SOVIET BLOC AND WESTERN SUPPORT FOR ECONOMIC DEVELOPMENT IN SYRIA

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T01049A001500190002-3
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 88
• Document Creation Date: December 15, 2016
• Document Release Date: August 11, 2003
• Sequence Number: 2
• Publication Date: April 30, 1957
• Content Type: REPORT

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TAKE OF COMENTS
C. pAsoia ce for Bevo1op
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Unda . ak ?= 'A t,i .Blot- The Co r . ChAx ?,, h
was ravegained
Syria and East ag granted Y`5 a. i_.. 5. a C"v ?;' } ;': ' e,`ise,u,
By ~.'.: J a _ of 1956, Sy.::': , . had signed
,.e' . Mtd !. tt z .. ~-~ ^-~" 1p
AiSS (!s "aadsti "{y-fin
The et o ' m ..ai ry. :: ndi?tu s and the loss of im . ria-gr , -ob"? is
of foreign exc-hang, have severely curtails Syria ;as de elo ent
program, The program,, designed to expand a r aLtsa production and
productivity, calla for an ex rditure through 119611- of $183 million for
irrigation .J a ct s, i`Y ads9 airports,, drainage port de e l ent ,
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and an ail refinery, Two Major undertakings,, estimated to cost about;
$255 million, were scheduled for initial surveys during 1957. A major
source of funds for this program was to have been oil transit rw7enues
from the Iraq Petroleums Comp, The International Bank for Reconstruction
and Development had outlined a site year progr t Uhich would cost about
$270 milhionfl but most of the projects recommended were mwuh mailer
than those contemplated, by the Syrian Goverw en t,
Although the major share of the cost of Syrian economic development
must be financed from internal sources, a sizeable aunt of foreign ire
vestment will be needed if the program is to assume significant propor-
tions. As nationalist fervor has pushed Syria Increasingly toward the
lefts, however foreign private capital has beco: filling to expand
investments in Syria, The Blocs. despite numarcus t neral offers to pro,--
vide whatever economic assistance Syria requires, dogs not appear moiling
to become an alternative source of investment f ands on a large scale,
although it may be willing to undertake smallerg individual projects,
The combination of rampant nationalissme the loss of a significant
mount of oil transit revenues, the arms agreement with the Bloc mid the
estrangement with major Western trading partners has served to ptassh Syria
into closar politico cononic re'L tions with the B1eti. and hes cr steel
serous ev r i; proW-emo for Eyria uhich, 7
post oaeuent of Syria a progran for e;ono :
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Io Getneral E nomic Problems
A. Introdu?n
The majority of the projects necessary for 1i proving economic
welfare in most of the underdeveloped countries are of such magnitude
as to require sizeable investments from external sourceso Cvuse nt]y
the political climate in which economic develo nt takes place has
become a prisms consideration affecting the economic development of
these countries. In many areas of the world nationalism and antagonism
based on anti-colonial feelings have created con .ti a;s WtUch sserl ssly
affect the availability of direct, large scale, priva a investment.
As foreign private investors have become reluctas .t to ipplyy the capital
requirements of underdeveloped countries, and as weste governments
have been slow to fill the investment gap, the Soviet bloc has been
prossented with an excellent opportunity to play inc .gassing role
in the economic progress of many free world areas.
In Syria, the problem has been magnified to an extent that in
many instances political considerations have become the almost exclusive
determinants of economic decisions. Nationalis -Ag antsy onism toward the
West (arising pa ^ticularly out of the Arab-Israeli coan. 'lict) and a
general fear of the resurgence of W' stern colonial dowJnation have
considerably Increased Syria's political and economic vu~nerability to
the blandishmnts of the Soviet Bloc.
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I
B. AtMic tore
Syria is primarily an agricultural country. Cotton, wheat and
barley are Syria's major crops and the major commodity sources of foreign
exchange. Approximately 70 percent of the people derive their living
directly from agriculture and a considerable portion of the rest earn
their incomes by handling or processing agricultural comodities0
As a result, a program aimed at improving the living atandards in Syria
must emphasize investment which would increase agricultural productivity.
There is still a ~arge quantity of untilled land available in Syria
but the lack of water seriously limits its utilization. The total
arable land is estimated at 5.5 million hectaresL9 of wtich about
.305 million is under cultivation. Irrigated land ac aunts for only
about 10 percent of the land under cultivation and periodic droughts
tend to make agricultural production extremely netablla n U
a
=1 Due
severe drought in 1955., the harvest of wheat and barley was approximately
half the 1954 crop and almost all exports of wheat were prohibited. off
Syria is also faced with the problem of raising the relatively
low productivity of its agriculture. The maxim yield of wheat on
Syrian land is reported to be about kilogranns per hectare whereas
wheat-prod? ei.ng countries in Europe obtain yields of from 1 t 2 metr?? c
1 hectare equals 2.471 acres.
1,000 kilogra?s:s equals 1 metric ton.
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tons per hectares Notwithstanding differences in Syrian and European
costs of production, the comparatively low yield is an important factor
in the competitive position of Syria's agricultural colmodities on'the
world market.
C. Tr~c s __rttiad Storarre Facilitiea
The development of transportation facilities is one of Syria's
most urgent needs., Transportation has not kept pace with the expansion
of production and particularly with shifts in the geographic pattern
of agricultural output. The Jezirah area, located in the northeastern
part of Syria, produces most of Syria's wheat export sr~:plus and a
major portion of the country's barley and cotton crops. In spite of
this, the area is poorly equipped with highways and railroads. The
cost of transportation in this area has become e tremaly burdenso and
rates are subject to sharp seasonal fluctuations due mainly to heavy
traffic during the harvest season and virtual ceseatio of traffic
during the winter months. During the harvest season the coot of
transporting grain from the. Jesirah region to Aleppo is about, twice
as much as during the "dead season." J5
1 Transport charges represent
about one-third of the f.o.b. export price of barley arid about a fifth
of that of Wheat. The roads, most of which are unsurfa d, are
inadequately m: intained. The railways were nstructed prior to 1945
and are no longer adequate for the needs of the e :pent-ing econo n
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on the domestic market.
D u rarL-fT ; poker
A major 1iznit-att:lon to industrial expansion J. xi
The shortage of storage facilities isz the crop-p odu i, areas,,
in the o ercial. center of Aleppo and the port of 1 t4#r;:.z Is mother
obstacle which in .st be overcome before any sizeable e; .=.nsion of
agriculture can be under=taken,. Inadequate storage fac .T itiea keep
storage charges high and frequently force farnmers to &4 ,11) hair pr a ets
she .rage of
F
etri. firer ,~ Out of a population r ; k:, .t_l _i: ~y ns
rv>re th fl 1.5 d l ^snn live in towns and vil es p
gip, , 1. d w '
a el. tri ,iii and oriy about half actuaa, .1, , have 1,rF.
