special: Syrian foreign trade sector

The foreign trade sector was the dynamo of development in Syria over different periods of the 17th and 18th centuries. In the 20th century and shortly after Syria had won independence there was a considerable foreign demand for a variety of Syrian commodities such as agricultural products and raw materials like cotton and wool. This demand helped promote and develop agricultural production to a great extent.

Activities of the foreign trade sector continued to play their role during the 1960s and into the 1970s but basically depending on the public sector which had a share of about 71% of the total foreign trade operations in 1971. Nevertheless, the deficit in trade balance at that time registered 912 million Syrian pounds. But the private sector share then was within the limits of 25.3% in the export sector and 30.4% in imports, which means 29% of the entire foreign trade operations.

The foreign trade policy of that period, however, could not adequately meet the requirements of the ambitious and accelerating pace of the development process in comparison with the inherent energies and abilities. Later when there were certain economic hardships in the 1980s, the government realized the need for opening new channels to get foreign currency, and for encouraging the private sector to assume a bigger role.

The foreign trade policy was developed through a number of measures which include:

-Reactivating and supporting exportation production inputs, investment and export-oriented industries.

-Developing tariff rates to serve those goals; and

-developing the fiscal and monetary policies related to foreign trade.

Although there were numerous reasons behind achieving the first-ever positive trade balance in Syria, those measures really had a very good impact on activating exportation. The deficit, which was 17.760 billion Syrian pounds (SP) in 1987, excluding oil, and SP 12.723 billion including oil, receded and in its place there was a surplus of SP 3.864 million excluding oil, and SP 20.363 billion including oil in 1990.

Private sector exports to free currency states rose from SP 91 million in 1989 to SP 155 million in 1990. Due to the support and encouragement extended to it and the wider prospects opened to it in the sphere of investment and trade, the private sector registered 75.2 percent of the total of Syrian exports, not including oil, and 46 percent of all the export-import operations.

However, a deficit in the trade balance was noticed again in 1992 and onward as a result of more active importation to meet the needs of investment enterprises and building new production facilities that came up under Law no. 10 of 1991, which encourages investment, in addition to the growing activity of the export-oriented industries sector which requires the import of raw materials and capital equipment.

This is a logical consequence of the process of liberalizing imports which had to be pursued in order to release all production energies on one hand, and to face the hardships and harsh conditions blocking the competitive power of Syrian exports in the world market, on the other.

A lot of changes have affected Syria's foreign trade over the past 28 years, whether in terms of composition or geographical distribution. The percentage of Syria's exports to European Union countries was around 32.4% of the total Syrian exports in 1970. The figure jumped to 60% in 1993. Syria's imports from, those countries which registered 26.9% in 1970 rose to 36.8% in 1993.

Exports to the Arab states in 1993 were 23.7% of the total exports rising from a record low of 7.7% in 1980. The American countries' share of Syria's exports rose from 0.4% in 1970 to 3.1% in 1993, but this rise was on account of a drop in the socialist countries' share which went down from 42% in 1989 to 5.3% in 1993.

Syria's exports of raw materials registered a slight drop from 82% in 1970 to 80% in 1993. The export of manufactured or semi-manufactured materials rose at almost the same percentage points from 18% to 20% for the same period.

The private sector's share in the overall Syrian exports was 25% in 1993; of those exports crude oil recorded 66.7% whereas the manufactured or semi-manufactured goods constituted 47.6%.

At present the competition of Syrian exports can be identified as follows: oil and byproducts 70%, raw cotton 9.5%, vegetables and fruits 8%, garments and fabrics 5.5%, other manufactured products 6.1% and phosphate 1.4%.