Sport in Syria - Economy

Economy

Syria is classified by the World Bank as a "lower middle income country." Syria remains dependent on the oil and agriculture sectors. The oil sector provides about 40% of export earnings. The agriculture sector contributes to about 20% of GDP and 20% of employment. Oil reserves are expected to decrease in the coming years and Syria has already become a net oil importer.

The economy is highly regulated by the government, which has increased subsidies and tightened trade controls to assuage protesters and protect foreign currency reserves. Long-run economic constraints include foreign trade barriers, declining oil production, high unemployment, rising budget deficits, and increasing pressure on water supplies caused by heavy use in agriculture, rapid population growth, industrial expansion, and water pollution. The UNDP announced in 2005 that 30% of the Syrian population lives in poverty and 11.4% live below the subsistence level.

Syria's main exports include crude oil, refined products, raw cotton, clothing, fruits, and grains. The bulk of Syrian imports are raw materials essential for industry, vehicles, agricultural equipment, and heavy machinery. Earnings from oil exports as well as remittances from Syrian workers are the government's most important sources of foreign exchange.

Syria’s share in global exports has eroded gradually since 2001. The real per capita GDP growth was just 2.5% per year in the 2000–2008 period. Unemployment is high at above 10%. Poverty rates have increased from 11% in 2004 to 12.3% in 2007.

Political instability poses a significant threat to future economic development. Foreign investment is constrained by violence, government restrictions, economic sanctions, and international isolation. Syria’s economy also remains hobbled by state bureaucracy, falling oil production, rising budget deficits, and inflation.

Prior to the civil war in 2011, the government hoped to attract new investment in the tourism, natural gas, and service sectors to diversify its economy and reduce its dependence on oil and agriculture. The government began to institute economic reforms aimed at liberalizing most markets, but those reforms were slow and ad hoc, and have been completely reversed since the outbreak of conflict in 2011.

As of 2012, due to the ongoing Syrian civil war, the value of Syria's overall exports has been slashed by two thirds, from the figure of $12 billion USD in 2010 to only $4 billion USD in 2012. Syria's GDP declined by over 3% in 2011, and is expected to further decline by 20% in 2012. The IMF estimated in mid-2012 that the Syrian pound had experienced a 45% devaluation since the outset of the civil war.

As of 2012, Syria's oil and tourism industries in particular have been devastated, with US$5 billion lost to the ongoing conflict of the civil war. Reconstruction needed due to the ongoing civil war will cost as much as $10 billion USD. Sanctions have sapped the government's finance. US and European Union bans on oil imports, which went into effect in 2012, are estimated to cost Syria about $400 million a month.

Revenues from tourism have dropped dramatically, with hotel occupancy rates falling from 90% before the war to less than 15% in May 2012. Around 40% of all employees in the tourism sector have lost their jobs since the beginning of the war.