The Import Suspension Decision Was Indeed “Temporary” – (By Ehsani)

The decision to suspend imports for goods that have over 5% custom duties was supposed to be “temporary” when it was announced on September 22. The temporary nature of the decision was evident this morning when the decision was cancelled merely 12 days after it was adopted. SANA made the news official after the weekly Tuesday ministerial meeting which produced the announcement that the Syrian government abrogated the import suspension.

It was only few days ago that the Governor of the Central Bank said that the decision to suspend imports would “enable Syria to save six billion U.S. dollars annually to face the sanctions imposed by both the EU and the United States”.

The initial import ban announcement was met with shock and disbelief by the country’s business community. An atmosphere of fear, panic, anger and confusion was the way many described the mood in the country. Syria was already reeling from the seven-month crisis and the sanctions imp0sed on it by the EU and the US. The import ban was the final blow that crippled the economy and almost brought it to a standstill.

No government decides to suspend imports hastily. It is clear that government officials reacted in a panic-like atmosphere when the announcement was first made 12 days ago. The official reason at the time was to “save foreign exchange reserves”. Presumably, the need to do so has not changed since then.

The new plan now is for the Central Bank to stop financing “a large part” of the imports of the private sector. Food and medical items may be excluded.  As for everything else, importers need to rely on their savings of foreign currencies outside Syria or by going to the black market. Mr. Shaar (Minister of economy and trade) announced that this solution was adopted on the suggestion of the business community which had been using this financing mechanism anyway since the ban was announced. The public sector will still be able to rely on the Central Bank for financing their needs of foreign exchange. The private sector, on the other hand, will incur a nearly 10% disadvantage as today’s black market rate for SYP is 51.5 rather than the official rate of 47.

Mr. Shaar urged the business community to lower the prices of their products as they can no longer use the execuse of the import ban. During a press conference early this morning, he demanded that he did not want to hear  that someone imported his products last week and hence the need still exists for higer prices and if such a case does exist, “it is life which involves profiting and losing”.  He later warned that there is no longer an “economic or humane  logic behind high prices from now on”.

It is fair to say that this policy reversal was a major embarrassment to this government. The damage to the reputation of the economic team will take time to reverse.

Foreign Direct Investments (FDI) in the Arab world:

Staying on economics, the Arab spring has sparked a sharp fall in foreign direct investment. Egypt, for example, is expected to experience a drop from $6.4 billion last year to a mere $500 million in 2011, a 92% slide, according to a report from the Kuwait-based Investment and Export Credit Guarantee Corp. Foreign direct inflow into Syria are forecast to fall by 62% from $1.4 billion in 2010 to around $500 million this year. Remember that the initial goals of the Syrian government under Mr. Dardari were based on attracting close to $10 billion a year. Interestingly, investments are pouring into Iraq. The country expects FDI to more than double to $3.5 billion this year.

 

Erdogan and Russia

In a news conference in South Africa, the Turkish Prime Minister was quoted saying that the United Nations can’t “remain indifferent” to violence in Syria and must act to resolve the situation.

Russia, on the other hand, continues to reject the latest wording out of the UN Security Council when it comes to Syria. The final text is expected to be announced later today. Russia is expected to veto the text as it stands now.

Comments (156)


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151. MNA said:

Tara @ 122

“To all regime supporters

Do not be over-thrilled today with what happened in the UNSC when Russia and China vetoed the resolution against Bashar al Assad. Remember, nations have no permanent friends or allies, they have permanent interests. It will take a twist or two for things to change and Russia and China find their interest somewhere else. The Syrian people after shattering their wall of fear are well fit for that marathon.”

I 100% agree with your above statement, but does this apply to the US and your for ever hero Amb Ford?

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October 5th, 2011, 5:14 am

 

152. ann said:

Saudi Arabia Vows ‘Iron Fist’ After Attack in Oil Province

Wednesday, October 5, 2011

http://www.sfgate.com/cgi-bin/article.cgi?f=/g/a/2011/10/04/bloomberg_articlesLSKWKU6JTSEB.DTL

Oct. 5 (Bloomberg) — Saudi Arabia vowed to use “an iron fist” after 11 members of the security forces were injured by attackers during unrest in a Shiite Muslim town in the east, the official Saudi Press Agency said.

The government accused an unidentified “foreign country” of seeking to undermine the stability of the kingdom as a result of the violence in Awwamiya, in which the assailants, some on motorcycles, used machine guns and Molotov cocktails, the Riyadh-based news service reported late yesterday. A man and two women were also injured, it said.

Saudi Arabia, the world’s largest oil supplier, escaped the mass protests that toppled the leaders of Egypt and Tunisia this year and spread to Saudi neighbors Yemen and Bahrain. There were rallies earlier in the year in mostly Shiite eastern Saudi Arabia, including Awwamiya and al-Qatif village.

Predominantly Sunni Saudi Arabia has accused Shiite-led Iran of interfering in the affairs of Arab countries in the Persian Gulf, home to three-fifths of the world’s oil reserves. Iran denies the charge and accuses Sunni rulers in Bahrain and Saudi Arabia of discriminating against Shiites. Saudi Arabia and other Gulf countries sent troops to Bahrain in March to quell the mainly Shiite unrest.