Yuarkr in th etrIP 1. estahiish nts provide their oinj po ei
nt as rv,1 - . r, sa.-..,>. a y r
.~~~?vo b.;G . ~~~.i.~,~` extsts~ Wid.ely load p 6qrudr4=; _.
rents tl ad. i hhe '1 +aZnt use of diesel unite prodn' r? prae;e.k
i 3ihk ez? st oal p?. wer generation and . v; 4.i--s.k,, x. i. . ; e n itin
?o , s,sr. pi's odu: rtion in Syria is
&,'t y..p ~zn t-, "'a3e tugjlkV C S Ianl industry has bean.
end of YY7aorld fY avT.y ILi bL: S .h rate of ',.{
fi aa+'- earlier rapid 'rt'lir 1 ' of q~ i,~d~x :. ! R I: ?n e.t~', J~ A~ ed
ha,,, begun iC B Y"i Mi y industrial conccr c} L,:' S _ s" wr tp F ..`E rux
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as a result of wartime and postwar commodity shortages have been
maintained by an exaggerated system of protection from foreign competition.
This protection has dulled the incentive to increase efficiency, and
has therefore retarded the expansion of domestic markets.
F. Face
1. Lack of Inds enaus~Fund-'Pravid Institut.ons
Primary financial deterrents to economic development in
Syria are the lack of indigenous sources of investment capital. For
the most part, there are no savings banks, insurance companies, mortgage-
financing institutions, or any of the other institutions which normally
mobilize savings and invest in government or other hi&==grade bonds.
The agricultural Bank provides only an insignificant amoient of capital
and the Central Bank, established on 1 August 1.956, has not begun
to function as a source of domestic capital.
The Syrian economy is served primarily by foreign banks.
Of the 15 commercial banks accredited at the beginning of 1954, ten,
including all the larger institutions, were foreign.* The French
Banque do Syrie et du Liban (BSL), as the largest commercial bank and,
until 1 August 1956, the bank of issue, dominates the banking system.
These foreign commercial banks are engaged principally in short-term
Franco 5; Jordan 2; Iraq, Britain and Egypt, 1 each.
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financing of foreign and domestic trade and offer little in terms of
longterm investment funds. The BSL has, in the past, extended some
investment loans to industry, but only after securing the guarantee
of the Syrian Government.
The development of domestic capital faces the handicap
of a low annual per capita income (approximately $100) and the traditional
hoarding of savings practiced by the wealthy class. Neither
o f these d i f fi c u 1 tie s are likely to be overcome in any short-
run program. Savings among the bulk of the population are practically
nonexistent. The wealthy class converts its savings into gold. In
1954 the size of this accumulation was estimated at about 0140 million.
The middle class saves a part of its income for extraordinary expenditures-
weddings, illness, etc., retaining the funds at home arsd refusing to
invest savings at the expense of liquidity. 2/
2, DQtaesiiic_ Credit-
Until the recent creation of a central banking authority to con-
trol commercial creditbcommercial banks generally had been free to determine
their own credit policies, The volume of credit extended was usually based
upon the expectations of the next harvest season., By the end of 1953, out-
standing bank credit totalled approximately $63 million., During 1954, bank
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credit expanded rapidly, rising to a level of about $111 million.
This rise was due mainly to the expectation of bumper crops. Credit
expanded only slightly during 1955, reaching a total of about $119
million. 10Y This relatively small increase over the previous year
was the result of a contraction of credit in early 1955 because of a
severe winter drought and poor harvest prospects. By the last quarter
of 1955 credit began to expand again and by the first quarter of 1956
banking circles had regained their optimism and were expecting a
record agricultural season. U/
In addition to bank credit,, farmers obtain credit in a
number of other wags, of which the following are the most importants
1. Loans by the Agricultural Bank of Syria secured
by land mortgages;
2. Credit purchases from merchants;
3. Future sales of growing crops at a price lower than
that which might be obtained during the harvest. I
Until the establishment of the Central Bank,, the Agricultural
Bank was the only government banking institution. The bulk of the
loans extended by the Agricultural Bank are short-term loans to farmers
owning small or medium=sized farms. Long=term loans, which form a
small part of total loans, are extended for land purchase and improvements
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and for the purchase of farm machinery. These loans are extended for
a period generally ranging between 3 and 15 years. No one borrower
may receive more than $2100. The inability to obtain large loans
from the Bank often compels large landowners to turn elsewhere to
satisfy their capital requirements.
In 1955, the Bank granted short-term loans valued at $7.3
million and long-term loans valued at $0.9 million. in an attempt
to increase the Bank's lending capacity, the government authorized
in 1956, an increase in the Bank's capital from $2.8 million to
$2722 million. j
Since most Syrians use currency for the settlement of
obligations, increased credit resulting from an expansion of economic
activity has been accompanied by a similar increase i the quantity
of currency issued. / During the first quarter of 1954, .the total
volun of money in circulation was about $154 million, By July 1955,
after a period of general credit expansion, the total had increased to
approximately $180 million. Syrian officials claim this increase
was much less than necessary to meet the needs of the econo.
3. In=to-rnational F ____ cif Pro ems
The increasing economic activity, with the concomitant.
expansion of credit and demand for imports, has resulted in a
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deterioration in Syria's balance of payments and foreign exchange
holdings. Syria's trade deficit is usually offset, on the current
account of the balance of international payments, by local expenditures
by foreign concessionaires and oil transit payments made by foreign
oil companies, by United Nations Relief and Works Agency expenditures
in Syria, and by emigrant remittances (see Table 8). Since 1953,
however, the annual trade deficits have become larger without a pro-
portionate increase in the offsetting factors.
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Syria's Balance of Trade
(millions $US)
M- M&
km
Imports 139.0 184.7 196.4
Exports ip-_ l"2-
Trade Balance - 35.3 0 56,3 - 64.1
During the first 10 months of 1955, foreign exchange reserves fell
so rapidly that Syria faced a foreign exchange crisis. A crisis was
averted when the Syrian Government received a $10 million loan from
Saudi- Arabia and concluded a new agreement with the Iraq Petroleum
COMIanY, (IFC) which involved a sharp increase in sterling receipts.
