 1,255 2,023Construction 212 281 310 365 590

Services 3,359 3,839 4,128 4,975 6,437Electricity, gas and water 113 118 135 147 136Transport and communications 628 780 658 988 875Trade: wholesale and retail 867 1,007 1,208 1,243 2,502Finance and Insurance 120 130 1563' 159 174Ownership of dwellings 498 534 556 579 612Government 711 816 919 1,198 1,310Other services 422 454 496 661 828

j Preliminary2/ Including petroluem dues.3/ Probably a statistical error, as this item appears to be undeflated.

Source: Central Bureau of Statistics

Table 2.4: GROSS FIXED CAPITAL FORMATION BY SECTORS AND BY ASSETS(Million of Syrian pounds)

1970 1971 1972 1973 1974

At Constant 1963 Prices

By Sectors:

Agriculture 210 228 215 197 196Industry 152 268 400 327 542Transportation and

Communication 135 121 91 104 106Dwellings 202 211 194 196 210Other 89 104 112 139 187

Total 788 932 1s012 963 1,241

By Assets:

Dwellings 202 211 194 193 221Industrial andCommercial Buildings 46 53 55 72 91

Construction 197 300 311 265 341Transportation Equipment 105 35 82 114 83Machinery and other.

Equipment 238 333 370 319 504

Total 788 932 1,012 963 1.241-I

At Current Prices

By Sectors:

Agriculture 248 295 324 372 448Industry 178 338 606 611 1,249Transportation 158 155 137 200 246Dwellings 298 320 360 406 603Other 108 137 174 277 443

Total 990 1,245 1i601 1,866 2,989

By Assets:

Dwellings 298 320 360 406 603Industrial and Commercial Bldgs. 69 82 102 145 255Construction 267 419 455 506 826Transportation Equipment 109 41 124 208 184Machinery and other

Equipment 247 383 560 601 1,121

Total 990 1,245 1,601 1,866 2,989

1 Preliminary/ Total does not add up due to rounding error.

Source: Central Bureau of Statistics

Table 2.5: TMPLICIT DEFLATORS(1963=100.0)

1970 1971 1972 1973 1974

GNP(mp) 114.17 119.62 130.26 134.99 184.30

GDP(mp) 114.55 120.44 131.00 135.69 185.38

GDP(fc) 115.88 122.34 135.01 140.86 198.92

Agriculture 120.32 138.24 156.22 157.61 204.79

Industry 117.88 126.46 142.36 159.23 266.22Mining 105.531 137.24 175.76 134.86 544.36Manufacturing 114.71 119.64 129.87 154.18 194.71Construction 145.21 148.68 169.40 214.71 279.62

Services 113.48 115.39 123.11 130.44 170.29Electricity, gas and water 136.14 128.26 126.17 110.53 121.43Transport and communication 102.61 101.96 108.76 110.64 105.93Trade: wholesale and retail 125.11 139.67 168 .72i, 199.20 397.77Finance and Insurance 100.00 100.00 100.65 100.00 100.00Ownership of Dwellings 143.52 148.75 149.87 151.97 155.33Government 100.99 100.12 100.11 108.12 121.18Other services 105.24 102.02 103.12 128.35 144.50

Consumption 112.57 112.22 121.10 120.11 144.80Private 113.59 112.34 124.22 119.44 145.71Public 108.80 111.78 110.72 122.14 141.12

Investment 125.63 133.55 158.21 178.48 259.42Gross Fixed Investment 125.63 133.58 158.20 193.77 240.85

Private (144.73) (143.75) (168.93) (195.42) (254.45)Public (117.42) (128.66) (150.83) (192.63) (234.55)

Exports (g + nfs) 99.11 99.80 117.50 134.21 253.00

Imports (g + nfs) 101.16 90.59 107.31 107.19 140.59

1/ Probably a statistical error, as this item appears to be undeflated.

Source: Tables 2.1, 2.2, 2.3, and 2.4

Table 3.1: THE BALANCE OF PAYMENTS(Millions of Syrian Pounds)

1970 1971 1972 1973 1974-L

Trade Balance - 642.7 - 906.5 - 877.9 - 981.5 -1656.9Exports (f.o.b.) 844.8 864.7 1211.4 1363.1 2914.0Less: Imports (c.i.f.) -1487.5 -1771.2 -2089.3 -2344.6 -4570.9

Non-Factor Services (Net) 512.8 487.0 429.2 652.3 657.9Receipts 483.8 660.0 628.6 931.9 1005.4

Oil transit dues, etc. ( 291.6) ( 469.4) ( 295.3) ( 563.4) ( 479.2)Shipping and Transport ( - ) ( - ) ( - ) ( 25.2) ( 53.4)Travel and Tourism ( 100.1) ( 108.7) ( 206.8) ( 216.0) ( 307.4)Government (n.e.i.) ( 40.2) ( 41.1) ( 60.8) ( 85.4) ( 100.6)Other / ( 51.9) ( 40.8) ( 65.7) ( 41.9) ( 64.8)

Less: Payments - 171.0 - 173.0 - 199.4 - 279.6 - 347.5Shipping and Transport ( - ) ( - ) ( - ) ( -22.5) ( -28.8)Travel and Tourism ( -46.3) ( -73.1) ( -86.6) (- 163.9) (- 220.4)Government (n.e.i.) ( -71.2) ( -62.8) ( -66.3) ( -30.8) ( -21.4)Other ( -53.5) ( -37.1) ( -46.5) ( -62.4) ( -76.9)

Factor Income from Abroad (Net) 165.9 161.7 254.0 192.5 71.Workers Remittances 192.2 197.4 259.3 195.6 242.6

From Lebanon / ( 100.0) ( 108.0) ( 125.0) ( 81.0) ( 120.0)Other / ( 92.2) ( 89.4) ( 154.3) ( 114.6) ( 122.6)

Interest (net) -26.3 -35.7 -25.3 - 3.1 28.5Receipts ( 4.3) C 8.9) ( 10.1) 3 56.6) ( 117.3)Less: Payments (Private) ( -14.1) ( -27.0) ( -21.1) ( -23.8) ( -71.2)Less: Payments (Public) / ( -16.5) ( -17.6) ( -14.3) ( -15.9) ( -17.6)

Transfers 36.4 126.0 221.4 1415.8 1569.6Public ( 13.4) ( 103.6) ( 187.8) ( 1387.2) ( 1539.0)Private3 ( 23.0) ( 22.4) ( 33.6) ( 28.6) ( 30.6)

Balance on Current Account -127.6 11.8 6.7 1279.1 841.7

Capital -22.6 117.6 450 - 0.2 533-5Private, ST (net) n.a. 149.5 64.8 - 103.2 73.5Public, M+LT g/ -22.6 -31.9 -19.8 103.0 259.8

Disbursements 5 4/ ( 83.2) ( 86.6) ( 114.3) ( 254.9) ( 437.4)Less: Amortization' (- 105.8) (- 118.5) (- 134.1) (- 151.9) (- 177.6)

Change in Reserves (-increase) 195.9 50.0 -27.6 -1201.4 - 1, nMonetary Authorities 163.3 -56.9 -22.5 -1190.0 n.a.

Assets ( 31.9) (- 121.5) (- 241.5) (-1231.5) ( .. )Liabilities ( 131.4) ( 64.6) ( 219.0) ( 41.5) (

Commercial Banks 30.5 106.9 - 5.1 -11.4 n.a.Assets ( 13-5) ( 8.4) ( -48.5) ( -32.4) (Liabilities ( 17.0) ( 98.5) ( 43.4) ( 21.0) (

SDR Allocations 27.5 25.0 24.7 - -

Errors and Omissions -71.2 -60.8 -48.8 -77.5 -534.0

/ The 1974 figures are preliminary, as reflected in the large errors and omissions item./ The credit items for "Other Services" officially published in the estimates of

the balance of payments, have been decomposed into "Other Non-factor Services"and "Workers' Remittances from Lebanon" in this table, based on data providedby the Central Bank.

