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					                                               Appendixes


Appendix (A) The Studies Program ................................................................................ 29

Appendix (B) The Policies Program ................................................................................ 37

Appendix (C) The Institutions Program .......................................................................... 73

Appendix (D) The Technology and Innovation Program ................................................ 83

Appendix (E) The National Quality Program .................................................................. 87

Appendix (F) Technical Assistance- Private/public sector Programs ............................ 90

Appendix (G) More About the Establishment of IMCS .................................................. 99

Appendix (H) Funding and budget ................................................................................ 102

Appendix (I) Donor Programs- The EU ....................................................................... 104




                                                        28
    APPENDIX (A)

THE STUDIES PROGRAM




         29
Objective: Reveal product development potential                        Action No: Studies-1


 Action : Prepare a number of sub-sectoral studies

 Description / rationale
 The sub-sectoral studies are to include a clear analysis of global situation and a down to
 earth analysis of the local performance of the industry leading to recognition of its
 competitiveness drivers plus its real future potential. It is to lead to sub-sectoral/product
 development strategies. The latter would contribute to the development of the investment
 map by the new Syrian Investment Commission (SIC).




 Status:                                             Implementation Steps
 Textile study already on
                                 1. Prepare the terms of reference for study preparation
 schedule in current two
                                    taking into account all already available studies.
 year modernisation project
                                 2. Initiate the process with three sectors (textiles, food and
 with UNIDO.
                                    chemicals)- (immediate).
                                 3. Seek funding to cover for study expenses from a donor
                                    agency (immediate).
                                 4. Form a steering committee from relevant private and
                                    public producers to monitor all stages of the study for
 Responsibility:                    results to be practical.
 Consultants,                    5. Dissemination of the results of the studies to private and
 Chambers/ Private sector,          public sector (beyond its technical importance, the whole
 Donor agencies                     action represents part of the public relations campaign to
                                    support IMPS).
                                 6. Coordinate the studies program with technical component
                                    of IMPS/IMCS because the studies will be used to guide
                                    technical assistance to enterprises.
                                 7. Other studies to follow for all industrial sub-sectors
                                    including IT and traditional handicrafts.




                                               30
Objective: Promote industrial exports on solid and clear grounds Action No: studies-2


 Action : Prepare export promotion strategies for specific products

 Description / rationale
 Export promotion strategies guide Syrian industry on which specific products to focus on and
 to which market. A market strategy to approach each market is needed. This study follows
 from the sub-sectoral development plans in previous activity. It is a necessary step to translate
 the macro objectives of the 10th five year plan into specific implementable objectives.




 Status:                                              Implementation Steps
 A new activity.
                                  1. Prepare the terms of reference for study preparation.
                                  2. Initiate the process with three sectors (textiles, food and
                                  chemicals)- (short term- action has to follow studies).
                                  3. Seek funding to cover for study expenses from a donor
                                  agency (immediate).
                                  4. Form a steering committee from relevant private and
                                  public producers to monitor all stages of the study for results
                                  to be practical.
                                  5. Dissemination of the results of the studies to private and
 Responsibility:                  public sector (beyond its technical importance, the whole
                                  action represents part of the public relations campaign to
 Consultants,                     support IMPS).
 Chambers/ Private sector,        6. Plan on updating studies regularly to keep up with global
 Donors                           changes.
                                  7. Coordinate the studies program with technical component
                                  of IMPS/IMCS because the studies will be used to guide
                                  technical assistance to enterprises.




                                                31
Objective: Set the basis for the formation of efficient industrial        Action No: studies-3
          clusters

 Action : Mapping potential industrial clusters


 Description / rationale
 The experience of both developed and developing countries shows that clustering firms
 making similar products in the same location helps create the strong and effective links that
 sustain competitiveness and upgrading. Clustering by itself does not necessarily create strong
 local links, but it does facilitate interconnected and cumulative growth. Examples of
 successful clusters, include the computer cluster in Hsinchu, Taiwan Province of China, the
 textile cluster in Denizli, Turkey, the footwear cluster in the Sinos Valley of Brazil, and the
 surgical instrument cluster in Sialkot, Pakistan. In all these cases the driving force was the
 connection with the global economy. The objective of this action is to set the base for using
 the clustering tool to support the development of Syrian enterprises.



 Status:                                             Implementation Steps
 Some relevant efforts by
                                     1. Geographically map all industrial clusters in Syria
 UNDP project but activity
 is relatively new.                     (immediate).
                                     2. Use the results of sub-sectoral studies, export
 - SEBC 2005 study.
                                        strategies and the on-going efforts done by the “the
                                        competitiveness team” using Porter’s approach
                                        (UNDP project), to identify the clusters with potential
                                        for further development and future connections with
                                        the global economy (short term).
                                     3. Closely study the success story of the “Damietta
                                        cluster” in the case of Egypt to develop a model for
                                        Syria (short term).
 Responsibility:                     4. Use (1), (2) and (3) to guide technical assistance to
 Ministry of Industry,                  enterprises with cluster potential within IMCS.
 UNDP project




                                               32
Objective: Prioritize public sector changes                                Action No: studies-4


 Action : Prepare studies to guide specific changes in the public sector

 Description / rationale
 This action is of key importance because, while recognized by all as necessary, any actual
 change in the public sector manufacturing set-up will have to be preceded by an impact
 assessment on the government and the balance between public and private sector in
 manufacturing in Syria as a whole. Studies here are supposed to guide government towards
 the stepped changes in public sector. It is meant to seek maximization of its benefit to the
 economy as a whole and minimization of its potential negative impact on employment,
 government budget and the whole social market setting.




 Status:                                            Implementation Steps
 There is currently a law for
                                    1. Form a steering committee from the public sector,
 public sector reform but
                                       private sector, different government agencies’
 prioritizing actions has not
                                       representatives to guide this action (immediate).
 been initiated by
                                    2. Prepare the terms of reference (has to be approved by
 government yet.
                                       steering committee) –(immediate).
                                    3. Lobby to allocate government funding for this action-
                                       (immediate).
                                    4. Choose local and international consultants to cover
                                       the needs of the study
                                    5. The action is meant to guide all programs within the
 Responsibility:                       public sector department of IMCS (technical
                                       component).
 Ministry of Industry,
 Ministry of Economy and
 Trade,
 Chambers/ Private sector,
 Consultants




                                               33
Objective: Secure Specialized labor force for manufacturing                 Action No: studies-5


 Action : Undertake a skills survey of Syria’s main manufacturing industries and project
 needs as per vision of IMPS and recommendations of sub-sectoral studies

 Description / rationale
 Survey the managerial and production workers’ skills present in the industry (and the
 shortfalls) in the industry and project the annual needs for new managerial graduates and
 skilled operators until 2015 (the time limit for the vision of IMPS), in all business
 disciplines and production departments. This is to be done for three industries (textiles, food
 and chemicals) for starters. Action to be later repeated for other sectors.



 Status:                                              Implementation Steps
 Labor force observatory
                                      1. Survey skills levels in manufacturing industries
 project under EU is already
                                      individually on yearly basis to identify the skills that are
 in progress. It is currently
                                      present and those missing. and the gap that needs to be
 doing at least the initial
                                      filled. Survey to be done at the following levels:
 phase of this work has not
 been       initiated     by                Production operatives- skilled and semi-skilled.
 government yet.                            Supervisory level- technical skills, management,
                                               etc.
                                            Technical/ engineering staff- e.g. different phases
                                               of production process.
                                            Senior-middle management- e.g. marketing,
 Responsibility:                               finance, human resources.
 Ministry of Industry,                      merchandising, etc. specific for each sub-sector.
 Ministry for Social Affairs
 and Labor,                           2. Form a steering committee from public and private
 Central Bureau for                   sectors and relevant ministries to supervise all aspects of
 Statistics                           the needed survey.




                                                34
Objective: Secure Specialized labor force for manufacturing                 Action No: studies-6


 Action : Survey technical Higher Education Institutes

 Description / rationale
 Survey the existing technical Schools (by sub-sectors: textiles..), specialized higher
 education Institutes, Vocational Training Centres, to identify their numbers, student
 capacities and the courses they offer relative to the industry’s needs. Action is to start with
 textiles, food industries and chemicals as a first phase. Other sub-sectors are to follow.




 Status:                                              Implementation Steps
 Survey already completed
                                      1. Identify a source of funds for making the survey
 for textiles as part of
                                      (medium term).
 UNIDO Project.
                                       2. Survey to include:
                                            • Identification of all available technical schools,
                                               specialized higher education institutes and
                                               vocational training courses.
                                            • Profile all schools, institutes and centers in terms
                                               of their student capacities, numbers of graduating
                                               students & relations with industry.
 Responsibility:                            • Detailed assessment of the existing curricula.
                                      3. Compare gaps identified in skills survey (previous
 Ministry of Industry,                action) with the existing education system in terms of
 Ministry of Higher                   curricula and capacities.
 Education,                           4. On the basis of previous action and item (3) in this
 Ministry of Education,               action, prepare a plan to induce changes in curricula and
 Chambers/ Private Sector             capacities so as to properly secure qualified labor force
                                      for the fulfillment of IMPS vision (long term).




                                                35
Objective: Support all components and programs of IMPS/IMCS Action No: studies-7


Action : Prepare studies for all programs as needed

Description / rationale
Since practical studies of different kinds are always needed to guide policy changes and
technical activities, this action is meant to keep the studies program flexible to address the
needs of all components as they come up.




Status:                                            Implementation Steps
To be embedded in the
                                  To have a simple mechanism for coordination between
structure of IMCS.
                                  studies program and all other programs within IMCS to be
                                  able to meet all study needs by all programs in a timely
                                  way.




Responsibility:

Internal responsibility of
IMCS




                                             36
    APPENDIX (B)

THE POLICIES PROGRAM




         37
Objective: Finalize public sector reform law preparations and              Action No: Policies- 1
start implementation

 Action : Revise the current draft public sector reform law and set a deadline for its final
 issuance

 Description / rationale
 The pubic sector reform law has been subject to discussions and debates for a very long
 time without reaching any conclusions. The core of the problem lies in the insistence on
 accommodating conflicting objectives that are impossible to combine. On one hand, keep
 the present administrative set up with as little changes as possible and at the same time
 manage the enterprises on the basis of real economic criteria and with achievement of
 economic profits as a goal. The purpose of this action is to push for further revision of
 specific concepts in the current draft law that lie at the core of the problem and also to set a
 deadline for issuance of the law as delay is impeding the progress of all Syrian industry and
 would obstruct all attempts to implement IMPS.



 Status:                                               Implementation Steps

                                      Generally revise the law on the basis of the Egyptian
 There is an on-going
                                      experience with law 203 of public sector reform and the
 program for public sector
                                      introduction of holding companies. Despite some
 reform with no clear
                                      problems at the initial stages of implementation of the
 deadline.
                                      Egyptian law, there is a lot of learning by doing that
                                      would be useful for Syria, particularly in the separation of
                                      management from ownership which is badly needed in
                                      the case of Syria.

 Responsibility:

 Ministry of Industry,
 Ministry of Economy and
 Trade,
 State Planning
 Commission




                                                 38
Objective: Finalize public sector reform law preparations and           Action No: Policies- 1
start implementation

Action : Revise the current draft public sector reform and set a deadline for its final
issuance (continued)

                                      Implementation Steps
       1.   Assess the existing institutional and organizational environment within which the
            public sector operates. The aim is to revise the law within, rather than in isolation
            of, the institutional context.
       2.   Open the door for partnership with private sector in management of enterprises as
            previously attempted successfully in some individual cases and allow for full
            liquidation of assets where there is complete failure of performance.
       3.   Revise the current draft law so as to allow a flexible business like structure where
            accountability is clearly pronounced. For example, managers need to be working
            with contracts that are not automatically renewed but rather conditional upon
            performance measured by the achievements of the organization/enterprise. It
            follows that the managing directors of companies cannot be members in the board
            of directors to which they are accountable.
       4.   Restrict the relationship between public organizations and the ministry of finance
            to profit taxing only and leave financial decisions beyond that level to the
            organizations/ enterprises themselves.
       5.   Set a deadline for finalization of law and start of implementation.




                                               39
Objective: Finalize public sector reform law preparations and              Action No: Policies- 2
start implementation

 Action : Build on public sector priorities study to initiate a stepped approach for
 industrial public sector reform

 Description / rationale
 The public sector reform program is proceeding with law preparation but doesn’t seem to
 have any priorities set for technical implementation, which sectors need to experience changes
 first etc., which policies need to change beyond the public sector reform law. The purpose of
 this action is to build on the results of the study addressing the issue of priorities within the
 public sector in order to move the whole process towards implementation.




 Status:                                              Implementation Steps
 There is currently a law for
 public sector reform but
                                      1. Use the same steering committee in charge of the
 prioritizing actions has not
                                         study to continue its task and lobby for needed
 been initiated by
                                         policy changes and sources of funds.
 government yet.
                                      2. Incorporate additional changes in the whole public
                                         sector reform program as per the results of the
                                         study.

 Responsibility:
 Prime Minister and Cabinet
 Ministry of Industry,
 Ministry of Economy and
 Trade,
 Chambers/ Private sector




                                                40
Objective: Export promotion                                           Action No: Policies- 3


Action : Adopt specific trade policy changes of impact on exports

Description / rationale
Currently there are a number of specific policies that tend to discourage exporters. These
policies need to be altered if the ambitious objectives of the 10th five year plan are to be
implemented. There are also new suggestions applied in other countries that have high
potential benefit for Syria. The objective of this action is to explore those issues.




