Syria: Key Industries Destroyed by the War

In December, Britain and Germany joined the fight against IS in Syria after the deadly attacks in Paris. Internally, the regime took back Homs, the “capital of the revolution” and Syria’s third largest city, after striking a truce with the rebels and allowing them to leave the city peacefully with their families. On the humanitarian front, the UN Security Council renewed authorization for the passage of aid into Syria until January 10th, 2017. The official statement reads the following” the 15-nation body decided that the United Nations humanitarian agencies and their implementing partners were authorized to use routes across conflict lines in Syria and the border crossings of Bab al-Salam, Bab al-Hawa, Al Yarubiyah and Al-Ramtha, in addition to those already in use, with notification to the Syrian authorities.”

In the capital Damascus, the consumption department revealed that its marketing strategies were fruitful in 2015. Officials revealed that the intervention of the Damascus consumption department generated 6 billion SYP in sales in 2015. With many merchants taking advantage of the war status of the country to inflate prices of basic necessities, the consumption departments aimed at pumping the market with basic goods and foods such as oils, groceries and grains, at prices 15 to 25% lower than market prices. The department also set up moving carts for the sale of these basic goods for the sake of higher accessibility.  


 Syria: Key Industries Destroyed by the War 

 Syria: Key Industries Destroyed by the War 

The cement sector on the other hand suffered from power and gas cuts, shortage of labor, difficulty of finding spare parts for the machines and trouble commuting workers from and to the factories. Therefore the Adra Cement Company produced only 450,000 tons of cement as opposed to a planned 768,000 tons, equivalent to a 59% execution rate. Only 41% of the planned cement deliveries were actually delivered as they reached around 348,000 tons compared to a planned 845,000 tons. According to official sources, the sales of the Adra Cement Company totaled 6 billion SYP in 2015.

The cotton industry, believed to be the second biggest generator of foreign currencies for the Syrian treasury has regressed sharply due to the crisis. In 2005, cotton plantations extended over 240,000 hectares of land and production amounted to 1 million tons. By 2015, production was slashed by half and the actual cotton plantation land was a mere 45,000 hectares, where Raqqa and Hasaka were the top producing regions.

Activity at the Port of Tartous dropped in 2015. In 2014, 5.44 million tons were processed through the port while only 3.5 million tons went through it in 2015. The tonnage of exports dropped from 954 million tons in 2014 to 567 million tons in 2015, most of which are phosphate, containers and food products. Meanwhile imports reached 2.96 million in 2015 tons down from 4.49 million tons in 2014 and they were mainly made up of iron, wood, corn, coal and sugar. The number of containers also fell from 39,428 containers in 2014 to 29,859 containers in 2015. 

Incoming and Outgoing ships at the Port saw their number drop from 991 ships in 2014 to 653 ships in 2015.  Despite the sluggish trade activity, the extra charge of $100 per container allowed the sales of the company managing the port of Tartous to increase from 4.43 billion SYP in 2014 to 5.25 billion SYP in 2015.

In 2015, the Syrian government’s efforts to boost the eroded fiscal revenues have paid off. Tax collection from large establishments increased by a yearly 3.37 billion SYP from 9.95 billion SYP in 2014 to 13.32 billion SYP in 2015. The Ministry of Finance believes this increase to be a testimony of the good adaptability measures put in place by large establishments in the face of the raging war. Policies such as prioritizing costs allowed for the government to cash in on more taxes in 2015 despite the closure and relocation of many large establishments.

Due to the exceptional operational environment, the real estate bank announced that the sum it failed to collect in 2015 amounted to 1.3 billion SYP while the guarantees taken by the bank amounted to 69.5 million SYP. Due to the war, contact details of the borrowers changed, making it difficult to reach them. Therefore, the Real Estate Bank of Syria has now agreed on granting loans only in safe areas and noted that the project for which the loan is taken must be ready for investment or already kicked-started. The bank is also accepting applications for operational loans[1] related to the financing of working capital for as high as 3 million SYP with a duration of one year and a possibility of a 6 months extension. This measure is aimed at boosting productive sectors such as agriculture and industry. As for the country’s currency, it depreciated further in 2015 going from 179.2 SYP to the dollar at the end of 2014 to 219.65 SYP to the dollar at the end of 2015.

On the Damascus Securities Exchange, the volume and value of traded shares amounted to 1.4 million shares worth 160 million SYP compared to 2 million shares worth 268 million SYP traded in the third quarter. The Damascus Securities Exchange Index ended the fourth quarter at 1,227.86 points, up by 2.38% from the previous quarter. For the year 2015, 8.4 million shares, worth more than 1.1 billion SYP were traded compared to 25 million traded shares worth 3.3 billion SYP last year. The market index fell by a yearly 3.4% to 1,227.86 points. The top performing stock of the year was the Alahliah For Vegetable Oil Company with a yearly upturn of 30.68% while the worst performing stock was the National Insurance Company with a yearly drop of 17.45%, which was due to the modification of the reference price after the company distributed dividends.

[1] Short term loan meant to cover short term expenses

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