3,1 "Private Transfer Payments" in the officially published estimates of the balanceof payments include workers' remittances to Syria through the banking system. Inthis table, these remittances have been estimated at 80 percent of the total item,while the remaining 20 percent are recorded as private unrequited transfers.

J IBRD external debt data based on information supplied by the Ministry of Finance,converted at $1.00=S.P.3.82. (Officially published estimates record commitmentsrather than disbursements, and include interest in repayments.)

J Published IMF data in "International Financial Statistics," (October, 1975)

Source: Central Bank and IBRD Estimates

Table 3.2: CO1MMODITY COMPOSITION OF EXPORTS(Values, prices and quantities)

1963 1970 1971 1972 1975 1974

VALUES (SL mln at current prices)Total Exports 5! 720.9 775 88.9 1140.7 1541.5 2914.0

Crude oil - 128.8 176.0 200.2 291.2 1607.5Raw cotton 348.8 309.8 313.9 373.1 448.5 715.0Textiles 47.7 68.7 79.8 126.6 178.1 239.9Industrial Products 12.1 13.8 13.5 21.3 33.3 109.6Wool 24.8 10.7 18.5 36.5 77.2 57.0Wheat 43.7 - 0.1 84.2 45.0 0.1Barley 71.8 22.1 - 10.6 2.1 0.1Fruits and vegetables 47.5 17.7 19.3 29.9 17.6 37.1Oil cake 24.1 20.8 11.6 29.3 9.9 8.7Live animals and meat 34.1 71.4 25.7 60.5 50.3 12.3Lentils 13.5 6.4 19.8 21.3 17.4 10.9Tobacco 4.6 17.6 14.0 20.5 45.2 14.6Cotton seed oil 2.6 9.9 3.1 - - -

Raw hides and leather 6.8 8.8 7.7 17.0 34.0 19.2Other Products 3 38.8 68.8 85.9 109.9 91.7 82.0

PRICES (SL/ton) 6Crude oil 355 37 51 48 67 261Raw cotton 2,355 2,278 2,638 3,205 5,761 6,506Textiles 2,806 2,961 2,425 5,507 4,749 7,161Industrial Productsl/ 190 160 86 122 112 195Wool 4,509 2,140 2,643 3,724 6,433 6,628Wheat 241 .. 333 302 363 500Barley 179 124 *- 290 389 500Fruits and vegetables 173 338 239 304 779 661Oil cake 242 257 318 372 474 524Live animals and meat (SL/Head) 102 141 164 259 222 101Lentils 325 604 671 747 1,7404/ 2,180Tobacco 3,067 3,200 3,889 4,833 18,080 5,615Cotton seed oil 1,040 1,179 1,348 .

Raw hides and leather 3,238 3,520 5,348 5,152 9,444 11,294Other Products 2,192 1,600 1,800 1,537 2,118 2,316

QUANTITIES ('000 tons)Total Exports 1260 4155 3984 5154 5025 6993

Crude oil - 3521.0 3465.0 4197.0 4325.0 6159.9Raw cotton 148.1 136.0 119.0 116.4 119.2 109.9Textiles 1 17.0 23.2 32.9 36.1 37.5 33.5Industrial Products'L/ 63.8 86.4 156.9 175.1 296.8 563.3Wool 5.5 5.0 7.0 9.8 12.0 8.6Wheat 181.3 - 0.3 278.4 124.1 0.2Barley 401.8 178.1 0.1 36.6 5.4 0.2Fruits and vegetables 274.0 52.3 80.7 98.2 22.6 56.1Oil cake 99.7 80.8 36.5 78.7 20.9 16.6Live animals and meat ('000 Heads) 333 506 157 234 227 122Lentils 41.6 10.6 29.5 28.5 10.0 5.0Tobacco 1.5 5.5 3.6 4.2 2.5 2.6Cotton seed oil 2.5 8.4 2.3 - - -Raw hides and leather 2.1 2.5 2.3 3.3 3.6 1.7Other Products ! 17.7 43.0 47.7 71.5 43.3 35.4

Value at 1963 prices (SL mln)- 720.9 791.1 729.1 922.9 828.3 833.2

/ Chemicals, glassware, and metals.a Derived residually. (Live animals and meat exports, in thousands of tons, were

3.4 (1963), 0.2 (1970-72), 0.1 (1973), and 0.0 (1974)./ Derived from Value and Quantity data./ Possibly an error in the data.

Data for 1970-73 slightly different from Table 3.1, due to differences in exchangerate valuations.A notional price of crude oil exports of SP 35 per ton in 1963 was used to derive

the value of exports at 1963 prices.

Source: The Central Bureau of Statistics

Table 3.3: COMMODITY COMPOSITION OF IMPORTS(Values, prices and quantities)

1965 1970 1971 1972 1973 1974

VALUES (SP mlns at current prices)Total Imports 3/ 897.5 1374.6 1703.5 2081.9 2342.0 4571.0

Metal and metal products 85.5 207.7 201.2 508.0 312.7 858.0Machines and equipment 127.7 174.1 222.2 374.8 417.3 601.7Transport equipment 71-3 64.2 63.6 83.7 129.0 263.2Medical and other scientific instruments 11.9 16.1 17.3 31.7 37.0 61.8Textiles and textiles products 140.2 120.7 112.2 202.3 223.3 310.9

Paper and paper products 15.4 28.8 27.0 33.6 42.9 117.9Wood and wood products 23.5 41.0 32.7 44.4 76.o 150.4Resins, rubber, and rubber products 35.6 56.1 58.2 58.2 70.3 111.1Chemicals and chemical products 88.3 133.9 167.9 219.7 190.9 333.2Fuels 93.4 106.9 102.3 91.4 106.2 275.4Raw sugar 32.8 36.1 62.8 94.8 85.4 102.7Live animals, meats, and foodstuff 72.0 247.4 386.9 274.7 300.7 72.2Fruits and vegetables 48.0 60.1 81.3 81.1 102.9 122.8Other J 51.9 81.5 167.9 183.5 247.4 1189.7

PRICES SP/ton)Metal and metal products 648 697 777 843 1,023 1,625

Machines and equipment 5,576 5,260 6,104 7,511 7,742 10,374Transport equipment 4,098 4,169 3,926 5,073 5,489 7,094

Medical and other scientific instruments 23,800 23,000 28,833 31,700 41,111 47,538Textiles and textiles products 3,514 3,298 4,400 4,629 4,361 6,306Paper and paper products 906 935 954 1,135 1,308 2,325Wood and wood products 330 366 445 454 704 1,152

Resins, rubber, and rubber products 2,967 2,791 2,435 1,727 1,831 4,340Chemicals and chemical products 800 684 711 1,180 1,743 1,820Fuels 74 72 103 127 87 101Raw sugar 485 330 453 718 824 1,633Live animals, meats, and foodstuff 1,141 380 423 625 1,381 8,805

(in SP/Head) ( 172) ( 1,010) ( 1,348) ( 1,014) ( 1,055) ( 356)Fruits and vegetables 252 332 355 487 428 517Other 1,407 475 302 388 399 1,O50

QUANTITIES ('000 tons)Total Imports 2045 3338 3528 2756 310 5245

Metal and metal products 132.0 297.8 258.8 365.4 305.8 528.1Machines and equipment 22.9 33.1 36.4 49.9 53.9 58.0Transport equipment 17.4 15.4 16.2 16.5 23.5 37.1Medical and other scientific instruments 0.5 0.7 0.6 1.0 0.9 1.3Textiles and textiles products 39.9 36.6 25.5 43.7 51.2 49.3Paper and paper products 17.0 30.8 28.3 29.6 32.8 50.7Wood and wood products 71.1 111.9 73.5 97.8 107.9 130.6Resins, rubber, and rubber products 12.0 20.1 23.9 33.7 38.4 25.6Chemicals and chemical products 110.4 195.7 236.1 186.1 109.5 183.1Fuels 1263.7 1483.2 990.8 721.3 1224.6 2739.5Raw sugar 67.6 109.5 138.7 132.1 103.7 62.9Live animals, meats, and foodstuff 63.1 650.5 914.6 439.4 217.7 8.2

(in '000 Heads) ( 419) ( 246) ( 287) ( 271) ( 285) ( 203)Fruits and vegetables 190.5 181.1 228.8 166.5 240.5 237.3Other 1/ 36.9 171.6 555.8 473.0 619.6 1133.3

Value at 1963 prices (SP mln) 897.5 1359.2 1880.3 1939.5 2185.5 3255.8

1/ Derived residually.E/ Derived from value and quantity data.