Status:                                             Implementation Steps

                                1. Cancel the decree whereby foreign currency revenues
Some items are already on
                                   from export transactions by the private sector are fully
government agenda but
                                   delivered to authorities (the act has been adopted in
implementation didn’t start
                                   Egypt and cancelled a year after because it was
yet.
                                   discouraging to exporters. It was also declared as
                                   illegal by court decision)- (immediate).
                                2. Cancel all customs on imports of all inputs that do not
                                   exist in Syria and yet are needed by manufacturers
                                   (such as the case of wool threads among others)-
Responsibility:                    (immediate).
                                3. Assess the present drawback system through a survey
Ministry of Industry,              and explore reasons why it is not properly activated and
Ministry of Finance                introduce necessary changes to activate it. (short term)
(customs),                      4. Study potential of introducing “transit trade” similar to
Ministry of Transportation,        Jordan and Lebanon (short term).
Ministry of Economy and         5. Study potential of introducing “shipping villages” along
Trade                              the case of Tunisia, a project that stands to be very
                                   beneficial for Syria as it facilitates and reduces costs of
                                   shipping for small producers/exporters (medium term).




                                              41
Objective: Export promotion                                        Action No: Policies- 4


Action : Improve market access

Description / rationale
This group of policy actions focuses on improving commercial representation in Syrian
embassies, activating trade agreements favoring Syria, providing incentives to Syrian
exporters and creating institution to promote exports and support exporters.




Status:                                         Implementation Steps

Each action to be presented
                                        1. Establish an export promotion commission
in details in following
                                        2. Strengthen the role of commercial
pages.
                                           representation.
                                        3. Activate the existing trade agreements and
                                           consider signing new bilateral agreements
                                           favoring Syria.

Responsibility:

Ministry of Economy and
Trade,
Ministry of Foreign
Affaires,
National Planning Institute




                                          42
Objective: Export promotion- Improve market access                       Action No: Policies- 4-A


Action : Establish an export promotion institution

Description / rationale
To create the Syrian institution for Export Promotion and Insurance (EPI Syria). It is to be an
umbrella institution to support and facilitate all individual efforts by Syrian exporters through
provision of information on opportunities/dangers as well as insurance of Syrian exporters
(different from insuring Syrian exports).




Status:                                              Implementation Steps

                                   1. Conduct a comparative study on similar institutions in
The concept of establishing
                                      other countries to build on other countries experience
an institution is on
                                      and avoid previous mistakes and also to be introduced
government agenda and
                                      to new concepts to supporting exports at the macro
scheduled for
                                      level -(immediate).
implementation in 2007.
                                   2. On the basis of the study decide upon the unique
                                      structure and mandate of EPI Syria (immediate).
                                   3. Take implementation steps to establish such an
Responsibility:                       institution ( get necessary legal authorizations, find
Ministry of Economy and               suitable location, equip the establishment, recruit
Trade,                                required expertise and personal….).
Ministry of industry,              4. Choose the board of directors of EPI Syrian from
SIC,                                  government members and private sector (immediate).
Chambers/ Private sector,          5. Seek the services of a specialized international agency
Donors                                to support the first year of activities of EPI
                                      (immediate/short term).
                                   6. Put the first plan of action for the export promotion
                                      institution on the basis of results of export strategies
                                      in studies program ( activities can be initiated on
                                      standard export promotion standards until results of
                                      studies are out)- (immediate/short term).




                                               43
Objective: Export promotion- Improve market access                 Action No: Policies- 4-B


Action : Strengthen the role of commercial representation

Description / rationale
Based on other countries experience a strong and wide network of commercial representation
in different countries is key to boosting Syrian exports. It helps improve timely access to
detailed information on different foreign markets and establish key long term relations in
different countries to the benefit of Syrian exporters and the Syrian economy.




Status:                                           Implementation Steps
Being discussed in
governmental circles.
                               1.  Assess the present status of commercial representation
                                  (qualifications of personnel. Countries where
                                  representation exists, location within the country,
                                  equipment, role played thus far.. )- (immediate).
                               2. Conduct a survey on a sample of exporters on the extent
Responsibility:                   of their benefit of the existing commercial representation
Ministry of Industry,             and what their expectations are, not to mention the
Ministry of Economy and           problems they face in different countries- (immediate).
Trade,                         3. Based on (1) and (2) and the outcome of product-export
Ministry of Foreign               strategies from the studies program within IMCS, revise,
Affaires,                         improve and upgrade commercial representation from all
Chambers/ Private sector          aspects as per the new needs.




                                            44
Objective: Export promotion- Improve market access                     Action No: Policies- 4-C


Action : Activate the existing trade agreements and sign new ones as needed

Description / rationale
Syria is already part of GAFTA, EU agreements and a number of bilateral agreements.
Agreements provide opportunities as well as put responsibilities on country. This action is
meant to initiate active assessment of opportunities and translate them into policy actions as
needed to maximize benefit to Syrian exports.




Status:                                             Implementation Steps

                                 1. Form a number of trade agreement committees and sub-
Being discussed in
                                    committees (by product group) with representation of
government circles.
                                    legal specialists, commercial representation, Ministry of
                                    Foreign Affaires and business associations particularly
                                    active exporter members- (immediate).
                                 2. The role of the committees is to analyze the trade
                                    agreements signed by Syria to discover potential
Responsibility:                     benefit/danger and needed policy changes to initiate
Ministry of Industry,               activation. The representation of business associations
Ministry of Economy and             through active exporters is key to the success of the
Trade,                              committees because they are the ones exposed to all the
Ministry of Foreign                 practical issues related to exports. At the present time
Affaires,                           the role of business association in relation to foreign
Chambers/ Private sector            trade is very limited.
                                 3. Address the practical issue of dumping and how to
                                    protect Syrian industry from unjustified competition
                                    (develop by laws of decree #42/2006).
                                 4. The role of the committees is also to consider on the
                                    basis of product-export strategies from studies program
                                    within IMCS the need for signing any new agreements.
                                 5. There might be a need for study tours or diplomatic
                                    tours to countries in question. Such activity is to be
                                    done in collaboration with commercial representation.




                                               45
Objective: Export promotion                                         Action No: Policies-5


Action : Provision of export incentives

Description / rationale
To industrialize for export is one of the slogans of the 10th five year plan. Its
implementation requires encouraging Syrian exporters to expand production facilities and
seek export markets in replacement of or in addition to local market. This requires the
provision of export incentives at least until take off of exports.




Status:                                           Implementation Steps
On government agenda.
                               1. Assess the present incentives received by exporters of
                                  industrial products (if any) tax rebate, tax reduction or
                                  any other kind of support (immediate).
                               2. The assessment is to be done jointly with private
                                  exporters.
Responsibility:                3. Revise incentives according to assessment and in light
                                  of other countries experience and WTO rules (while
Ministry of Industry,             export subsidy is illegal there are specific clauses that
Ministry of Economy and           give room for legal support to exporters such “as
Trade,                            actionable subsidy”).
Ministry of Finance,           4. Introduce new set or expand existing incentives in
Chambers/ Private sector          collaboration with private sector (for a temporary
                                  period and in return for export objectives by private
                                  sector (this comes in light of the 10th five year plan).




                                            46
Objective: Export promotion                                             Action No: Policies-6


Action : facilitate export financing

Description / rationale
Export financing is a key component of any program for export promotion. It is handled here
as an action separate from other financing policies because of its specialization and
importance.




Status:                                             Implementation Steps
                                   1. Conduct a feasibility study to assess different options
On government agenda for
                                   for improved financing of exports (immediate):
2007.
                                                Option (1): to establish an actual bank
                                                   for financing exports.
                                                Option (2): to negotiate conditions and
                                                   status of public banks to orient
Responsibility:                                    funds/allocate budget to export financing
                                   2. On basis of results of (1) start legal actions to
Ministry of Economy and            implement.
Trade,                             3. Facilitate procedures for transfer of money and all
Ministry of Finance,               processing of export financial transactions as per
Banking sector,                    international standards.
Chambers/ Private sector




                                             47
Objective: Investment Attraction                                       Action No: Policies-7


 Action : follow- up on the establishment of the Syrian Investment Commission (SIC)

 Description / rationale
 The important step of establishing (SIC) has been taken as per legislative decree # 9/2007.
 This action is meant to follow up on the law by introducing its by laws as well as consider
 revision of some articles based on other countries’ experience.




 Status:                                             Implementation Steps
 Investment is on
                                 1. (Immediate) Revise the structure of both the Supreme
 government priority
                                    Council of (SIC) ( article 2) and the membership of the
 agenda.
                                    Board (article 7) to include private sector
                                    representatives beyond the nominal representation of
                                    the chambers with focus on members from industry
 Responsibility:                    given its importance in the 10th five year plan. Also
 Ministry of Industry,              members from the banking sector needs to be
 SIC,                               considered.
 Ministry of Economy and         2. Revise the role of SIC board (article 8) as being both
 Trade,                             the developer and implementer of the plan.
 Ministry of Justice,            3. Introduce monitoring of implementation according to
 Chambers/ Private sector           specific performance indicators as being a key role of
 sector                             supreme council. Also link duration of appointment of
                                    all staff including board to achievement of objectives
                                 4. Further develop article (11) to provide a clear and
                                    transparent alternative (such as automatic approval) if
                                    the deadline of 15 day decision is not met.
                                 5. Seek the support of FIAS the World Bank institution
                                    specialized in investment in the creation of the one-
                                    stop-shop in article (10) of the law.
                                 6. For successful implementation and to benefit from
                                    other countries’ experiences also seek the support of the
                                    same institution FIAS in the development of the by-
                                    laws. This is to be done with the recommendation of
                                    the board as per article (14) but only after changing its
                                    membership to include private sector representatives.




                                               48
Objective: Investment Attraction                                      Action No: Policies-8


 Action : follow- up on investment legislative decree #8/2007

 Description / rationale
 The Syrian government has introduced legislative decree#8/2007 on investment guarantees
 and incentives and general provisions. This action is focusing on the follow up in the form
 of bylaws and needed revision of some articles to avoid problems already faced by other
 countries as well as address issues of significance to 10th five year plan and not addressed
 by law.



 Status:                                            Implementation Steps
 Investment is on
                                 1. Revision of some articles in decree # 8 to avoid pitfalls
 government priority
                                    already faced by other countries (immediate) :
 agenda.
                                  Decree #8 doesn’t include any regional dimension, i.e.
                                    special advantages for investment in regions with high
                                    unemployment rates or rich in natural resources. It
                                    needs to be added because it is receiving a lot of
 Responsibility:                    importance in the 10th five year plan.
                                  Investment guarantees against appropriation are vague
 Ministry of Industry,              and give room for exceptions (article 3).
 Syrian Investment                Investment incentives are vague and subject to
 Commission,                        subjective decisions (article 11),
 Ministry of Economy and          Industrial zones that are on the agenda of the
 Trade,                             government will require another phase of change in the
 Ministry of Justice,               law.
 Business association            2. Qualify decree #16 (whereby expansion of industrial
                                    investment is only allowed for complementary
                                    production or expansion of existing activity) to include
                                    different products within same line of activity
                                 3. Develop the bylaws of decree # 8 by SIC with
                                    participation of the private sector.
                                 4. Study potential of introducing other types of incentives
                                    beyond tax advantages (sample from other countries
                                    presented in next page) especially that current tax
                                    incentives apply equally to all enterprises (article 8)
                                    thus not allowing any favouring for investment in
                                    industry more than other sectors.




                                               49
              SYNOPSIS OF TYPES OF INVESTMENT
                        INCENTIVES




                                                             Customs
                                               Investment                                 Deduction
                Tax Holiday /   Reduced                      Duty / VAT       R&D
Country                                        Allowance /                                for Qualified
                Tax Exemption   Tax Rate                     Exemption        Allowance
                                               Tax Credit                                 Expenses
                                                             Reduction
Egypt                     *                                               *
Tunisia                   *                              *                *
Morocco                   *                *             *                *
China                     *                *             *                *           *
India                     *                *             *                            *              *
Malaysia                  *                *             *                            *              *
Philippines               *                              *                *           *              *
Singapore                 *                *             *                            *              *
Turkey                    *                              *                *
Brazil                    *                *             *                *                          *
Ecuador                   *                *             *                *                          *
Panama                    *                              *                *           *              *




                                                  50
Objective: Investment Attraction                                    Action No: Policies-9


 Action : Improve the business environment

 Description / rationale
 In addition to continuing on-going improvements in the investment climate (subset of
 business environment) introduce additional policy interventions to further improve the
 business environment within a clear time frame and in close collaboration with private
 investors so as to be effective and faster in implementation. Only a complete and
 comprehensive set of improvements in business environment have a real sensible impact.


