The Average Arab Has Grown Poorer Since 1980; Oxford Analytica and EIU Reports (24 Oct. 2010)

World Bank data shows that per capita Gross Domestic Product (at constant 2000 prices) for the entire Arab world actually declined from an average of $2,671 for the decade of the 1980s to $2,556 this decade (going even lower to $2035 for the decade of the 1990s in between). In other words, in the last 30 years, the average income or personal wealth of Arabs on average has been simultaneously low, dropping and erratic. For every BMW and Mercedes car you see in Arab capitals there are 50 families you do not see that cannot provide their children with sufficient nutrition, school supplies or heat in winter.

[Ba’th] command dismisses secretary general of party’s Hama branch
On October 21, Al-Watan – Translated thanks to mideastwire.com
by Muhammad Ahmad Khabazi

“The command [of the Ba’th Party] held its 215th session yesterday, during which it issued decision 542 to dismiss Adnan Muhammad al-Ezzo from his post as secretary general of the party’s branch in Hama, after having discussed “the performance and practices of the aforementioned man, and his adoption of personal behavior going against the party’s values and principles.” Last Monday, Al-Watan had put forward the violations committed by Ezzo and some of his relatives. They amounted to 48 violations, many of which were handled while the rest are still pending. It is worth mentioning that the head of the city’s council, Ali Othman, was arrested against the backdrop of these violations.

“In the meantime, the dismissal news spread a climate of relief among the Hama population with all its factions, and especially in the ranks of the Ba’thists, who circulated the news yesterday afternoon through phone messages and land lines. A partisan source told Al-Watan: “The dismissal was not only made against the backdrop of the construction violations detected in the city of Souran, where the branch’s secretary general lives, but also against the backdrop of the accumulation of numerous practices related to weak performance and expertise at the level of partisan action, neglect and the adoption of the policy “divide and conquer”, which led to the division of the partisan branches and groups in the different cities and regions.”

“The source indicated that the dismissal decision was also made against the backdrop of financial violations seen in the cultural directorate in Hama, following which its director was toppled via a decision issued by new Culture Minister Riad Osmat… The source continued: “The branch’s secretary general was interested in everything but partisan affairs, especially in terms of nepotism in official directorates. His dismissal confirms the prevalence of the law and that fact that no one is above the law, regardless of this person’s position.”” – Al-Watan Syria, Syria

Confidence key to Syria’s infrastructure drive
By Khaled Yacoub Oweis
DAMASCUS | Wed Oct 20, 2010 10:57am EDT

DAMASCUS (Reuters) – An executive running one of Syria’s biggest privately held companies predicted a boom in infrastructure development if the government assures investors of their rights in mega projects on offer.

Projects also need to be structured more carefully for investors to have confidence that they can secure the financing as international banks begin to show interest in Syria, Marwan Midani, managing director of Souria Holding, told the Reuters Middle East Investment Summit on Wednesday.

The state, which has been controlled by the Baath Party since it took power in 1963 and imposed emergency law still in force, is looking to the private sector for half of $85 billion it says is needed over the next five years to repair and expand the dilapidated transport, power, water and hospital networks.

“Investors need to have rights guaranteed by the judicial system in case of a dispute or anything of this nature. The guarantees have to be clear in the contracts,” Midani said.

“Once this is assured I am sure the rest of the projects will take off. The government has already hired international consulting firms and is working to have very clear private public partnership (PPP) contracts in terms of litigation,” the U.S.-educated engineer said in an interview.

Ehasani writes:

This is how Turkey attracted tourism. By offering FREE land and cheap loans. Our tourism minister wants investors to come without incentives

للعبرة.. ياحكومة..!!

معاون وكيل وزارة السياحة أورغو ارسلان وضح كيفية تشجيع المستثمرين والتي تعود إلى عام 1982 من خلال قانون تشيع الاستثمارات السياحية والتي جعل الحكومة التركية تقدم ميزات كبيرة للمستثمر في المجال السياحة كتقديم الأرض مجاناً وتقديم قروض عبر بنك سياحي وبفوائد منخفضة وهذا بقي لمدة 15 عاماً وبعد ذلك تم رفع الفائدة تدريجياً، وفي الوقت الحالي قال ارسلان انه يوجد بعض الأمور التشجيعية تقدم بين الحين والأخر، على سبيل المثال تم تخفيض رسوم الإنفاق الاستهلاكي من 18% إلى 8% ، وجاهزين لتقديم الخبرة للقطاع العام والخاص في سورية منوهاً إلى ضرورة تحضير خطة مستقبلية قبل الاستثمار، وأشار إلى أن الحكومة التركية تركز حالياً على السياحة العلاجية والصحية والثقافية.

يذكر أن تركيا استقطبت خلال عام 2009 حوالي 27 مليون سائح وكانت أكثر المدن زيارة هي انطاليا ومولا

Abdullah Dardari says that Syria must create 1.25 million jobs over the next five years
Syria Steps 13/10/2010

Industrial output will grow from 14% to 17 of GDP by 2015

The controversy over Dardari’s statement that Syria will become the strongest economy in the Middle East by 2015 continues to create bad press.

A Real discussion about the Syrian exchange rate that is too highالدردري: لسنا سذجاً لنعتقد أن قوة الليرة من ارتفاع سعر

Iraqi refugees regret going home, UNHCR survey finds
By Stephanie Nebehay
GENEVA | Tue Oct 19, 2010

Separate polls of a total of 3,500 Iraqi refugees living in Syria and Jordan, released on October 8, found most still reluctant to return home on a permanent basis, according to the UNHCR.

Refugees cited political uncertainty and insecurity in Iraq, as well as poor educational opportunities and housing shortages. Syria and Jordan host some 180,000 registered Iraqi refugees.

FORCED DEPORTATIONS

While violence has plunged from the height of sectarian bloodshed in 2006-2007, explosions and attacks happen daily. Bombs destroyed the home of a senior Iraqi police commander on Tuesday, killing at least 11 people in the northern city of Tikrit, hometown of former dictator Saddam Hussein, police said.

The UNHCR does not promote returns to Iraq, due to insecurity, and its guidelines to all governments strongly recommend that Iraqis should not be sent home to five central provinces, including Baghdad, seen as too dangerous.

However, it helps refugees who voluntarily want to go home, providing them with transport costs and a small cash grant.

Fewer than 3,000 have taken up the offer since 2007, though many have returned without its support, according to the agency.

IFC: “…Syria to benefit Gulf Arab investors, who are ...
Oxford Analytica: Excerpts: (Thanks to our friend at FLC)

“… The IMF recorded growth in Syria of 4% in 2009, and expects that to increase to 5% this year. Nonetheless, high unemployment underpinned by rapid population growth and falling oil revenues continue to cloud the outlook.

Foreign investment. The outlook for foreign investment has brightened. The International Finance Corporation (IFC), the World Bank’s private-sector lending arm, expects investment in the power sector to act as a precursor to greater private investment in other infrastructure projects. The government is also working to end US sanctions, which have deterred many foreign investments.

In the meantime, Syria will continue to benefit from petrodollar-rich Gulf Arab investors, who are comfortable with the country’s political risk profile and look to invest in the Middle East. According to the Ministry of Local Administration, investment in Syria’s four industrial cities increased by almost 70% year-on-year to reach 441.7 billion Syrian pounds (9.4 billion dollars) by mid-2010. Of this, almost 25% was from non-Syrian companies.