1 Data for 1970-73 slightly different from Table 3.1, due to differences in exchange ratevaluations.

Source: The Central Bureau of Statistics

Table 3.4: INDICES OF EXPORT AND IMPORT PRICES AND QUANTITIES(1970 = 100.0)

1964 1965 1966 1967 1968 1969 19'70 1971 1972 1973 1974

PRICESExport Prices

Laspeyre's Index 95 96 80 97 103 103 100 120 140 174 331Paasche's Index 92 89 91 94 100 98 100 116 130 172 407Fisher's Index 93 92 85 95 101 100 100 118 155 173 367

Import PricesLaspeyre's Index 97 98 105 104 100 97 100 116 149 168 237Paasche's Index 85 89 100 95 94 89 100 112 127 129 204Fisher's Index 91 93 101 99 97 93 100 114 133 147 220

QUANTITIESExports

Laspeyre's Index 102 104 90 '75 81 102 100 82 100 93 90Paasche's Index 100 97 103 73 79 98 100 80 93 92 111Fisher's Index 101 100 96 74 80 100 100 81 96 92 100

ImportsLaspeyre's Index 75 63 87 74 82 112 100 105 105 125 156Paasche's Index 66 57 84 68 76 102 100 102 96 96 134Fisher's Index 70 60 85 71 79 107 100 103 100 110 145

TERMS OF TRADE(Fisher' s Indices)Net Barter TOT 1 102 99 84 96 104 108 100 104 102 118 167Income TOT 2/ 103 99 81 71 83 108 100 84 98 109. 167

j Defined as export price/import price.

2/ Defined as Net Barter TOT multiplied by Export Quantity Index.

Source: The Central Bureau of Statistics

Note: For national accounts at 1963 prices, a different set of export and importprice indices, with 1963=100.0 were derived from the data of Tables 3.2 and 3.3.These are reproduced below:

1970 1971 1972 1975 1974

Export Price Index (1963=100) 98.0 108.2 123.6 161.9 349.7Import Price Index (1963=100) 101.1 90.6 107.3 107.2 140.4Terms of Trade Index (1963=100) 96.9 119.4 115.2 151.0 249.1

Table 3.5: DIRECTION OF TRADE(Million of Syrian Pounds)

1970 1971 1972 1973 1974

Exports (f.o.b.) 775 7453' 1098?' 1341 2914

Arab Common Market andAEU Council L/ 91 72 88 110 125

Other Arab Countries 101 76 187 177 277Socialist Countries 206 224 423 460 924European Common Market 238 278 225 339 900Rest of Europe 68 42 116 139 528USA and Canada 3 7 8 10 10Rest of World 68 44 50 106 150

Imports (c.i.f.) ' 1378 1677a/ 2061? 2341 4571

Arab Common Market andAEU Council j 150 181 150 184 262

Other Arab Countries 92 149 140 157 374Socialist Countries 333 334 424 524 960European Common Market 36s 465 659 875 1793Rest of Europe 100 115 193 174 373USA and Canada 144 220 136 95 198Rest of World 190 213 357 332 611

I Arab Economic Unity Council. The members of the ArabCommon Market are: Syria, Egypt, Iraq and Jordan. Inaddition to these countries, other AEU Council members areKuwait, Sudan and the Yemen Arab Republic.

? Excluding some exports and imports which are not availableunder this classification.

/ Data consistent with Tables 3.2 and 3.3, but not withTable 3.1, due to differences in exchange rate valuations.

Source: Central Bank and Central Bureau of Statistics

Table 3.6: INTERNATIONAL RESERVES

(In millions of US dollars)~'

Nov.End of Period 1970 1971 1972 1973 1974

Gross Reserves 83 108 171 530 860

Central Bank 70 98 149 491 788Gold (28) (30) ( 27) ( 28) ( 28)

SDR ( - ) ( - ) ( 4) ( 9) ( 10)Convertible foreign exchange ( 27) ( 58) (102) (436) (733)Inconvertible foreign exchange ( 15) ( 10) ( 16) ( 18) ( 17)

Commercial Banks 13 10 22 39 72

Foreign Liabilities 111 151 207 245 405

Central Bank!-' 95 112 159 174 348Commercial Banks2! 16 39 49 77 57

Net Foreign Assets -28 -43 -36 285 455

Central Bank -25 -14 - 9 317 440Commercials Banks - 3 -29 -27 -32 15

11 Including Payments Agreements balances.

t/ Including use of IMF credit.

S/ $1.00 = SL 3.80

Source: Central Bank

Table 4.1! SYRIA

ESTIMATED EXTERNAL PUBLIC DEBT FROM PROJECT LOANS AS OF DECEMBER, 1974-

Debt Repayable in Foreign Currency

(In thousands of U.S. dollars)

Disbursed Undis-Creditor only bursed Total

SuppliersBelgium 57 - 57Canada 5,020 - 5,020France 23,398 64,680 88,078Germany (Fed. Rep. of) 13,739 44,039 57,778Italy 6,249 17,044 23,293Japan 4,183 4,514 8,697Kuwait 1,233 - 1,233Lebanon 264 255 519Spain 7,176 8,854 16,030Sweden 7,430 19,053 26,483Switzerland 3,677 4,647 8,324UK 448 - 448

Total 72,875 163,086 235,961

Private BanksFrance - 17,634 17,634Multiple lenders - 10,46o 10,460

Total - 28,094 28,094

International orgnaizationsIBRD - 88,000 88,000IDA lo,998 38,639 48,637

Total 10,998 125,639 136,637

Loans from governmentsAlgeria 258 1,029 1,287Austria 288 - 288Bulgaria 919 11,040 11,959China, Peoples Rep. of 25,996 2,429 28,425Czechoslovakia 6,503 6,018 12,521Germany (East) 28,887 23,941 S2,828Germany (Fed. Rep. of) 993 - 993Hungary 1,194 4,869 6,063Kuwait 24,138 - 24,138Poland 6,248 2,426 8,674Romania 2,810 4,714 7,524USA . 421 - 421USSR 74,882 69,585 144,467Yugoslavia 339 1,456 1,795

Total 173,876 127,508 301,384

Total external public debt 257,748 444.328 702,076

Note: Totals may not add due to rounding.

/ Excludes military debt as well as program loans, if any.