‘Greater Trouble Ahead’

“Given that this happened in the predominantly Shiite area of Saudi Arabia, in its east, this could be a sign of greater trouble ahead,” Paul Sullivan, a political scientist specializing in Middle East security at Georgetown University in Washington, said yesterday in response to e-mailed questions. “It could easily ratchet up Saudi-Iran tensions.”

King Abdullah announced $130 billion in spending in February and March in response to the spread of unrest in the Middle East. The kingdom’s senior religious scholars responded by issuing a statement calling protests un-Islamic, ahead of a so-called Day of Rage planned for March 11 in Saudi Arabia. Protesters stayed off the streets amid a high security presence.

“Using motorcycles is a new tactic in Saudi Arabia,” said Theodore Karasik, director of research at the Dubai-based Institute for Near East and Gulf Military Analysis. “It is a new way to get around security forces. Oil prices will likely rise because of the nature of the attack and if the violence continues.”

Oil gained for the first day in four in New York after a surprise drop in U.S. crude stockpiles led investors to reduce bets that prices will decline. Crude for November delivery rose 2.8 percent to $77.75 a barrel at 6:45 a.m. in London.

‘Discrimination Condoned’

Saudi Arabia produced 9.8 million barrels of oil a day in September, while Iran pumped 3.6 million barrels a day, according to Bloomberg data.

Saudi Arabia’s Shiite minority is concentrated in its eastern oil-producing hub. The U.S. State Department said in a human-rights report on Saudi Arabia published in 2009 that Shiites face “significant political, economic, legal, social and religious discrimination condoned by the government.”

The rioters must decide whether “their loyalty is with their homeland or to that state and its authorities,” the Interior Ministry said in a statement, according to the Saudi Press Agency. The attack took place at 9 p.m. local time on Oct. 3, the news service said.

The government called on “rational members of their families, those of whose loyalties we have no doubts, to bear their responsibilities towards their sons,” the interior ministry said. “Otherwise, all will bear the consequences of their actions.”

Saudi-Iran Tension

Bahrain’s Saudi-backed rulers detained hundreds of people, most of them sharing Iran’s Shiite faith, following a crackdown on protesters who held rallies in February and March to demand a more representative government. At least 35 people were killed during the clashes. Shiites represent about 70 percent of Bahrain’s population, according to the U.S. State Department, while its hereditary rulers are Sunni.

“What we may be beginning to see is the response to the crackdown in Bahrain,” Karasik said in a phone interview. “There may be more radical, new groups, who are attacking Saudi security forces in terms of the Sunni-Shiite divide.”

Saudi Arabia, which holds 20 percent of the world’s oil reserves, enforces restrictions interpreted from the Wahhabi version of Sunni Islam. In addition to the restrictions on women, the government limits the practices of other branches of Islam.

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October 5th, 2011, 6:25 am

 

153. Tara said:

MNA @ 151

Good comeback!

Of course it applies to all nations including the US. I hope it does not apply to people. Therefore if the US suddenly changed course and start hailing Bashar as an eternal leader, I expect Amb Ford to resign, otherwise I will be ready to recall my flowers and all my previous statements in his regard.

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October 5th, 2011, 7:12 am

 

154. Akbar Palace said:

We’re referring here to a race of people whose chief exports are Arab soap operas. For the past thousand years or so, their principal activity has been feuding amongst themselves to the vast amusement of their neighbors.

Dale Andersen,

I agree, it would be great if the Syrian opposition would clearly ask for help, and work with Israel in some fashion, but if they did this, they would lose credibility with their own people. Right now they’re between a rock and a hard place. I’ll leave it to the Syrians here to agree or disagree with me. My experience here on SC has told me that siding with Israel is still a taboo subject.

Syrians are proud the way Austrians are proud.

I don’t know. I tend to believe that people have the same aspirations as everyone else. Sure they’re are cultural differences, but the bottom line is that everyone wants to be treated with respect. Bashing Israel has become so ingrained into the Arab psyche, that working together on a political level is probably out of the question.

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October 5th, 2011, 7:16 am

 

155. SYRIAN HAMSTER said:

LAW OF THE VILLAGE

ANN @ 114
Every village has but a single idiot, and no one would dare to challenge you.

Ignorance is a bliss, when it doesn’t kill others

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October 5th, 2011, 9:07 pm

 

156. Hiba said:

Alex,

The report of Ghadi Francis clearly states the destiny of the smuggled weapons. The arms dealer says;

..”You call it smuggling.. I don’t call it that.. Others would call it JIHAD!!.. It’s a JIHADI act, because this is a dangerous job that aims to support the “Syrian Revolution”.. Smugglers may lose their lives over it.”

This is another report in the Daily Star back in May;

…”Motives for Syrians to purchase weapons appear to be driven by anger at the bloody crackdown by Syrian security forces and by a need for self-protection should the country descend into sectarian violence in the weeks and months ahead.”

http://www.dailystar.com.lb/News/Politics/2011/May-09/Black-market-arms-sales-up-on-Syria-demand.ashx#axzz1Lqkw1XGI

Of course, it’s up to the opposition to carry on with their denial, but most of us, Syrians, do KNOW what they say is far from the truth, and their credibility record has long been damaged..

Thank you

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October 15th, 2011, 9:08 am

 

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