Lack of framework. Despite these trends, foreign investors still face problems. The country has yet to establish a coherent framework for foreign investment. The government’s attitude is shaped by caution and hesitation, with decisions being made out of necessity and on a case-by-case basis. This was seen most recently with Decree no. 56 issued in July and aimed at regulating the creation and operation of investment banks:

  1. Necessity. The government was forced into devising a law due to the need of the cement industry — traditionally under public sector monopoly — for financial resources. In November 2009, Bank Audi had arranged with syndicates for a 340 million dollar project-finance facility for Lafarge Cement Syria. This provided partial funding for the first private greenfield cement plant in Syria, with a production capacity of 2.75 million tons per annum. It also meant that investment banking activity in the country needed to be regulated.
  2. Ambivalence. The decree reflects official ambivalence towards foreign investment:

The government claims that it will deepen the financial system and attract more investment into the private sector. Yet the decree stipulates that banks have a minimum capital requirement (MCR) of 435 million dollars, far outstripping the requirements of investment banks in neighbouring countries.

When licences were initially offered in 1997, MCRs depended on the services being offered, with the highest amount of 6.8 million dollars only required for banks underwriting share rights issues.
Yet the new requirement disqualifies Egyptian banks, H.C. Securities and EFG Hermes, both which had been granted licences to set up in Syria….

Damascus seems keen to emulate the Chinese model of financing of allowing a few investment banks to operate as long as they are outnumbered by government-owned banks. Minister of Trade and Economy Lamia Assi called last month for the establishment of a Syrian-Chinese bank to finance infrastructure projects in the country. By limiting the number of banks, it will be easier for the government to monitor activity and to intervene to direct finance. However, Syria does not have the resources of China to follow through a policy of controlled capitalism with bureaucratic intervention.
Business environment. Syria needs to do more to boost its regional competitiveness:

According to the IFC’s Ease of Doing Business 2010 report, Syria’s world ranking of 143 is the second-lowest in the Middle East and North Africa (MENA) economies, followed only by Iraq. Worse, Syria has slipped down from its previous rank of 138, in contrast to regional competitors Egypt, Morocco, Jordan and Tunisia, which all recorded improved rankings.

Limits to privatisation. Although the government wants to attract investment into some sectors, widespread privatisation is unlikely due to concerns about income inequalities. With around 35% of the total workforce employed by the government, restructuring would mean heavy job losses.

Evidence from other MENA economies which have pursued privatisation is mixed. According to the Gini index, a standard method of measuring inequalities: Jordan has become significantly more unequal; inequality in Morocco has increased, though less so; while Tunisia has become slightly less unequal….

Lack of skills. Investment will also suffer from the lack of individuals with the necessary technical and motivational skills to build up the private sector, such as the risk management expertise required in the new Syrian investment banks … Syrian students predominately travel to other Arab countries or mainland Europe to study, rather than the United States, Australia or the United Kingdom. Syria suffers a brain drain as educated people seek greater remuneration and opportunities in other, more meritocratic, economies. Compulsory military service (although there are exemptions) can also deter qualified individuals from returning.

Political context

For the private sector to flourish, political reform is required, and this the government is unwilling to undertake. A new contract between state and the people would need to be established with greater representation, transparency and debate offered in exchange for taxation. This is still a long way off …..

In addition, apparently nepotistic business practices, such as the ownership of Syriatel by Rami Makhlouf, cousin of President Bashar al-Assad, would need to be curbed so as to open the way fully for greater private sector activity. ..”

Syria economy: Thinking big
2010-10-07 Economist Intelligence Unit

Oct. 7 (Economist Intelligence Unit) — The Syrian government is preparing to present to parliament its five-year plan, for 2011-15. According to Abdullah al-Dardari, the deputy prime minister for economic affairs, real GDP is set to grow by at least 5.5% per year over the plan’s period, and the Syrian economy will emerge in 2015 as “the strongest in the region”. Elements of Syria’s recent economic performance have been encouraging, but Syria still has a long way to go to match some of its more dynamic and economically advanced regional peers.

The investment target in the plan is S£4trn (US$87bn), to be financed in equal measure by the private and public sectors. This is almost double the target in the previous plan, but Mr Dardari says that both private and public investment has exceeded the targets over the past five years and that the government has created the platform for further leaps.

Much of the new investment will be directed to improving Syria’s infrastructure, with transport a priority as Syria seeks to take advantage of its geographical position as a trading hub, serving Iraq and the Gulf, as well as developing its tourism industry. A scheme involving the redevelopment of Syria’s existing airports—including a new terminal at Damascus—and the construction of new ones was approved by the council of ministers in August, and plans have been drawn up to invest US$2bn in the construction of two highways with a combined length of 800 km, linking Tartous port in the west to the Iraq border in the east, and connecting Syria’s borders with Turkey in the north and Jordan in the south. A request for proposals is also under preparation for the expansion and development of Latakia and Tartous ports, including the construction of new berths and silos, and the government aims to start construction of a metro system in Damascus in 2012. Electricity and water will also be priority sectors, and the government hopes that the recent opening up of the telecommunications industry will stimulate major new investments in this underdeveloped sector of the economy—a new mobile phone licence is to be auctioned in the next
few months.

PPP route

Syria’s ability to deliver such a substantial increase in investment will depend on how successfully it can implement an equally ambitious programme of reform. The introduction and application of a long-awaited law establishing a framework for public private partnerships (PPPs) is crucial to meeting the private investment targets, while the planned introduction of treasury bills, also much-delayed, is central to the government’s ability to raise debt for increased infrastructure spending. Mr Dardari is confident that both bills will be passed in 2010:

“The PPP law will allow the private sector to invest in, operate and own utilities such as transport infrastructure, drinking water and sanitation plants and power facilities,” he told the Economist Intelligence Unit during a recent interview in Damascus. “It will be going to the council of ministers soon and I would estimate it will be passed by the end of the year. We plan to spend a minimum of US$30bn on infrastructure. How much of that will be through PPPs is under review.”

Private investors are already being invited to carry out infrastructure schemes under existing legislation. One recent example is a 180-250-mw thermal power station to be built at Naseriya, 50 km north of Damascus. This project has elicited strong interest, and the state-owned power utility announced on October 5th that it had  prequalified 14 groups to bid (in addition to the two that were prequalified last year). The companies involved come from a wide range of countries, including Malaysia, Japan, India, Germany, Greece, Saudi Arabia, Egypt and the UK.

Financing

The introduction of legislation governing the use of treasury bills was originally expected in 2006, and there is widespread frustration in Syria’s financial services sector at  the lack of progress in the past four years. But Mr Dardari denies that the bill has been unduly delayed.

“It’s not a question of a hold up,” he says. “The ministry of finance and the central bank have been preparing the ground, we have had two mock exercises, and now we are ready. The ministry of finance is reviewing and studying the use of public debt for the next five years to ensure debt sustainability, to ensure that we keep within our thresholds for debt, which is 45% of GDP, and for the fiscal deficit, which is 4% of GDP, and that we are mindful of the level of inflation. It will all be finalised with the new five-year plan.”

Another important element in the financing of projects included in the plan is a new investment company to be established under legislation passed last month. The investment company will be capitalised at S£5bn (US$105m), and will be run in the same way as a privately owned company, with the flexibility to raise debt finance and to form partnerships with private companies, both local and foreign.

Less helpful has been a law passed in July to allow the establishment of investment banks: the minimum capital requirement of S£20bn (US$435m) is likely to be an insurmountable barrier.