The IPC agreed to pay Syria 61 million pounds sterling annually
(approximately $19 million) for transit rights of the oil pipelines,
In addition,, the IPC agreed to pay 88 million pounds sterling
(approxi atelY $24 million at the official rate of exchange) for
retroactive payments and to deliver up to 60080 tons of crude
oil annually at a price considerably below the market priced
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r
Syria's Foreign Exchange
Reserve ,s
December 1951
(million WS)
33.4
December 1952
29.3
December 1953
44.5
December 1954
46,7
July 1955
28.5
October 1955
30?9
December 1955
37.8
SECRE r
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II o Syrian Plans for Economic Deve1 orma &
A,
apr ed ?nve ent
On 13 August 1955, the Syrian Parliament approved a 6-year
extraordinary and special budget for economic development providing
for expenditures through 1961 of about $183 million,, 18 The budget
includes $24 million for new irrigation projects,, $17 million for
roads, $8 million for airports, $12 million for the Ministry of Defense,
$24 million for completion of the Ghab drainage project in Western
Syria, and $22 million for an oil refinery., Also included were allo-
cations for surveys for the Euphrates Valley irrigation scheme and the
Latakia-Jesirah Railroad (See Table 9)..
On 29 August 1955, a Permanent Economic Council and an Insti-
tute for Economic Development were established to control the execution
of the development plans as a whole.. The Council will serve as an
advisory body and the Institute will plan and supervise capital devel-
opment projects. 1 /
Syria has in progress.. in addition to a number of smaller
projects,, two major undertakings,, The first, started late in 1952, is
the transformation of Latakia into a modern seaport to serve as a prin-
cipal outlet for Syrian cormioditiesn The cost of renovating the port
area is estimated at 012 million and is to be completed by late 1957.
The second major project., started in late 1953, is the reclamation
of the Ghab swamps,, A/ This project is to be completed by 1965 and
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will cost about $48 million? / Approximately 1259000 acres suitable
for growing rice, cotton, sugar beets, wheat and barley will be reclaimed?
23/ In addition to drainage facilities and irrigation dams, 5 power
stations are to be constructed on the Orontes River to increase electric
power generating capacity for the Homs-.Hama area, 2.
The Euphrates Valley hydroelectric and irrigation complex is by
far the most ambitious of Syria's planned development projects. The
construction of the complex will extend over a considerable length of
time and will cost approximately $200 million, The cost of the Yusef
Pasha Dam alone is estimated at $40 million and that of the irrigation
system at about $155 million., / Upon completions the system will
irrigate about one million acres suitable for cotton,, aheatf, barley
and other products suitable for cultivation in Syria. In addition,
the Dam will provide Aleppo with a sizeable increase in electric power
Related to the Euphrates Valley complex is the expansion of
transportation facilities to the area, In addition to funds allocated
for road maintenance and improvement, the Syrian Goverment plans to
invest approximately $56 million in the construction of a railroad from
the area to the Part of Latakia,,, 26
B _ ~E10&2g Div .oa,nt
More than half of public investment in the program of economic
development is to be financed through government bond issues and anti-
cipated recelpto of petroleum revenues from the Iraq Petroleum Cora-.
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ble 3
Sources of Revenue
A to
(6-.;Year Estimate) IS 0
00
000
Withdrawals from ordinary budget 9080
00
25,000
Share of petroleum revenues 155,0
00
43,100
State reserve funds 68,9
54
199155
Revenues from IBM loans 77,0
00
21,389
Government domestic loans 246,9
46
68,597
Other 22,0
00
6,111
IS 659,90
0 $183,352
either contribute to or draw upon the ordinary budget, These ancillary
independent of the ordinary budget; some are interrelated in that they
special, related, autonomous,, and annexed budgets-, Some are entirely
These include the ordinary and developmental budgets, and various
budgetary information., Syria has many different types of budgets.,
development program cannot easily be determined by the use of published
The ability of Syria to undertake a la:g&-scale econumic
reduced accordingly or if other sources of funds are anticipated,
mates were prepared. It is not known whether the program will be
resulting from the new IFC agreement had been included when the esti-
3-approximately $7 million a year., however, indicates that receipts
loan. The amount of anticipated petroleum revenue presented in Table
sent with the Iraq Petroleum Company eliminated the need for such a
The Syrian Government at one time planned to seek a new loan
from the International Bank,, but later considered that the new agree-
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budgets total approximately 50 percent of the ordinary budget, IV
The special budget, which includes a related budget and an autonomous
budget, totalled about $37 million in 1955 22/ Syria traditionally
underestimates revenues in its budget and the additional income is
placed in a "reserve fund." The size of the fund is considered a
military secret inasmuch as supplementary arms purchases are made from
it. IQ/ It would appear,, however, that approximately 40 percent of
the country's national income* is absorbed in governmental operations,,
Implementation of the economic development program without sizeable
investment from foreign sources is hardly feasible, unless the govern-
ment is willing to undertake severe anti-inflationary measures,
C. Creation of a Ce, nnttW Bank
On 1 August 1956, the Syrian Government opened a Central Bank
as a major preliminary step in its expansion program., In an address
commemorating the opening of the Banks, President QuwSratli indicated
that the Bank will "direct the granting of loans in the country as is
commensurate with the requirements of national economyo o .and will
direct the financial policy with a view to promoting productions in-
creasing the national revenue. o oR. ,/ The Central Bank is now the
bank of issue and is responsible for determining credit and discount
policies. In tadditious, the Bank will make Inns for indumtria1 and
ag*i4ulturai puruosos:, Flotentielly, the Bank is a eourca of
* Syria bass an estimated population of 3,75 million and a $100 per
capita income,
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The Banque de Syrieet du Liban (BSL), the former bank of issue, limited
its note issue to the extent of its gold and foreign exchange reserves*
The Charter of the Central Bank permits an expansion of Money in circula-
tion covered to the extent of only 30 percent by gold and foreign exchange.
The balance of the backing is to be in official and private Syrian receivables.
The Syrian economy is not yet experiencing any significant degree of infla-
tion but inflationary forces Are present and an injudicious Central Bank
Policy could reenforce theme Present bank reserves do not appear adequate
to support more than a moderate increase in note issue. If these reserves
should increase appreciably at a future date, the inflationary potential
would accordingly increase too.
The Syrian Government is in the process of establishing an
Industrial Bank to finance industrial devolop .ent. The capital of the
Bank will be approximately $2.8 million, of which the Syrian Government
will subscribe to 51 percent of the stock and offer the remainder to the
banks of other Arab countries.