 Status:                                           Implementation Steps
                               Form a committee from government and private sector to
 On-going
                               explore issues beyond direct investment concerns addressed
 Priority items on
                               by legislative decrees 8 & 9:
 government agenda.
                                 • Simplify any investment procedures outside scope of
                                   existing laws.
                                 • Increase the level of transparency and information
 Responsibility:                   dissemination and practical implementation of existing
                                   laws.
 Ministry of Industry, All       • Improve the procedures concerning commercial dispute
 relevant ministries,              settlement with present system
 Private sector                  • Lobby for quick establishment for specialized
 representatives                   commercial court (on government agenda sometime
                                   between 2008 and 2010).
                                 • Introduce an intellectual property rights law to attract
                                   foreign direct investment in different domains especially
                                   high technology industries (planned campaign by
                                   government for importance of property rights).
                                 • Initiate a new competition law (anti trust law)- (currently
                                   under study by government).
                                 • Encourage and simplify procedures necessary to
                                   transform individual and family companies to joint stock
                                   companies-(2million SP already allocated by government
                                   in 2007 to program to develop new forms of ownership).
                                 • Issue a new companies law to organize entry and exit of
                                   enterprises (currently under study by government)
                                 • Revise social insurance law and labor law to conform
                                   with present and future needs.
                                 • Simplify all the administrative procedures in all
                                   ministries.




                                             51
Objective: Investment Attraction                                         Action No: Policies-10


 Action : Initiate an investment promotion campaign focused on manufacturing

 Description / rationale
 A specialized investment campaign directed to the Syrian private sector as well as foreign
 investors. Such campaign will contribute to the realization of the objectives of the 10th five
 year plan in the area of investment. It will also attract FDI in high technology which Syria
 needs. The campaign is not to be a one time event but rather an on-going process with
 introduction of changes as needed.




 Status:                                              Implementation Steps
 Investment receiving
                                  1. Conduct a background study to understand in details the
 attention from government
                                     impediments to increasing investments in Syria by the
 but there is a need to
                                     private sector. It is to be based on an anonymous
 complete efforts as soon as
                                     questionnaire addressed to a large sample of private
 possible.
                                     producers (immediate).
                                  2. Seek the support of MEGA the World Bank institution
                                     specialized in investment promotion to initiate the
                                     campaign (China the biggest attracting country of
 Responsibility:                     investment in the world is using the services of MEGA
                                     to attract investment in its smaller cities).
 Ministry of Industry,            3. Base the campaign on the potential of Syrian industrial
 Ministry of Economy and             products (an investment map) as per the results of the
 Trade,                              sub-sectoral development studies under the studies
 SIC,                                program of ICMS.
 Chambers/Private sector          4. Collaborate with commercial representation to initiate
                                     the campaign
                                  5. Establish a mechanism whereby the campaign is an on-
                                     going dynamic process introducing regular changes to
                                     campaign as reflecting the stages of development of the
                                     Syrian industry.




                                                52
Objective: Improving tax and customs system                        Action No: Policies-11


Action : Simplification and improvement of customs procedures (continued)

Description / rationale
A series of specific steps to improve the Customs Clearance system in order to reduce the
clearance duration, facilitate the procedures, reduce the ambiguity of the system and
enhance personnel capabilities. It is a critical action to support export promotion and
investment attraction.




Status:                                           Implementation Steps
Significant reductions in
                               1. Study experience of other successful countries such as
customs rates already
                                  Tunisia (immediate).
adopted by government but
                               2. Provide specialized training to customs personal
improvements in customs
procedures have not been          (immediate).
                               3. Increase personnel and revise the salaries and incentive
initiated.
                                  system to eliminate corruption (short term from 3 on).
                               4. Computerize all possible operations of the customs.
                               5. Revise the working Hours (introduces the shifts system to
Responsibility:                   make custom services available 24 hours, 7 days a week)
                               6. Create electronic linkages between ports and customs
Ministry of Industry,             branches.
Ministry of Finance,           7. Create a coordination mechanism between the customs
(Customs Authority)               and all related agencies.
                               8. Create a system of clearance during dispute, or put a time
                                  limit for dispute resolution.
                               9. Create a feedback mechanism.




                                            53
Objective: Improving tax and customs system                            Action No: Policies-11


Action : Simplification and improvement of customs procedures


                                       Implementation Steps

       1. Revise all laws, regulation and methods of evaluation related to customs.
       2. Use the inspection by sample method instead of the inspecting the whole cargo.
       3. Revise the customs structure (e.g.: reduce the no of tariff lines, make customs rate
          proportional to the degree of manufacturing).
       4. Simplify the export/ import procedures and make them more clear and precise and
          not subject to interpretation. Also make them available to public through a plan
          for awareness and dissemination.
       5. Revise violation penalties and its enforcement methods.
       6. Involve private sector in specialized committees dealing with problem solving.
       7. Assess temporary admission system and introduce improvements.




                                             54
Objective: Improving tax and customs system                           Action No: Policies-12


Action : follow-up on government on-going efforts in improving tax system

Description / rationale
Thanks to the Syrian government initiative the tax system has already been subject to
significant improvements in the last couple of years such as reduction of taxes on imports of
primary products from 50% on average to 1% as well as cancellation of taxes on machines
and equipment. There is still however a need to assess the implementation of the new
system as well consult with private sector on the need for further changes to the benefit of
industry.




Status:                                             Implementation Steps

                                      1. conduct a survey on a representative sample from
Action would be
                                         the private sector to:
continuation of on-going
efforts by government.                 Assess the impact of tax changes on industrial
                                         investment and industrial exports.
                                       Assess the efficiency of the institution in charge of
                                         tax collection (some improvement in institution is
Responsibility:                          already implemented by government but
                                         implementation remains to be tested).
Ministry of industry,                  Seek new suggestions on further improving the
Ministry of Finance,                     system.
(Customs Authority)                   2. On the basis of survey results form a committee
                                         from the relevant authorities in the government and
                                         membership of private sector to study the cost and
                                         benefit of new suggestions from the government
                                         point of view relative to impact on industry.




                                              55
Objective: Expanding industrial zones and improving operations          Action No: Policies-13
of existing ones

 Action :

 Description / rationale
 A number of industrial agglomerations/zones exist but are not legally accepted by the
 government and thus treated as informal and operate with temporary rather than permanent
 working permits and no with decent industrial infrastructure. In Damascus alone 6 of these
 conglomerates represent no less than 50% of Syrian private manufacturing capacity in the
 city. Some of the conglomerates have high potential for cluster creation because they are
 already concentrations by products (for example textiles, chemicals etc.). The informal status
 is currently causing a lot of problems. The issue is receiving attention by government through
 forming a committee that studied the issue and made recommendations for solutions, but there
 is an urgent need to follow up on recommendations of committee as well as solve problem
 from its roots because of the negative impact of continuing the status quo on attracting
 investment to manufacturing.



 Status:                                            Implementation Steps
 On-going by Ministry of
                                 1. Negotiate with private investors in these zones financial
 Industry.
                                    arrangements whereby needed infrastructure is jointly
                                    financed to ensure safety engineering measures and easy
                                    transportation (such as establishment of waste treatment
 Responsibility:                    units, roads, technological facilities and ambulance
 Prime Minister,                    equipment) .(immediate).
 Ministry of Industry,           2. Discuss with existing enterprises individually or in small
 Ministry of Local Affaires,        groups permanent status of activities depending on a
 Chambers/ Private sector           number of criteria such as (quality of product, level of
                                    exports, size of production, level of technology, level of
                                    employment,         environmental         protection...etc)
                                    (immediate).
                                 3. Set a long term plan to dismantle informal zones that
                                    aren’t economically viable or technically adequate. This
                                    is to be done on the basis of a technical engineering
                                    assessment of each agglomeration separately..(short term)
                                 4. For a permanent solution of problem, the establishment of
                                    new industrial zones needs to be taken out of ministry of
                                    local Affaires to the umbrella of ministry of industry
                                    (immediate).




                                               56
Objective: Expanding industrial zones and improving operations Action No: Policies-14
of existing ones

 Action : Assessment of existing industrial cities (Adra, Hissya and sheikh naggar)

 Description / rationale
 The action is meant to assess the experience thus far with existing official industrial zones
 to improve performance and set proper rules for the establishment of the 8 new industrial
 cities as per the 10th five year plan.




 Status:                                             Implementation Steps
 On-going by Ministry of
                                 1. Form a committee from relevant ministries and private
 Industry.
                                    investors and a specialized technical team of engineers
                                    to assess the present status of industrial cities from the
                                    following aspects (immediate):
                                  Infrastructure facilities (roads, ambulance, supply of
                                    water and power and industrial sewage).
 Responsibility:                  The administration authority in charge of the industrial
                                    city.
 Prime Minister,                  Incentives to enterprises to operate in industrial cities
 Ministry of Industry,            Procedural issues and daily interaction with relevant
 Ministry of Local Affaires,        ministries.
 Private sector
                                 2. On basis of assessment make policy recommendations
                                    to improve performance and avoid pitfalls in new cities
                                    (short term).
                                 3. Follow-up on establishment of new 8 zones.




                                               57
Objective: Secure Specialized labor force for manufacturing          Action No: Policies-15


 Action : Facilitate access to expatriate management

 Description / rationale
 Government to facilitate local companies recruitment of expatriate middle & top management
 [Asian/ European for top management and Asian for middle management]; Also Asian for
 production workers. The objective is to provide Syrian manufacturers with foreign skills not
 found in Syria and up-grade Syrian work force through providing practical examples of
 international standards for doing things. Expatriates employment is to be on temporary basis
 only.




 Status:                                           Implementation Steps
 New project.
                                1. Identify    specialized     international   head-hunters
                                   (immediate).
                                2. Project the Syrian industry’s requirements of
                                   expatriates in the three sub-sectors of focus (as a first
 Responsibility:                   stage) (textiles, food and chemicals) head-hunters,
                                   based on the results of the skills needs survey and the
 Ministry of Industry,
                                   sub-sectoral studies in studies program. (short term)
 Ministry of Social Affairs
                                3. Organize a workshop for companies to further specify
 & Labor,
                                   their management or technical needs and to profile their
 Chambers/ Private sector
                                   requirements. Needs are clearly only for skills not
                                   adequately provided by Syrian workers.
                                4. Present projections to the Ministry of Social Affairs and
                                   Labour and agree on ease of regulations governing
                                   foreign employment.




                                              58
Objective: Secure Specialized labor force for manufacturing              Action No: Policies-16


 Action : Prepare an Incentive Package for investments in technical education by sub-
 sector

 Description / rationale
 The action will require lobbying with government departments and donor agencies. The
 objective is to attract investments in sub-sectoral technical education where weaknesses are
 clearly identified as seen in surveys (studies program) and to minimize the costs for
 universities/ technological institutes, to ensure accessibility by Syrian students. Action is to
 build on existing infrastructure of intermediate technical institutes.




 Status:                                              Implementation Steps
                                      1. This action is to build on results of surveys in
 On government agenda.                   studies program (medium term).
 Big improvements in                  2. Prepare a list of the possible incentives for private
 textile schools have already            colleges, universities and institutes for sub-sectoral
 taken place (government                 technical education such as: empty public sector
 efforts & donor programs).              facilities; offer already equipped facilities with
                                         nominal fees against the commitment of private
                                         investors to up-grade facilities to international
                                         standards.
 Responsibility:                      3. Ensure that incentives will be for specific
                                         geographic locations to ensure proximity to labor
 Ministry of Industry,
                                         markets.
 Ministry of Local Affaires,
 Ministry of Education,
 Ministry of Higher
 Education,
 Chambers/ Private Sector




                                                 59
Objective: Facilitate financing of industrial projects               Action No: Policies-17


 Action : Diversify and expand financial tools

 Description / rationale
 Diversification of financial tools accommodates the needs of different enterprises thus
 encouraging more investment by Syrians. The Syrian government has already initiated a
 number of steps and has on its agenda more. This action is meant to follow up on the items
 still on agenda to assure quick implementation. Financial leasing in specific needs to
 receive more priority because it is the most compatible with the present needs of small
 sized enterprises which represent the vast majority of Syrian enterprises.




 Status:                                            Implementation Steps
 Most steps are already
 implemented by                   1. Allow private banks to operate in Syria (already
 government and the rest is          adopted by government).
 on top priority on               2. Reopen the stock market (scheduled for the end of
 government agenda.                  this year).
                                  3. Negotiate with banks -with private sector
                                     representation- the introduction of financial leasing-
 Responsibility:                     (on government agenda in 2007/2008).
                                  4. Initiate a program to develop and upgrade Syrian
                                     public banks to have the flexibility and functions
 Ministry of Industry,
                                     compatible with present needs and encourage to
 Ministry of Finance,
                                     diversify their tools (to be implemented in 2007).
 Central Bank, EU, JICA,
 UNIDO and UNDP,
 Chambers/ Private sector




                                              60
Objective: Facilitate financing of industrial projects                  Action No: Policies-18


 Action : Introduce specialized funds to finance programs in technical assistance
 department within IMCS

 Description / rationale
 This action is meant to develop the tools for financing the needs of the technical assistance
 program to enterprises by creating specialized funds that are meant to reward serious
 enterprises that excel in certain domains beyond the standard services received through the
 programs of the technical assistance. It is also meant to encourage other enterprises to
 follow suit. While the actual delivery of the support is done through the technical
 component of IMPC, the creation of the fund and the setting of its rules of operation
 (revolving or not for instance) falls on the policies component.