Streamlining

Mr Dardari is also spearheading a programme to increase the efficiency of public spending. “Better control, evaluation and monitoring are key to our expenditure plans in the next five years,” he says. “We have already moved to results-based budgeting in some ministries, including agriculture and education. As we speak we are writing a new public procurement law that will remove bottlenecks from the system and make it easier to implement a more transparent and effective public expenditure programme.”

With the help of the World Bank, which is acting as a consultant on the public procurement law, Mr Dardari faces the stiff challenge of trying to incorporate international best practice into a Syrian system that is hugely inefficient, invariably bureaucratic and often corrupt. Economists and foreign investors decry a lack of reliable data on the country’s economy and point to the confusion created by the frequently overlapping jurisdictions of a host of government economic policy-makers, including the minister of economy and trade, finance minister, central bank governor, president, prime minister, and Mr Dardari himself.

Mr Dardari is aware that transforming a socialist economy into what the government likes to call a social market economy will not be straightforward. “We need to do so much to attract and absorb the planned investment, and to be able to both encourage the development of small and medium enterprises and attract large multinationals.”

Credibility

Opposition, says Dardari, is inevitable: “We’re in the early phase of change and of course there is resistance. There is a lack of understanding of what we are trying to do. But  we have a relatively well-functioning team that all realise that the institutional economic governance set-up must be altered. We are talking about creating a different economy—it cannot operate within the same system. The government is beginning to take on a regulatory role. It’s a complete paradigm shift.”

Mr Dardari’s advocacy of Syria’s economic potential has helped to drum up interest in the country as an investment opportunity, and there is undoubtedly more  enthusiasm among international business people about the country’s prospects than was the case when he was promoting the previous five-year plan. However, his claim that Syria would become the strongest economy in the region has stretched credibility, and has prompted some sarcastic comments on discussion forums in the Syrian media. Although Syria’s growth prospects are positive and its fiscal and public debt indicators are relatively healthy, it comes at the lower end of most regional rankings for economic performance and the ease of doing business—in the IMF’s recently issued World Economic Outlook for example, Syria ranks fifth from bottom in the MENA region in terms of GDP per head at purchasing power parity, with a figure of US$5,108 for 2010; above Morocco, Iraq, Yemen and Sudan, but lagging behind countries such as Jordan, Lebanon, Egypt, Iran, Tunisia and Algeria, not to mention the Gulf Arab economies as well as Israel and Turkey.

Elie Elhadj remarks on Syria’s water

An impressive and ambitious plan. Hope that irrigation will be abandoned, military spending reduced, oil revenues made transparent, and the term “social
market economy” explained.
Water received a passing remark: “water will also be priority sectors”.

I happen to know a bit about Syria’s water.

To supply the Greater Damascus region alone with its almost five million inhabitants with sufficient drinking and household water, there are three options:

The first is to divert the water currently used in agriculture to households and to reduce leakages from existing distribution network.

The region uses an estimated 900 billion m3 per annum in Al-Ghouta and adjacent areas. At the reasonable average of 100 m3 per annum per person, householders would need about 500 million m3 per annum (more as the population grows). In 2005, I reasoned that this option is the quickest the least expensive—less than $500 million.

However, this option is politically explosive. 87% of the wells in the Damascus Region were non-licensed. The concentration of senior military officers, ruling party functionaries and other members of the ruling elite, many of whom are beyond the reach of the law makes it impossible to pursue this option.

The second option is to transfer water from the Euphrates. I estimated that the cost, if there were sufficient reliable water, would be in the region of $1.5 billion. But, Syria’s share of the Euphrates’ water is not enough to make this a safe option. So, this option is academic.

The third option is to transfer water from the Coastal Region. There are two possibilities here. The first is to harvest potable groundwater flows in offshore springs south of Latakia. The second possibility is desalination of Mediterranean waters. Desalination costs has come down considerably during the past two decades. Today, it can be done at $0.5/ m3.

To deliver the desalinated water to the gate of Damascus, a pipeline would be rather costly, though the distance is not that great. Pipelining over the mountains is expensive. I estimated that the economic cost of this option to be in the region of $2-3 billion.

To these figures, water distribution and sewage systems in the region should be added. Roughly, water network rehabilitation would cost appx. $50 per person, water expansion; $100 per person, sewage rehabilitation; $50 per person, sewage expansion; $100 per person, sewage treatment; $75 per person.

When the household water needs of other cities are added, a back of the envelop guesstimate suggest some $8 billion to $10 billion for water alone.

It would be interesting to know how much the plan allocated to water alone.

Elie

Comments (26)


1. aron said:

“World Bank data shows that per capita Gross Domestic Product (at constant 2000 prices) for the entire Arab world actually declined from an average of $2,671 for the decade of the 1980s to $2,556 this decade (going even lower to $2035 for the decade of the 1990s in between).”

Correct me if I’m wrong here … But the region wide GDP level is pinned to oil prices, since such a large percentage of Arab GDP is hydrocarbon-based. (All of the Gulf, plus some of the largest Arab economies: Algeria, Iraq, Libya, Sudan.)

Oil prices were very low for much of the 80s and 90s, but are very high now. This should mean that ordinary families who have no share in the region’s oil/gas income (= the vast majority of Arabs) have experienced a far larger drop in their relative welfare than even those WB statistics indicate.

Right?

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October 24th, 2010, 5:47 pm

 

2. norman said:

Aron ,
You are right , my thoughts also.

It is interesting how they count the Arabs all together without redistribution of resources between the rich and the poor states .

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October 24th, 2010, 7:20 pm

 

3. EHSANI2 said:

Aron,

Measuring GDP in constant dollars means that you strip out the effect of inflation. Had the calculation been in “nominal” or current Dollars, your observation would have been correct.

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October 24th, 2010, 8:32 pm

 

4. Norman said:

Syria needs prperty rights and contract laws to lure investments,

» PrintThis copy is for your personal, non-commercial use only. To order presentation-ready copies for distribution to colleagues, clients or customers, use the Reprints tool at the top of any article or visit: http://www.reutersreprints.com.

Confidence key to Syria’s infrastructure drive
Wed, Oct 20 2010
By Khaled Yacoub Oweis

DAMASCUS (Reuters) – An executive running one of Syria’s biggest privately held companies predicted a boom in infrastructure development if the government assures investors of their rights in mega projects on offer.

Projects also need to be structured more carefully for investors to have confidence that they can secure the financing as international banks begin to show interest in Syria, Marwan Midani, managing director of Souria Holding, told the Reuters Middle East Investment Summit on Wednesday.

The state, which has been controlled by the Baath Party since it took power in 1963 and imposed emergency law still in force, is looking to the private sector for half of $85 billion it says is needed over the next five years to repair and expand the dilapidated transport, power, water and hospital networks.

“Investors need to have rights guaranteed by the judicial system in case of a dispute or anything of this nature. The guarantees have to be clear in the contracts,” Midani said.

“Once this is assured I am sure the rest of the projects will take off. The government has already hired international consulting firms and is working to have very clear private public partnership (PPP) contracts in terms of litigation,” the U.S.-educated engineer said in an interview.

Syrian businessmen set up Souria Holding in 2007 along with Cham Holding, which is controlled by Syrian tycoon Rami Makhlouf — a cousin of President Bashar al-Assad.

The move was part of government efforts to create private sector ‘champions’ after four decades of Soviet-style economic policies obliterated competitiveness and scared capital away.

Several of the businessmen are simultaneous shareholders in the two companies.