D. E, 'fecto of the Middle East Crisis
The crisis which arose in the Middle East in mid.4956, forced
Syria to curtail its economic development program at a time when it
had scarcely got underway. On 6 November 1956 the Syrian Prime Minister
ordered all. Syrian ministries to stop spending on construction projects,
not to seek tenders, and to suspend any work requiring large expenditures
with the exception of matters related to national defense. 2-4/ He
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stated that the rapid increase in mobilisation needs has presented
Syria with the problem of raising an additional $112 million for "non=
recurrent arms purchases." I/ (The length of time for which this sum
is required has not been determined.) This is more than the $90 million
budgeted for total government operations during 1956. Whereas the 1956
budget increased by 25 percent over 1955, the estimated 1957 budget
will be about 55 percent higher than in 1956, with more than 40 percent
of the budget allocated for military expenditure,,, I
Table
Military Share of the Ordinary Budget
($us ?00 )
Total Budget
58,683
72,989
90,771
1409000
Military Share
21,128
22,829
33,614
57,000
Military Share as a
Percent of Total
36
31
37
41
The Prime Minister of Syria indicated that the increase in the
budget would be raised by imposing either a retail sales tax, an excise
tax on manufactured goods, a capital levy, or a combination of these
27/ \
measures:. On 10 December 19569 it was announced that the Cabinet was
studying a bill which would provide for a three-rear national loan of
between $24 to $27 million and a tax upon industrial production, salaries
and wages, and commodity purchases for raising the remainder of the emer-
gency funds.
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In addition to draining Syrian financial resources for
military expenditures, the Middle East crisis has had other effects:
The severing of the Iraq Petroleum Company pipelines has resulted in
the loss of Syria's major source of foreign exchange and has created
a fuel shortage with its accompanying adverse affects on industry,
The actual loss to the Syrian econoir will depend on how won and
at what rate the flow of oil at full capacity is resumed, It may
take 9-12 months to restore full capacity.
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Dev,~l2 ment
in February 1954, at the request of the Syrian Government, a ten-
member commission from the International Bank for Reconstruction and
Development (IBM ) arrived in Syria to undertake a general. review of
Syria S's economic potentialities and submit recommendations for insti-
tuting a long-term economic development program. The Mission completed
its survey during the latter part of April 1954 and submitted its report
to the President of Syria,..
The Mission outlined a program of government action for the years
1955 through 1960 and recommended a program for economic development
amounting to about $270 million *
Ta
Susmnary of IM Recommendations
(millions M)
Irrigation and reclamation
55?8
Other agriculture
38,6
Electric power
16:,8
Transport and communication
48-.2
Public services and housing
105,1
Other
5.5
TOTAL
$2700
The Mission suggested that any long-range development program
place primary emphasis upon agriculture with special consideration
* Unless otherwise indicated, information presented in this section is
based upon the published report of the Mission, The mas Dev 1-
oome of__S_a-ria.,
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given to stimulating Cotton and grain exports, Although the total invest_
ment recraunended is somewhat larger than that currently planned by Syria,
the Mission recommended allocating .s. larger portion to public services
and housing, The Mission suggested concentrating upon a number of
smaller projects which could be completed in a short period of time and
without too severe a bnrrden on the economy The Mission further recommenc-
dad that the entire Euphrates Valley complex be put off until after 1960,,
in view of the high cost of the project and the construction time required,,
The Mission was apprehensive that the simultaneous execution of the Euph-
rates and other major projects would impose an excessive burden on the
available financial reurces. Expenditures over a long period of time
with no significant increase in production during the extended construc-
tion period would be extremely inflationary
It was suggested that a road network from the Jesirah area to
Latakia be constructed rather than an expansion of railroad facilities,
New and expanded road facilities would cost approximately 00 million,
compared to the estimated $55 million for the expansion of the railroad,
In addition to modernisation of the port of Latakia, it was recommended
that approximately $6 million be invested in an expansion of grain storage
facilities,, eliminating the need for many farmers to dump their grain on
the market during the harvest season.
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In addition to the sources of revenue indicated in the Syrian
btxlget, the Mission suggested that additional revenue (about $25 million)
could be obtained through selective tax increases and an improvement
in tax collecting procedures. The growth in the economy would itself
provide an increase of 3 to 4 percent per year in taxes and other revenues
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Pti.. Wxe n Stt~M&-t,o Fq
Val_ c Develo
The extent to which Syrian economic development wi'l require
externa?, assistance will depend upon the rate of progress desired:,
Until the announcement of the Six Year Development Program, Syria had
been able to maintain a slow rate of economic expansion without signif-
icant external assistance With a rapid rate of expansion planned for
the next few yearn, however.. Syria will have to seek capital, from ex-
ternal sources,
A. "PI _Wt fgign Inv tint
The Syrian political and economic climate for pr ivate invest=
ment presents a paradoxical picture. The country still has undeveloped
agricultural resources and some degree of economic stability, Inflation
is not yet a problem and the free market rate of the Syrian pound has
been relatively stable for some time. Private ownership of industry
predominates. The entrepreneurial group is influential and maintains
satisfactory relations with foreign business circles., There are vir-
tually, no foreign exchange restrictions? !xschsange Control Decree #637
of 21 April 1952 permits free transfer of capital and profits out of
Syria, c d lS cl aigu6d tO foster both short and long==term foreign invest-
ment. IV The development of a foreign exchange market is prirr: oily
rz,a on.ul b.: for the relative stability of the do:?l, ,ar --pou dd e:xrhang+e rate
cad is a proregsaieite for the encouragement of domesti savings
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Or, tt: ' azL'w er hand, there are factors which tend to dampen any
r;'..,u~.asr^ .t.Ve;,trnet%t of foreign Private capital.
'Mere is the rat; ar
rrarr:et Which presently confines the expansion and divers-
fficatlan in;a, trial output in Syria. In a country of only 3.8 million
Peu 4 -. with low purchasing power it is possible to manufacture economically
-r~:y a i1i iced range f articles for the home market. This market lim.
ation has been stmewhat offset by excessive protection of industry
resulting from the. priority given to measures designed for national self.,
suffic;i.er;t~ .
Of even greater significance has been Syrians political instability
and rampant nati>naii m. Government changes have been frequent, with each
new government becoming more anti-Western. Nationalization of foreign
property has become more frequent. In March 1952, the government issued
a decree requiring companies which were established outside Syria to be
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represented in Syria only by Syrian nationals or by cram ercial companies
owned by Syrians. In addition, the decree requires that a majority of
the managers and members of the board of directors of these commercial
companies be Syrian. JQJ
'Decree #189 issued in April 1952 states that only Syrian
nationals may own agricultural land. .1 Broad interpretation of this
decree could affect oil-prospecting concessions and leases inasmuch as
prospecting is often carried out on land suitable for cultivation.
