Syria is opening up to market economics, and tourism is now bringing in $5.2bn annually, writes MICHAEL JANSEN
GLEAMING PRIVATE banks nestle like jewels against the rich brown velvet facade of modern Damascus, ATMs stand sentinel beside shops boasting the latest Paris fashions, and electronic signs at money changers display shifting exchange rates.
Gone are the days when Damascenes and visitors dealt only with the Commercial Bank of Syria. Mobile phones abound. Cafes sport wireless internet connections and massive flat television screens for viewing the World Cup. Vending machines collect parking fees, and bright yellow clamps looped like horseshoes around the bases of lamp posts warn motorists that the state is determined to exact fees for misbehaviour.
At Bab al-Sharqi, the Eastern Gate of the Old City, beautifully restored half-timbered medieval buildings host shops selling traditional furniture inlaid with mother-of-pearl, and intricately decorated brass trays and delicately painted glassware. On the Street Called Straight where St Paul walked 2000 years ago, elegant boutique hotels have sprung up in Omayyad and Ottoman houses with glorious courtyards.
In a decade, Syria has moved from a stalled command economy to a vibrant market economy, so free that even the parking meters are privatised, and Syria’s doors are open wide to foreign investment and world travellers.
Abdullah Dardari, deputy prime minister for economic affairs, tells The Irish Times, “Early in 2000 it became clear that the previous economic management system . . . was no longer tenable.”
At that time, 60 per cent of revenues came from oil exports, he says, which represented 70 per cent of the total. Today, he adds, non-oil exports count for 70 per cent of revenues and are growing at 15 per cent a year.
Dr Dardari, architect of the transformation, lists Syria’s achievements: industrial output is growing at 15 per cent, foreign investment rose from the low level of $160 million (€129 million) to $2.2 billion in 2009, 6,000 new industries have been launched, the population is growing at 2.5 per cent, and consumer spending and demand for homes, goods and services is rising.
Over the next five years, Syria plans to invest $100 billion – $45 billion will come from public coffers and go into infrastructure, education and health, while $55 billion is expected to be invested by the private sector in housing, industries and trade. “The public and private sectors are now in partnership,” he says, admitting that the government is pressing businessmen to pay taxes and tariffs, while business demands removal of bureaucratic obstacles and red tape.
The 2011-15 plan calls for 1,000 communities with 880,000 apartments for middle class and lower-income families, along with technology parks and private universities. He calls the new management system “the social market economy”, and argues that it is “pro-poor”: designed to “make the poor richer so that they can consume the production of the rich”.
Rateb Shallah, chairman of the stock exchange, observes: “The trouble is that we are becoming like Texas. Everything is big. We have huge opportunities and a large, heavy burden of constraints . . .We as a nation want to preserve social harmony.”
He says corruption and the reluctance of the traditional mercantile class to shift from real estate to productive investments are two key problems. While most exports are still in raw form, Syria is now exporting clothing and tinned fruits and vegetables. He argues that family firms must be persuaded to go public and list on the stock exchange, which has 16 trading firms and will have 20 by the end of the year. “We have a new law calling for a certain percentage of stocks to be sold at [$2- $20], so small investors can participate. They represent a huge source which has been idle.”
The 1950s practice of giving stocks as dowries to daughters is being revived, providing a nest-egg for women and children.
Tourism is expected to become a major sector. Minister Saadalla Agha al-Kalaa says six million tourists visit Syria each year – 3.5 million from the region, 1 million expatriates, and 1.5 million from Europe, generating an income of $5.2 billion. Forecasts for growth are strong.
Tourism currently represents 11-12 per cent of GDP, provides 23 per cent of the country’s hard currency, and employs 13 per cent of the workforce. The number of European tourists has doubled in three years. Dr Kalaa says Syria seeks to provide “quality tourism” for pilgrims who want to visit religious sites and visitors who wish to experience the country’s monuments, culture, natural wonders and beaches. “Our vision for tourism is to build bridges . . . and dialogue,” he states.