Syria - Overview
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After three years of social revolts and later a civil war, Syria is in a disastrous social and economic situation. By late 2013, the war had left around 120,000 people dead and 2.3 million people had fled the country, while 5 million had been left in Syria without a home. The blockade imposed by the Syrian army has led to famine and a rising number of cases of tuberculosis. The country has received support from Russia, which has provided weapons on credit, as well as Iran, which has offered loans and in-kind donations. The country's economic situation is alarming: the budget deficit has reached 14% of the GDP, the state is no longer able to subsidy basic rpoducts, the Syrian pound continues to lose its value and oil production has decreased ten fold due to an embargo. As in the previous year, the 2014 budget is expansionary, reaching 9.8 billion USD. President Asad and his government are likely to focus spending on the zone under the regime's control, on military operations and wages as well as to subsidize fuel and staple foods.
The social situation of the country had been serious already before the crisis: a third of the population lived below the poverty line, unemployment affected 20% of the population (75% of the unemployed were aged 15 to 24 years), and economic growth lagged behind the very high rate of population growth (3.3% / year). Since the war, the situation has only gotten worse. The population, which is living without access to water or electricity, must deal with rising food prices, destruction and privation.
Industry had a relatively important place, especially thanks to the textile, chemical and of course oil industry, the latter representing 14% of the Syrian GDP. The hydrocarbon sector is very important for the Syrian economy and contributes up to 65% to the country’s exports. Nevertheless, the country’s oil reserves are diminishing from year to year and although the increase of barrel price enabled an average growth of 4.5% in recent years, experts expect the Syrian oil wells to dry up by 2020. The manufacturing sector contributes 25% to GDP, with the production of handicrafts such as silk, leather and glass products.
The tertiary sector was well established (mainly tourism) and contributed more than 45% to GDP.
Foreign trade overview
After a few years of positive development, trading came to a standstil due to the country's serious political, social and economic crisis, which later changed into a civil war, and the economic sanctions imposed by its trade partners (especially by the embargo adopted by the Arab countries). The volume of trade diminished considerably and the trade deficit increased. Since the beginning of the crisis, oil production has decreased ten fold.
Foreign trade represents about 65% of the country’s GDP. Although trade had been growing in the recent years, it has now dropped because of the serious political, social and economic crisis faced by the country and economic sanctions imposed by its trading partners (including the Arab embargo).
Syria's main exports are its oil resources, but also textile, livestock and vegetables, as well as food products. Its main clients are the Arab countries, with a particular intensification of trade relations with Iraq, Lebanon and Algeria, followed by the European Union, with Germany and Italy in the lead and France only taking the 6th place. In terms of imports, the most important position belongs to oil products (up to 35%), and also to metals and fabricated metal products, followed by chemical industry, livestock and consumer goods. The two main suppliers are the European Union and Asia, respectively.
Foreign investors were growing more numerous in the country but the current severe political, economic and social crisis has degenerated into a civil war, which impeded this dynamics and led to the reflux of FDI.