Table 4.2: EXTERNAL PUBLIC DEBT AS OF DECEMBER 31, 1974

FOR LOANS ISSUED DURING THE PERIOD JANUARY 1I 1900 ' DLCEMEMN 31'1974

DEBT REPAYABLE IN FOREIGN CURRLNCY

IN THOUSANDS OF U.S. DOLLARS

TOT AL

DEBT OUTSTANDING TRANSACTIONS DURING PERIOL

BEGINNING OF PERIOD CANCEL-LAT IONS,

DISBURSED INCLUDING COMMIT' DISBURSE SERVICL PAYMENTS ADJUST-

YEAR ONLY UNDISBURSED MENTS MENTS PRINCIPAL INTEREST TOTAL MENTS(1) (2) (3) (4) (5) i6) (a) (8)

1969 173'352 222,188 21'436 35,080 i6,817 J,592 30,409 -21P694

1970 170'430 195,113 15s259 12,268 27,692 4,321 32i013 20,820

1971 166P403 203,500 90881 22,668 41,043 4,606 35,650 12P590

1972 165,834 273,696 104,054 30,230 J5,97 J4*837 39,815 579

1973 160'665 342P353 130O701 64#602 40,3b8 4,189 440577 8,459

1974 185P860 441,U60 288,482 111,984 47P162 4,647 5l,808 19P695

1975 257'834 702,076 139,108 o3,2b2 9,07( 72P359

1976 333P660 638,796 - 117k261 o6p896 1I,74U 79,637

1977 384'024 571,900 - 77,554 67P495 10,442 83P937

1978 394,083 504,406 - 46,d68 o3,329 11,360 eo,689

1979 379P621 441,077 - 22,836 v9'509 11,634 77i142

1980 342p949 3R1,568 - 7,410 B5,490 1b,995 71*440 -

1981 294,87? 326,077 7,772 48,125 14,809 61,933

1Q82 254,522 277,951 - 1,823 42,111 1016 54 127

1983 231'231 235,837 - 4,460 J5,562 11#179 46'742

1984 ?0',12M 200,273 - 101 J1,968 9,818 4A1787

1Q85 168.262 168,305 - 30 17,549 U,474 26,023

1986 15O.746 150,756 9 8,971 (,644 16.615

1987 141.784 141,785 - - 8,8b1 (P213 16,094

1986 132P903 132,904 - . 7,117 6,7S1 13.909 -

1989 125,786 125,787 - 7,038 0,407 13,446

1990 118P748 118,749 - 6,047 0o036 12,083 -

1Q91 112P701 112,702 - 6,292 D,707 12,000 -

1992 106A408 106,409 6 - 6,833 5,361 12,194 -

Table 5.1: CONSOLIDATED PUBLIC SECTOR FINANCES(In millions of Syrian pounds)

Actuals Budzet1970 1971 1972 1973 1974 1975

Domestic revenues 1,451 1,686 1,940 2,676 4,293 5,788of which: Tax revenue ( 671) ( 719) ( 975) (1,075) (1,500 (1,322)

Non-tax revenue ( 309) ( 409) ( 349) ( 622) ( 539) ( 674)Transfers from

public enterprises ( 471) ( 558) ( 616) ( 979) (2,254) (3,792)

Current expenditure 1,286 1,470 1,735 2,242 3,204 4,595of which: Defense and national

security ( 764) ( 894) ( 793) (1,485) (2,023) (2,613)

Surplus or deficit 165 216 205 434 1,089 1,193Development expenditure 743 850 936 1,098 2,393 5,851Overall deficit -578 -634 -731 -664 -1,304 -4,658

Financing of the deficit 578 634 1 664 1>304 4,658External borrowing / 98 82 65 75 505Receipts ( 200) ( 250) ( 245) ( 280) ( 725)Repayments ( -102) ( -168) ( -180) ( -207) ( -222)

Domestic borrowing 481 341 503 -733Outside the banking system ( 36) ( 24) ( 25) - - -From the banking system ( 445) ( 317) ( 478) ( -733)

Residual / 6/ - 1 -211 163 1,324 1,500-' 1,750-'Memorandum item_r - - - - 350 600

1/ PreliminaryU/ Due to difference in timing and coverage these data do not coincide with

those in the balance of payments./ Mainly loans from public sector enterprises; phased out in 1973.

g/ Residual results from the exclusion of transfers from Arab countries for thebudgetary accounts.

|/ Bank estimates|/ Transfer of foreign aid to the budget.

Source: Based on data provided by the Ministry of Finance and the Central Bank

Table 5.2: BUDGET EXPENDITURE BY FUNCTIONAL CLASSIFICATION(In millions of Syrian pounds)

Actuals 9 Budget1970 1971 1972 1973 194 1975

General administrationCurrent 42 50 47 58 70 112

Investment - 3 4 4 6 529Total 42 53 51 62 76 639

National securityCurrent 764 894 793 1,485 2,001 2,613

Investment 2 2 4 6 22 26Total 766 896 797 1,491 2,023 2,639

Education, culture, informationCurrent 220 254 284 336 409 564

Investment 22 28 44 49 83 293Total 242 282 328 385 492 857

Social affairsCurrent 41 44 37 24 37 46

Investment 3 6 8 10 20 64Total 44 50 45 34 57 110

Finance and economyCurrent 154 163 227 .256 344 490

Investment 16 5 13 29 241 336

Total 170 168 240 285 585 826

Agriculture, irrigationCurrent 36 39 43 48 56 75

Investment 250 272 318 324 368 1,185Total 286 311 361 372 424 1,259

Industry, mining, power, oilCurrent 5 6 6 11 12 16

Investment 228 260 303 409 1,036 2,532Total 233 266 309 420 1,026 2,548

Transportation, public utilities,public works

Current 26 28 18 24 28 57Investment 219 261 242 267 618 834

Total 245 289 260 291 646 891

OtherCurrent - 205 280 - 244 623

Investment - - - - - 50

Total - 205 280 - 244 673

Total Current 1,286 1,470 1,735 2,242 3,204 4,596Total Investment 743 850 956 1,098 2,393 5,846

Total Budget Expenditures 2,029 2,320 2,671 3,340 5,597 10,442

j Preliminary

Source: Ministry of Finance

Table 5.3: BUDGET ORDINARY REVENUES(In millions of Syrian pounds)

Actuals Pre.iJ Budget1970 1971 1972 1973 1974 1975

I. Tax Revenue1. Taxes on net income and

profits 161 181 221 210 298 270Rental ixcome tax 37 37 40 40 46 50

Profits tax 102 121 156 139 210 180

Wages and salaries tax 20 21 23 29 40 37

Movable capital tax / 1 2 2 2 2 3Business license tax_! 1 - - - - -

2. Taxes on property and wealth 40 38 41 41 43 46

Real estate tax 3 3 3 3 3 3

Inheritance and gift tax 7 7 8 8 8 10

Property transfers taxes 15 15 19 20 22 23

Cattle taxes 15 13 11 10 10 10

3. Taxes on production, consump-tion and domestic transactions 195 202 240 249 252 288

Tax on agricultural production 36 38 54 50 75 85

Profits from fiscal monopolies 100 107 127 135 104 123

Cement (17) ( 17) (15) (13) ( 17) (15)

Sugar ( 19) ( 37) (44) (45) ( 22) (27)

Salt (10) ( 4) ( 8) ( 3) ( 2) ( 6)

Tobacco ( 54) ( 49) (60) (74) ( 63) (75)

Selective excises 59 57 59 64 73 80

Alcoholic beverages ( 6) ( 7) ( 7) ( 8) ( 9) ( 8)

Petroleum ( 47) ( 43) ( 45) ( 50) ( 56) ( 60)

Excise tax on electricity ( 6) ( 7) ( 7) ( 6) ( 6) ( 12)

4. Taxes on international trade 178 204 350 367 569 490Import duties and taxes 151 169 308 323 486 410

Customs duties (108) (117) (221) (220) (347) (300)

Statistical tax ( 34) ( 36) ( 67) ( 67) (106) ( 75)

Foreign trade tax ( 9) ( 16) ( 20) ( 36) ( 33) ( 35)

Export taxes 27 35 42 44 83 80

5. Other taxes 97 94 125 208 338 228Car fees 28 27 29 32 45 42Television fees 4 4 4 5 6 15

Registration and stamps 53 53 67 76 97 83

Other 12 10 23 95 190 88

Total Tax Revenue 671 719 975 1,075 1,500 1,322

II. Non-tax Revenue1. Fees and service charges 12 15 20 16 18 20

2. Propriety receipts 233 326 230 539 446 586

Petroleum dues 222 312 216 530 434 575

Public domain and investmentincome' 11 14 14 9 12 11

3. Other receipts 64 68 99 67 75 68

Total Non-tax Revenue 309 409 349 622 539 674

Total Ordinary Revenues 980 1,128 1,324 1,697 2,039 1,996

J Ministry of Finance estimates based on actual figures for 11 months.