CAUTIOUS LIBERALISATION

Assad has taken cautious steps toward economic liberalization but investment still lags behind U.S.-backed Jordan and neighboring Lebanon, where a tradition of laissez-faire has helped overcome political turmoil.

Midani said the central bank could help by studying the projects before they are offered and consult the privately owned banks on how they assess chances for financing them.

Syria’s privately owned banks, which entered the market only six years ago after the government relinquished its monopoly on the sector, also needed to develop project financing and “not just focus on classical loans,” he added.

“We have seen many projects offered only to turn out later that they are not bankable,” Midani said.

One of the first contracts under the new “PPP” policy, a concession to manage and improve the container terminal at the main Latakia port on the Mediterranean, went to a consortium that includes Souria Holding and French shipper CMA CGM.

Traffic at Latakia port fell slightly to 293,000 Twenty foot equivalent Units (TEU) in the first half this year from 299,000 TEUs in the corresponding 2009 period, but Midani said the port’s potential was huge as a hub for Iraq and as Syria streamlines its customs and port bureaucracy.

The government has also granted Souria Holding a concession to develop a 33,500 sq meter (360,600 sq feet) prime property in Damascus into a hotel, shopping center, apartments and offices.

He said Souria Holding was making progress with a Western bank he did not name to secure private equity partners among the banks customers to help finance the $350 million property project, named Abraj, despite U.S. sanctions imposed on Syria, which he said do not affect the company.

Construction on the two tower Abraj project is expected to begin in October 2011, with initial tenders for construction to be issued before the end of this year, he said.

U.S. sanctions, which were first imposed in 2004 for Syria’s support for militant groups, specifically targeted members of the ruling hierarchy and the state owned Commercial Bank of Syria, the country’s largest bank.

(Editing by Mike Nesbit)

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October 25th, 2010, 7:46 am

 

5. Elie Elhadj said:

TO WHY, EIU, ANONYMOUS, MONTAGNARD,

The discussion on Syria’s oil production, revenues, and reporting prompted me to write:

A QUESTION OF OIL ACCOUNTING
Reporting by Syria’s Central Bureau of Statistics (CBS) of the country’s oil revenues in the national budget and balance of payments is confusing, inconsistent, and ambiguous. The IMF Country Report on Syria, No. 10/86, dated March 2010 states on page 30: “Government finance statistics (GFS) suffer from major deficiencies with respect to definitions, coverage, classification, methodology, accuracy, reliability, and timeliness that generate severe inconsistencies with monetary and balance of payments statistics”.

In the interest of clarity and transparency in connection with Syria’s crude oil accounting this article poses six questions.

SYRIA’S OIL PRODUCTION IN 2008
Syria’s Statistical Abstract of CBS reveals in Table 5/5 (Main Extractive Industries Production 2004 – 2008) that 20,245,000 m3 of oil were extracted in 2008, a volume equating to 145 million barrels (7.15 barrels = 1 m3), or a touch below 398,000 bbl/d (145 million barrels / 365 days).

Syria’s oil production is divided between two sources. The first source is jointly owned oil fields with international partners. The second source is Syrian Petroleum Company (SPC), a wholly owned government company.

As for the division between the two sources, at the end of 2009, according to Industrial Info Resources of Texas, Syria had produced 5.56 billion barrels of oil equivalent since it began exploiting oil and gas resources. Of this, 3.08 billion barrels of oil equivalent have been produced by the joint ventures with international companies, accounting for about 55 percent of the country’s total oil production.

According to this formula, Syria’s joint oil fields would have produced in 2008 around 218,000 bbl/d (398,000 barrels x 55%) and SPC another 65 million barrels, or around 180,000 bbl/d (398,000 x 45%).

THE OSTENSIBLE VALUE OF SYRIA’S OIL PRODUCTION IN 2008 FROM JOINT OIL FIELDS WITH FOREIGN PARTNERS
In terms of local currency, using an exchange rate of S£50 to $1 in 2008 for simplicity (the rate was 46.8599 in 2009, 46.5281 in 2008, 50.0085 in 2007), the ostensible value of government revenues from the joint fields, after accounting for production costs plus royalties to foreign venture partners of, say, one-third, could have been S£225 billion ($4.5 billion x S£50).

However, Syria’s Statistical Abstract, Table 4/14 (Estimated Revenues in the Consolidated Budget, 2008) shows that, “Government Royalty of Joint Oil Fields” in 2008 was S£ 42.452 billion, not S£225 billion. Looking at this revenues amount (S£42.452 billion) differently, the per-barrel price in 2008 would be S£535 [S£42.542 billion / 218,000 bbl/d x 365 days)], or $10.7 (S£535 / S£50), not $85.

Question 1: How might the difference between the ostensible revenues from Syria’s joint oil fields of S£225 billion and the budget revenues of S£42.452 billion be reconciled? Might it be that the CBS used a rate of exchange of S£9.45 to $1 (S£42.452 billion / $4.5 billion) instead of S£50 to $1? If such were the case, would using a rate of S£9.45 to $1 not contradict the unification on January 1, 2007 of Syria’s official “budget” exchange rate with the private sector exchange rate? (IMF Country Report No. 10/86, March 2010, p. 26).

INCONSISTENT EXPORT PROCEEDS COMPARED WIT REVENUES FROM JOINT OIL FIELDS
According to Table 8/9 (Exports by Main Commodities 2008) crude oil exports in 2008 were 7.83 million tons, or 56 million barrels (7.83 million tons x 7.15 barrels per ton), or 153,000 bbl/d (56 million barrels / 365 days). Export proceeds were reported in Table 8/9 as S£218 billion.

Question 2: How could it be that government royalty from 218,000 bbl/d from the joint oil projects was valued in Table 4/14 at S£42.452 billion while export proceeds from 153,000 bbl/d (30% less bbl/d) in Table 8/9 were S£218 billion (512% more S£)?

Question 3: Syria’s dollar earnings from the export of 153,000 bbl/d in 2008 ought to be in the region of $4.8 billion (153,000 bbl/d x 365 days x $85).

Might it be that the government allocated from the $4.8 billion the equivalent of S£42.452 billion (at S£50 to $1), or about $0.9 billion (S£42.452 /S£50), keeping the remaining $3.9 billion ($4.8 billion – $0.9 billion) in an undisclosed account to be spent on confidential purchases and operation?

AMBIGUOUS OIL REVENUES REPORTING AND DISCLOSURE
As seen above, in 2008 CBS reported in Table 5/5 Syria’s oil production as 20,245 m3, or 398,000 bbl/d. Table 4/14 reported “Government Royalty of Joint Oil Fields” as S£42.452 billion.

Question 4: Was government’s joint oil fields revenues of S£42.452 billion a net balance after deducting production costs plus foreign partners’ royalties or was it gross revenues? Since Table 3/14 (Estimated Expenditures in the Consolidated Budget, 2008) shows no costs associated with oil production, then it may be deduced that the £42.452 billion is a net figure. Is netting in such a case proper? The answer is no, especially if the amounts of gross revenues and associated costs are not disclosed in at least a footnote. Was there such a footnote in the budget tables? The answer is no.