On 3 April 1956, the Syrian Parliament ratified a law arbitrarily
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oFiarilg ft n"esbio~rxary c:ampaniest' to increase wages by 16 percent.
i
he
i
? .?. is
--
k
n pending wnicn would require foreign insurance
Comp' nie- To deposit case in Syria instead of using bank guarantees. 1 J
S. Forte Znve
There are approximately 12,350 agencies and branches of foreign
enterprises and '172 Joint stock companies registered in Syria, These
firms hairs invested about X64 million in commercial activities and about
$3 m11lion in barking operations. Except for investmsnte in petroleum
Pipelines, total British and French investment is probably not large.
United States investment is estimated at $45 millions, of which 90 percent
is in petroleum facilities. /, Some important investment in oil explor-
ation has recently been undertaken by an American firm and a West German
consortium. f Due to the current political instability in Syria,
however, it is unlikely that further foreign investment will be undertaken
there in the near future. Several major Western oil companies recently
decided not to expand their present facilities in. Syria.
G a jaMs zand_ Technical Assistance
Nationalistic and anti-Western sentiment is nowhere more evi-
dent than in Syria's reluctance to accept loans or economic assistance
from Western countries or Western-sponsored organizations. Except for
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United Nations relief aid to the Arab refugees,
Syria has accepted only
about $300,000 annually in technical assistance from the United Nations
since 1953, / This bas been confined to health and educational devel-
opment and to technical advice provided by small groups of industrial
and agricultural experts,
In July 19569 the Syrian Government refused to accept a $30.
million loan offered by the International Bank for Reconstruction and
Development. Q/ The Syrians claimed that their new agreement with
the Iraq Petroleum Company would provide the required funds for which
a Bank loan was sought. It is probable that the Syrian Government may
have objected to the supervisory requirements of the Bank and to the 4x75
percent interest rate- In addition, the rising anti-Western sentiment
and probable desire to benefit from anticipated East-West competition
also may have influenced the decision.
As far as is known, the only governmant~to=governme+nt loans
accepted by Syria from the West have been a $105f,000. Export-Import Bank
loan for drilling water Wells ,M/ and two loans totalling $16 million ex-
tended by Saudi Arabia, In 1950 Syria received a $6?-million loan from
Saudi Arabia, In November 1955, Saudi Arabia extended a $l0 pillion
interest-free loan to Syria and postponed repayr,;mnt of the previous loan.
The loans are to )lob repaid through normal comomodity trade
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T
D. Wes Construction Contracts
Few significant contracts-.private or public have been awarded
to Western firms during the past several years. The following table
is a eursary of such major contracts as have been awarded to Western
companies,
Contracts Awarded to Western Companies 1954-1956
cQr Dte Tvt~ of sect
West Germany late 1954 10,000 kw thermal electric
plant near Aleppo. ,~,,,?/
Construction of 52 km, canal
near the Ghab. M/
Belgium 1956 Survey of Jesirah--Latakia
Railroad. ? /
Netherlands 1956 Construction of buildings at
Aleppo and Mesas (Damascus)
airports M/
United States 1956 Survey of Hejaz Railway.
Denmark Latakia port survey,: 5V
Italy
Survey of 250 km,, road from
to Qamishli,
Switzerland
Sweden
Two drainage canals in the Ghab"12/
Survey of a dam on the Orontes
River,, , 0/
Drilling of ten water wells. ,a/
Yugoslavia 1954-56 Several projects.*
7-See Section .lV F for Yugoslav activities in Syria
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Since the outbreak of hostilities in the Middle Pant, an
agreement with a British coapany for drawing up plans for the construction
of the International Airport in Damascus has been cancelled, as have
various agreements with French and British firms for executing a number
of small public works projects. &?/
E.
Tl'ade iri tl_t ~sr Tdrr4
Trade with the West in 1955 comprised about 97 percent of Syria.3s
total trade France,, Lebanon, and the United Kingdom accounted for approx-
imately one-third of this trade (see Table 10:,) Although complete trade
statistics are not yet available, it is likely that there will be an increase
in the proportion of trade with the Bloc and some change in the pattern of
Syria Fs trade with the West, It appears, however,, that the bulk of indus-
trial and agrimultural commodities required for Syrian gone r require,-
manta and economic development will continue to be imported from this
;Feat, The most important commodities
imported from the West are .t5xelap
machinery, precious metals,, iron and steel products, automobiles and other
vehicles,, and silk products (see Table il),, Iraq and Saudi Arabia provide
almost all of Syria?a petroleuea requirements. The United Kingdom, the
United Staten, France, and West Germany provide the bulk of the other impor=-
tant commodities imported by Syria,
Syria's major exports to the West are raw cotton, wheat, barley,
and wool (see Table 11). France generally takes about half of SyriaVls
cotton exporta=-=the major source of foreign exchange earnings.;
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SF-Can
Lebanon imports nearly all of Syrian exports of livestock and sizeable
quantities of wheat, barley and wool,
A record crop during 1956 provided Syria with an exportable
sur lus of 809000 metric tone of cotton, 300,000 metric tons of wheat,
and 4009000 metric tone of barley. l3,F Bloc activity in the Syrian
rsotton market raised prices to a level sufficient to pz?ice French
importers out of the market after France had contracted for only 5,000
tons, ,&/ Approximately 50 percent of Syria's cotton surplus had been
purchased by the Bloc by the end of January, 1957.
Activity in the wheat market during 1956 was characterised
chiefly by political rather than economic decisions,, France had con-
treated for shipments of 75,000 metric tons, but public reaction to the
Algerian crisis forced the Syrian Government to embargo all shipments
of wheat to France: The ban denied exporters access to a major importer
and forced the price of wheat on the domestic market to drop. ~/b
(France was offering 15 to 18 percent higher prices than other countries..)