/ This tax was eliminated in 1971.

Source: Ministry of Finance

Table 5.4: TRANSFERS OF PUBLIC ENTERPRISES TO THE BUDGET(In millions of Syrian pounds)

Actuals Budget1970 1971 1972 1973 1974 1975

Surpluses from Enterprisesof Economic Nature 415 500 585 895 1870 3378

Banking and Financial Sector 145 174 203 213 175 210Commercial 57 80 55 94 78 94Public Utilities 54 30 77 61 110 107Industrial )Power and Fuel ) 149 216 249 540 1500 2957Transportation )Construction )Services - - - - - -

Agriculture 10 - 1 5 7 10

Other Surpluses 56 58 _l 86 384 414

Administrative Enterprises 56 34 21 86 384 414Surplus of Public Debt Fund - 8 - - - -Other - 16 10 - - -

Total Surpluses 471 558 616 979 2254 3792

Source: Ministry of Finance

Table 5.5: PUBLIC INVESTMENT DURING THE THIRD FIVE-YEAR PLAN, 1971-75

(In millions of Syrian pounds)

Plan Allocations _ Actuals Pre.

SECTOR (in 1970 prices) 1971 1972 1973 1974

Euphrates 1,593 224 252 289 243

Irrigation, Land Reclamation 212 18 24 ( 75 27

Agriculture 436 28 35 ( 99Industry 1,173 266 80 121 420

Energy and Fuel 1,014 ( 232 290 970

Transport and Communications 783 168 137 120 269

Public utilities works, housing 586 88 ( 140 (200 343

Services 526 36 ( ( (Internal Trade 125 1 6 3 22

Total 6,448 829 906 1,098 2,393

Source: State Planning Commission

Table 6.1: MONETARY SURVEY(In millions of Syrian pounds)

Ehd of Period 1970 1971 1972 1973 1974Oct. Nov. Dec. Oct. Nov.

Money and quasi-mqney 2 271 3428 3893 3985 4114 5803Money 2341 2502 3151 3b74L 3673 3797 5345 5085

Currency outside banks (1795) (i8h6) (2245) (2624) (2630) (2757) (3210) (3277)Demand deposits ( 546) ( 656) ( 906) ( 960) (1043) (lo4) (2135) (I80,)

Quasi-money- 180 213 277 309 312 317 458 476

Net Foreign assets -108 -161 -137 698 1082 1037 2014 17??

Ulet Domestic assets 2629 2876 3565 3195 2903 3077 378' ? 7

Claims on Central Government (net) T5T5 2130 25 2127 1803 T12 2I41 f17Claims on other sectors 1523 1650 2006 22h1 2373 2475 3L63 -(7)

Claims on puhlic economic sector v (972) (1080) (1428) (1540) (1679) (1822) (2722) (2l44)Claims on private sector?! (551) (570) (578) (701) (694) (653) (741) (7,5)

Commercial prepayments (import deposits)-152 -272 -267 -3L0 -419 -436 -556 -586Other items net -560 -632 -762 -834 -854 -817 -1042 -1280

lJ Preliminary/ The seminationalized firms were fully nationalized in January 1970 and claims were transferred from claims on

private sector to claims on the public economic sector.

Source: Central Bank of Syria

Table 6.2: FACTORS AFFECTING CHANGES IN MONEY SUPPLY(In millions of Syrian pounds)

1973 1974Up to Up to

1970 1971 1972 1973 Sept. Oct. Sept. Oct. Nov.L 1

Changes in:Money and quasi-money 3Q7 196 694 686 362 46 1 713 1 689 1L4L2Money 3 62 30 iJZ 3 5 B 1 33

Currency outside banks (218) (51) (399) (512) (164) (379) (367) (454) (520)

Demand deposits (35) (11i) (231) (134) (150) (54) (1,221) (1,094) (763)

Quasi-money 54 34 64 40 48 32 125 141 159

Net foreign assets -172 -S5 25 !LU7 313 835 990 977 692

Net domestic assets 479 247 670 -488 49 -370 723 712 750

Claims on Central Govemnment(net) 445 314 458 -733 -8 -460 -19 69 159

Claims on other sectors 77 127 326 469 199 235 829 988 1,204Claims an public economic

sectors (121)?/ (108) (350) (394) (72) (113) (741) (900) (1,122)

Claims on private sector (- 45)g/ (19) (-24) (75) (127) (123) (88) (88) (82)

Import deposits (increase -) -13 -11.9 5 -169 -37 -73 -52 -120 -150

Other items (net) (increase -) -30 -75 -119 -55 -105 -72 -35 -225 -463

Percentage changesMoney and quasi-money 14 8 26 20 11 14 42 41 35

Net domestic assets 22 9 24 -14 1 -10 23 23 24Claims on Central Govemrment

(net) 33 17 22 -28 __ -18 -1 4 8

Source: Central Bank of Syria

1/ Preliminary2/ Because of nationalization measures, some claims on the private sector were classified as claims on the

public economic sector.

Table 6.3: CREDITS OF SPECIALIZED BANiKS(In millions of Syrian pounds)

1970 1971 1972 1973 1974Nov. 1

Total 1391.4 1535.5 1925.4 2322.0 3627.4

By type of economic activity

Agricutlure 277.9 298.1 301.8 272.5 362.0Commerce / 938.8 1053.4 1393.5 1782.1 2894.0Industry 113.6 110.6 142.6 165.2 227.6Construction 47.1 58.2 77.0 92.2 127.8Other 14.0 15.2 10.5 10.0 16.0

By sector

Public 840.3 965.3 1347.1 1743.3 2891.9Mixed o.6 o.6 0.7 0.1 0.7Cooperative h1.0 55.6 58.8 58.3 112.9Private 509.5 514.0 518.8 520.3 621.9

By type

Agricultural Cooperative Bank 209.0 234.0 336.0 210.0 301.3Discounts 103.1 9h.9 118.8 128.0 193.3Guaranteed loans and advances 151.5 248.1 231.6 306.9 1270.1Personal credits and overdrafts 267.7 ?46.5 341.8 699.8 1140.1Financing loans 418.6 475.5 768.7 753.6 510.1Other 241.5 236.5 228.5 223.7 212.5

V Preliminaryv An important part of credit to commerce i.s actually utilized by the agricultural

and industrial sectors.

Source: Central Bank of Syria, Quarterly Bulletin

Table 6.4: LOANS ADVANCED BY THE INDUSTRIAL ANDTHE COOPERATIVE AGRICULTURAL BANKS

(Tn millions of Syrian pounds)

1970 1971 1972 1973 1974

Industrial Bank

Long term-/ 0.3 0.1 - - n.aMedium term 13.7 6.5 6.3 37.8 n.aShort term Y 23.4 31.5 52.7 25.1 n.a

Total 37.4 38.1 59.0 62. n.a

Cooperative Agricultural Bank

A. In cashLong term 0.4 2.9 1.0 1.6 1.8Medium term 9.4 15.0 15.2 16.0 34.3Short term 97.6 99.1 88.5 83.4 75.1

Total 107.4 117.0 104.7 101.0 111.2

B. In kind 52.1 67.3 52.1 84.3 61.7

/ More than 5 years1 to 5 years

/ Less than 1 year

Source: Central Bureau of Statistics. The fitures for 1973 have been providedby the Central Bank.

