Syria modernizes its economy to comply with European partnership agreement
Syria-European Union, Economics, 7/16/1998

Syria is working to deepen cooperation relations with the European Union Monte Carlo radio reported. This is, however, to modernize its economy and to make it compliant with the under-negotiation Association Agreement with the European Union.

In its commentary, the radio reported that Syria is leaning toward more openness and economic liberalization. In this era, it has embarked on the support given by the European Union, especially technical aid, so as to improve its economy to the needed level in order to sign a partnership agreement with the 15 member states of the European Union.

The report added that this agreement has been under negotiation since May. A new rounds of talks, dedicated to setting up a zone for free exchange between the EU and Syria, will be held in Damascus during October. The agreement, which will be put into actual practice in the year 2010, requires lengthy preparations and modernization of the economic and financial system in Syria, especially on matters concerning Syrian economic laws.

The report added that Syria is working to establish a modern banking network and to adopt an information system with the support of the European Union. But this effort to change and modernize is challenged in the view of experts by difficulties linked to the deterioration in Syria's oil prices. Syria produces 600,000 barrels of oil per day. Economists said the proposal to reduce the budget deficit might not be workable due to the reduction in oil revenues.

Meanwhile, the Syrian budget for 1998 increased by 12.4% in comparison with last year's budget. Thereby, the decrease in oil revenues as well as in values of sums sent in hard currencies by Syrian employees recruited abroad, estimated at US $300 million, would have an adverse impact on the Syrian economy which has a growth rate estimated at 1.09% compared to a population growth of 3.4% with 50% of the population under the age of 20.

It is quite clear that population growth average exceeds the rate of economic growth in Syria. To deal with these difficulties, Syrian officials do not want to deal with the World Bank and the IMF. They prefer to work with EU experts, who are working to link the Syrian economy and the European economy in the future.

Previous Stories:
  Syrian - Iraqi oil pipelines to be opened very soon   (7/15/1998)
  UK determined to build solid relations with Syria   (7/10/1998)
  Euro-mission chief: Syria has self-sustaining economy, needs modernization   (6/12/1998)

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