Question 5: Does the entry in Table 4/14 (Government Royalty of Joint Oil Fields) reflect the entirety of Syria’s revenues from crude oil? In answer, there is no entry in Table 4/14 that would signify the existence of other source(s).
Where might the revenues from the oil production of Syria’s wholly owned company, Syrian Petroleum Company (SPC) of 185,000 bbl/d be classified? Given the absence of a clear designation in Table 4/14, it might be speculated that SPC’s production is transferred to Syria’s two refineries in Banyas (133,000 bbl/d capacity) and Homs (107,000 bbl/d capacity) free of charge and that the net profits from the two refineries would be transferred at year end to the government in the form of dividend.

If such were the case, do the refineries’ dividends appear in Table 4/14? The answer is that two minor revenue captions might possibly contain dividends from the refineries; namely, a small item of S£90 million under “Distributed profits – Industrial Revenues”, and a balance of S£9.3 billion under “Budget Surplus – Manufacturing Industry”, though it is unclear what “Budget Surplus” might encompass.

In the absence of a clear presentation of the value of crude oil transferred to the refineries in Banyas and Homs, might it be that Syria’s government allocated the proceeds of crude oil supplies to the two refineries, in part or in full, to an undisclosed account in a manner similar to the allocation referred to in question three above?

Question 6: The IMF Country Report on Syria above mentioned shows on page 18 that Syria’s “revenues” from “oil” in 2008 were S£131.4 billion. The report does not specify whether the oil revenues came from “Government Royalty of Joint Oil Fields” and/or other sources. It would, therefore, be reasonable to assume that the IMF figure represents Syria’s entire revenues from oil and that the IMF oil revenues balance, like that of the balance in Table 4/14, represents net revenues.

If such were the case, SPC’s oil revenues ought to be in the region of S£89 billion (S£131.4 billion – S£42.452 billion). If so, the question arises as to why it is that revenues from the joint oil fields’ 218,000 bbl/d were S£42.452 billion in 2008 while revenues from SPC’s 180,000 bbl/d were twice as much in the same year (S£89 billion / S£42.452 billion)?

CONCLUSION
The above six questions give rise to a seventh question: Is the ambiguity in Syria’s crude oil accounting intentional or is innocent presentational flaws? In the interest of transparency, accuracy, and honesty in reporting and irrespective of motive or reason the CBS needs to deal convincingly with the issues involved in the above questions in order to avert negative speculations, rumours, and erroneous conclusions regarding government responsibility and integrity.

Elie

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October 25th, 2010, 10:10 am

 

6. Ghat Al Bird said:

IS THIS LIKE BORROWING WATER FROM A NEIGHBOR

Israeli diversion of Golan’s water violates Int’l law: Syrian FM
English.news.cn 2010-10-25 23:21:16

DAMASCUS, Oct.25 (Xinhua) — Syrian Foreign Minister Walid al- Moallem sent on Monday a note to UN Secretary General Ban Kimoon accusing Israel of stealing Golan Heights water, the Syrian official SANA news agency reported.

Moallem said diverting water resources to the Israeli settlements leads to an economical and environmental disaster on Syrian citizens of Golan Heights.

He argued that the Israeli action is a flagrant violation of the international law, the Fourth 1949 Geneva Convention and UN Security Council resolution No. 465 which demands occupation authority to protect land, people, private and public property and water resources.

The Syrian minister called on UN to prevent Israel continuing the violation policy in the occupied Arab territories, the report said.

Syria Friday accused the Israeli forces of continuously setting massive fire in the occupied Golan Heights.

Israel captured the Syrian Golan Heights during the 1967 War and unilaterally annexed it in 1981. Syria and Israel have been technically at war ever since.

In June, a Syrian report accused Israel of continuously seizing lands, violating liberties, keeping Syrian captives detained, and arbitrarily exploiting water and natural resources in the occupied Golan Heights.

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October 25th, 2010, 11:45 am

 

7. Souri said:

To Elie Elhadj:

You ignored the most economic and most reasonable option, which is to relocate the government away from Damascus. Damascus is a desert area (Rif Dimashq has only 190 villages, c.f. 1400 in Halab alone)– most of the population in Damascus are not native to the region, they were drievn there from other regions by the government. Taking the government out of Damascus to another reasonable location would decimate the population of Damascus and solve its problems at a very low cost. I am stunned by how you totally ignored this commonsense option.

Unfortuantly this option is not an option due to political reasons that have to do with the structre of the regime. Damascus is the only city in Syria whose elite faithfully supports the regime. They are not going to sacrifice that just to help the Syrian economy. I think what the government wants to do is the crazy Euphrates plan. They have just started with a crazy project to draw Euphrates water to Hassia south of Homs. The next step obviously will be Damascus. This is all insane.

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October 26th, 2010, 2:18 pm

 

8. Elie Elhadj said:

Souri,

Thanks for the suggestions.

However, the issue is not where the seat of the government is located. Moving the capital city away from Damascus will not solve the range of basic public utilities problems facing almost five million people.

The majority of these millions will not be moving away from the greater Damascus region if the capital is moved elsewhere.

The issue is how to provide around 500 million m3 per annum of clean drinking and household water to the region’s five million inhabitants.

I agree with you that the Euphrates is not a viable solution. In fact it is outright dangerous to pursue such a course of action. Why? Because there is not sufficient water to divert to Damascus under current realities: Flows from Turkey, irrigation water use along the river in Syria, and Aleppo’s water transfers from the Euphrates, not to mention Lake Asad’s evaporation.

Further, since Turkey controls the volume of the Euphrates waters that flow into Syria and Iraq, the availability of Damascus’ household water becomes a function of Ankara’s political pleasure. Such a situation would not be in Syria’s best national security interest. It would not be surprising if Turkey would encourage Syria to Water Damascus from the Euphrates. In such watering lurks Turkey’s long-term political control over Syria.

Elie

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October 27th, 2010, 5:14 am

 

9. Souri said:

Elie Elhadj,

You said “The majority of these millions will not be moving away from the greater Damascus region if the capital is moved elsewhere.”

I would have appreciated if you explained to me WHY wouldn’t they move?

I don’t know how many exactly the government’s public servants are, but I think they are at least more than 1 million people. Those will HAVE TO move if the goverment was moved. They have no option. This is a guaranteed 20-25% reduction in population.

You also ignored the most important part, which is the POPULATION GROWTH. I am not expert in demographics, but I know that most of a (normal) city’s population growth comes from the its countryside. Damascus does not have a real countryside since its surrounded by desert. The population growth of Damascus laregly depends on its status as a hub of government acitivity and investment.

Perhaps the government should STOP investment in large-scale industrial and real-estate projects in the the water-poor Damascus area and invest instead in water-sufficient areas such as the Euphrates valley and the coastal area. This will diminish the flow of people from remote areas towards Damascus and will greatly benefit the Syrian economy in general.

I think the solution is easy and logical. The only problem is in the minds.