Table 6.5: SYRIAN ARAB REPUBLIC: BALANCE SHEET OF CENTRAL BANK OF SYRIA(In millions of Syrian pounds)

Sept. Oct. Dec. Sept. Oct. Nov.1970 1971 1972 1973 1974

Foreign assets 264 362 571 976 1,504 1,868 2,867 2,926 2,994Claims on Government 2,275 2,711 3,208 3,307 2,901 2,578 2,957 2,921 2,977Claims on public economicsector 132 115 81 79. 79 78 52 52 52Claims on commercial andspecialized banks 330 234 346 230 234 432 189 363 52L

Assets = Liabilities 3,002 3,422 4,206 4.592 4,718 4,956 6,o65 6,263 6,547

Reserve money 2,093 2,265 2,684 2,888 2,988 3,301 3,781 3,989 3,824

Foreign liabilities 359 418 606 650 670 727 947 934 1,323Government deposits 419 536 586 707 763 715 1,098 982 952Counterpart funds 21 21 21 21 21 21 21 21 21Other items (net) 110 183 309 326 276 192 218 336 427

Source: Central Bank of Syria.

Table 6.6: SYRIAN ARAB REPUBLI.C: INTEREST RATE STRUCTUREDuring 1971-74 Period(In per cent per annum)

I. Lending rates1. Central Bank rates

Rates applied to the Comrmercial Bank of SyriaDiscounts (commercial papers up to 120 days) 5.00Loans on advances (against commercial papers up to 120 days) 5.75

Rates applied to the Agricultural BankDiscounts 2.75Loans and advances 2.50

Rates applied to the Industrial BankMedium-term transactions (up to five years) 3.00

Rates applied to the Popular Credit BankDiscounts 2.50-3.50Loans and advances 2.75-3.75

2. Commercial Bank of Syria ratesDiscounts 7.00-8.50Loans and advances 5.25-9.00

3. Industrial Bank ratesDiscounts 4.00-7.00Loans and advances 4.25-7.00

4. Popular Credit Bank ratesDiscounts 6.00-7.50Loans-and advances 6.25-7.50

5. Agricultural Bank ratesLoans 3.00-5.50

6. Real Estate Bank ratesDiscounts 7.00-7.50Loans and advances 5.50-7.50

II. Deposit rates Public Private,Commercial and specialized banks Sector Sector -Current accounts and demand deposits 4.00 4.00Deposits held for not less than three months 4.25 4.50Deposits held for not less than six months 4.50 5.00Deposits held for not less than 12 months -- 5.75

Source: Central Bank of Syria

1/ The rates apply also to public saving entities such as the Post Office and cooperativesocieties. These accept deposits from the private sector and pay interest at 5 per centper annum.

Table 7.1: AREA OF LAND BY USE, 1972-73(Thousand hectares)

1972 1973Land Area % Total Area % Total

Total 18,518 100.0 180518 100.0

Uncultivable 10,014 54.1 10,573 57.1

Miscellaneous.! 3,431 18.5 3,595 19.4Pastures 6,o65 32.8 6,497 35.1Forests 518 2.8 481 2.6

Cultivable but unused 2 2,503 13.5 2,067 11.2

Cultivated 6,001 32.4 5,878 91.7Fallow 2,897 15.6 2,481 13.4Cropped 3,104 16.8 3,397 18.3

of which: irrigated ( 625) ( 3.4) ( 619) ( 3.3)rainfed (2,479) (13.4) (2,778) (15.0)

/ Desert, marshes, lakes, roads and buildings./ Primarily land cultivable under good rainfall conditions.

Source: Central Bureau of Statistics

Table 7.2: THE DEVELOPMENT OF AGRICULTURAL PRODUCTION COMPARED WITH ANNUAL PLANS, 1971-74(Thousand ton)

1970 - 1971 1971 - 1972 1972 - 1973 1973 - 1974 1974

CropsPlanned Executed % Planned Executed % Planned Executed % Planned Executed % Planned

Wheat 1106 846 76 1138 1808 158 1519 593 39 1381 1629 117 1776

Barley 648 262 40 642 710 110 653 102 15 714 655 91 763

Lentils 116 87 75 108 96 88 96 23 23 98 83 84 120

Cotton 460 408 88 415 419 100 411 408 99 372 389 96 39

Sugarbeet 290 232 80 295 248 84 312 200 64 308 171 44 301

Tobacco 6.5 7.5 115 12 11.6 96 12 10 83 16 9.4 59 15

Peanuts 23 20 86 21 23.6 112 26 23 88 27 20 85 27

Tomatoes 317 248 78 298 316 106 442 268 60 404 399 90 508

Potatoes 79 72 91 119 119 100 123 115 93 132 114 91 129

Onions 72 90 125 89 81 91 86 99 115 108 131 94 147

Apples 27 34 125 25 42 168 43 41 95 54 44 81 81

Citrus 9.4 16 170 12 19 158 20 29 145 24 32 117 32

Milk 596 441 74 599 458 76 727 393 54 464 437 94 426

Meat 79 76 96 92 98 106 121 62 51 87 67 77 79

Eggs (mln) 270 301 111 300 323 107 349 369 105 386 445 116 512

Source: Ministry of Planning

Table 7.3: EXPORTS AND IMPORTS OF MAIN AGRICULTURAL COMMODITIES, 1964-74(Thousand tons)

Commodity 1964 1965 1966 1967 1968 1969 1970 1971 1972 1973 1974

Exports

Raw cotton 146.6 121.7 164.2 113-8 99.6 124.1 136.0 119.O 116.4 119.2 109.9Wool 8.0 7.5 8.0 7.3 6.o 5.8 5.0 7.0 9.8 12.0 8.7Wheat 196.1 24.2 1.6 0.1 4.9 0.5 - 0.3 278.4 124.0 0.2Barley 208.0 244.8 17.1 84.1 104.5 273.1 178.1 0.1 36.6 5.4 0.2Tobacco - - 0.5 1.3 1.9 2.1 5.5 3.6 4.2 2.4 3.1Fruits and vegetables 73.1 108.0 88.3 118.7 99.2 95.5 52.3 80.7 98.2 39.3 56.1Oil cake 89.0 127.9 121.4 78.1 89.2 120.1 80.8 36.5 78.7 21.0 16.6Live animals ('000 head) 447 580 749 538 763 732 506 157 234 228 122Lentils 51.4 82.6 14.2 46.8 28.3 35.5 10.6 29.5 28.5 10.1 5.0Raw hides and skins 2.2 2.0 2.0 1.7 2.3 2.1 2.5 2.3 3.1 3.0 0.0

Imports

Fruits and vegetables 211.9 152.0 158.9 165.1 161.4 140.4 181.1 228.8 166.5 244.0 437.3Live animals ('000 tons) '79.9 120.1 378.0 218.4 396.0 197.5 6s0.5 914.6 439.4 0.1 4.2Meat ('000 head) 326 425 303 185 266 374 245 287 271 286 19Raw sugar 73.5 79.9 63.5 67.9 54.9 100.4 109.5 138.7 132.1 103.7 102.7

Source: Central Bureau of Statistics

Table 7.4: COTTON YIELD, AREA AND PRODUCTION,IRRIGATED AND UNIRRIGATED, 1961-73

Yields Area Production of LintYear Irrigated Unirrigated Irrigated Unirrigated Irrigated Unirrigated

Kg lint cotton per Ha. Thousand hectares Thousand tons

1961 586 124 203 46 119 6

1962 612 132 229 73 140 10

1963 637 163 222 70 141 11

1964 745 171 221 66 164 11

1965 735 139 232 56 172 9

1966 616 77 226 29 139 2

1967 616 118 197 42 122 5

1968 668 114 229 60 147 7

1969 601 116 237 63 142 7

1970 630 5 236 13 149

1971 698 125 220 30 154 4

1972 759 121 211 28 160 3

1973 793 110 195 5 155

1974 789 100 187 5 145

Source: Cotton Board

Table 7.5: MAJOR FRUITS AND VEGETABLES; AREA AND PRODUCTION 1964/5 and 1974

Average 1964/5 1972 _ 1973 1974Area Product. Area Product. Area Product. Area Product.

