Economic Round Up (Febrary 2011)


Here is Noble Energy’s presentation to analysts and investors showing estimated reserves in the Cyprus A, Leviathan, Tamar and Dalit fields off of Israel and Lebanon, as projected by 3D seismic studies.

The area with good prospects (yellow) would fall on both sides of a line stretching west from Ras Naqura, which should be the line marking the territorial waters of Lebanon and Palestine (Israel). Noble has only drilled Tamar and Dalit (red).

Other studies have projected more hydrocarbon reserves on the north side of the line than to the south. Noble can drill directional and horizontal wells and tap the northern resources and claim that it is from the Tamar and Dalit wells.

You can read it here:

Latest Economic Headlines from Syria Report

Syrian American bilateral trade rose more than 50 percent in 2010 on the back of an increase in the global prices of food commodities and oil products.

Economy: CPI Rises 6.3 Percent in Syria as Food Prices Post 2-Digit Increase

Syria’s government bonds: Captive Markets
Feb 17th 2011 | DAMASCUS | from PRINT EDITION

TRYING to flog sovereign debt three days after the fall of a neighbouring president appears audacious. But the Syrian government’s offering of three billion Syrian pounds ($63.9m) of six-month bills and three-year bonds on February 14th—following a trial run in December, the first in decades—was less risky than it looked. Nine banks bought, and the auction was oversubscribed.

The sale reflects the relative stability of Syria’s government. But it has more to do with the scarce choices available to domestic banks, the only permitted bidders. Fourteen private banks, all of which are subsidiaries of Arab banks, have opened since Syria’s centrally planned economy started to creak open in 2000. But they suffer from limited currency convertibility and a lack of investment opportunities. Undeveloped credit scoring and a lack of transparency hamper their ability to issue retail loans. Surplus liquidity currently sits interest-free in Syria’s central bank.

That gives the government plenty of scope to drive down its borrowing costs. Private banks groan about yields below the rate of inflation: the six-month bills yielded 1% and the three-year bonds just over 2.7%. “The government is in effect asking private banks to lend it money at a subsidised rate,” moans one banker. “But we have no other option.”

More sales will follow: this year’s projected bond issuance is 30 billion Syrian pounds. Syria’s government has long been urged by the IMF to issue bonds to finance its budget deficit—funded until now by internal borrowing. The deficit is modest, predicted at 5.8% of GDP this year, thanks to a rise in the price of oil. But Syria’s oil reserves are diminishing, and plans to do away with subsidies may be diluted as the government keeps a wary eye on regional unrest. The country is also looking to invest billions of dollars in infrastructure projects.

What the government does not want, however, is to rely on foreign creditors for its borrowing. Syria is not planning to issue international bonds. A preoccupation with sovereignty and problems with transparency contribute to that, says Abdulkader Husrieh, a local financial analyst. And complain though they might, domestic banks can be counted upon to lap up the debt.

Syrian Wheat, Barley Production Drops on Crop Disease, Weather
By Lina Ibrahim and Nayla Razzouk – Feb 16, 2011

Syrian wheat, barley and cotton production fell in 2010 because of a crop disease and adverse weather, according to the Ministry of Agriculture.

Wheat output dropped 17 percent from the prior year to 3.08 million metric tons as the fungal disease known as yellow rust hit the crop, the ministry said in a statement. The government had estimated production at 4.5 million tons, it said.

The ministry asked farmers to plant wheat instead of more typical winter crops such as barley as a result of a drought affecting domestic production of the staple grain, Al-Baath newspaper reported last month.

Barley production declined 20 percent to 680,000 tons, the ministry said. Adverse weather meant that output amounted to 43 percent of the government’s 1.6 million-ton goal, it said.

Cotton production slid 28 percent to 472,500 tons, the ministry said, compared with the government’s 681,000-ton estimate.

DAMASCUS, Feb. 12, 2011 — Iraqi President Jalal Talabani said here on Saturday that his country is keen on building a strategic relationship with Syria, Syrian official SANA news agency reported.

The president also stressed Iraq’s readiness to develop ties with Syria at all levels, when meeting with his Syrian counterpart Bashar al-Assad on bilateral ties.