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October 27th, 2010, 6:17 am

 

10. Mr.President said:

Elie,
Damascus with its current large inhabitants and its dense layout acted and will still act as a great deterrent against Israeli invasion from the south or Lebanese supported US invasion from the west (remember the Frensh invasion of early 1900 came from Lebanon with the full support of lebaneese factions). the real water problem in Damascus is old leaking pipes (infrastructure), non separation of drinking water and plain usable water (the culture of buying bottled drinking water), bad allocation of real estate usage ( one/two-people family living in a 160+ meter apartment). bad usage of water (daily wash of one’s apartment floor by a live-in Asian slave, non traditional usage of water (using a running sink to cleanse one’s hands and feet five times a day before pray. I wonder if the profit Mohammad had that luxury for his household,…),…
cheers

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October 27th, 2010, 7:25 am

 

11. Mr. President said:

Elie,
Damascus with its current large inhabitants and its dense layout acted and will still act as a great deterrent against Israeli invasion from the south or Lebanese supported US invasion from the west (remember the Frensh invasion of early 1900 came from Lebanon with the full support of lebaneese factions). the real water problem in Damascus is old leaking pipes (infrastructure), non separation of drinking water and plain usable water (the non existing culture of buying bottled drinking water), bad allocation of real estate usage ( one/two-people family living in a 160+ meter apartment). bad usage of water (daily wash of one’s apartment floor by a live-in Asian slave, non traditional usage of water (using a running sink to cleanse one’s hands and feet five times a day before pray. I wonder if the profit Mohammad had that luxury for his household,…),…
cheers

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October 27th, 2010, 7:32 am

 

12. Souri said:

Well, the large population of Damascus never deterred Israel from trying to invade it in 1973, and again in 1982 when Sharon made a shy attempt at Damascus from the Biqa’. Also everybody knows how the Golan was evacuated in 1967 in order to prevent an Israeli advance towards Damascus.

I don’t know where these arguments come from, but they simply have no basis in histroy. Moreover, no country can annex Damascus if that what the argument is about, simply because Damascus is the political capital of Syria, whether it was the seat of government administrations or not.

I think the situation of Damascus can be best explained from a Marxist point of view. It is a class of people who are trying to secure their privileges. That’s all. I am not the first one who have suggested to limit the population in Damascus. This has long been suggested and always been ignored for (internal) political reasons.

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October 27th, 2010, 10:27 am

 

13. Elie Elhadj said:

Souri, Mr. President

To move a million people:

First, the logistics are monumentally challenging. Assuming an average family size of five, 200,000 homes will be need to be built in the new location. At an estimated cost of between $25,000 and $50,00 the cost of housing alone, let alone government buildings, highways and other transportation networks would be $5 billion to $10 billion.

Second, what would happen to property prices in Damascus? They’d inevitably drop through the floor. What would happen to the cost of building materials? They’d go through the roof. Does Syria have sufficient cement and steel production capacity and other building materials to meet such a gigantic one-off demand? The answer is no. Can Syria spare the foreign currencies needed to import the shortfall in building materials? The answer is doubtful.

Third, such a huge project would become a bonanza for corrupt constructers and government officials to milk for many years to come, if not decades.

Fourth, in my remark above, I said: The concentration of senior military officers, ruling party functionaries and other members of the ruling elite, many of whom are beyond the reach of the law makes it impossible to legalise the illegal wells. Would the same ruling elites who resist legalising their illegal wells not act also to derail a project that would inevitably cause a reduction in the value of their fancy homes and the very farms that contribute to the water problem in Damascus? The answer is in the affirmative.

Fourth, What would happen to the three to four million Damascenes who would not move? They’ll still need public utilities, including clean household water.

The water problem in the greater Damascus Region is a local problem and should have a local solution; namely, divert water currently used in irrigation to households, reduce leakages from existing distribution network, and treat sewage water. And, of course, Mr. President, water conservation is a key element in the supply/demand equation.

The local solution is the least expensive alternative–certainly much less expensive than moving the capital city. Also, it can be achieved relatively quickly–much quicker than moving a million people to a new location.

But, for the local solution to work the illegal wells must be plugged. And that is the political challenge today.

Elie

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October 27th, 2010, 2:30 pm

 

14. Souri said:

The Syrian government is already undertaking to rebuild government buildings, but guess where? In the periphery of Damascus! This is a total waste of money that will do little to solve the real problems of Damascus if any.

As for the housing, there are already huge plans to build more homes in Damascus. Syria is going to witness a housing boom soon, both from the public and private sectors.

So the fact is that the country is going to pay the cost anyway, but without solving any problem. Not the water problem, the traffic problem, or anything.

Your fourth point is exactly the heart of the problem. There is a privileged elite in Damascus that has been always opposing any effort at de-centralization.

Finally, I extremely disagree with your statement that “the water problem in the greater Damascus Region is a local problem.” This would have been true if Damascus were the one paying for its problems, but what happens is that OTHER regions have to pay for Damascus.

Either drawing water from the Euphrates or the coastal region will cost the SYRIAN economy (not Damascene economy) tremendously. We have to remember also other horrible projects like the so-called Damascus Subway project which will also cost the Syrian economy tremendously.

The eastern and northern parts of the country are devastated. It is better to invest in infrastructure in those parts of the country rather than to waste money on senseless projects in Damascus. Lowering taxes in the eastern part of the country will not draw private investment as long as there is no sufficient infrastructure there. The eastern parts of Aleppo Governorate have horrible poverty unmatched anywhere in Syria. There is almost no infrastructure there. Aleppo itself (which has the same population as Damascus) is in horrible shape, and has the highest poverty and crime rates in Syria. Education and healthcare all over Syria are among the worst in the region, perhaps second only to Iraq. It is better for the government to concentrate spending on those vital sectors than to waste money on senseless projects in Damascus.

But I know that nothing of that is going to happen, because the structre of the ruling regime does not allow it.

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October 27th, 2010, 5:57 pm

 

15. OFF THE WALL said:

Souri
Frank, blunt, unapologetic. Welcome to SC.

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October 27th, 2010, 7:14 pm

 

16. Elie Elhadj said:

Souri,

You said: “Finally, I extremely disagree with your statement that “the water problem in the greater Damascus Region is a local problem.”

I might have been unclear. For the removal of doubt, may I emphasize in the statement the starting words: “The WATER problem…”. I did not say the financial problem or the funding problem.

In fact, the cost of the project, I believe, should be underwritten by the Damascus water users in the form of new water tariffs following the completion of the project.

In my remark above I listed three alternatives to solving the water problem in the Greater Damascus Region. Two involve water transfer from the Euphrates and the Mediterranean Coast. The third is the local solution.

Regarding costing, I estimated a price tag of $500 million for the local solution as compared to three times as much for the Euphrates solution and four to six times as much for the desalination solution.

As for relocating the capital, the cost would be astronomical and beyond prediction at this stage and much more than the cost of building new government complexes on the outskirts of Damascus, which you mentioned. Additionally, the cost of relocation will come on top of the cost of solving the household water problem of today’s Damascus, which will continue to be a major city with three to four million people after the capital is relocated.

Further, given Syria’s government’s obsession with the hydraulic mission there is a real risk that the Ministry of Irrigation might include in the very expensive transfer alternatives not only the modest needs of householders for water but also the gigantic needs of irrigation. Can you imagine the folly of growing produce with desalinated water?

Elie

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October 28th, 2010, 2:25 am

 

17. Souri said:

Elie,

You said “the cost of the project, I believe, should be underwritten by the Damascus water users in the form of new water tariffs following the completion of the project.”

We all know this is not going to happen. What happens is the contrary– people in other regions will bear the cost. This is like the subway project (Metro Dimashq) which is going to be subsidized by the government before and AFTER it completes. The tickets will cost about 70 SP, but will be sold to the public for only 10 or 15 SP. This means that the Syrian people will have to pay about 50-60 SP for every subway ticket sold in Damascus. It is not me who is saying that but this is what the transportation minister told the media. This is how our state works.

My main concern is not about the CURRENT population of Damascus. The local solution you mentioned is probably good for the current city, but what worries me is the (near) future. If the state continues with its current Damasco-centric policies then the population of Damascus will rise to perhaps 10 million people in the next 15-20 years. The Damascus region CANNOT support that many people. The costs on the Syrian people will be tremendous.