 Status:                                             Implementation Steps
 There is already a fund         1. Allocate the industrial development fund (already on
 allocation for industrial          government agenda) to the financing of the technical
 development on                     component of IMCS (immediate).
 government agenda.              2. Seek a funding source for the creation of a pilot
                                    research and development “(R&D) fund” to support the
                                    R&D needs of enterprises (immediate).
                                 3. Seek a funding source for a pilot “equipment fund” for
 Responsibility:                    financing equipment purchase in certain very specific
                                    cases and set the rules of operation (immediate).
                                 4. Seek a funding source for a pilot “innovation fund” to
 Ministry of Industry,
                                    encourage enterprises to introduce new innovative
 Ministry of Finance,
                                    products and set the rules for operation of the fund
 Banking Sector,
                                    (short term).
 Chambers/ Private Sector,
                                 5. Seek a funding source for an “export fund” that finance
 R&D institutions
                                    certain aspects of company export expenses (market
                                    entry expenses for instance) for the case of enterprises
                                    that excel in export performance and other indicators
                                    (immediate).
                                 6. Draw lessons from the experiences of Jordan and
                                    Tunisia on operation and variety of funds.




                                               61
Objective: Facilitate financing of industrial projects                    Action No: Policies-19


 Action : Create linkages between IMUPS and private banks

 Description / rationale
 This action is meant to create linkages between the Syrian industrial community and private
 banks so as to achieve two goals: 1) support the request of enterprises for funds to finance
 projects; and 2) at the same time encourage banks to be more involved in financing
 manufacturing projects by reducing their risk exposure through providing information on
 the validity of the project. This action is also to be implemented in close collaboration with
 technical assistance program.




 Status:                                              Implementation Steps
 A new activity
                                       To start the preparatory work for negotiating deals
                                      with prominent private banks whereby protocols of
                                      collaboration with IMPS/IMCS are signed to achieve
 Responsibility:                      the following advantages for enterprises (immediate):
                                      Feasibility studies for projects assessed by IMCS as
 Ministry of Industry,                conforming with the potential development of the sub-
 Ministry of Finance,                 sector concerned (outcome of sub-sectoral development
 Central Bank,                        studies and product export strategies) receive longer
 Private Banks,                       term financing than normally allowed by banks or fall
 Chambers/ Private Sector             into a (less risky category of projects) thus subject to
                                      lower interest rates.
                                      Banks to give priority treatment in considering
                                      financing for enterprises whose project document files
                                      have been filled with IMCS help (to be implemented
                                      with technical program). It is a considerable reduction
                                      of transaction costs for both the enterprise and the bank.
                                     The Egyptian experience with these protocol can be
                                      used a s reference.




                                                62
Objective: Facilitate transportation and trade                        Action No: Policies-20


 Action : Adopt policies that facilitate transportation and trade in support of industry

 Description / rationale
 All types of transportation suffer from low efficiency, and inadequate services.
 Transportation is considered to be a bottle neck on the movement of goods across Syria, and
 from Syria to the outside world. This action is meant to induce the necessary policy
 changes that allows the implementation of physical and procedural changes in the
 infrastructure in a quick and efficient way thus transforming transportation from being an
 obstruction to trade to being an enhancer of trade.




 Status:                                             Implementation Steps
 On government agenda.           1.   Policies concerning land transportation.
                                 2.   Policies concerning maritime transportation.
                                 3.   Policies concerning air transportation.
                                 4.   Coordination between all means of transportation.
 Responsibility:

 Ministry of Industry,
 Ministry of Transportation,
 Chambers/ Private sector




                                               63
Objective: Facilitate transportation & trade- Land transportation Action No: Policies-20-A


 Action : Adopt policies that facilitate trade and transportation in support of industry

 Description / rationale
 Land transportation is a key means of transportation of Syrian goods. It suffers from a
 number of weaknesses related to quality, quantity and costs. Syria has joined neighborhood
 transportation agreements such as TIR and ATA but hasn’t been able to properly benefit
 from them. This action is meant to focus on needed policy changes and necessary
 background studies to change this situation.



 Status:                                           Implementation Steps
 On government agenda.
                                  1. Explore the status of “office of product
                                     transportation” and the impediments it creates for
 Responsibility:                     land transportation (immediate).
                                  2. Assess the technical status of existing land transport
                                     companies (trucks technical specifications, quality of
 Ministry of Industry,
                                     drivers, safety elements..) and suggest policies that
 Ministry of Transportation,
                                     assures compliance with high efficiency international
 Chambers/ Private sector
                                     standards (immediate).
                                  3. Assess the need for new qualified land transportation
                                     companies and revise relevant governmental policies
                                     to identify and change policies that discourage the
                                     expansion in land transportation (if any) (short term).
                                  4. Explore how to take advantage of the different
                                     transportation agreements signed by Syria TIR, ATA.
                                     Start by taking action of quick dissemination of
                                     information on agreements to all relevant parties
                                     (immediate).
                                  5. Explore the problems pertaining to train
                                     transportation and ways of encouraging and
                                     improving it (short term).
                                  6. Follow up on the implementation of governmental
                                     plans for improvement of land transportation
                                     infrastructure of relevance to manufacturing and trade
                                     (roads, bridges etc.).




                                              64
Objective: Facilitate transportation & trade- maritime                Action No: Policies-20-B
transportation

 Action : Adopt policies that facilitate trade and transportation in support of industry
 (continued on next page)

 Description / rationale
 Maritime transportation is the main low cost means of transportation between countries.
 Successful exporting countries have significantly improved all aspects of maritime
 transportation thus increasing efficiency and reducing cost. Syria needs to do the same. This
 action is meant to push forward all changes at the policy level as well as do all preparatory
 work to support implementation of physical improvements in ports.



 Status:                                            Implementation Steps
 On government agenda.            1. Do preparatory work and necessary lobbying for
                                     establishment of direct navigation lines with all the
                                     Arab countries and African countries of interest to
                                     Syria (immediate).
 Responsibility:
                                  2. Form a committee with private sector to simplify
                                     governmental procedures in ports and benefit from
 Ministry of Industry,
                                     other countries experience to modernize ports (taking
 Ministry of Transportation,
                                     into account the need for quick clearance of highly
 Ministry of Health,
                                     perishable goods) (immediate).
 Ministry of Agriculture,
 Chambers/ Private Sector
                                  3. Explore ways of decreasing timing of loading and
                                     down loading of shipments and link administrative
                                     and health procedures with high/medium and low risk
                                     products (immediate).




                                              65
Objective: Improving tax and customs system                            Action No: Policies-20-B


Action : Simplification and improvement of customs procedures


                                    Implementation Steps


       4. Assess the current role of public companies operating in all areas related to
          maritime transportation (immediate).

       5. Based on (7) suggest improvements to in these public companies (immediate).

       6.    Take policy actions to allow private sector operation in all port services
            (immediate).

       7.    Assess the need for extra storage areas in ports and initiate actions accordingly
            (medium term).

       8.    Explore potential for having labs established in ports for quick clearance
            (medium term).




                                               66
Objective: Facilitate transportation & trade- air transportation             Action No: Policies-
                                                                                            20-C

 Action : Adopt policies that facilitate trade and transportation in support of industry

 Description / rationale
 Air transportation is used mostly for shipping highly perishable exportable goods (such as
 food products). It therefore needs to be equipped with cooling facilities and be associated
 with quick clearance procedures to be of benefit to exporters. Syria is far behind in this
 facility. It is a serious impediment to exportation particularly in the case of food products
 which lie at the heart of Syria’s present and future comparative and competitive advantage.
 The purpose of this action is to enhance air transportation to support the export potential of
 Syria



 Status:                                               Implementation Steps
 On government agenda.
                                    1. Simplify the procedures for exportation through air
                                       (short term).

 Responsibility:                    2. Assess the existing “shipping village” from all aspects
                                       (size, staff, cooling facilities, storage areas..) and put
 Ministry of Industry,
                                       a plan for complete upgrading (immediate).
 Ministry of Transportation,
 Ministry of Health,
                                    3. Study the pros and cons of allowing other airlines
 Ministry of Agriculture,
                                       beyond Syrian airlines to take charge of transportation
 Chambers/ Private Sector
                                       of Syrian goods (immediate).

                                    4.    Study and lobby with authorities the purchase of
                                         equipped aircrafts specialized for air transportation of
                                         perishable goods (medium term).




                                                 67
Objective: Facilitate transportation & trade- Coordination            Action No: Policies-21


 Action : Achieve complimentarity between different means of transportation

 Description / rationale
 There are governmental plans to upgrade all means of transportation but these do not
 necessarily address the specific needs of manufacturing and trade. There is a need to
 follow-up on these efforts in order to represent the interests of manufacturing and speed up
 implementation. There is also a need to achieve relative complimentarity between different
 means of transportation capacities and the actual needs of manufacturing and also achieve
 coordination between authorities in change of different means of transportation and customs
 authorities.



 Status:                                            Implementation Steps
 On government agenda.           1. Form a steering committee from a diversified group of
                                    representatives from public and private sectors
                                    (manufacturers, traders etc.) to:
                                   • Follow-up on the progress of government plans to
 Responsibility:                      upgrade means of transportation (immediate).
                                   • Encourage partnership between public and private
 Ministry of Industry,
                                      sector in implementation of different projects related
 Ministry of Finance,
                                      to all transportation infrastructures through BOT and
 Ministry of Transportation,
                                      BOOT systems (immediate).
 Chambers/ Private Sector
                                 2. Guide government efforts to achieve complementarity
                                    between capacities of all means of transportation and
                                    the actual needs of manufacturing and follow-up on the
                                    implementation of policies suggested in IMPS.
                                 3. Lobby for efficient coordination between authorities in
                                    charge of different means of transportation and customs
                                    authorities.




                                               68
Objective: Environmental Protection                                  Action No: Policies-22


Action : Measure the environmental impact of Syrian manufacturing

Description / rationale
The environmental dimension is not only important for the welfare of Syrians and Syria’s
sustainable long term development but it also lies at the core of trade agreements and
import restrictions imposed by developed countries. Protecting the environment and
environmental compliance can thus also be perceived as an export promoter in itself.




Status:                                           Implementation Steps
Environment is on                1. Conduct a specialized study for measuring pollution
government agenda.                  caused by manufacturing in Syrian industry in both
                                    the public and private sectors and assess its health
                                    impact (already on government agenda for 2007).
Responsibility:                  2. Based on results of study identify the products and
                                    types of industries behind the heavy pollution
                                 3. Explore means of treating pollutant impact of existing
Ministry of Industry,
                                    enterprises.
Ministry of Local Affaires
                                 4. Translate the results into decrees and specific
(environmental division),
                                    recommendations that guide new investments
UNIDO and UNDP
                                    accepted by SIC and export strategies.
                                 5. Add an environmental compliance study as a key
                                    component of any application for a new investment.




                                            69
Objective: Environmental Protection                                    Action No: Policies-23


Action : Introduction of cleaner production into Syrian industry through UNIDO
Program of NCPC

Description / rationale
This action is meant to open doors for Syrian industry to benefit from opportunities offered
by donor programs that provide and facilitate access to cleaner production technology to
enterprises.




Status:                                            Implementation Steps
There are on-going actions
by UNIDO and UNDP.                1. Explore potential collaboration with UNIDO on the
                                     issue of cleaner production technology. UNIDO has
                                     supported the establishment of Centers in 30 countries
                                     (labelled (National Cleaner Production Centers–
Responsibility:                      NCPC) ) that support the shift of enterprises towards
                                     cleaner production (short term).
                                  2. The environmental problems addressed by the centers
Ministry of Industry,
                                     would be (decreasing negative impacts of air
Ministry of Local Affaires
                                     emissions, incomplete burning fuel and bad odors,
(environmental division),
                                     reduction of waste, noise, and fume emissions,
UNIDO and UNDP
                                     chemicals Management and industrial waste
                                     management).
                                  3. The Centers also explain to enterprises the advantages
                                     of investing in cleaner production technology and the
                                     reduction in costs of production associated with it.
                                  4. In several countries the centers’ activities are
                                     associated with other incentives provided by
                                     government to support cleaner production by
                                     enterprises.




                                              70
Objective: Environmental Protection                                Action No: Policies-24


Action : Benefit from opportunities for cleaner production and cleaner environment
provided by KOYOTO Protocol

Description / rationale
The KOYOTO Protocol provides developing countries with excellent opportunities to reduce
environmental damage of manufacturing at no cost. This action is meant to guide Syria to
benefit from this opportunity as many LDCs already did.




Status:                                          Implementation Steps
New activity.                 1. Start initial collection of information on insitutions
                                 involved and conditions of joining the Clean
                                 Development Mechanism (CDM) which is a
                                 mechanisms designed to help industrialized countries in
Responsibility:                  Koyoto protocol to meet their emission targets (through
                                 implementing a project that reduces greenhouse gas
Ministry of Industry,
                                 emissions, removes the gases by carbon sequestration
Ministry of Local Affaires
                                 or sinks in the territory of a developing country, where
(environmental division),
                                 the cost is lower. The resulting certified emission
International
                                 reductions (CERs) can then be used by the
Environmental agencies
                                 industrialized country to help meet its emission
                                 reduction target. This is done to the benefit of
                                 developing country enterprises at no cost at all) (short
                                 term).
                              2. Explore the benefits of Syria joining the program and
                                 any disadvantages if any.
                              3. Explore the legal actions needed to maximize the
                                 benefit and identify the counterpart local institution to
                                 deal with the European side.




