Middle solution for Syrian debts to Iran
Syria-Iran, Economics, 6/10/1999

Well-informed sources in Tehran told the London-based al-Hayat daily that Syria and Iran have recently reached a "preliminary agreement" in order to settle the question of the debts that are to be paid by Damascus to Iran, at the "decision" of Presidents Hafez al-Assad and Muhammad Khatami in the summit which brought the two presidents together last month in Damascus.

Meanwhile, a high-ranking Iranian official told al-Hayat that Khatami was "careful to visit Damascus in his first Arab tour in order to assert the continuous and distinguished relations between the two countries." He stated that the meeting held between the Iranian President and Bashar al-Assad was "excellent" in which they discussed several issues.

The source added that the "agreement" reached by Syrian Finance Minister Muhammad Khaled al-Mahayni and the president of the Iranian Central Bank, Nour Bakhsh, stated that a "middle solution" was reached for settling the problem of debts and the exchange rate in relation to the Syrian pound, which will be 28 Syrian pounds for each dollar, at a Syrian request, while the actual exchange rate is 50 SP, according to Iranian requests.

Thereby the value of debts is estimated at US $500 million (the basic sum) for oil products Iran exported to Syria during the Iraqi-Iranian war in the 1980s.

The source added that the two sides agreed not to discuss the issue of "raised interests on this sum," though part of the oil products was given to the Syrian side for free.

The source added that the Iranian side "agreed" to spend this sum for establishing a cement factory at US $189 million and grain silos at a cost of US $180 million in addition to setting up charity and religious projects in Syria.

The source continued that Syria has recently embarked on a policy to settle the problem of its foreign debts in order to attract foreign investments to it. He added Syria has settled its debt problem with France which was estimated at 1.8 billion French francs in 1996 and with the World Bank (US $527 million) in 1997.

The sources expected that the reached "middle solution" will lead to developing Syrian-Iranian economic relations and raising the level of trade exchange, which reached in 1998 US $30 million, according to a statement by the Iranian ambassador in Damascus, Hussein Sheikh al-Islam.

Previous Stories:
  Khatami talks with al-Assad over Egypt   (5/18/1999)
  Iranian-Syrian agreements, protocols signed on Khatami's visit to Damascus   (5/17/1999)
  Confidence entrusted by Khatami on President al-Assad   (5/17/1999)
  Al-Assad, Khatami summit, Iranian sources   (5/15/1999)

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