Fruits

Grapes 70.0 218.0 67.0 207.5 74.0 147.0 81.0 250.0Apricots 9.5 19.0 10.8 39.0 10.0 29.0 11.0 33.0Apples 7.0 22.9 10.0 42.4 14.0 41.1 16.0 44.3Pears 2.4 5.5 1.8 5.8 1.6 3.5 1.8 6.2Plums 1.3 2.9 2.2 11.7 2.3 8.7 2.5 11.5Peaches 1.5 4.5 2.1 10.5 1.8 8.3 2.6 8.0Panagranates 2.7 10.9 3.3 21.1 3.2 13.9 3.4 16.9Figs 21.5 60.5 21.0 38.0 21.0 31.0 21.0 38.0Cherries 1.2 1.3 3.6 7.0 3.8 7.3 4.2 3.7Oranges 1.2 3.5 2.0 8.4 2.1 14.3 2.3 16.3

Total Fruits 118.3 349.0 123.8 391.4 133.8 304.1 145.8 427.9

Vegetables

Tomatoes 17.6 144.3 21.8 316.0 20.7 269.0 29.9 295.5Potatoes 4.6 48.3 7.8 119.0 8.3 110.5 8.4 12.5Onions 4.2 33.0 6.9 80.8 6.8 98.6 8.7 15.3Cucumbers 8.5 40.8 11.3 95.2 9.5 90.8 12.0 134.8Aubergines 3.8 34.0 4.9 64.9 - - - -Squash 3.7 32.6 4.5 49.9 5.0 58.4 6.7 78.8Beans 4.5 30.2 4.9 31.9 4.7 21.4 6.0 43.1Peppers 1.9 10.0 2.5 18.5 2.5 20.5 2.9 27.8Green Beans 1.4 4.7 2.9 19.2 3.3 14.3 4.6 31.3Cabbage and

cauliflower 1.7 25.9 2.9 54.0 3.1 41.8 4.5 70.7Okra 2.2 5.6 3.5 12.9 2.9 11.1 4.0 15.2

Total Vegetables 54.1 409.4 73.9 862.3 66.8 736.4 87.7 825.0

Source: Central Bureau of Statistics

Table 7.6: CONTROLLED PRODUCER PRICES FOR MAJORAGRICULTURAL COMMODITIES, 1965-74

(SP per ton)!'

Wheat Cotton Barley Lentils SugarbeetBase Average

PricePound

1965 180 800 n.a. 200 - -

1966 260 800 n.a. 200 - -

1967 265 800 n.a. 205 - -

1968 275 800 726 160 - -

1969 280 800 779 160 370 650

1970 280 800 750 130 450 650

1971 280 800 788 180 400 650

1972 310 789 788 230 420 880

1973 36o 818 808 280 480 880

1974 440 1143 n.a. 350 580 880

1/ Prices vary by grade; prices shown are foremost common varietyand top grade; average price would be somewhat lower.

Source: Ministry of Agriculture

Table 7.7: CONTROLLED INTERNAL FARM PRICES AND WORLDPRICES, SELECTED COMMODITIES, 1974

($ per ton)

Commodity Syrian Internal Price World Price

SP/ton US$/ton US$/ton

Wheat 440 126 210

Barley 350 96 135

Cotton 1143 315 602

Sugarbeet 880 241 340

Source: Ministry of Planning

Table 8.1: INDEX OF INDUSTRIAL PRODUCTION(1965 = 100)

1967 1968 1969 1970 1971 1972 1973

Industries

Extractive industries 94 537 1048 1848 2090 2460 2284

Manufacturing industries 100 102 120 127 133 138 155Food, beverages and tobacco 96 97 105 109 113 121 144Weaving, spinning, ginning

and leather 97 95 115 117 124 129 132Wood and furniture 113 134 181 171 187 196 196Paper, printing and binding 154 151 163 200 215 230 322Chemicals 108 107 148 204 227 232 256Non-metal products (except

for coal and petroleum) 103 132 130 137 130 142 134Basic metal industries 110 110 136 137 137 159 217Equipment and metal products 94 94 137 145 150 137 471

Electricity and water eindustries 110 122 141 144 157 181 171Electric power production 112 128 154 156. 173 206 190Water network 107 112 116 122 128 133 136

General Index-Number 101 108 130 145 154 163 177

Source: The Central Bureau of Statistics

Table 8.2: PRODUCTION OF SELECTED INDUSTRIES

(In thousands of tons unless indicated otherwise)

1967 1968 1969 1970 1971 1972 1973

Food

Sugar 72 83 114 124 130 137 142Olive oil 24 22 25.6 15.5 22.2 33.5 13.7Vegetable oil 26.1 21 26.3 25.1 26.2 27.5 28.7Canned food 4.2 4.8 3.6 5.5 5.7 5.8 4.7Tobacco products 4.1 4.0 3.9 4.2 4.4 4.7 5.3

Textiles

Woolen fabrics? 1625 2644 4500 6100 5668 5900 3362Cotton and silk yarn 23 20 23.5 22.2 25.9 30.3 30.8Cotton and silk fabric 38 39 28.3 27.0 29.1 29.7 31.1

Chemical and Engineering

Soap 15.9 14.2 18.7 21.2 23.3 25.9 27.8Cement 688 917 933 964 910 1004 848Glass 13 16.1 13.7 15.9 15.2 15.8 22.2Matches3 1.4 1.8 1.7 1.3 1.8 2.1 2.0Batteries g 24 25 25 25 23 33 31.7Refrigerators 5.7 10.0 16.6 16.9 18.7 25.1Televisions / 6.3 4.2 6.7 7.6 12.3 0.2 12.7

Other

Crude petroleum - 1033 2620 4242 5289 5862 5543Benzine 139 180 223 248 278 288 299Kerosene 172 171 224 275 284 303 264Gas oil 244 254 342 494 609 599 581Fuel oil 456 427 575 678 718 740 613Other petroluem products 44 40 96 278 356 387 299

Electricity generated

TotalS (million Kwh) 676 773 934 947 1049 1223 1154Public estab. (million Kwh) 444 522 668 676 753 936 884.7

Sj Preliminaryg/ Thousands meters/ Million croz/ Thousand unitsSJ Including factories generating electricity for own use.

Source: Ministry of Planning and Statistical Bulletin of Central Bank

Table 8.3: CONSTRUCTIONI/

(in thousands of square meters of floor area)

Simple andIndustrial Commercial wooden Residential

Year Buildings Buildings Buildings Buildings

1967 8 3 3 945

1968 12 119 149 1268

1969 52 142 7 1727

1970 28 124 105 1721

1971 21 124 95 1723

1972 31 199 92 1862

1973 27 258 78 1790

1974 55 226 65 2017

1/ Based on building permits issued to the private sector.

Source: Central Bureau of Statistics

Table 8.4: HIGHWAY NETWORK, 1965-1973

Surface Type 1963 1969 1970 1971 1972 1973

(kmn)

Asphalt 4,926 7,348 8,o96 8,688 9,o86 9,831

Gravel 898 1,306 1,500 1,466 1,311 1,381

Earth ?2062 1,879 2,091 1,554 1,439 2,363

Total 7,886 10,553 11,687 11,708 11,836 13,575

Source: Statistical Abstracts, Central Bureau of Statistics

Table 8.5: REGISTERED MOTOR VEHICLE FLEET, 1963-1973

Vehicle Type 1963 1969 1970 1971 1972 1973

(Thousands)

Passenger Cars!' 23.1 29.4 29.7 30.7 31.0 34.7

Pick-ups 1.5 4.7 5.0 4.8 5.2 6.2

Buses 1.8 1.7 1.7 2.0 2.2 2.5

Trucks2' 11.3 li.1 11.6 12.1 13.3 14.4

Subtotal 37.7 46.9 48.0 49.6 51.7 57.8

Motorcycles 3'4 7.2 8.1 8.6 9.0 9.7

Total 41.1 54.1 56.1 58.2 60.7 67.5

I/ Including landrovers.

t/ Including tankers.

