"Embassy of India"
Embassy of India Damascus ……. Economic and Commercial Report, March 2010 Economy and Finance : Syria, Iran lift visa requirements : The Foreign Minister of Syria Walid Al Moullem and his Iranian counterpart Manouchehr Mottaki have signed a bilateral agreement waiving visa requirement for nationals from the two countries during the visit of Iranian President Mahmoud Ahmadinejad to Syria on February 25 and 26. This agreement has been signed with a view to enhancing the level of cooperation between the two countries in the field of trade and commerce also. Exports Decline - Syria’s Trade Deficit with Turkey Doubles : According to Turkstat, the Turkish Institute of Statistics, Syria’s trade deficit with Turkey doubled last year to USD 1 billion as Syrian exports halved while Turkish exports continued to increase. Turkish exports to Syria increased to USD 1.42 billion in 2009, an annual increase of 27 percent while Syrian exports to Turkey declined to USD 327 million from USD 639 million in 2008. However, total trade volume between the two countries remained stable at USD 1.75 billion. In September last year the two counties waived visa requirements for travel of the nationals between the two countries. In December, the Syrian-Turkish High-Level Strategic Cooperation Council which was established earlier this year, held its first meeting in Damascus and signed 50 memoranda of understating and protocols of cooperation. Syrian Trade with Turkey (USD in millions) 2007 2008 2009 07/08(%) 08/09(%) Exports 376 639 327 69 -48 Imports 797 1115 1424 39 27 Total 1173 1754 1751 49 0.1 Balance -421 -476 -1097 -13 -130 EUR 12 million for Development Projects : Germany is providing EUR 12 million in grants to assist in various economic and development reform programmes in Syria. The agreement was signed on the Syrian side by the State Planning commisson and on the German side by the German Technical Cooperation Agency (GTZ) and the Federal Institute for Geosciences and Natural Resources (BGR) and is aimed to fund technical projects in the financial sector, for the sustainable urban development program, the higher institute for managing water resources and for the studies and experts fund. -2- Italy Provides Loan to Support SMEs : The Italian Government has announced a loan of EUR 20 million to support economic and financial reforms in Syria. The loan will back up the role of small and medium size enterprises (SMEs) in Syria’s economic development. The funding will be managed by the Syrian Government while a mixed panel will supervise the performance of SMEs benefiting from the funding. Italy is to open a credit line from the Directorate-General for Development Cooperation in the Ministry of Foreign Affairs for SMEs. Industry : The Sheikh Said Cement Plant located near Aleppo that is affiliated to Shahba Cement Company, one of six owned by the General Organization of Cement and Building Materials (GOCBM) is being shut down since it had been incurring heavy losses for the last many years. The 440 staff members working for the plant will now be relocated to another state-owned company. Meanwhile, the Syrian Government has also floated a tender seeking offers from private investors for the management of the General Company for Metallic Industries of Barada, the only state-owned manufacturer of home appliances. Gulf Finance House (GFH), an Islamic investment bank based in Bahrain has signed a memorandum of understanding with the Syrian Investment Authority to invest in a number of projects in Syria. GFH is planning projects in cement, phosphate and power as well as in specialized economic zones within existing industrial cities. Except for a project in the cement sector where an investment of USD 350 million is under consideration, no details on other projects, their size or their capacity are available. Syria’s Banking Sector : Syria’s banking Sector continues to grow. The commercial banks held total assets of SYP 1.96 trillion at the end of 2009, a year-on-year increase of 14.4 percent as per the data from the Central Bank of Syria. Fransbank Syria, Bank Al-Sharq and Qatar National Bank Syria the three new private conventional banks have started functioning from last year while Bank of Jordan Syria completed its first full year of operations. Foreign exchange assets represented 20% of total SYP 401 billion, an increase of 2.8 percent. All sectors of activity benefited from the increase in loans and other credit facilities except for retail and wholesale trade. Lending to Agricultural sector increased by more than 100% and lending to the mining, manufacturing and utilities sector increased by more than 70%. Customer’s deposits also continued to increase although deposits in foreign currencies declined as interests paid on USD and Euro deposits remain low. Time deposit increased by 22%, demand deposits by 7% and savings deposit by 7.5%. -3- Syria’s Commercial Banking Sector(SYP billion) 2008 2009 Change(%) Assets 1716 1964 14.45 Lending 982 1124 14.46 Deposits 1069 1199 12.16 Ibdaa (Creativity) Small and Micro Finance Bank, Syria’s first bank for the poor, which was established under a special presidential decree (9/2010) passed on 23 rd February, will become operative within 2 months after its by-laws are approved by the Cabinet, the Ministry of Economy and Trade and the Central Bank of Syria. The bank will operate a full fledged bank providing both conventional and Islamic services. It will offer lending to low income clients without demanding bank guarantee. In accordance with the instructions to be issued by the Syrian Insurance Supervisory Commission, the bank will also accept deposits and insure its loans with local insurance firms. The board of directors will include three members representing Arab Gulf Programme for United Nations Development Organizations (AGFUND), one member from Public Commission for Employment and Projects Development (PCEPD) and five members representing the private sector. National Bank of Kuwait has received preliminary