Several months after the imposition of the ban the Government concluded
an agreement to export 100,000 metric tons of wheat to Egypt, at a rate
of 20,000 tons a month, f The Syrian Government reportedly agreed
to sell the wheat to Egypt at a low price and is meeting difficulty in
fulfilling its commitment because domestic producers are balking at
this government-established price level, In addition, Syria is having
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difficulty in chartering ships to transport the wheat.,
Syria's surplus of barley has found a ready market. Belgium
has been replaced by West Germany as the major market and Yugoslavia
has appeared as a.major importers, Czechoslovakia is reportedly active
in the market and other shipments are scheduled for Western Europe-,
The following table presents preliminary data of Syrian exports of
wheat and barley during the 1956 export season.,
i-2
Syrian Exports of Wheat and Barley., June=September 1956
(metric tons)
Italy
14,400
31,000
Yugoslavia
-
28,100
Belgium
400
56,400
Rumania
-
14,500
Denmark
-
179,400
West Germany
.5,200
66,4000
France
800
500
Netherlands
4,600
10,800
Bulgaria
28200
Egypt
19244
Others
1Da7
Via. 3Qf~
"Yria.
37, 3c 2:32,600
is presently faced with the problem of disposing of its
major industrial export= =textiles.: Growing competition in neighboring
Arab states from Japanese and Eastern European textilea is pushing the
higher=priced Syrian goods out of traditional markets,,, is ialiy In
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Iraq, Some sales are being .lade in Saudi Arabia, Sweden and Switzer-
land but Syria is still finding it difficult to develop new markets
for its textiles:.
F ~_ can ;?witiee in S
Syrians commerce with Yugoslavia has expanded considerably..
In 1955 trade between the two countries reached a level of about $2
million. In 1956, trade was at an annual rate of approximately $3,,3
million over the first three months and its expected to register an
increase in the balance of the year. During all 19559 Yugoslavia
imported only 8,360 metric tons of barley, whereas in the period,
June-September 1956, imports of 28,130 metric tons of barley were
registered?
Tea Yia*^aelatvs have been succossful in obtaining a number of
important construction contracts in Syria In the Fall of 19529
Yugoslavia was awarded contracts for a major port of the project to
develop Latakia into a modern seaport., The parblon contracted for was
to have been completed by the end of 1956. 22/ The Syrian authorities
were so pleased-with the work the Yugoslavs had done that it appears
probable that the remainder of the project will be awarded to them, U/
In September 19539 the Yugoslavs received a $1 million contract to begin
the initial work on the Ghab reclamation project., The project was to
be c-ompleted within two years after work commenced, /
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In early 1956, a Yugoslav company was awarded a contract to
drill sixty desert waterwel.ls in Syria and immediately dispatched
50 teams of drilling technicians to execute the contract., 24/
The Yugoslavs are actively bidding on a wide variety of projects
They were one of the first to submit a bid on the petroleum refinery
project:, hen a Belgian firm was awarded a contract for the survey of
the Jeairaht-Batakia Railway, the Yugoslavs attempted,, unsuccessfully, to
reverse the decision with a cut-rate offer., 2W In reply to a Syrian
request for bids for the construction of a number of silosf, the Yugoslavs
underbid the lowest Western offer by 70 percent, 12/ The Yugoslavs are
one of three leading contenders for the award to survey the Euphrates
Valley complex
R Gently Yugoslavia has become involved in. arms negotiations
with Syria., Two Syrian military representatives are reportedly nego-
tiating for addtttmial arms and may have already purchased approximately
$130,000 worth of rif".es ~ The Syrians plan to accredit a military attache
to Belgrade, i'
Yugoslavia has plans for further expansion of trade with Syria
and other Arab countries, The Yugoslav Foreign Trade Committee has estab
fished a special group to concern itself solely with the Ydddle East area,
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It contemplates selling goods on short term credit and promoting
cooperation between individual firms and manufacturing enterprises
of Yugoslavia and the Arab countries, In addition,, each of the
Yugoslav embassies in the Arab countries are being staffed with several
Moslems to facilitate working with the Arab States. Aq/
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V. 5 no~Sov et Bloc Su ort Por E?ontaM4 DeveloJMe t,
A. Ltt4on
Until late 1954 Syrian economic relations with the Bloc were
confined to a limited commerce, almost all of it with Czechoslovakia.
It September 1954, the Sino-Soviet Bloc gave the first indication of
a more active economic policy toward Syria. At the First Damascus
International Fair the participating Bloc countries constructed
elaborate pavilions, displayed extensive lines of commodities, and
otherwise dominated the exhibition. With the initial propaganda
benefits, thus obtained9 the now familiar pattern of Bloc economic
penetration began to unfold. Numerous delegations with authority to
sign commercial agreements appeared in Damascus with increasing
frequency. Bloc commercial representatives offered to sell crmnodities
at below-market prices and to buy Syrian commodities at premium prices.
Commercial offices were opened in Damascus and Bloc commodities were
advertised extensively in local newspapers. Local representatives for
Bloc trade organizations began to appear throughout the major cities of
Syria. Commercial., scientific, technical and cultural delegations
were exchanged and numerous, though vague, offers of aesisetance for
Syria's economic development program were extended. By the time of
the Third Damascus International Fair in September 1956, Syria had
signed trade a r- eements with Communist Gina and 1 the European
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Bloc countries, The foundation for an expansion of trade relations
appeared to be firmly established,
B. Ex siaqof EEconomic Rem
. The Damascus Internatior FA
The Damascus International Fair, the most important of
the trade fairs held in the Arab countries, serves as an important
mechanism for the expansion of Bloc economic relations not only with
Syria but with other Arab countries as well. Since the first fair
was activated in September 1954, the Bloc has dominated the fairgrounds
with elaborate pavilions and well devised propaganda, At the first
fair, the Soviet Jnion, Communist China, Czechoslovakia, Hungary and
Bulgaria presented the most spectacular pavilions and attracted the
most visitors. / These countries displayed everything from heavy
industrial equipment to foodstuffs and clothing, with major emphasis
upon these conRoditiea necessary for a suitable expansion of agricul-
tural and industrial production in the region. (See Table 12)
The USSR did not participate in the second fair but the
Bloc was represented by Communist China, Czechoslovakia, East Germany,
Hungary and Poland. The Bloc again dominated the event.,, with the
pavilion of Communist China the most popular.
Bloc participation at the third fair was particularly
important as every European Bloc country and Communist China had
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both these countries offered cc oditien at low prices and were willing
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worth of business by the and of the 1956 Fair. / Representatives
displays. Several of the Bloc countries advertised heavily in local
newspapers and the Bloc pavilions again were among the most impressive
of the Fair.
With the exception of the East G rman and Czechoslovakian
exhibits, it appears that the main purpose of the Bloc pavilions was
to impress the Syrian public with the range and capabilities of
industry in communist countries. Many of the Bloc representatives
at the displalrs refused to discuss prices, credit terms,,, or delivery
terms. Obse vver reports indicate that the various displays of heavy
industrial equipment made little impression upon a country with no
prospect of developing heavy industry. Many of the consumer goods
displayed could not have been designed for sale in a consumer market
with limited purchasing power. Much of the advertising undertaken
by the Bloc during; the fair was of a general nature, without reference
to specific commodities.