I know how these people think. They know no body is going to finance their crazy plans to draw water to Damascus, so they are trying to trick financers into that by moving in gradual steps. First they were talking about drawing water to Tadmur, and they actually got some finance for that. Next they started talking about drawing water to Hassia south of Homs; and eventually they will say “it’s only 100 km more to Damascus, so let’s do it.” They want to stop some of the irrigation projects already in work in the Euphrates valley (where people are dying of hunger and poverty) and pump the water instead for 500 km to Damascus. This is their plan. They are going to say “these irrigation projects are old-fashioned and too water-consuming; let’s stop them and pump the water instead to Damascus;” and I bet they will also start modern irrigation projects in Rif Dimashq with that drawn water.

I don’t know why the cost of moving government buildings to the outskirts of Damascus should be less than the cost of moving them to, say, the plains to the east of Homs? Homs is a small city very fit for growth. The plains to the east of Homs are arid and suitable for holding a small new city. Government employees and visitors can reside in nearby Homs. Water can be cheaply pumped from the coast if necessary (the coast is less than 70 km away from Homs, and the terrain is relatively flat in the pass between the Alawite and Lebanon mountains). The water can be pumped to Qatina Lake (50 km away from coast) and then it will naturally flow to Homs and Hama through the course of the Assi River. Secondary canals can be dug from the Assi to the eastern plains of Homs and Hama if the government wants to farm new land (and this is also better than pumping Euphrates water to Salamiya and Tadmur like the government plans to do). The location is perfect– in the middle of Syria in a vast, unused plain.

I am not Homsi and not even close to Homs, but this solution will save me the enormous and illogical cost of continued population GROWTH in the Damascus area. Investors will stop investing near Damascus and move instead to the central portion of the country where the government will be and where water should be available. This will keep the population GROWTH in Damascus in check and restore some BALANCE to Syria. People don’t want to move from Hassaka to Damascus; the government is forcing them to. People are sick of that.

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October 28th, 2010, 9:20 am

 

18. Elie Elhadj said:

Souri,

You raised some very interesting points:

You said: “Damascus will rise to perhaps 10 million people in the next 15-20 years. The Damascus region CANNOT support that many people”. I suppose you meant support in terms of water.

I believe that the region’s water endowment can support 10 million people easily, provided that the leaks are almost stopped, much of the illegal wells plugged, conservation awareness and irrigation efficiencies raised, and sewage water treated—75% of sewage water is recyclable, even to a clean drinking level.

You said: “They want to stop some of the irrigation projects already in work in the Euphrates valley … and pump the water instead for 500 km to Damascus”.

What you said is significant in light of what I had said in comment 8 above: There is not sufficient water from the Euphrates to divert to Damascus under current realities: reduced flows (50%) from Turkey since the giant GAP project, current irrigation water use along the Euphrates in Syria, and water transfers to Aleppo from the Euphrates, not to mention Lake Asad’s evaporation.

Implied in my statement is that the only way to make further transfers from the Euphrates feasible is to cut down irrigation use along the river. In this context, your statement, is particularly enlightening and important.

You said: “They are going to say “these irrigation projects are old-fashioned and too water-consuming; let’s stop them and pump the water instead to Damascus”.

To abandon today the very irrigation projects that were promised to justify the construction of the Tabqa Dam is to admit openly that the project was a failure. Tabqa was built to irrigate 640,000 hecatres by 2000. However, only 124,000 hectares had been achieved by 2000. 43% of the land in the Euphrates Basin was later identified by the World Bank as having drainage problems.

To abandon today parts of the already reclaimed lands in the Euphrates Basin (at a very high monetary cost I may add) in order to release water to Damascus is an example of ill planning at the level the Dam and the capital city’s water needs. Further, Lake Asad’s evaporation is estimated at 1.6 billion m3 per annum. Had Tabqa not been built, the lake would not have existed and Syria would have had 1.6 billion m3 per annum in additional water from the Euphrates. 1.6 billion m3 of water is sufficient to meet the household water need of 16 million people at the generous volume of 100 m3 per person annually.

You said: “I don’t know why the cost of moving government buildings to the outskirts of Damascus should be less than the cost of moving them to, say, the plains to the east of Homs?”

I believe the issue here is not so much the location of the capital city. The issue is the size of the population and growth rate regardless of where the people happen to be. Whether Damascus’ 5 or 10 million people are in the south of the country or the center there will be the need to provide the same number of people with the same volume of water.

One last point re. the political implications of transferring the Euphrates water to the Greater Damascus Region

In comment 8 above, I said: since Turkey controls the volume of the Euphrates waters that flow into Syria and Iraq, the availability of Damascus’ household water becomes a function of Ankara’s political pleasure.

I should add that since Aleppo is watered from the Euphrates, adding Damascus plus the towns and villages along the route of the pipeline would make 50% or more of Syria’s population dependent on the political whims of Ankara. While relations between Turkey and Syria are hailed today as wonderful, the future might not be so rosy. Such a situation would not be in Syria’s best national security interest. In such a one sided water relationship lurks Turkey’s long-term political control over Syria.

Elie

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October 28th, 2010, 2:13 pm

 

19. Souri said:

Elie,

You said “I believe that the region’s water endowment can support 10 million people easily, provided that the leaks are almost stopped, much of the illegal wells plugged, conservation awareness and irrigation efficiencies raised, and sewage water treated—75% of sewage water is recyclable, even to a clean drinking level.”

You yourself said the wells won’t be plugged. I doubt that these measures alone will be enough in the long term. The government itself does not sound to be convinced with that either, because they keep talking about alternatives.

I have no information whatsoever on plans to shut irrigation projects in the Euphrates valley. I am just speculating. The government indeed has plans to draw water to Salamiya, Tadmur, and Hassia. I am just figuring that if they plan to draw water as far as Hassia (and then possibly to Damascus), then this can only be possible if they shut down some irrigation projects. This is just speculation.

Please think about moving the government thing. It does not necessarily mean changing the capital; Damascus can remain a political capital but not an administrative capital. This will have many advantages for (all of) Syria.

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October 28th, 2010, 5:22 pm

 

20. Souri said:

Elie,

I have a question to you. Since evaporation in the Tabaqa Lake is as huge as you say, don’t you think that the government and private sector should be hugely investing in Aleppo and Raqqa Governorates to make use of all that wasted water? These two regions happen to be the POOREST in Syria. It is bewildering how a region with such huge water reserves is the poorest in Syria, while Damascus is the richest even though they have much less water. This is the IMBALANCE I am talking about. The government should be heavily investing in infrastructure and irrigation projects around Lake Tabaqa at least to make use of the water; but this is not happening as most investment continues to be far from these deprived regions.

What is the reason for that? I personally believe it is because the people who run things in Damascus don’t look to these regions as equal to Damascus. They rather look to them as colonies of Damascus. Sorry for saying that.

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October 28th, 2010, 5:46 pm

 

21. Elie Elhadj said:

Souri,

You said that I myself: “said the wells won’t be plugged”.

Yes, I said that. And, to be realistic that would be the most likely scenario. However, where there is life, there is hope. It might just be that the gravity of the situation would spur officials to crack down hard on illegal wells’ owners and the owners might develop moments of conscience that’ll guide them to acquiesce to plugging the illegal wells. Sounds too optimistic? May be.

The point here is to draw attention to the fact that with political will on one hand and appreciation of responsibility on the other there could be a viable local solution to the water challenge in the Greater Damascus Region.