approval from the Syrian and Kuwait monetary authorities to establish a bank in Syria. Money Exchange Bureaus ; 4 new money exchange bureaus have been approved by the Central Bank of Syria. Gulf Finance House, a Bahrain based Islamic investment bank is setting-up an Islamic bank In Syria in joint venture with local partners which will be known as Syrian Finance House (SFH). SFH will operate as a comprehensive Islamic Bank and will provide whole range of commercial and investment services. Agriculture and Water : KfW, the German Development Bank is providing EUR 50.2 million to finance the construction of a water and network system in the Sayyida Zeynab district of Damascus. The project aims at supplying drinking water to 100,000 people expected to touch the figure of 2,50,000 by 2025 in the area known as Sayyida Zeynab located south of Damascus. Out of the total estimated cost of the project of around EUR 95.4 million, KfW will provide a loan of EUR 45.2 million and a grant of EUR 5 million, the rest will be paid by the Syrian Government. The Kuwait Fund for Arab Economic Development (KFAED) will provide a loan of USD 51 million to help finance the rehabilitation and expansion of the water supply -4- system in Damascus and its surroundings. Projects will include the extension and rehabilitation of existing primary and secondary water distribution networks, the construction and rehabilitation of water tanks and reservoirs of pumping stations and the supply of a leakage detection and control unit. USD 43.6 million Syrian Drought Response Plan (SDRP) established last year by the United Nations to alleviate the impact of the drought affecting Syria’s northeast, has not received adequate funding. The drought that Syria’s northeastern region is facing since 2006 has impacted 1.3 million people, 800,000 of them severely. 300,000 of these are considered highly vulnerable by the UN. The efforts of SDRP are mainly focused on the district of Al Shaddadi, the most affected by drought, that is located on the Khabour River midway between Hassakeh and Deir-ez-Zor. The Syrian Governments’s contribution to SDRP has been only the equivalent of US dollars 7,26,000/- so far. Japan’s International Cooperation Agency (JICA) is providing Syria with USD 16.27 million in grants to finance projects in the water management, clean power and education fields. JICA has a number of ongoing projects in Syria in the fields of water management, environment protection and urban planning. Oil & Gas : Oil Field Discovery in Syria : ONGC Videsh Ltd., and its partner IPR Mediterranean Exploration Ltd., have made significant new oil field discoveries in Block –XXIV with an area of about 1927 Sq. Kms. located in northeastern part of Syria where the exploration work is still continuing. The first Rashid discovery well Rashid-I was drilled upto 1739m in Judea/Rutba formations of cretaceous age. The well tested oil with with a rate of 1343 bopd. The second discovery well Abu Khashab-I drilled Jeribe Formation of Miocene age at 950m and tested oil with a rate of 900 bopd. The third well Abu Khashab-2 was drilled deeper horizons Dibbane and Chilou. The Chilou Formation of Oligocene age was tested first and flowed oil at the rate of 1507 bopd. The younger Dibbane Formation of Miocene age was tested in two intervals. The Lower Dibbane interval produced oil at the rate of 179 bopd and gas at the rate of 3.76 MMCFPD. The upper Dibbane interval tested oil at the rate of 1353 bopd in this well. The Jeribe Formation was also tested and produced oil at the rate of 1410 bopd. The two discoveries are expected to hold about 185 MMbbl of oil in place. Plan of Development (POD) has been submitted for development of both Rashid and Abu Khashab fields. The Concession Agreement was signed for Petroleum Exploration, Development and Production in Block-XXIV between the Government of Syrian Arab Republic & Syrian Petroleum Company as one part and consortium of ONGC Videsh Ltd., and IPR Mediterranean Exploration Ltd. (IPR) as the other part in 2004 with contract being effective from 29th May, 2004. ONGV Videsh Ltd., hold 60% PI with 40% being held by IPR. -5- Natural Gas from Azerbaijan : According to the minutes of the agreement signed on March 3 between Sufian Al-Allao, Syria’s Minister of Petroleum and Mineral Resources and Natiq Aliyev, Minister of Energy and Industry of Azerbaijan, Syria plans to purchase some 1-1.5 billion cubic meters of natural gas a year from Azerbaijan starting in the middle of 2011. If the deal goes ahead, it will involve the General Petroleum Corporation, which will buy the gas on behalf of Syria and the State Oil Company of Azerbaijan (SOCAR). Takeover bid by Indian Oil Companies : Gulfsands Petroleum, the UK based independent oil company whose main assets are located in northeast of Syria has confirmed that it has received takeover bid from two Indian bidders namely Oil India Ltd., and Indian Oil Corporation which has been rejected on the ground that the offer is wholly inadequate and materially undervalues the company. The value of the offer is estimated at GBP 400 million or USD 610 million. Tourism : As per the recent forecast report of the World Travel and Tourism Council (WTIC), Syria’s travel and tourism industry will contribute 5.2 percent of the country’s GDP in 2010. In ten years, the T&T economy is projected to generate SYP 565.8 billion in economic activity or 11.9 percent of the country’s GDP in 2020. Visit from India : A five member engineers delegation of MECON LIMITED visited Syria from 7 to 12 March, 2010 in connection with consultancy for technical, economic & environment studies for production of phosphate in Syria by GECOPHAM and for finalizing draft feasibility report on various points including assessment of reserves and its quality, General layout of the project, Township planning and workshop maintenance facilities among others. During their stay, the team visited Homs Headquarters, mines area, port area and had discussions at Homs and Damascus. ---------