Meanwhile, the two leaders also talked about speeding up the implementation of the agreements signed during Iraqi Prime Minister Nuri al-Maliki’s visit to Syria in October, 2010, and the recent visit of Syrian Prime Minister Mohammad Naji Otri to Iraq In January, the report said.

Syria and Iraq resumed diplomatic relations in November, 2006 after 26 years of rupture.

Bilateral Trade Reaches USD 2.5 Billion as Turkish Interest in Syrian Market Expands
Bilateral trade between Syria and Turkey expanded 43 percent last year to reach a total of USD 2.5 billion, as Turkey’s presence across various sectors of the Syrian economy is increasing at a fast pace.

Strait Tms [Reg]: Help us build up infrastructure, Syria tells Malaysia
2011-02-14 By Rupa Damodaran

SYRIA, which has embarked on a comprehensive reform programme that offers the private sector a bigger role, wants Malaysian businesses to be a major player in its infrastructure development.

Deputy Prime Minister of Syria Abdullah Al-Dardari, who is in Kuala Lumpur, said the country’s public private partnership (PPP) also provides opportunities in transportation.

Speaking at a dialogue meeting with Malaysian businesses yesterday, Abdullah said Syria is eyeing investments totalling US$100 billion (RM304 billion) between 2011 and 2015, with US$63 billion (RM191.52 billion) from the private sector.

“We are keen in co-developing an industrial park with Malaysians in the east region, which provides the right location for investors to export to Iraq, Europe and the Gulf,” he said.

Investors in the park will enjoy 10 years’ tax breaks and 100 per cent equity in business ownership.

Malaysia is keen to be part of Syria’s development in areas covering roads, highways, bridges, water works, housing, telecommunications, solid waste management and power supply.

Both countries see a close cooperation, which will provide access to the Asean and Asian market as well as the growing Middle East.

Read more: Help us build up infrastructure, Syria tells Malaysia

Government Hikes Fuel Oil Price

In a bid to curb its growing subsidies bill, the Syrian Government has decided a steep increase in the price of fuel oil sold to manufacturing concerns starting April this year, according to the local press.

Iraqis to be Issued Syrian Visas on Borders Starting February 1

Iraqis will be given visas on the Syrian border again starting February 1, following a decision by the Syrian Government.

Syrian President Dismisses Aleppo Mayor

Maan Shibli, the head of the municipal council of Aleppo, the country’s second largest city, has been dismissed by the Syrian President.

بقلم: نادر الشيخ الغنيمي
منشور في العدد (108) من مجلة الإقتصادي

Further Improvements Ahead As Syria Reverses 10 Years Of Oil Production Decline

Syria’s first oil output gain in a decade has been accompanied by a near-doubling of gas output. With the country due to award exploration blocks and complete its new refinery in the near future, 2011 is set to be the most positive year for the Syrian oil and gas industry since US sanctions were imposed in 2004.

مخالفة النمو على الورق للنمو الحقيقي، مفارقة غريبة: تراجع النمو في سورية بين 2005 و2009 بينما ارتفع الناتج المحلي90%

One friend writes of the firing of the Aleppo Mayor:

It was truly astonishing that he had not been touched so far. All his guys were. the president’s last trip may have sealed it. He met with both the acting Foreign Minister of Iran and Foreign Minister of Argentina in Aleppo, which is unusual. He seems to have spent more time in Aleppo this time. last time he personally met with Maan Ober for two hours. I think he really wanted to give him a chance. It seems that in the end it was too much even for him to handle. The rest of the guys were all just found guilty.

Mahmoud Ramadan was going to prison in Aleppo and they are awaiting judge’s final decision on how long he will be there for. I think that when these guys were heading to prison, Maan could not just carry on. This is a very significant development. I now believe that the fight against corruption has taken a more serious step forward. That Maan’s mom is an iconic woman in the party and is an Alawi did is a testimony to that. The president trusted Maan. he gave him incredible powers given that he is merely the head of the municipality (raees baladiye). at one stage he was more powerful than the governor himself, thanks to an open line to the palace. but, Maan like all others could not resist the temptation of making millions over millions. having inside information on the tanzeem meant that a piece of real estate can jump 8-10 fold if it becomes part of the tanzeem (the code changes from agricultural land to residential or commercial).