Source: Statistical Abstracts, Central Bureau ofStatistics

Table 8.6: RAILWAY TRACK AND ROLLING STOCK, 1963-1975

System 1963 1969 1970 1971 1972 1973

Northern Railways

Track (km) 543 733 833 952 1026 1112Rolling stock (No.) 1235 1258 1408 1493 1613 1646Automotrices 4 11 11 11 11 11Locomotives 41 46 46 46 56 53Passenger cars 50. 59 59 144 144 144Freight cars 985 985 985 985 1085 1085Tankers 107 107 107 107 107 143Other cars 48 50 200 200 210 210

Hediaz Railways

Track (km) 301 307 307 307 307 307Rolling stock (No.) 585 582 583 584 582 582

Automotrices 4 4 4 4 4 4Locomotives 35 35 35 35 35 35Passenger cars 47 57 58 59 57 57Freight cars 452 452 452 452 452 452Tankers 25 25 25 25 25 25Other cars 22 9 9 9 9 9

Both Systems

Track (kIn) 844 1040 1140 1259 1333 1419Rolling stock (No.) 1820 1840 1991 2077 2195 2228

Automotrices 8 15 15 15 15 15Locomotives 76 81 81 81 91 88Passenger cars 97 116 117 203 201 201Freight cars 1437 1437 1437 1437 1537 1537Tankers 132 132 132 132 132 168Other cars 70 59 209 209 219 219

S/ Standard gauge, 1.435m/ Narrow gauge, 1.05m.

Source: Statistical Abstracts, Central Bureau of Statistics

Table 8.7: RAILWAY TRAFFIC, 1963-1973

System 1963 1969 1970 1971 1972 1973

Northern Railwayss

Passengers (thousands) 553 641 532 519 489 484

Passenger-km (million) 36.5 73.6 60.7 60.0 46.8 46.1

Tons (thousands) 436 1,034 1,266 1,038 1,072 723Ton-km (million) 75.5 104.5 88.1 115.0 143.8 122.0

Hedjaz Railwaysm'

Passengers (thousands) 365 543 581 553 546 504Passenger-km (million) 19.5 22.7 25.8 23.7 21.9 22.8

Tons (thousands) 136 176 140 98 100 105Ton-km (million) 12.2 18.3 13.6 9.9 10.2 10.1

Both Systems

Passengers (thousands) 918 1,184 1,113 1,072 1,035 988Passenger-km (million) 56.0 96.3 86.5 83.7 68.7 68.9

Tons (thousands) 572 1,210 1,406 1,136 1,172 828Ton-km (million) 87.7 122.8 101.7 124.9 154.0 132.1

1/ Standard gauge, 1.435m/ Narrow gauge, 1.05m.

Source: Statistical Abstracts, Central Bureau of Statistics

Table 8.8: PORT TRAFFIC, 1969-1973

Port 1969 1970 1971 1972 1973

Latakia

Passengers Emb. and Disemb. ('000) 6 6 6 10 8Goods exported ('000 tons) 518 465 254 519 310Wheat - - - 214 94Cotton 132 157 152 154 122Barley 210 175 - 8 5Other 176 124 102 143 89

Goods imported ('000 tons) 1,165 1,475 1,379 1,132 987Sugar 103 142 172 96 118Wood 105 110 88 81 95Chemicals 165 195 196 147 107Iron and scrap 275 295 180 249 151Cereals 109 402 382 116 69Other 408 331 361 443 447

Tartous

Passengers Emb. and Disemb. ('000) 0 0 0 0 0Goods exported ('000 tons) 2,336 3,522 3,490 4,158 4,549

Crude oil 2,321 3,466 3,422 4,080 4,268Phosphate - - - 61 228Cotton 5 - - 3 30Other 10 56 68 14 23

Goods imported ('000 tons) 227 407 697 538 518Sugar 42 43 64 63 93Wood 26 45 31 26 72Iron and scrap 84 63 75 64 71Cereals - 199 340 227 49Other 75 57 187 158 233

Banias

Passengers Emb. and Disemb. ('000) 0 0 0 0 0Goods exported ('000 tons) 30,800 31,100 28,100 22,600 29,700

Crude oil 30,800 31,100 28,100 22,600 29,700Goods imported ('000 tons) 0 0 0 0 0

Source: Statistical Abstracts, Central Bureau of Statistics

Table 8.9: AIRPORT TRAFFIC, 1963-1973

Airports 1963 1969 1970 1971 1972 1973

Passengers (thousands)?!

Damascus 159 275 291 349 401 413Aleppo 30 36 36 39 30 17Kamishly 12 15 18 20 16 10Latakia 4 0 0 0 0 -Palmyra 1 - - - - -Deir-ez-Zor 7 25 27 29 24 18Al-Thawra - - - - - 2

Total 213 351 372 437 471 460

Freight (tons) '

Damascus 2567 1571 2331 2283 2346 2541Aleppo 147 39 27 25 25 55Kamishly 32 23 17 11 12 8Latakia 23 1 1 2 7 -Palmyra 2 - - - - -Deir-ez-Zor 5 8 9 5 8 10Al-Thawra - - - - - 0

Total 2776 1642 2385 2326 2398 2614

Flights (No.)

Damascus 9982 7284 9279 10566 12170 11147Aleppo 2209 807 781 872 641 545Kamishly 464 232 312 350 223 199-Latakia 600 52 62 118 170 46Palmyra 470 - - - - -

Deir-ez-Zor 615 191 434 436 352 266Al-Thawra - - _ 70

Total 14340 8566 10868 12342 13556 12273

j Damascus traffic include both domestic and international traffic.Other airports include domestic traffic only.

/ Embarked, disembarked and transit./ Loaded and unloaded./ Take-off and landings.

Source: Statistical Abstracts, Central Bureau of Statistics

Table 8.10: PIPELINE THROUGHPUT, 1969-1973(Million tons)

Pipeline 1969 1970 1971 1972 1973

International

From IraqLto Banias 30.8 31.1 28.1 22.6 29.7to Tripoli (Lebanon) 23.1 23.3 20.7 7.3 22.8

From Saudi Arabia jto Saida (Lebanon) 16.7 8.3 16.7 21.3 20.4

Domestic

From Karachok fieldsl/to Homs 2.6 4.2 5.3 5.9 5.5

From Homsto Tartous L 2.3 3.5 3.4 4.1 4.3to Aleppo / )to Latakia / ) n.a. n.a. n.a. n.a. n.a.to Damascus / )

L Crude oil pipelines./ Product pipelines from refinery.

n.a. not available.

Source: Statistical Abstracts, Central Bureau of Statistics

Table 9.1: WHUL0SALE PRICE 1TDICES(1?62 = 100)

Raw Manufactured Building GeneralPeriod Foodstuffs MYsterials Products Materials Fu els PrIce-index

1964 101 la4 93 107 91 101

1965 100 102 103 110 91 100

1966 115 102 110 115 72 110

1967 132 106 114 117 93 121

1968 122 108 122 118 96 117

1969 120 103 120 123 94 115

1970 139 105 122 145 914 123

1971 157 108 126 167 93 136

1972 137 115 131 164 94 129

1973 210 133 153 201 96 178

1974 205 177 227 268 95 195

Source: Central Bureau of Statistics