The displays of the East Germans and Czechs, although
tinged with propaganda, appear to have been successful in selling the
commodities displayed. In 1954, the Czechs reportedly closed contracts
?or about 41 million worth of cosmx dities of the types displayed at
the Fair. A.3/ The East Germans claimed to have arranged for $3 million
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MT
to extend favorable credit terms.
Available information indicates that the commodities
displayed by the Bloc were generally inferior or obsolete when compared
to Western products. It must not be overlookedq however9 that to
countries in the early stage of industrial development the low cost
of such equipment may far outweigh the slight disadvantages of
obsolescence. Fmrthermore, where funds are short buyers willl, be
attracted by payment plane which extend over a long period of time
The following information is representative of comments
about the quality
of the products displayed by the Bloc during the three fairs. 96J
Conimwaist _C;ain .
Heavy equipment,, agricultural and textile
machinery generally considered goody consumer
goods are generally very poor; prices of
Soviet television about 2 s that of
comparable U.S. sets* road-building oquip
vent generally good but not suitable for
large-scale operations; Soviet tractors
equally as good as U.S. tractors.
General appearance of machinery and machine
tools seemed quite goody textile machinery
on display needed frequent repairs; some
machine tools possibly made in the USSR-
conr goods generally poor- agricultural
equipment generally acceptable; medical
equipment appeared to be copies of
obsolete American products.
38
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. CMS-hcaWMMM__P.
Quality of products oc 8isteaxtIy goods induea
trW and agricultural sent re . dyad
hi ; medical equipment g'wd * du r ative
e ppsnt generally infer or; PIport: rg
eq i nt exceUent4
adustriUl and agricultural e .pxe-nt and.
consu.r goods germ good; rubber
prod ote excellent; tractor trailers
accept ble; binoculars and other optical
e p nt exxcellernt; auto oti? e eq nt
inif prior a
"" , dl le machined not up to Syr etwad&n_: ;
;+liv s a .pment good but cad hi ; ag i
e?.ltural machinery below Weehern 'stand dd
pia iiae tools c parable to y in $WWcato
Ea opa; autos and trucks inferior
Ge acrally below standard; ra in gcsad and
to=w priced- indawkrial. d & ?: salt gal
mainex-a inferior,
IL` Kadhiner7 unfavorable benComp to
Itral i = or French; some goods : ?cbab:
iazde in USSR; agricultural ocipa nt
firs, electrical e ent obeolet i l.
Maw i ..hing equip I nt ob of t y
7n. F Machin a tools below et d. rd; ?io to a1
L o'r in 3 a poorly de; i&-ned; nmia 3 t L nt
cop{ is obsolete stern E ?op ;u,
L-b ?- i y g'e 'aea a ly fir! oleuh, dab
rY,1.a h *: vn w products shabby.
f;N ?,eIr -E: ifiies of the Bioo delegations o 't the Soo
n.M3
Ra aces : - , ratio a e Fair soon imam it clear I.-hat nn acanva- I c;
M=L
39
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25X1X
delegations into Syria.
there has been a steady low of Bloc trade, scientific *aid technical
in concluding trade agreements with Syria. Since the end of 1955
to these btaendisntssm The lour Bloc delegations were successful
characterised, the domestic political scene assured Syrtaz receptivity
of closer economic relations. The drift to the left which had
Syrian offlcialu were entertained and impressed with the advantages
contained reports of banquets given by these delegations at which
by a similarly authorized Soviet trade delegation 7' Newspapers
to conclude trade agreements, and war* joined late in September
all came to Damascus authy the eot,n truoti n of the
Hejaz .ilroa.d The contract-0445,000--se cured in S trtion ag airt
Western bidder*_. waat far below Western bids and ru wo-,CLd not
have xmvered the contractorO s costs? -IW The ortrae; t. waa ee ze q rt
canee e d. wiser>. Saudi Arabia refused to permit tha :Po ..sgh tec cie a
t.r2 oa ~,ar that couaatzya, Tau of the Polls technicians rom& ed in Syria
and & To preparing an offer for the survey of the :a f, ,-A.I appri= ozira t
Railroad. : g/
mrtir before the opening of the 0aeaa a .us Fair in Uptember
1956, G aeo he /ye dr` so.t, Director of the Rumanian e. prie;sed
an te:tet in a ssn ati S)1rU in construction of - ;~erntnt pianau:s at
Hama acid m s w id in the e~nsion of the railro, d fas.c ?U.tias in tae
Fp `F 9 f y +y71
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1 -1
D a Issue 0i' th 14oa a Petrol ecs~ f' ?
The prospect of Bloc erosion of Western influence in the Middle
Feet petroleum industry,, which could result from Bloc construction of
a major petroleum refinery in Syria., has caused considerable concern
among Western officials, The United States Government considered the
situation serious enough to warrant increasing P.L. 480 assistance to
certain Western governments if they uld agree to subsidize any bid
extended by their domestic firms,, ~ The refinery became a major
East=West economic issue.
Under an agreement concluded late in 1955> the II agreed to
provide Syria with 600,E tons of crude oil arinually at reduced prices.
The USSR immediately offered to construct a refinery at a nominal price
to process the crude oil Pressure from laft,-sring elersnts in
Syria then forced the government to include the construction of a refinery
with an annual capacity of one million tons in its Six=Tear Developm ntal
Budget, The Syrian Petroleum Institute was created to draw up specifica-
tions and call for bids on the project?
