TRADING WITH SYRIA SYRIA SLOWLY OPENS DOORS TO WESTERN INVESTMENT

TRADING WITH SYRIA SYRIA SLOWLY OPENS DOORS TO WESTERN INVESTMENT

Since the 1991 Persian Gulf War and the collapse of the Soviet Union, its major political ally and trading partner, Syria has been gradually opening its doors to capital and goods from the West.

The Syrian government has reduced import restrictions, loosened tight foreign exchange controls and in 1991 implemented an investment law that established, among other things, tax holidays and duty-free privileges for importers. Moreover, it allowed U.S. companies to form independent businesses or participate in joint venture agreements with Syrian partners.Betsy Hiel, research coordinator of the National U.S.-Arab Chamber of Commerce in Washington, D.C., said the new law has generated growth in the oil and agriculture sectors and had fueled interest especially among Syrian expatriates.

''Law #10 has worked very well. You see a lot of expatriates testing the waters," she said.

Ms. Hiel said good export prospects existed for U.S. companies involved in oil and gas infrastructure, computers and technology, textiles and food processing.

The rich gulf Arab states renewed aid to Syria following its participation in the Arab coalition against Iraq during the 1991 war.

The program - intended to rehabilitate the country's deteriorating infrastructure and revitalize ailing state enterprises - involves construction of water treatment facilities, gas separation plants and pipelines, power plants, textile mills, cement and fertilizer plants and irrigation systems.

BUYING FROM

PRINCIPAL EXPORTS

Petroleum, textiles, cotton and produce.

POTENTIAL GROWTH EXPORTS

Crude oil, petroleum products, produce, tobacco, textile fibers, textile yarns, clothes, cotton, phosphates, gift items and beans.

PRINCIPAL FOREIGN MARKETS

European Union, former Council for Mutual Economic Assistance countries, other Arab countries.

EXPORT PROGRAMS/INVESTMENT INCENTIVES

Private exporters may retain 75 percent of foreign exchange proceeds from industrial exports and 100 percent from agricultural exports to purchase permitted imports such as rice and sugar. Under the May 1991 investment law, tax holidays and duty-free privileges are given to certain investors.

CURRENCY

Commercial rate: US$1= 43 Syrian pounds.

MAJOR BANKS

Central Bank of Syria, Agricultural Bank, Commercial Bank of Syria, Industrial Bank, Popular Credit Bank and Real Estate Bank.

LABOR

The labor force is 3.5 million; most people are employed in government and personal services, agriculture and manufacturing.

LANGUAGE

Arabic is the official language. Also spoken are Kurdish, Armenian, Aramaic, Circassian and French.

CLIMATE

Mostly desert; hot, dry, sunny summers and mild, rainy winters along the coast.

TIME DIFFERENCE

GMT +2, EST +7.

INTERNATIONAL TRANSPORTATION

The international airport is in Damascus; upgrading of the Aleppo airport is planned so that it can handle international traffic. Syrian Arab Airlines offers passenger and cargo services to Europe, the Middle East, North Africa and the Indian subcontinent. Arterial roads run from Sidonon, Lebanon through Syria to the Jordanian border; from Beirut, Lebanon, through Damascus to Baghdad, Iraq, and from Tripoli, Lebanon, through Syria to the Turkish border. The Syrian part of the Hedjaz Railway extends 144 miles.

OFFICIAL (BANK) HOLIDAYS

1995: Jan. 1; March 3, 8; April 21-24; May 10, 31; July 23; Aug. 9; Sept. 1; Oct. 6; Nov. 16; Dec. 20, 25.

BUSINESS HOURS

Government: Sat.-Thurs. 8 a.m.-2 p.m. Banks: Sat.-Thurs. 8 a.m.-2 p.m. Commerce and industry: 7 a.m.-3 p.m.

BEFORE YOU GO

U.S. travelers must carry a passport and visa. For additional information, contact the Embassy of Syria, 2215 Wyoming Avenue N.W., Washington, D.C. 20008. Telephone: (202) 232-6313.

SELLING TO

PRINCIPAL IMPORTS

Computers, pharmaceuticals, foodstuffs, machinery and equipment, chemical items, industrial supplies, electricity, gas and water supplies.

PRINCIPAL IMPORTS FROM THE U.S.

Oil and gas field machinery, cigarettes, cotton gins, oil well and gas field drilling equipment, oil and gas field machinery parts.

POTENTIAL GROWTH IMPORTS FROM THE U.S.

Oil- and gas-related equipment, agricultural sector inputs and capital goods to rehabilitate public utilities and state enterprises.

BARRIERS TO TRADE

All legally imported products require an import license. Customs procedures are cumbersome and tedious because of tax regulations. Duty rates are extremely high. Syria participates in the Arab League boycott of Israel. The United States has terrorism-related sanctions against Syria.

PRINCIPAL FOREIGN SUPPLIERS

European Union, former Council for Mutual Economic Assistance countries, United States and Canada.

MARKET SIZE

Population is 14.89 million, growing at 3.74 percent; additionally more than 30,000 people live in the Israeli-occupied Golan Heights.

DOMESTIC INDUSTRIES

Textiles, food processing, beverages, tobacco, phosphate rock mining and petroleum.

DOMESTIC AGRICULTURE

Accounts for 30 percent of the gross domestic product and one-third of labor force. Major crops: wheat, barley, cotton, lentils, chickpeas. Animal products: beef, lamb, eggs, poultry, milk.

DOMESTIC TRANSPORTATION

There are 1,095 miles of standard-gauge and 144 miles of narrow-gauge rail track. The rail system extends to the Turkish, Iraqi and Lebanese borders. Many lines pass through Damascus and Aleppo. Arterial roads run north-south and between the Mediterranean and the eastern frontier. Most highways are not paved.

INFRASTRUCTURE/FREE-TRADE ZONES

The main port is Latakia. Other ports are at Tartous and Banias. Oil pipelines, which cross the country are of great importance to the national economy. There are free-trade zones in Aleppo, Damascus, Latakia and Tartous. The nation's telecommunications system is undergoing significant improvement and digital upgrades.

MONETARY POLICY/INFLATION

Consumer prices rose 18 percent to 20 percent annually in 1993 and 1994. A similar rate is expected for 1995.