SYRIAN BANKING & FINANCIAL SERVICES CONFERENCE PRESS CUTTINGS

 

SYRIA TIMES 5/11/2006

The 2nd Syrian Banking and Financial Services Conference 2006, held from 3-5 November under the Patronage of President Bashar al-Assad, was opened yesterday at in the Four Seasons Hotel in Damascus.

The event entitled "Integrating Syria into the Global Economy" is organized by the British-Syrian Society.

"The 10th 5-year plan is a framework of economic and social transformation and to prepare the country for the requirements of the 3rd millennium," said Abdullah al-Dardari, Deputy Premier for Economic Affairs, highlighting the comprehensive change in the structure and orientation of the Syrian economy.

The plan constitutes a package of structural reforms for transformation to social market economy, he said in his opening speech. ‏
These reforms concentrate on a number of priorities in the areas of politics, finance, monetary, commercial and investment with a special focus on building knowledge economy.

Al-Dardari stressed: "The 5-year plan is a starting point for Syria`s gradual integration into the global economy." ‏
In the financial area, the Syrian taxation system has witnessed vast changes towards transformation to a system that depends on low taxes along with expanding the tax collection base and reducing the maximum limit of income tax from 65% to 28%.

Al-Dardari pointed out that taxation reforms will be introduced within the next 2 years including the application of value added tax by 2008 to encourage investment and improve public finance. ‏

He went on to say, the state budget is based on a new government basic financial law that allows - for the first time - the public companies to be financially independent. This is the first step towards the independency and institutionalization of these companies. ‏
In the monetary area, al-Dardari explained, the Central Bank of Syria managed in the last two years to maintain the stability of the Syrian Pound and to face inflation pressures.

"The government is committed to ensure maximum independency for the Bank which is moving towards the application of indicative interest, leaving full freedom to public and private banks to compete in providing best banking services for the economic growth." ‏
Al-Dardari affirmed: "The banking system in Syria is the best embodiment of the structural changes in the Syrian economy during the past few years." ‏

To complete the infrastructure of the new financial system, a law on the Damascus Stock Exchange was recently issued which is likely to operate early next year. ‏

About the private insurance sector, al-Daradri said there are six private insurance companies operating in Syria , noting that other important steps will be followed to develop the services sector in Syria. ‏

He noted that tremendous changes are expected to take place in foreign trade, especially after the liberalization of trade exchange, customs ‏duties, reduction and removal of non-customs obstacles particularly following the Customs automation. ‏

"The overall exports went up from $6.7 billion in 2004 to $8.2 billion (22%) in 2005, whereas imports increased from $6.9 billion to 9.7 (40%) billion in the same period," al-Dardari pointed out. ‏

The share of the private sector of total exports went up from 21% in 2003 to 50% in 2005 which is an additional sign of the success of the Syrian government`s efforts to decrease dependency on oil. ‏

" Syria is qualified to be the starting point of trade, manufacturing and re-exporting to the Arab world and Asia ," he stressed. ‏
Al-Dardari underlined that the changes that took place in the Syrian economy and relevant legislation have received favorable response from investors inside and outside the country. ‏

Consequently, the value of project increased from $4 billion (out of which 11% DFI) in 2004 to $7 billion in 2005 (30% of which DFI). ‏
"The good response is peaked by the economic growth rate which was less than 2.5% in 2003, went up to 4.5% in 2005 and 5% in 2006 and it is likely to become 5.6% in 2007, steadily moving towards achieving the hope for economic growth 7% by 2010," said al-Dardari. ‏

As such huge investments need an efficient banking sector, the banking reforms will be in the heart of the economic reform executive program for the years 2007 and 2008. ‏

"These reforms eventually aim to double an individual`s share of the Gross Domestic product (GDP) by 2015, reduce the unemployment rate to less than 6% and the rate of those who are living below the minimum income line to less than 7%, i.e. achieving the Millennium Development Goals to which Syria is committed." ‏

In a special statement to Syria Times al-Dardari affirmed: "We believe in the integration into the global economy in a way that achieve our national interest and not at its account. We also believe that isolation and marginalization is harmful to our interests and to the Syrian citizen`s living standard." ‏

Stressing that transformation to social market economy is not the end goal, al-Dardari affirmed: "Our end goal is the improvement of the Syrian citizen`s living standard. The market economy is only a tool and we possess enough freedom and flexibility to expand the tools that are at our hands to apply the best economic management method that fit Syria `s needs and priorities."

He outlined that 15% of the 5-year plan investments are dedicated to rural development areas and to the agricultural sector. A considerable part of these investments will go to the northeast region.

He stressed that the rural areas, in which 50% of Syria `s population are living, need development projects in all domains.
Finally, al-Dardari re-affirmed: "We are aware that reform steps should be accelerated, but there are some issues that must be well considered and you cannot take rapid steps. We are not ready to take quick reform steps at the expense of Syrian citizen."

 

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