I would like to think that this is a turning point. Future city officials will think twice before engaging in such wide-scale corruption. But the damage is already done. Large parts of Aleppo’s residential areas have been damaged for good, thanks to terrible instances of granting commercial licenses in the middle of first class residential areas. lots of people have made hundreds of millions and this has made people very very angry. Simple corporate governance procedures were never followed by government officials. on Fridays, Maan would sit with a group of close friends at a coffee shop and discuss what was going on in the city. They were clearly privy to information and even if they were not, the “appearance” of him sitting with business people openly in a coffee shop is not kosher.  It is not good public policy to allow for this corruption to continue. It adds to the resentment of the masses towards the growing income gap.

Will President Bashar Assad hold his nerve?Syria’s economy
Jan 20th 2011 | DAMASCUS | from PRINT EDITION
The market must prevail

SYRIA has been edging away from a centrally planned socialist economy to a “social market” one. “The last five years have been about deconstructing the socialist ideology in favour of the market,” says an adviser to the government. “The next five will be about implementing it.” That means big cuts in subsidies and painful belt-tightening for Syria’s far-from-opulent masses. But will the government, seeing unrest simmer in the region in the wake of Tunisia’s upheaval, hold its nerve?

The proposed changes risk breaking the social contract long upheld by President Bashar Assad’s Baath party. The old deal meant low wages and secure jobs, while providing life’s basics, such as food and fuel, very cheaply. The new plan envisages raising cash by issuing government bonds and soliciting foreign investment to the tune—it is hoped—of $55 billion. As subsidies shrink, the price of fuel, electricity, water, transport and food should rise to market levels.

Fearing unrest, the government recently wobbled. It announced a 72% rise in heating-oil benefits for public workers and froze the price of electricity. But it sorely needs more cash. Oil revenue has dipped as the population, which has doubled to 22m since the mid-1980s, continues to soar. The government cannot put off its reforms for long.

The IMF has for years been urging Syria to do away with subsidies. In 2008 the government leapt ahead of its counterparts in the region, notably Egypt, by raising petrol prices. It removed subsidies for fertiliser but kept many items, including electricity and food, artificially cheap. Direct energy subsidies still cost Syria around 5% of GDP a year, according to the government and the IMF.

Farming, a mainstay of the economy, is also being liberalised. An agricultural fund has been set up to replace blanket subsidies. The list of key crops, which have their prices set by the government as the sole buyer, has been pared down from seven a decade ago to three today: cotton, sugar beet and wheat—deemed the “red-line” crop since it is the basis for bread, the people’s staple. But Syria’s land is hard-pressed to meet demand, let alone provide for a strategic reserve.

The steady introduction of market reforms since 2005 has yet to make a big difference. Opening up business has so far benefited only a few. Property has been bought for speculation. Food prices have risen faster than wages. Quite a few industrialists have seen their businesses founder in the face of cheaper goods from China and Turkey. Plans to ease the pain by creating a welfare safety net have fallen behind. People scrimp to pay for private education and health care because state provision, due to be overhauled in the next five years, is so bad. “The growing wealth gap is threatening the middle class,” says a local economist.

Elections due this year are sure to be tightly controlled. People are still too scared to protest. And events in Tunisia may make the government even warier about pushing ahead with its reforms.

from PRINT EDITION | Middle East & Africa

وحضرته بحسب صحيفة الوطن شخصيات بارزة من شام القابضة

Will Syria become the Singapore of the Middle East? – Ayoon Wa Azan:
Thu, 20 January 2011
Jihad el-Khazen

My friend Nemir Kirdar, the President of the investment bank Investcorp, believes that. He proposed the idea as we were with other friends and our families on vacation for the Western holiday season. While everyone would be singing, I and Nemir would sit in the corner of the house or the restaurant, discuss what we know about Singapore and Syria, and study the possibilities.

There are several requirements for a given country to become a tiger economy, which are present in both Syria and Singapore, while some fundamental differences between both countries exist.

Nemir Kirdar believes that Singapore, not the United States, is the best model to be followed by Arab countries, specifically Syria. He reminded me that the founding fathers sought to build democracy and freedom first in the United States, and then the economy, whereas a country like Singapore (and China) sought to build institutions and advance its economy first, and democracy second. Since I agree with Nemir that we are an undemocratic people, I went along with him in what regards the idea of building a prosperous economy that would enable the government to gain popular support, and at which point democracy becomes possible…..

