Syria has adopted a promising budget for 2002, providing large spendings for infrastructure projects with the overall aim of facilitating investments and boosting growth, which has long been static. Next year's budget was approved on Saturday, December 1 by Syrian President Bashar Al-Assad, two days after it was endorsed by parliament with projected expenditure totaling 356.4 billion pounds ($7.12 billion), an increase of 10 percent.
The budget's adoption comes as Syrian politicians expect a new cabinet to be sworn in the next few days to replace the government of Prime Minister Mohammed Mustafa Miro which was formed in March 2000.
The hike in expenditures is aimed at giving a new government the means to relaunch the Syrian economy, which has been stagnant for the past 20 years, as well as make progress on the economic reforms pledged by Assad, who replaced his father, the late president Hafez Al-Assad, in July 2000.
Expenditures and revenues are balanced out in the 2002 budget, unlike the 2001 budget which carried a $1.85 billion deficit and set spending at 322 billion pounds ($6.44 billion). Economists, however, said that the government has earmarked 81 billion pounds ($1.6 billion) to be taken from the reserves of the central bank to make up for any eventual deficit in 2002. Such a move reflects the uncertainty linked to fluctuations on the global oil market as Syria produces nearly 550,000 barrels of oil per day, which provide the country with its main source of revenue, the economists said.
Oil revenues for 2002 are expected to reach 125 billion pounds ($2.5 billion), representing 45 percent of earnings accounted for in the budget, less the provisions which amount to 275 billion pounds ($5.5 billion).
According to the economists, the 2002 budget is based on the understanding that the average cost of a barrel of crude oil stands at $22 while current market prices are under the $20 mark.
The budget allocates 184 billion pounds ($3.68 billion) to investments, or 52 percent of expenditures, compared to 131 billion pounds ($2.63 billion) for the public sector (36 percent of the budget). A total of 40 billion pounds ($800 million), or 12 percent, are allocated to service debts and subsidize several basic consumer products such as bread, sugar, rice and fuel oil.
In the field of investments, the transport and telecommunication sectors will get the lion's share or 22 percent of expenditures allocated in the budget, followed by water and electricity (19 percent) and irrigation (15 percent). "The budget's main priority is to finance investments that reinforce growth capabilities and create more jobs," Miro said.
Next year's budget will provide for the creation of 27,000 new jobs in the administrative sector and 42,000 in the economic sector, the prime minister explained. The 2002 budget "also meets the country's security needs", Miro said, in reference to the defense budget estimated at 46 billion pounds ($920 million) or 13 percent of the total.
Economist said the government's optimistic figures are based on an expected boost to the economy due to come from an increase in trade with neighbors such as Iraq and Lebanon. Iraq and Syria agreed at the onset of 2001 to create a free trade zone and Syria has sold goods worth one billion dollars to its eastern neighbor since January 2002, economists said.
Syria and Lebanon are also linked by an agreement that provides for the gradual lifting of customs tariffs on industrial products since 1999. All tariffs should be abolished by January 1, 2002. — (AFP, Damascus)
by Maher Chmaytelli
© Agence France Presse 2001
© 2001 Mena Report (www.menareport.com)