                                           71
Objective: Environmental Protection                                   Action No: Policies-25


Action : Revise industrial policies from environment perspective and assess possible
conflicts with environmental policies

Description / rationale
This action is meant to incorporate thee environmental dimension in industrial policies as well
as formally link clean environment to new investments as suggested in implementation steps.




Status:                                             Implementation Steps
New activity.                     1. Translate the results of previous activity
                                     (measurement of environmental impact of Syrian
                                     manufacturing) into specific recommendations that
                                     guide new investments accepted by SIC (immediate).
Responsibility:                   2. Also guide newly developed export strategies to
                                     compliance      with     environmental     measures
Ministry of Industry,
                                     (collaboration between: studies program, technology
SIC,
                                     and quality program and technical assistance
Ministry of Local Affaires
                                     programs within IMCS).
(environmental division
                                  3. Add an environmental compliance study as a key
                                     component of any application for a new investment
                                  4. Update environmental policies and explore conflicts
                                     with existing and newly developed industrial policies
                                     (short term).




                                              72
      APPENDIX (C)

THE INSTITUTIONS PROGRAM




           73
Objective: Finalize the restructuring of Ministry of Industry          Action No: Institutions-1


 Action : Follow-up on the restructuring of the Ministry of Industry

 Description / rationale
 The Government has already initiated a very comprehensive program for restructuring the
 ministry of industry involving the joint efforts of all administrative divisions within the
 ministry. This action is meant to enhance implementation and complete whatever is needed
 in blue prints or funding to initiate implementation as soon as possible.



 Status:                                            Implementation Steps
 In final stages of
 preparation. A budget of 15     1. Review the progress of the restructuring project on the
 million SYP has been               following four main fronts of: the new role of the
 allocated to                       ministry, capacity building, supply of necessary
 implementation of project.         equipment and tools; and arrangement for needed
                                    specialized training of employees (immediate and high
                                    priority).
 Responsibility:                 2. Assess the possibility of having the new ministry as
                                    ministry of trade and industry for a more efficient role
 Prime Minister and
                                    (based on experience of other countries) (immediate
 Cabinet,
                                    and high priority).
 Ministry of industry,
                                 3. Have representatives from the private sector assess the
 Chambers/ private sector
                                    new suggested structure of the ministry to have the
 Donors
                                    ministry play its role in the most efficient way possible
                                 4. Specify a deadline for completion of all logistics related
                                    to the restructuring process (immediate and high
                                    priority).
                                 5. Lobby for increased funding from donor agencies to
                                    support implementation.




                                              74
Objective: Create a mechanism for efficient coordination                   Action No: Institutions-2
between all ministries of relevance to manufacturing

 Action : Establish the Syrian Industrial Development Council (SIDC)

 Description / rationale
 The responsibility of industry is spread over a number of ministries which impedes the
 smooth handling of issues even daily routine stuff. While the most serious negative impacts
 fall on the private sector, the public sector is also affected. The private sector loses its trust
 in the system as a result of the conflicts between institutions/ministries. This action is meant
 to establish a permanent mechanism whereby coordination between ministries is granted,
 the legitimate interests of manufacturers are respected, and more adequate support and
 service to industry are provided. Given that the establishment of SIDC will facilitate the
 implementation of all aspects of IMPS, it needs to take very high priority.


 Status:                                                Implementation Steps
 Action was previously
 initiated by the Ministry of        1. Form a steering committee with the representation of
 Industry on the basis of the           the private sector to adopt the project (immediate and
 Malaysian experience.                  very high priority).
                                     2. Assess the current conflicts and overlaps between
                                        ministries of relevance to industry
 Responsibility:                     3. Revive the SIDC project and update it on the basis of
                                        (2).
 Prime Minister and
                                     4. Initiate the necessary steps of implementation.
 Cabinet,
                                        (Immediate and very high priority).
 Ministry of Industry,
                                     5. Lobby for funds to support implementation of project.
 Donors




                                                  75
Objective: Coordinate between institutions providing support for Action No: Institutions-3
SMEs

 Action : Division of roles between different institutions affiliated with financial and non-
 financial support of SMEs

 Description / rationale
 Along with IMCS (main implementation arm of IMPS), there are other existing institutions
 that are also responsible for providing financial and non-financial facilities for enterprises.
 Overlap of roles between these institutions can impede the implementation of IMPS through
 impeding the operations of IMCS leading to limited benefit to the real beneficiary, the
 industrial enterprises. There is also a need to separate start-ups from already operating
 institutions because their needs at both the financial and non-financial levels are different.




 Status:                                              Implementation Steps
 Interest in SMEs by              1. Study the pros and cons of the following proposed
 government and donors but           division of roles between IMCS, the Public Authority
 overlap in roles hasn’t been        for Employment and Development of SMES-
 addressed yet.                      legislative decree # 39/2006; and the SEBC in the
                                     following way (immediate and high priority):
                                   To restrict the role of the Public Authority for
 Responsibility:                     Employment and Development of SMEs to the
                                     provision of financial and non financial support to start-
 Ministry of Industry,
                                     ups of all sizes and operating micro industrial
 Ministry of Economy and
                                     enterprises (less than five employees).
 Trade,
 Planning Authority,               To restrict the role of SEBC to financial and non-
 Ministry of Social Affairs          financial and non-financial support to all sized non-
 and Labor                           industrial enterprises.
                                   To focus IMCS activities on all already operating
                                     industrial enterprises of more than five employees.
                                  2. Initiate all needed amendments (legal and otherwise) to
                                     institutions as per the proposed division (immediate).




                                                76
Objective: Support private business organizations                      Action No: Institutions-4


 Action : Enhance the abilities of existing business associations and support the creation
 of new ones

 Description / rationale
 Private business associations (including chambers and consultation associations) have the
 advantage of being (in general) trusted by private sector producers. Consequently, they have a
 big responsibility in encouraging private enterprises to joint IMPS. In specific they need to
 convince private enterprises to accept IMCS conditions to receive service and contribute in
 cost. This role, however, cannot be played unless the business associations themselves are
 institutionally capable to play that important role. The objective of this action is thus to
 enhance the abilities of business associations.



 Status:                                             Implementation Steps
 Currently on agenda of
 chambers but needs funds            1. Assess the needs of existing industrial Chambers
 to be implemented.                     and other associations for equipment, training of
                                        employees and funds for different activities
                                        (immediate).
 Responsibility:                     2. Allocate governmental funds to support business
                                        associations in a pattern proportional to their current
                                        activities and success in supporting members.
 Ministry of Industry,
                                     3. Suggest specific training programs as needed to be
 Ministry of Social Affairs,
                                        implemented by technical component of IMPS.
 Chambers,
                                     4. Give room for joint funding of training programs on
 Relevant Associations
                                        a case by case basis depending on condition of
                                        association.
                                     5. Proceed with last stages for preparation of industrial
                                        sub-sectoral associations (on-going on government
                                        progress agenda- scheduled for initiation in 2007)-
                                        (immediate).




                                               77
Objective: Encourage private sector involvement in new              Action No: Institutions-5
supportive activities

 Action : Encourage the creation of specialized trading companies

 Description / rationale
 Trading companies have proven to play a very significant role in promoting exports
 especially in the case of small enterprises such as in the Syrian case. Trading companies
 compensate the limited ability of small enterprises to collect information about a new
 market, search for a buyer, send samples, understand technical specifications etc. The
 purpose of this action is to encourage the creation of such companies.




 Status:                                           Implementation Steps
 New activity.
                                     1. Adopt a model for trading/export companies on the
                                        basis of other countries successful experiences
                                        (China and/or any European country as role
 Responsibility:                        models)- (short term).
                                     2. Promote the concept within the business community
 Ministry of Industry,
                                        in Syria to encourage investments in this new
 Ministry of Economy and
                                        activity (short term).
 Trade,
                                     3. Do the necessary preparatory work to facilitate the
 Chambers / Private sector
                                        establishment of such companies (legal, logistics,
                                        lobbying in government circles etc.) (short term).




                                             78
Objective: Encourage private sector involvement in new                   Action No: Institutions-6
supporting activities

 Action : Encourage the creation of companies specialized in supporting Syrian
 enterprise involvement in international fairs

 Description / rationale
 With increased competition between exporters all over the world, attendance of international
 fairs is no longer restricted to the simple concept of having a certain space reserved on fair
 grounds. For attendance of fairs to be effective (i.e. leading to an actual increase in exports of
 Syrian manufactured goods) it needs to be preceded by a lot of promotion, catalogue
 preparation and lots of professional expertise. One or more companies (along the lines of
 Expo-link in Egypt) are needed for the case of Syria.




 Status:                                               Implementation Steps
 New activity.                      1. Closely study the case of Expo-link in Egypt to
                                       establish a model suitable for the case of Syria (short
                                       term).
                                    2. Do the necessary preparatory work to facilitate the
                                       establishment of such companies (legal, logistics,
 Responsibility:                       lobbying in government and business circles etc.)
                                       (short term).
                                    3. Seek funding for the creation of such companies from
 Ministry of Industry,
                                       donors (Expo-Link relied for many years on the
 Ministry of Economy and
                                       support of the US AID (salaries of employees etc.)
 Trade,
                                       (short term).
 Chambers / Private sector,
                                    4. Actual services delivered to enterprises will be
 Donors
                                       financed through IMCS jointly with enterprises (as
                                       per conditions set by technical component).




                                                 79
Objective: Improve the institutional infrastructure for                 Action No: Institutions-7
information

 Action : Change the status of the UNDP competitiveness observatory from a project to a
 permanent institution

 Description / rationale
 The current UNDP project is setting the basis for a national competitiveness observatory
 that collects and analyzes data on Syrian economic performance with specific focus on the
 industrial sector. Beyond dissemination of the collected information among stakeholders,
 the observatory is also to benchmark Syrian performance, for selected sub-sectors, against
 its competitors at the micro, meso and macro levels. Since those functions are key for the
 success of IMPS and its constant updating/revision as needed, this action is meant to
 support the change of status of the present project from a project to a permanent institution.



 Status:                                             Implementation Steps
 Original project ended in          1. Form a steering committee from the private sector,
 July 2007 and got extended            relevant government institutions and experts to assess
 to December 2008.                     the achievements of the competitiveness observatory
                                       component of the UNDP project thus far (immediate).
                                    2. Seek funding to extend project beyond 2008 with the
 Responsibility:                       intention of making it a permanent institution in
                                       charge of industrial and trade statistics collection
 Ministry of Industry,
                                       from primary and secondary sources and also
 Ministry of Economy and
                                       benchmarking Syrian industrial performance against
 Trade,
                                       competitors (immediate).
 State Planning
                                    3. Study alternative scenarios of making the permanent
 Commission,
                                       observatory part of the proposed IMCS, affiliated to a
 UNDP
                                       suitable existing government institution, or a separate
                                       institution altogether (short term).
                                    4. Revise the set-up and focus of the current activities of
                                       the competitiveness observatory to conform with the
                                       needs of the IMPS (immediate).




                                                80
Objective: Improve the institutional infrastructure for human            Action No: Institutions-8
capital

 Action : Establish the Syrian Industrial Training Council (SITC)

 Description / rationale
 To establish the Syrian Industrial Training Council (SITC) where all responsibilities related to
 human capital are collected and concentrated. It would have the following responsibilities:
 1)- Put standards for the skill level in industry both at the generic and sub-sector levels (labor
 force surveys and sub-sectoral development studies in studies program provide the basis for
 such standards); 2)- coordinate all existing financial resources and programs targeting human
 resources development in Syria (both local and donor programs);
 3)- Issue skill certificates accredited by the Syrian Accreditation Body; 4)- Improve and
 increase the provision of training services by the private sector; 5)- Plan generic and
 specialized training programs in different fields; 6)- Supervise all existing vocational training
 centers irrespective of their original affiliation; 7) Follow up on all labor force related
 activities (including upgrading of vocational training facilities) and set targets and deadlines
 for each .


 Status:                                              Implementation Steps
 There is a 23 million
 Euros, EU project for            1. Conduct a comparative study on Training Bodies in
 vocational training in              other countries (short term).
 progress.                        2. Decide upon the unique structure and mandate of the
                                     Syrian Human Resources Training Council (short
                                     term).
 Responsibility:                  3. Take implementation steps to establish such a body (get
                                     necessary legal authorizations, find suitable location,
                                     equip the establishment, recruit required expertise and
 Ministry of Industry,
                                     personal….) (medium term).
 Ministry of Social Affairs
                                  4. Decide on the way of financing the operations of the
 & Labor,
                                     Council (public/private) (immediate).
 Chambers/ Private sector
                                  5. Get the accreditation of the Syrian Accreditation Body.




                                                81
 Objective: Accommodate new institutional changes as needed                        Action No:
in a timely and efficient way                                                    Institutions-9

Action : handle all necessary preparatory work to establish new institutions as needed by
IMUPS

Description / rationale
Several actions in IMPS have already suggested the creation of new institutions or
reorganization and restructuring of existing ones. This action is meant to handle all necessary
studies and logistics related to such activities as they come up.




