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- GDP (PPP):
- $106.0 billion
- -3.4% growth
- $4,630 per capita
- Inflation (CPI):
- FDI Inflow:
Numerical grading of Syria’s overall economic freedom has been suspended in the 2013 Index because of the ongoing political turmoil that has led to civil unrest and a significant deterioration in the quality of publicly available economic statistics. Those facets of economic freedom for which data are still available have been individually scored. As a “mostly unfree” economy with a score of 51.2, Syria was ranked fourth lowest in the Middle East/North Africa region when it was last graded in the 2012 Index.
The Bashar al-Assad regime’s brutal actions to maintain its hold on power have destroyed the rule of law and destabilized the region. The fragility of Syria’s foundations of economic freedom had already been reflected in very low scores for property rights and corruption in previous years.
Many aspects of the entrepreneurial framework have been severely undermined by intrusive and heavy-handed state action. The state has long dominated many areas of economic activity, and the repressive environment has marginalized the private sector and prevented any sustainable development of new enterprises. Monetary freedom has been gravely marred by state interference.
The Assad family’s iron grip on Syria, which it has ruled since Hafez al-Assad’s coup in 1970, faced a serious challenge in 2012. Bashar al-Assad, who succeeded his father in 2000, had failed to deliver on promises to reform Syria’s socialist economy and ease political repression. Anti-government protests in the “Arab Spring” of 2011 were met with brutal crackdowns and unconvincing promises of future reforms. The populist uprising against the Assad regime grew into a sectarian civil war. 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.
The rule of law is collapsing as the country faces violent disintegration and possible partition. The legal framework to date has been inefficient, and protections for private property rights have not been strongly enforced. The judiciary lacks transparency and is not independent of political interference. Pervasive corruption has exacerbated the weak rule of law and severely undermined the foundations of economic freedom.
The top income tax rate is 22 percent, and the top corporate tax rate is 28 percent. Other taxes include an inheritance tax and a property transfer tax. The overall tax burden is equivalent to 10.4 percent of total domestic income. Increasing political violence has made public administration difficult. Public debt equals about 30 percent of total domestic output.
Before the ongoing civil unrest, the business environment, lacking transparency and efficiency, had improved only marginally. The repressive business environment, burdened by heavy state intervention, continues to retard entrepreneurial activity and prolong economic stagnation. The labor market suffers from state interference and control. Dramatically increasing political instability has similarly increased the risk of hyperinflation.
The trade-weighted average tariff rate is 6.1 percent, and systemic non-tariff barriers further constrain trade freedom. Private investment is deterred by heavy bureaucracy, direct state interference, and ongoing political instability. Political uncertainty and repression have severely weakened the financial system. The central bank has imposed restrictions on the sale of foreign currency by banks to individuals.