President Bashar al-Assad began a policy of cautious economic openness, after decades of isolation, and a Western economic embargo for political (read Israeli) reasons. I believe that Syria is capable if it begins a policy of economic openness out of conviction, rather than out of considering that it is an unnecessary evil. There is a trio in place to push the economy forward, consisting of Deputy Prime Minister Abdullah Dardari, who comes from the world of media and finance, the Minister of Economic Affairs Lamia Asi, who is an expert in modern technology, and the Minister of Finance Mohammed Hussein, who is rather familiar with the pulse of the street…..

After a later session in London, I agreed with Nemir Kirdar that Dr. Bashar al-Assad can do in Syria what Lee Kuan Yew and his comrades did in Singapore. The nature of the regime in both countries is similar, and so is the influence wielded by the ruler. Meanwhile, the human and natural resources of Syria are much bigger. What Syria is in want of are institutions for an open, competitive and creative economy, while corruption needs to be eliminated, all under the supervision of an independent rule of law.

Comments (6)

Roland said:

“Opening up business has so far benefited only a few. Property has been bought for speculation. Food prices have risen faster than wages. Quite a few industrialists have seen their businesses founder in the face of cheaper goods from China and Turkey. Plans to ease the pain by creating a welfare safety net have fallen behind. People scrimp to pay for private education and health care because state provision, due to be overhauled in the next five years, is so bad. “The growing wealth gap is threatening the middle class,” says a local economist.

Naturally. That’s what liberal markets do. They increase overall production, and they compound social inequality. That’s what liberal markets are meant to do. That is all they can ever do. It is not possible for a liberal market to do anything else.

Let’s not forget that the Western world raised living standards mostly thanks to the nationalist or left-wing *reactions* to the problems posed by the liberal markets. Without those political reactions to liberal markets, the economic gains by themselves would not have resulted in much overall social progress.

February 18th, 2011, 2:42 pm


G.Saghir said:

“Let’s not forget that the Western world raised living standards mostly thanks to the nationalist or left-wing *reactions* to the problems posed by the liberal markets. Without those political reactions to liberal markets, the economic gains by themselves would not have resulted in much overall social progress.”


Would you care to give examples?

February 18th, 2011, 5:29 pm


BigB said:

HA!! Who would have thought that I’d see Noble Energy, pioneered by the Noble Family in Ardmore, Oklahoma – my hometown, on Syria Comment. Small world. Awesome!

February 18th, 2011, 7:32 pm


Norman said:

MR Saghir,

I think he means the progress in work place safety initiated by the Unions,and child labor laws, coudn’t that be an example .

February 18th, 2011, 8:03 pm


Syrian Nationalist Party said:

LOL. Yeah sure… the resource field basin is a ruler straight line on the boarder with Lebanon. It is more like a jaggiddy area that stretches into half of Lebanon area. These maps are doctored.
The field’s resource should be shared 50/50 or 33% for Israel, Lebanon and Cypress. I would not be surprised if the field reach Latakia shores. Someone needs to go out and make study, It could be 25% for each of the 4 States.

February 21st, 2011, 5:52 pm


Andrew said:

I’ve come rather late to the discussion on the new bonds being issued by the Ministry of Finance. I’ve been monitoring for some years the extent to which banks in the Middle East have used their resources to fund private sector growth, as opposed to placing their resources abroad or with their own government. So I took a look at the balance sheet of Syrian banks (as published in the Central Bank of Syria Quarterly Bulletin). The broad picture is that ten years ago, banks placed more than half their balance sheet with foreign banks. This has now shrunk to 16% as the banks increased lending to the private sector, but also increased their placements with the Central Bank. If the increase in private sector lending continues (and that would be a good thing for the economy) then banks’ capacity to buy government bonds over the longer term will be limited, with two important qualifications: first, the government might use the Min of Fin bonds to replace the deposits currently being collected by the Central Bank (good financial policy); and second, since state-owned banks account for about 70% of the banking system, the government has a lot of scope to tell the banks to buy its bonds. But the long-term trend is very clear: fairly soon, the banking system will have to make a choice between funding the government or continuing to increase its funding of the private sector.

This post is already rather long. I’ve posted a longer piece on the issue on my website,

February 25th, 2011, 1:17 pm


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