Status:                                             Implementation Steps
As needed.
                                1.     In close coordination with all programs within IMPS
                                      initiate all preparatory work for establishment of new
                                      institutions or restructuring of existing ones beyond
Responsibility:                       the actions previously stated.
                                2.    Preparatory work includes but is not exclusive to:
Internal responsibility of
                                     Feasibility studies.
IMCS along with relevant
institutions                         Assessment of pros and cons in close coordination
                                      with private sector.
                                     Enact the necessary lobbying for pushing the new acts
                                      forward. This includes convincing the government of
                                      the act and obtains financial support from donor and
                                      local agencies.




                                              82
             APPENDIX (D)

THE TECHNOLOGY AND INNOVATION PROGRAM




                  83
 Objective: Support applied R&D of relevance to the needs                             Action No:
of manufacturing industries                                                         Technology-1

 Action : Implement a program for applied R&D initiated by enterprises

 Description / rationale
 Missing linkages between R & D in research centers and universities and the actual down to
 earth needs of industrialists is a problem in Syria just as it exists in a number of other LDCs.
 This action aims to initiate a pilot project whereby the gap between the two sides is
 narrowed. IMCS will finance through its R&D fund (suggested in policies program) 80%
 of the cost of a number of research projects suggested by the private sector.




 Status:                                               Implementation Steps
 To be first experienced for
 textiles at the level of
 UNIDO pilot project to be            1. Through the public relations department invite
 later adjusted as needed on             industrialists (individually or collectively) to submit
 the basis of actual                     proposals for applied industrial research they need to
 experience.
                                         enhance their production lines or solve specific
                                         technical problems they face.

                                      2. Proposals are to be assessed by experts appointed
 Responsibility:                         by IMCS on the basis of clear criteria such as
                                         (sound scientific grounds, degree of usefulness for
                                         the sub-sector in question as a whole among others).
 IMCS,
 Ministry of Higher
                                      3. Viable proposals will be financed by R&D fund
 Education,
                                         (80% to be paid by IMCS while the remaining 20%
 Chambers/ Private sector
                                         are covered by the enterprise).




                                                 84
Objective: Establish a network of specialized technology centers                    Action No:
                                                                                  Technology-2

 Action : Establish three technology centers as a pilot project

 Description / rationale
 Technology centers are meant to provide specialized technical services to industrialists in
 the areas of technology of production and innovation. This action is to initiate the network
 of technology centers with the establishment of three centers in textiles, food and chemicals
 as a first phase. The new centers will build on the existing infrastructure as much as
 possible. Depending on the special status of each sub-sector the new centre can range from
 simple up-grading of an already existing institution to the creation of a brand new centre.




 Status:                                             Implementation Steps
 New project but                 1. Appoint experts to identify the special needs of the
 technology is receiving a          chosen sub-sectors on the basis of through background
 lot of attention at the            studies (studies program) and close interaction with
 government level.                  stakeholders.
                                 2. A scanning of the already existing institutions
                                    providing services to industrialists is to follow. This is
                                    to lead to a clear delineation of the role of the new
 Responsibility:                    potential technology centre and its most suitable
                                    structure.
 Ministry of Industry,
                                 3. Explore possibilities of twinning/linking the new
 Ministry of Higher
                                    centers with specialised best practice western
 Education,
                                    technology centre to ensure future sustainability of high
 Chambers/ Private sector
                                    quality service delivery to industrialists within the
                                    sector.




                                               85
Objective: Promote the concept of innovation                                         Action No:
                                                                                   Technology-3

 Action : Arrange a series of workshops to promote the concept of innovation

 Description / rationale
 Although innovation is often seen as an advanced step in a country where the technological
 infrastructure is weak and enterprises are generally still small and immature, it is important to
 educate the business community on the meaning and importance of the innovation concept
 which is often understood only in its very narrow sense of new products. The reason lies in
 the fact that Syria is already too far behind and needs to make big jumps at all fronts.



 Status:                                              Implementation Steps
 New project.

                                    1.    Appoint international experts to conduct a series of
 Responsibility:                          workshops to explain the innovation concept and
                                          promote its implementation.
 Ministry of Industry,
 Ministry of Higher
                                    2.    Workshops are to be attended by private sector
 Education,
                                          producers and members from the research
 Chambers/ Private sector,
                                          community.
 International consultants




                                                86
        APPENDIX (E)

THE NATIONAL QUALITY PROGRAM




             87
Objective: Adopt a national quality system to support the needs Action No: Quality-1
of Syrian manufacturing

Action : Revise and complete the existing draft national quality plan and set a deadline
for implementation

Description / rationale
The draft national quality plan set the broad lines of what is needed in terms of creating an
accreditation body, revising Syrian standards and complying them to international
standards but it is not a detailed plan that can be readily implemented. The objective of
this action is to revive the plan and adopt measures that take it towards implementation.



Status:                                              Implementation Steps
On government agenda.
                                 1. Form a specialized steering committee including
                                    international and local experts to revise the plan using
Responsibility:                     other countries’ experiences in that domain (the case of
                                    Egypt).
SASMO,
                                 2. Assess the status of existing public labs from all
Scientific centers,
                                    aspects: equipment, employees, management system,
Academic and State
                                    prices, overlap with others in same functions among
Institutions,
                                    others. Put a detailed plan for complete upgrading of
Civil society
                                    labs and incorporate it in the revised national quality
                                    plan.
                                 3. Estimate the needed human capital to make the plan
                                    operational in an efficient way and provide training
                                    courses to prepare needed calibres.
                                 4. Set a clear time plan for implementation that is
                                    immediately initiated. Steering committee is to also
                                    monitor implementation as it progresses.




                                               88
Objective: Adopt quality as a national theme                          Action No: Quality-2


 Action : Offer a national quality award for excellence

 Description / rationale
 Adoption of quality as a national theme is already on government agenda. This action is
 meant to take the concept beyond the superficial promotional stage to actually telling the
 business community what it means for enterprise to have a quality system operating (which
 is a much wider scope than the simple concept of quality as associated with a physical
 product). It is an award to be given to distinguished enterprises following an assessment of
 the enterprise by a panel of external examiners, and based on well defined criteria that
 assess both the performance of the enterprise, as well as the processes that lead to this
 performance to ensure sustainability of the excellent performance in all fields. All
 applicants -regardless of winning the award- receive a feedback report based on the
 assessment done by the panel of examiners.


 Status:                                             Implementation Steps
 New activity.                     1. Conduct a comparative study for other countries that
                                      applied the National award for excellence (e.g.: Egypt,
 Responsibility:                      Jordan, in addition to international experience).
                                   2. Decide on the nature of the award (financial/ other
 Ministry of Industry,
                                      advantages).
 All relevant institutions
                                   3. Decide upon criteria of assessment, these criteria should
                                      help the organization in self assessment, and the
                                      examiners to decide on the award and giving feedback
                                      to applicants.
                                   4. Design an application form and give guidance to the
                                      enterprise on how to fill it.
                                   5. Nominate the examiners who will be responsible for the
                                      assessment.
                                   6. Design a training course for those examiners (benefit
                                      from the experience of examiners in other countries
                                      applying this award).
                                   7. Begin implementation.
                                   8. Assess the results of the implementation for
                                      improvement (revise for example the criteria used, the
                                      examiners involved, the efficiency of the feedback
                                      mechanism… etc).
                                   9. Following first round other awards can be introduced
                                      with other themes of focus such as exports, innovation,
                                      entrepreneurship or any other.



                                               89
                    APPENDIX (F)

TECHNICAL ASSISTANCE- PRIVATE/PUBLIC SECTOR PROGRAMS




                         90
Objective: To screen enterprises and specify the needs of each one                   Action No:
                                                                                  T.Assistance-1

 Action : Prepare a diagnostic study for each enterprise applying for technical assistance

 Description / rationale
 Diagnostic studies are meant to identify the specific needs of the enterprise. They are meant
 to pinpoint the technological, managerial, labor skill gaps between the current status of the
 enterprise and a model enterprise of the same size producing this specific product line.
 Diagnostic studies can be done at more than one level depending on the level of details.




 Status:                                             Implementation Steps
 To be adjusted as needed
 depending on actual
 experience of pilot project       1. Enterprises submit applications to seek technical
 by UNIDO on 40 textile               assistance to either the main offices of IMCS or one of
 companies.                           its regional offices.
                                   2. IMCS employees perform a simple initial diagnostic
                                      study of the enterprise based on a clear questionnaire
 Responsibility:                      and scoring system to classify the enterprise in one of
                                      three categories: a mature and successful enterprise,
                                      mature and underperformer or underdeveloped
                                   3. This will determine the level of priority of needs of the
 IMCS employees,
                                      enterprise
 Consultants
                                   4. A detailed diagnostic study by a hired expert is to be
                                      done in order to identify the specific technical needs of
                                      the enterprise.
                                   5. On the basis of the diagnostic study a custom-made
                                      plan is to be put for the enterprise. The plan is to consist
                                      (as needed) of a variety of offered programs (explained
                                      in next pages).
                                    (The role of regional offices and the screening process
                                      are further clarified using diagrams in the three
                                      diagrams to follow).




                                               91
      (1) The first step for enterprises to receive technical support




            Outside                                                 In
           Damascus                                              Damascus


            IMCS                                                    IMCS
           Regional                                               Main office
            offices




•   Representative offices of IMCS to facilitate access for enterprises located outside
    Damascus.
•   Officers are authorized and qualified to accept applications that satisfy basic
    conditions and provide basic information on available services.
•   They act as intermediary between enterprises and IMCS on any issues.




                                             92
                   (2) Enterprise Screening Process



                        Refer to other
                         Institutions



                   NO
                                                       Stage three
                              Stage two                Classification of
   Stage one                                           enterprises into
                           Quick initial
Check if                   assessment on
                           basis of                     Mature &
company                                                 successful
 satisfies basic           indicators of
                           performance:                 companies
conditions:
                           sales, export,
-Manufacturing             overall
At least three             equipment etc.               Mature but
years of                                               underachiever
operation                                               companies
- More than five
employees

                                                      Underdeveloped
                                                        Companies




                                  93
     (3) What the classification in stage three means




                                            Enterprises ready
Mature & successful    specialized          in a short term to
   enterprises          support             produce high
                                            quality and
                                            export




     Mature but           General
    underachiever         support           Enterprises
     enterprises                            ready in medium
                                            term to produce
                         Specialized        high quality
                          support           and export




                                          Enterprises need
                                          a heavy doze
                        General           of general support
                        support           before moving
   Underdeveloped                         to specialized one.
     enterprises                          Likely
                                          to reach quality
                                          production in long
                                          term




                            94
Objective: To provide generic technical support to enterprises                     Action No:
                                                                                T.Assistance-2

 Action : General enterprise development

 Description / rationale

 A set of business development services that are not specific to the sector, yet they are
 delivered at the enterprise level, and have a positive effect on its operation.




 Status:                                            Implementation Steps
 To be first experienced at     1. Have experts identify the most common problems related
 the level of UNIDO pilot          to Syrian enterprises in the area of business development
 project to be later adjusted   2. Translate these problems into specific programs (e.g.:
 as needed based on actual         marketing skills, general management enhancement
 experience.
                                   programs,       top    management       training,    business
                                   development programs on (IT, preparation of financial
                                   statements, financial analysis among others).
                                3. Identify a list of consultants that can deliver the services.
                                4. Sign a memorandum of understating with service
 Responsibility:                   providers (including costs, payment arrangements, and
                                   the specifics of the courses to be taught).
 IMCS employees,
                                5. Classify the applications for service delivery by program
 Local & inter. Consultants,
                                6. Contact enterprises and sign a memorandum of
 All technically relevant
                                   understating that includes the commitments of both
 public and private
                                   parties (financial/ technical).
 institutions
                                7. Service delivery.
                                8. Assessing the quality of service provided (client reaction,
                                   indicators that reflect the effect of the service delivered
                                   on improving the business of the client).
                                9. Revising list of consultant based on assessment of quality
                                   of service provided.




                                              95
Objective: To provide generic technical support to enterprises                         Action No:
                                                                                    T.Assistance-3

 Action : Generic training of employees on basic industrial skills

 Description / rationale
 The more underdeveloped the enterprises are the more basic industrial skills are missing.
 Most of these skills are generic in nature and do not necessarily differ by sub-sector. Others
 still basic differ by sub-sector (for example basic skills in textile and garment industry etc.).




 Status:                                               Implementation Steps
 To be first experienced at         1. Using the results of the skills survey in studies program,
 the level of UNIDO pilot              identify the specific needs for general trainings.
 project to be later adjusted       2. Organize under the umbrella of the SITC different
 as needed based on actual             training programs as needed.
 experience.
                                    3. Follow same procedural steps as in (general enterprise
                                       development program).

 Responsibility:

 IMCS employees,
 Local & inter. Consultants,
 SITC ,
 All technically relevant
 public and private
 institutions




                                                 96
 Objective: To offer programs that address the specific technical                    Action No:
needs of enterprises                                                              T.Assistance-4

 Action : Specific Technical Requirements

 Description / rationale
 A set of technical programs that are unique to the sub-sector, and are tailored according to
 the needs of each enterprise.