Your “speculation” re. abandoning irrigation projects along the Euphrates is not unreasonable. Under current realities of water use in the area and transfers to Aleppo, there is not much extra left to transfer to Damascus, especially if the volume of the new transfer would be so big as to be used for irrigation, not only householders.

Most importantly in the Euphrates transfer scheme, however, is answering the following question: Does Syria want to rely on Turkey’s political will to provide 50% of Syria’s population in Aleppo and Damascus and all the towns and villages along the pipelines route with life saving water? In my humble opinion, even if Turkey doubles the flow of the Euphrates to Syria, it would not wise for Syria to allow itself to become a hostage to such capricious position, notwithstanding current wonderful relations.

Re. evaporation from Lake Asad, unless I misunderstand your point, once water evaporates from the lakes it goes into the atmosphere without a trace; may be contributing to rain elsewhere.

As for the preferential treatment that Damascus gets, such privileges are normally given to capital cities everywhere. However, equity with the rest of the country should be observed—easier said than done, though!

Elie

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October 29th, 2010, 6:07 am

 

22. Souri said:

I meant making use of the water BEFORE it evaporates. The districts of Manbij, Ain-al-Arab, Al-Bab, Sfira, and Raqqa Governorate are the poorest in Syria. These regions are found around the Euphrates before the Tabaqa Lake. Maybe the water should be used in irrigation, industrial, and touristic projects in those regions before it reaches the lake. We don’t need the lake.

I wish if you visit those regions and see how miserable they are. They need urgent attention much more than Damascus does. I’ve been following the media on Syria for two years and I’ve rarely read anything about development projects there. I wish to see something on them on Syria Comment.

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October 29th, 2010, 9:04 am

 

23. Elie Elhadj said:

Souri,

Your heart felt sincerity is touching. Whether the river’s water is used before or after the lake, evaporation will take its course. Lake Asad was created by the Tabqa Dam. It is impossible to remove. It will be there forever.

As you know, given the generally high temperature in that region, especially during the long and searing summer months, evaporation is a fact of nature. Yes, 1.6 billion m3 of the Euphrates waters that Syria gets from Turkey is lost annually to the atmosphere.

Elie

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October 29th, 2010, 10:43 am

 

24. Off the Wall said:

Dear Elie
I think Souri got the concept right. Think of evapotranspiration vs evaporation. Evaporation from the lake is lost to the atmosphere. Evapotranspiration creates biomass, which one would you prefer?

The larger the surface area of the lake, the larger amount of evaporation loss. Given that flow is fully regulated by Turkey upstream of the Tabqa dam, the only reason to maintain the surface area of the lake would be to maintain the hydraulic/energy head for hydropower generation from the dam. Therefore, the trade-off would be between water used upstream for irrigation in areas that are reasonable good, or that used downstream for irrigation of a less arable, hotter climate land but with the added plus of hydro power.

One thing about the lake now is that because of the many projects in Turkey, the water now has much less suspended sediments (longer operational life for the lake), but much higher concentration of nutrient and pesticides.

What I am confused about in your opinions so far is your insistence on using non of the renewable water resources. So what do we do with the Euphrates water, or for that matter water in any other river. It is above our current urban needs. The problem again is mismanagement, leaky pipes, and the reliance on open channels as opposed to aqueducts to transport irrigation water. Most of these issues require engineering and regulatory (with enforcement) solutions and financial resources. Same as drip irrigation would. But the key would be participatory approach, and development of integrated watershed management strategies along with basin authorities with real enforcement power, especially over fat cats and friends of the corrupt local leaders. Learn from Morocco.

I for one would not mind a moratorium on new reclamation projects since experience shows that most farmers will not settle for surface water allotment, but will dig for ground water to increase productivity using arcane irrigation practices. I would like to see projects to replenish aquifers. But you must also recognize that a reclaimed then abandoned land is much worse than natural semi-desert land. It is no good for anything. The more environmentally sound approach would be to establish different cropping patterns that are more consistent with water scarcity and to control our runaway population growth.

And yes, Syria must rely on the political goodwill of Turkey to continue receiving water. This is a matter of international relationships and law. Rejecting water development plans because we are downstream country is a wrong start and it indicates that we expect both countries to be unstable. This is not the way to manage shared rivers or aquifers. Syria can and should make it economically and politically appealing to turkey to continue sharing water and should also demonstrate to both turkey and Iraq that it values the water of the rivers by investing in improving irrigation efficiency. How would you propose it otherwise. It seems to me that this position is no different than that advocating food self sufficiency as you advocate reliance only on water generated inside Syria. That said, I am against any project to transfer water to Damascus before the city enact strict controls of its crazy expansion, same thing can be said about Aleppo. It is about time we plan our cities and our entire existence.

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October 29th, 2010, 1:33 pm

 

25. Souri said:

Three points:

-Hydroelectric power generated from the Tabaqa dam is already much lower than initially envisaged. I am not sure of the number but I think it is less than half of the initial plan.

-I don’t know much about the topography of the Lake’s basin, but I know that the land near the Euphrates is generally flat and slopes up gently. So the Lake may not be deep and reduction in water volume may decrease the surface significantly. I am not sure though.

-One of the reasons for Aleppo’s great expansion is the horrible living standards in the countryside. Aleppo Governorate alone (without Idlib) has 1400 villages, and it is by far the most densely populated region in Syria; yet it receives much less spending than the Damascus region. Many towns in Aleppo Governorate have no roads, electricity or water and still like they were in Ottoman times. Aleppo itself is in horrible shape.

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October 29th, 2010, 2:30 pm

 

26. Elie Elhadj said:

OFF THE WALL,

Thanks for the explanation. Evapotranspiration makes sense. However, such a decision ought to have been made at the design stage of the project. It is a bit late now to reconfigure the realities on the ground. It is a bit like changing the position of the elevators in the building after construction.

You said: “What I am confused about in your opinions so far is your insistence on using non of the renewable water resources”.

Of course I support using water from renewable sources, as long as: 1) the withdrawals do not exceed the renewals. I usually describe how Syria’s water policies have led to turning the BALANCE in five of its seven water basins negative. As long as the water table does not get lowered the extraction is acceptable.

2) In deciding on a new irrigation project, return on investment should be the determining factor.

You said: “The problem again is mismanagement, leaky pipes, and the reliance on open channels as opposed to aqueducts to transport irrigation water”.

I agree. You and I agreed on this point earlier today when you said: “The trick is to turn each liter of water used in agriculture to more value” and I translated the sentence to: More crop per drop!

Production efficiencies do improve the return from existing resources and should be pursued. In comment 8 above I said that the Damascus region’s water endowment can support 10 million people easily, provided that: 1) the leaks are almost stopped, 2) much of the illegal wells plugged, 3) conservation awareness and irrigation efficiencies raised, and 4) sewage water treated.

You said: “Rejecting water development plans because we are downstream country is a wrong start”.

I agree. I also agree with your statement: “Syria can and should make it economically and politically appealing to turkey to continue sharing water and should also demonstrate to both turkey and Iraq that it values the water of the rivers by investing in improving irrigation efficiency”.

However, I draw the line at transferring drinking and household water to 50% of Syria’s population. That would be too risky for Syria’s long-term independence and sovereignty. Recall Prime minister Demirel who said that like Arab oil, water of Euphrates and Tigris was its national wealth.

Elie

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October 29th, 2010, 3:44 pm

 

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