 Status:                                            Implementation Steps
 To be implemented               1. Identify the services that are specific to each sub-sector
 following the pilot phase of       (e.g.: production Technology, marketing techniques,
 the project currently              specialized labor force skills, industrial design,
 implemented by UNIDO.              information technology, specific quality certification
                                    (such as ISO, HACAP etc.) and environmental impact
                                    assessment among others).
 Responsibility:                 2. Design custom-made programs for enterprises as
                                    needed especially the ones belonging to the mature and
                                    good performance group.
 IMCS,
                                 3. Specify the list of distinguished pilot enterprises to
 Local & inter.
                                    benefit from the highly specialized funds focused on
 Consultants,
                                    exports, innovation, R&D and equipment fund.
 All technically relevant
                                 4. Follow the same procedural steps already presented in
 public and private
                                    the general enterprise development program.
 institutions




                                               97
Objective: To offer programs that build on the potential of                         Action No:
enterprises in exports                                                           T.Assistance-5

 Action : A variety of services that enhance the ability of enterprises to successfully export

 Description / rationale
 Help Syrian enterprises penetrate the export markets through different specialized programs.
 These would be either addressing groups of exporters, or specifically tailored to the specific
 needs of individual enterprises.




                                                       Implementation Steps
 Status:                         1. Based on the enterprise screening process, identify the
 To be first experienced at         different enterprises with export potential.
 the level of UNIDO pilot        2. Classify enterprises between traditional exporters, new
 project to be later adjusted       exporters.
 as needed based on actual       3. On the basis of sub-sector export strategies prepared in
 experience.
                                    studies program, prepare a database for each sub-sector
                                    the includes: potential export markets, technical
                                    requirement in the product to be exported for each
 Responsibility:                    market, different trade shows, international prices for the
                                    products, main competitors, market share, international
 IMCS,
                                    trade rules.
 Local & internat.
                                 4. Detailed enterprise assessment to identify the export
 Consultants,
                                    development needs of each company.
 All technically relevant
                                 5. Identify areas of collective action (addressed to all
 public and private
                                    enterprises working in the sector (e.g.: preparation of
 institutions
                                    product catalogues, market studies, trade mission.
                                 6. Design programs to enhance the export capability of
                                    individual enterprises (eg: training in marketing, putting
                                    an export plan, making a website, establishing an export
                                    production line, dealing with the local authorities
                                    responsible for exportation……).
                                 7. Provide support to enterprises to participate in
                                    international fairs (use the services of international
                                    companies until local qualified private companies along
                                    the lines of expo-link in Egypt are established).




                                                98
            APPENDIX (G)

MORE ABOUT THE ESTABLISHMENT OF IMCS




                 99
                           Pre-requisites for establishment of IMCS

        Members of the Board of Directors chosen by Prime Minister/ Vice Prime
         Minister as per transparent criteria (previous active participation in work groups,
         technical relevance to issues).
        Executive Management (layer two) building on/continuation of UNIDO’s first
         phase.
        Estimated overall number of employees in IMCS is 50 people (a very rough
         estimation to be revised as implementation starts and needs are assessed).

    Prepare a manual of procedures for:
        Criteria for choice of enterprises for technical assistance.
        Criteria for choice of consultants to deliver services.
        Tender procedures and conformity with procedures of different donors.
        Criteria for choice of employees.

                             The Three layer Management System
  Management Layer                 Members                                function



        ONE                  Board of Directors          Approval of yearly plans, monitoring
  (Top Management)           headed      by    H.E.      quarterly implementation of plan,
                             Minister of Industry.       approval of disbursement of funds
                             Board consisting of         beyond limit of authority of executive
                             diversified      active     director (level two)
                             members from public
                             and private sectors
        TWO                  A Syrian Executive          Daily operation of IMCS, responsible for
 (Top Executive Level)       Director of IMCS with       implementation of plans approved by top
                             a number of deputies        management (level one)
                             and/or consultants as
                             needed
       THREE                 Component           and     Technical management of           different
(Lower Executive Level)      Program managers            components and programs




                                               100
Internal Communication & Public Relations Department
This department is of key importance in IMCS. In fact, the success of the entire program
is conditional upon proper functioning of this department. In what follows is a brief
listing of the main functions involved:

Internal Communication
     Communication of management strategies & objectives to all employees
     Coordination between all components & programs
     Dissemination of information within IMCS

Public Relations
    Responsible for all communication between IMCS and other institutions and the
       business community
    In charge of press releases of all kinds
    In charge of all promotion campaigns as needed- critical for success of project


The Monitoring of IMUPS
It is of key importance that IMUPS is properly monitored both technically and
financially. In what follows is a brief presentation of the broad lines of the internal and
external monitoring systems.

Internal System
     Specification of indicators of performance per program
     Regular measurement of key performance indicators both at the macro industry
       level as well as for each program within IMUPS
     Specification of quarterly targets for each program
     Measurement of performance against targets and pinpointing of existing and
       potential obstructions to performance
     Customer satisfaction questionnaire for quality of services for each transaction (as
       relevant)

External System
    Financial auditing on yearly basis
    Sporadic testing for adherence to manual of procedures
    Sporadic monitoring of customer satisfaction by an external authority
    Regular reporting of all monitoring to Board of Directors and Prime Minister/
      Vice Prime Minister




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   APPENDIX (H)

FUNDING AND BUDGET




       102
Funding of IMPS Technical Components- Details (1)

Policies and Institutions

                    Studies                Policies           Institutions

Short term          (1)(3)                 (1)(3)             (1)(3)

Medium term         (1)(3)                 (1)                (1)
Long term           (1)                    (1)                (1)


Funding of IMPS Technical Components- Details (2)
Technical Assistance
                          Private sector                Public sector

Short term                (1)(2) (3)                    (1)
Medium term               (1)(2)                        (1)
Long term                 (1)(2)                        (1)



Tentative budget         Establishment & administrative costs of IMCS
                            Needed budget in million
  Budget item               SYP                             000 Euro
Buildings (central and                 400
regional offices)                                                  7353
Equipment                              100
Cars                                    40                          588
Administrative costs/year               40                          588
Sub-total                                        580                          8520


Tentative budget          Technical Assistance Component
 Budget item                 Needed budget in million
                             SYP                                       000 Euro
Technical assistance                     6.8                                  100
ceiling for each enterprise
Total assistance for                   6.8X1000= 6800                        100,000
1000 enterprises over
three years
Sub-total                                        6800                        100,000




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     APPENDIX (I)

DONOR PROGRAMS- THE EU




         104
Many donor projects of impact on industry are already on-going in Syria. It is key to
incorporate these projects in IMUPS to avoid repetition not to mention allow for a
realistic budget estimation of IMUPS and division of funding burdens on all three
sources: the Syrian government, the Syrian private sector and donors.

A. Coordination between IMUPS and the EU projects
The action of the following EU programmes must be taken into account within IMUPS in
order to avoid overlaps and maximize the efficiency of IMUPS

TRADE ENHANCEMENT PROGRAMME (TEP) already tackles the issues described as:
(Policies 4A) - establish an export promotion institution,
(Policies 4B) - strengthen the role of commercial representation;
(Policies 4C) - activate existing trade agreements and sign new ones as needed (assess
opportunities provided by the free trade agreements and translate them into policy actions
as needed to maximize benefit to Syrian exports (Capacity building MoET)).
(Policies 11) - Simplification and improvements of customs procedures.

SME SUPPORT PROGRAMME- SEBC
(Policies 19) – Facilitate financing of industrial projects incl. reduce risk exposure
through providing info on the validity of the project.
(Institutions 3) – Division of roles between different institutions affiliated with financial
and non financial support to SMEs.
(SEBC's role is very broad and should be taken into consideration by any new
programme in this area. The division suggested does not seem to reflect the current work
of the SEBC. Detailed discussions should be held with the SEBC prior to any decision on
this point.) .
(Institutions 4) – Enhance the abilities of existing business associations and support the
creation of new ones (support to chamber and other business associations with trainings
and equipment).
(Institutions 6) – Encourage the creation of companies specialized in supporting Syrian
enterprise involvement in international fairs.
(TA 5) - Enhance ability of enterprises to successfully export. Incl. detailed enterprises
assessment to identify export development needs of each company; programmes to
enhance capability of individual enterprises (training in marketing, setting an export plan,
making a website…); support to participate to international fairs.

BUSINESS ENVIRONMENT SIMPLIFICATION PROGRAMME (BESP)
(Policies 9) - Improve the business environment



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Especially: simplifying procedures for doing business; increasing the level of
transparency and information; improve procedures concerning commercial dispute
settlement (BESP-TEP); push for establishment of specialized commercial courts;
intellectual property law; competition law; companies law to organize entry and exit of
companies

QUALITY PROGRAMME
(National Quality System) – all suggested activities under this chapter
Technology and quality component (implement in 4 years):
- "national quality programme" adopt a national quality system to support the needs of
Syrian manufacturing; adopt quality as a national theme:
(Quality 1) Revise and complete existing draft national quality plan (creating an
accreditation body; revising Syrian standards and to comply to international standards)
incl. upgrading labs

MODERNISATION OF MINISTRY OF FINANCE (MMOF)
(Policies 11) - Simplification and improvements of customs procedures (also TEP)
Training to customs, computerizing all possible procedures; electronic linkage between
ports and customs branches

SUPPORT TO PUBLIC FINANCE REFORM:
(Policies 12) – Follow up on government efforts in improving tax system
Including improvement of tax collection efficiency;

BANKING SECTOR SUPPORT PROGRAMME (BSSP)
(Policies 17) – Diversify and expand financial tools
Including upgrading public banks

BUSINESS DEVELOPMENT AND INDUSTRIAL UPGRADING INCLUDING CORPORATISATION
OF STATE OWNED ENTERPRISES:
This programme includes: Reviewing the organisation of state owned industrial sector
and restructure it in a sense that gives more autonomy and incentive to enterprises.
Technical support to restructure profitable or potentially profitable SOE, liquidate non
competitive ones.
Set up a relocation agency to overcome the consequences of redundancy.

VOCATIONAL AND EDUCATIONAL TRAINING (VET)
(Policies 16)– Prepare an incentive package for investment in technical education by
sector


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(Institutions 8)– establish the Syrian Industrial Training Council (SITC) (reference to
VET exists in the draft)



B. Detailed description of some of the EU projects
1. Quality Programme
2. Trade Enhancement Programme
3. Business Environment Simplification Programme
4. Support to Public Finance Reform
5. Promoting Business Development (Corporatisation of State Owned Enterprises and
  Industrial Upgrading)
6. Upgrading the Vocational Education and Training System and Promoting Continuing
  Training



                             (1) Quality Programme
 Total cost            EC contribution of € 12 million
 Timeline              Implementation to start early 2008. Duration 4 years

1.        DESCRIPTION
1.1.      Objectives
Overall objective
The overall objective of the project is to contribute to the increase of trade with the
European Union and other countries.
Specific objectives
The objectives of this contract are as follows:
1) Harmonisation of technical legislation and alignment of the quality infrastructure in
priority sectors so as to enable Syria to
     Make maximum use and profit of the existing trade agreements (GAFTA, Turkey)
    Facilitate the opening of negotiations on ACAAs with the EC
     Facilitate Syria’s accession to the WTO
 3) Assist in improving the Quality Infrastructure in Syria.
 2) Assist in improving the quality of Syrian products to an internationally competitive
 level.

1.2.     Expected results
Policy
         R.1 A National Quality Policy and a National Quality Programme are in place,
         managed by the High National Committee for Quality, and actively supported
         and implemented by all concerned instances


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       R.2 In priority sectors, technical legislation is drafted and enforced in such
       way that it is compliant with international requirements and compatible
       (harmonised) with the relevant parts of the acquis communautaire
        R.3 The legal framework for the quality infrastructure is in place, ensuring
       institutional separation of the regulatory, standardisation, accreditation and
       conformity assessment functions
Standardisation
       R.4      SASMO is Partner Standardisation Body of CEN and CENELEC
Conformity Assessment
       R.5 The distribution of tests among the laboratories is coherent; gaps are filled
       and overlaps are minimised
       R.6 Good Laboratory Practices are in place in at least 60% of the state owned
       laboratories
       R.7 At least 25 departments (or sections) of state owned laboratories
       performing tests in the priority sectors defined above have implemented ISO
       17025
       R.8 At least 5 departments of state owned laboratories performing tests in the
       priority sectors defined above are accredited and their test methods validated.
       R.9 An accredited conformity assessment body operates in the priority sectors
       defined above
Accreditation
       R.10 The national accreditation body operates according to ISO 17011 and has
       carried out first (joint) accreditations in the priority sectors defined above
Metrology
       R.11 A national director supervising and coordinating all measurement
       activities carried out by various laboratories in Syria manages the National
       Metrology System
Legal Metrology
       R.12 Legal Metrology is redefined in its scope and re-organised
Economic Operators, Consumers, Universities
       R.13 The private sector is structured in sectors aware of their role in the
       functioning of the quality infrastructure
       R.14 Consumers representatives are actively participating in the standardization
       process as well as in market surveillance
       R.15 Quality related modules are introduced in the curricula of Engineering and
       Management Studies at HIAST and HIBA




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1.3.      Stakeholders
          Main stakeholders:
          a)     The Ministry of Industry
          b)     The Ministry of Economy and Trade
          c)     The High National Committee on Quality
          Main beneficiaries
          d)    The Syrian Arab Standards and Metrology Organisation; the Industrial
                Testing and Research Centre, both subordinated to the Ministry of
                Industry
          e)    The Central Laboratory of the Ministry of Economy and Trade
          f)    The laboratories of the Customs Authorities and other public laboratories
                (Ministries of Health, Agriculture etc)
          g)    The National Standards and Calibration Laboratory
          h)    The Syrian manufacturers of industrial and consumer products,
                particularly those with high export potential
          i)    The newly established Syrian national SME support institution
          j)    The Syrian Higher Education
          k)    The Syrian consumers in general.



                       (2) Trade Enhancement Programme

1.     IDENTIFICATION
Project title : Trade Enhancement             Amount : € 15 million
Programme
Beneficiaries : Ministry of Economy and       Timetable: Implementation to start early 2008
Trade                                         Duration : 4 years

2.        OBJECTIVES
    The overall objective of the programme is to assist Syria to take full advantage of
     globalisation, to facilitate and increase trade flows by enhancing the administrative
     and legislative procedures, and mechanisms that are necessary, and thereby
     improving Syria’s macro-economic situation, create jobs and alleviate poverty.
    The specific objectives envisaged at this stage will be to:
    - Strengthen capacities of the Ministry of Economy and Trade, the customs authority
     and related institutions directly involved in trade policy, implementation and
     enhancement issues.
    - Remove main non-tariff barriers to trade in Syria (e.g. cumbersome customs
     procedures and a restrictive regulatory trade regime).
    - Upgrade Syria`s trade regime and regulations in line with international practice to
     prepare for WTO accession.


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3.        COMPONENTS AND MAIN ACTIVITIES
    The programme will include three components:
    Customs support. Assistance will continue to support customs reform, in particular on
     the introduction of modern customs release procedures including risk assessment and
     streamlined procedures (green lane, etc.), modern warehousing systems, inland
     clearing depots, as well as on customs regulations, transparency and dealing with
     complaints. To the extent possible, support would go to set up automated systems and
     one-stop-shops, as well as to reinforce customs valuation, management of rules of
     origin and enforcement of measures against piracy and counterfeiting. In the tariff
     area, support could be pursued towards better compliance with WCO standards, and
     to reinforce and complete tariff classification efforts. This component would consist
     of institutional capacity building and regulatory assistance in the form of pilot actions
     through the delivery of technical assistance and training. Provision of equipment
     should be limited but due consideration might be given to key supplies of, for
     instance, anti-smuggling or testing equipment.
    Institutional capacity-building to the Ministry of Economy and Trade. Assistance
     could reinforce existing and future departments of the ministry responsible for
     managing and implementing trade instruments and agreements, such as the Trade
     Facilitation Directorate (in respect of trade defence instruments/anti-dumping), the
     International Relations Department (in respect of the EU-Syria association
     Agreement) and the WTO Directorate. Furthermore, in line with internal institutional
     reforms, support could be directed towards the development of a Syria`s trade
     diplomacy with a view to training a new class of commercial attachés that would be
     posted overseas to accompany marketing endeavours of the private sector and sell the
     investment image of Syria abroad. The option to support the still-to-be-created Export
     Promotion Agency could be looked at. This component would consist of institutional
     capacity-building and development, and technical assistance mainly in the form of
     training to relevant stakeholders.
    WTO-relevant regulatory support. Assistance could be provided to support a revision
     of Syria's trade regime in respect of import and export regulations, non-tariff barriers
     to trade, trade defence and relevant economic legislation in the field of investment,
     licensing, intellectual property and, generally, establishment of WTO-compatible
     mechanisms, procedures and institutions. Decision-making processes leading to the
     adoption of trade-relevant legislation should be streamlined and made more
     transparent, inclusive and consistent in terms of implementation. Regulatory
     upgrading and modernisation support will aim at reaching WTO-relevant
     international standards in the field of trade, which will both allow Syria to
     successfully implement FTA agreements such as the one with the EU and to
     substantially prepare its WTO accession bid. Technical and regulatory assistance will
     be provided to this effect.
    The programme should be implemented with the active participation, and benefit, of
     all stakeholders, including the private sector and relevant operators/stakeholders.
     Both identification and implementation of the programme should take account of
     current and planned relevant assistance schemes funded by other donors.




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              (3) Business Environment Simplification Programme
1      IDENTIFICATION

Project title : Business Environment               Amount : € 5 million
Simplification Programme
Beneficiary : Ministry of Economy and              Sector : Business support services and
Trade                                              institutions


2    DESCRIPTION
2.1 Objectives
The overall objective of the Programme is to contribute to the Syrian economic reform
programme through the improvement and simplification of the business environment in
the country in line with national requirements.

The purpose of this project is to establish and implement a range of actions that will
remove bottlenecks, reduce unnecessary red-tape and promote transparent and fair
practices for the Syrian business community.

2.2 Expected results and main activities
The programme will be divided into three components:
-    Capacity Building
-    Legislations and procedures
-    Regulatory body

  The expected results are:
-     Increased institutional capacity to implement and coordinate reform
-     Transparent and efficient service delivery
-     Business related procedures harmonised and simplified
-     Better quality business related regulation that reflects the needs of the private sector
-     Enhanced regulatory environment

2.3 Stakeholders
 The main stakeholders at the Government institutions are: State Planning
    Commission (SPC), Ministry of Economy and Trade, Ministry of Industry,
    Governorates and Municipalities. The main stakeholders at the private sector are
    Chambers of Commerce, Chambers of Industry and the Syrian Enterprise Business
    Centre (SEBC)
 The direct beneficiary is the Ministry of Economy and Trade.

2.4 Risks and assumptions
 Key risks underlying the programme intervention can be summarised as follows:
  Further economic reforms do not take place or the reform process slows down.
  Regional and/or national instability.


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    Overlap with projects of other donors.
    Lack of inter-ministerial co-ordination.
    Key assumptions underlying the programme intervention can be summarised as
     follows:
    Interest of Syrian government in economic reform and liberalisation is maintained.
    The main stakeholders will make available managerial, human and physical
     resources necessary to ensure a smooth implementation of the Programme.

     3 TIMELINE: IMPLEMENTATION FORESEEN TO START IN 2008. DURATION: 4 YEARS



                     (4) Support to Public Finance Reform

Title : Support to Public Finance Reform         Amount :€ 10 000 000 (grant)
Beneficiary : Ministry of Finance                Sector : Public sector financial management


1. SPECIFIC OBJECTIVES
The overall objective of the project is to improve the role of the Syrian Government in
the economy through PFR with a view to supporting economic, political and social
reform and improving the relationship and level of cooperation between the EU and
Syria.
The specific objective of the project is to modernize the Syrian institutional framework in
the field of public finance, consolidate public finances, improve the efficiency of
government expenditures, and increase the transparency and accountability of the system,
so as to ensure future fiscal stability and facilitate the implementation of the EU-Syria
Association Agreement.

2. EXPECTED RESULTS
The outputs of Supporting Public Finance Reform could target:
    Increased budget sustainability
    Implementation of a system of social compensation
    Increased administration efficiency
    Increased transparency and accountability
    Increased decentralization
    Facilitating the implementation of the Basic Finance Law Increase the autonomy
       and efficiency of internal auditors. Improved management of public debt and
       liquidity

3. POSSIBLE PROJECT ACTIVITIES
Consolidation of public finances
The Modernisation of the Ministry of Finance project (MMOF) currently supports
revenue reform and is due to finish in 2008. A full evaluation of the viability of outputs
for continuation and new target areas should be carried out, including the Large Taxpayer


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Unit and the possible extension of its scope to include combating fraud. Expenditure
reform is currently on hold due to strong political opposition to subsidy cutting.
Assistance with compensation schemes could unblock reform progress and ensure the
protection of the most vulnerable.

Modernising the public finance administration
MMOF also has outputs to strengthen tax administration capacity and services;
modernize the public finance systems, accounting and budgeting, which should be
evaluated. Possible activities include technical assistance (TA) and capacity building for
modernized and improved systems of planning, reporting, auditing, budgeting, and
decision making and establishing a working group to assist with modernisation and to
increase efficiency, transparency and accountability.

Structural reform
Activities could include TA and training aimed at refining structural reform strategy such
as decentralization, legislation and the creation of a Supreme Audit Institution and
establishing a working group to assist with the implementation of reform.

Daily management of public finances
Possible activities are TA and training for the management of debt and liquid assets of
the CBS and for the smooth introduction of government bonds and establishing a
working group to assist with the introduction of government bonds.

4.    BUDGET: EUR 10 million

5.    TIMELINES: To be implemented over a 4 year period from 2008


         (5) Promoting Business Development (Corporatisation of State
                 Owned Enterprises and Industrial Upgrading)

     1. PROJECT TITLE
       Promoting Business Development (Corporatisation of State Owned Enterprises and
       Industrial Upgrading)

     2. TARGET GROUPS
      The project will directly benefit the industrial sector in Syria, in particular the State
      Owned Enterprises (SOE). It will equally work to the benefit of the Syrian economy
      in general and the state budget in particular.

     3. OVERALL AND SPECIFIC OBJECTIVES
      The overall objective of the project is to facilitate the transition from planned
      economy to a social market economy for the SOE at as little a social cost as
      possible.



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 The specific objectives will be to make SOE more efficient; to identify competitive
 sectors; to increase the quality and competitiveness of products produced by SOE;
 to increase the profitability of SOE. These objectives are all funnelling towards the
 issue of ensuring higher profitability and thereby higher revenues for the Syrian
 state.

4. EXPECTED RESULTS
 The project is going to assist with the needed modernisation of Syrian State Owned
 Enterprises (SOE). The expected results are increased profitability; better quality
 products; higher transparency; better business management and administration
 structures; more efficient production methods and thereby assist in turning the SOE
 into profitable enterprises in their own right that can provide employment and
 quality products.

5. SHORT DESCRIPTION OF THE PROJECT
 The activities will predominantly be technical assistance in the following areas:
       Identification of competitive sectors for Syrian industry,
       Rationalisation of the SOE,
       Establishment of business plans,
       Training of managers,
       Up-grading of accounting services and financial reporting,
       Production line modernisation,
       Product modernisation,
       Human resources development plans (incl. remuneration reform),
       Marketing (incl. packaging),
       Market analysis,
       Capacity building in relevant ministries,
       Other activities identified during identification.

 In order for the activities to be successful the programme requires a strong and
 continuous commitment from the Syrian Government. The relevant ministries need
 to ensure the support of the SOE for the modernisation process. The Syrian
 Government should take the responsibility of informing the Syrian population of the
 rationale behind the programme and about the expected short-term costs and about
 the expected medium- and long-term benefits of the programme.
 The Syrian Government will contribute to the programme indirectly by funding
 needed changes in the SOE, e.g. new machinery.
 Possible cooperation with the European Investment Bank (EIB) has to be examined.



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   6. BENEFICIARY (draft possibilities)
            State Owned Enterprises (SOE)
            Ministry of Industry (MoI)
            Ministry of Economy and Trade (MoET)
            State Planning Commission (SPC)
     The beneficiaries will use this programme as a first, and essential, support to get the
     restructuring and upgrading of SOE started. It will significantly assist the
     beneficiaries in their efforts to reform the economy of Syria – especially in the
     industrial sector. The project will equally be beneficial to Syria’s aspirations to
     access WTO and will also assist Syria in reaping benefit from the Association
     Agreement with the EU when it will be signed.

   7. BUDGET: €20 million

   8. TIMELINES
     The programme should be launched in 2010. The Syrian economy is to a large
     extent reliant on petroleum revenues. These are expected to diminish rapidly over
     the coming 5-10 years. There is therefore an eminent need for modernisation of
     Syria’s non-petroleum sectors.
     The programme should be implemented over a four year period.


          (6) Upgrading the Vocational Education and Training System
                           and Promoting Continuing Training

 Indicative Budget      € 10 million
 Timetable              start 2010 ; duration : 4 years

1. General Objective:
To increase the competitiveness of Syrian economy and to facilitate the transition to the
social market economy.

2. Specific Objective:
To increase the employability of the Syrian labour force and to promote life long
learning.

3. Short Description of the Programme:
The programme will concentrate on:
VET Council/Authority
    Finalise the establishment of the VET Authority by preparing/finalising the
       legislation and regulations


                                           115
         Establish the governance and management structure
         Develop the capacity of the VET Authority based on an analysis of need and
          provide ongoing support and advice to it (including work shadowing, study tours,
          participation in relevant international events etc.)

National Strategy and Financing of continuing training
    Draft strategy options for developing continuing training based on a labour
       market need analysis.
    Ensure that the continuing training strategy is in line with the National
       Qualifications Framework
    Develop a financing scheme for continuing training that meets the needs of the
       labour market.

Institutional development and capacity of relevant stakeholders
     Further strengthen and develop public and private VET providers to engage in
         continuing training
     Further develop the identification of skills needs based on the model developed
         and implemented in MVET I
     Develop and provide continuing training opportunities to meet the needs of the
         existing workforce and potential new entrants
     Training of trainers to ensure the effective delivery of training opportunities
         Dissemination of good practice and lessons-learned

4.       Expected Results:

     1. Further development and establishment of the National VET Council/Authority
     2. A national strategy and financing scheme for continuing training is available
     3. Institutional development and capacity building of selected public and private
        organisations strengthened to enhance life-long learning for improved functioning
        of the labour market.



5.       Indicative Budget:

10 Million Euro




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