In addition to the rather nebulous Soviet bid Czechoslovakia
registered a firm bid and on 20 February 1956 it was rumored that the
Czech bid was accepted in principles Uhl In ? ch 1956 a group of Czech
petroleum experts arrived in Damascus and stated that Czechoslovakia could
X1
complete the refinery in two years.,
SECT
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25
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xi
In addition to the Soviet and Czech bids, the Syrian Govern-
sent received bide from firms in the United Kingdom, France, Went Germany,
Italy, Yugoslavia and the United States. The Syrian Minister of
Eablic Works established an advisory group consisting of one repereeen=
tative each from Czechoslovakia, Egypt and the United Kingdom to study,
the bids and provide technical advice. ,Q/
By mid-July 1956, the bids under consideration were narrowed to
those from Czechoslovakia and Procon, a IJUK firm. Both placed bids of
approximately $15.7 million but the Frocon plans were considered to be
technically superior./ Czechoslovakia, however, subsequently lowered
its bid _, , f? Frocon refused to engage in a Dutch auction" with the
Czechs and was unwilling to place a lover bid without a provision for an
escalation clause to compensate for any future increase in labor and
material costa. Yielding to U.S. governmental pressures, however,
Flacon presented a firm bid, offering to accept 10 percent one year after
the contract, 10 percent upon completion of work and 80 percent over 7
years at a low rate of interest, The Czechs had offered, to accept
50 percent upon completion and the balance over 5 years, /
With the outbreak of hostilities in the Yr.ddle East and antic'
Western sentiment at a peaks, public pressure mounted for an award to
Czechoslovakia, Seeking to find some grounds for compromise because of
the technical inferiority of the Czech specification, the Minister of
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Public Works attempted to have the Czechs construct the basic facilities
($12M itself plans to expand cotton
production by about 3309000 tons annually by 1962, J/ This s%pan-
Dion alone is ere than Syria~e total produastion of eotton0
Although trade between Syria and the Bloc may be expected to ex
pandy an economic foundation for a large-scale etpansiou of trade with
the Bloc does not presently exist,, The Syrians might be willing to
expand their purchases of industrial coirwdities from the Bloc9 but the
economic difficulties in Eastern Europe will coral these countries to
seek an expansion of trade with countries which can solve their immediate
economic problems.
The Bloc will probably continue to exert economic pressure upon
Syria with offers to expand trade end assistance for Syria ~s economic
development program,. It is probable that the Blot will continue to
undertake construction projects and, an long as tension eadsts in the
areas continue to provide Syria with arms.,
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APPENDIX A
Lab ;e
S i n Balm s of P enta
iJS million
XI
1953
Qredi Debit
-
Credit Debit
Con xsdities and
Serv'i t,e s
.1 Deports and E;epoate
114.3
135.6
159.7
188?5
2 Transit Trade
107
2.8
3 Tourism
4.2
6o7
506
19
6
4. Oil Companies
13.7
U02
.
5- Miecellaneo s
2.8
ZA1
Total (A)
136.7
143.4
183.5
203
1
Bo
Grants and Remittances
0
10 E igr'ant remittan
ces
2.8
208
2. UN grants to UNRW
2.8
I~1
Co
Total (B)
Capital and Gold Move
ments
5.6
3.9
1. Private Sector
5.6
2
6
2. Banks
12.9
.
13
8
3a IFM payments
4? Monetary Reserves
1.1
0
!L- 6
i
.
Total (C)
Errors and Omissions
18.5
15.7
2f.t~
2e1
Total (A?D))
160.8
160.8
210 2
210.2
65
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-MM
Table 9
.Sian D? o n ja R,ye~ rya,
1955- 1961
($t75 000)
Administrative Expenses 19443
Investments in Semi-Autonomous
Government Paso jests 2,301
Irrigation Prom 24, 505
Road Program
Construction g3.5d
Maintainanee 8 965
Airports 7,564
Land Surveys 336i
Miscellaneous Construction 14,596
Ministry of Defense ,~
TOTAL NEW }R03ECTS
Appropr:? at&on?r to Existing Projects 1,,6
Appropristions to Existing Commitments
for Loans ant Advances to Public
Projects* 4&443
Additional Inveatment in Semi-Auto-
nonus Government Corporations
j2 q?
2
Balances Not Yet Used by Existing Projects A-M
GRAND TOTAL
Includes IS'3O r..illi.an for a petroleum refine.,
25X1
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-95/gym Y
30 30
?partners
4.19126
banxin
471454
Uri :' Kingdom
35;071
Vnl.rdfl States
279 548
West Gerznary
25, 605
It iy
16,E
.r.q
7,752
Re gi
14 515
SawLl Arta
9 696
ha her. c,s
x;396
' Sa3d~'3
13
16
U
9
0
21
322$24-t
46,460
36,$ 6
11
35,892
11
279370
9
258.998
6
23,472
`T
r
179731
6
X907
3
9,
3
4,276
5Q
)
18
P scent.
of T t
196,:22
1.9
1:
34,,695
18
14.2
7
150502
8
16,171
8
14,,22?
7
10,766
5
6 s.0
3
8,934
5
3 7 :
2
522271
217
a .',Fz ;: x cthr :~ o 51~ aw. ,os~ o~ Frei 'wade, Damascus., 1976
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ion C
TableeU
U
Went
(
1954
Major Commodities
? 1955, Jan - Sep 1956
(: illioz: U5
1954
1955
Jan-Sep 1956
Percent
Va
g
Percent
lue 1RUL
T
WHO
Percent
of Total
Q
22
_ z~ fn;~iean3 ?i~9
11
Saudi Arabia
4
4
5
Ciaq
5
5
Lebanon
1
ftI i=lading electrical
L6 1
7
13
United States
J
4
11
United Kingdom
3
4
4
West Germany
3
4
3
Automobiles ~ae3 ?ot e~ ~
n~ e~
10-
United States
3
Vest Germs y
3
S11h and other txroducte
Italy
F'an?i
?eML tAR"10
United Kingdom
Union of South Africa
Lebanon
~? eteel,te
France
Belgium
$US w -- LS -,5f
Sr S ; x l.nistry of National Economy, Dirsct rte of S tttieti o
UasausI3 1956; ef
g0ji
lu
4
4
22
3
6
11 1955
12
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Table 11
(Conti un ed )
(Million US $.
1954
1955
Jan-Sep 195
Total Trade
Valul
X33
Percent
IV,
D-1
Peretnt
IN %
A
Fer nt
10-0
R t cotton
27
66
a9
25
26
France
19
27
United Kingdom
6
S
Italy
3
10
h
.1
2
United States
5
5
4,
Lebanon
1
2
2
Llxuluk
6
Lebanon
6
8
Cotten eeeda
4
3
2
Lebanon
2
1
United Kingdom
1
Wheal
Lebanon
S
I
003
2
?
8
2
United Kingdom 1
Ad= a
a 2
Belgium 7
03
3
Denmark 4
l
Lebanon 1
03
1
W I = tS 3,57
Sources Minietry of National Econbmye Directorate of Statistics, 3tatist3oa~ Ab?tract of Sv
Damascus, 1956; _of Fore{an_`Srsd F?rst Dine Month A of l4 6p Dsae~s~ua 1957.
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Tie sei i ?bq S
1954s 19558 1956 (9 months)
Total Total Percent
D a 8ioc o 9&&
2WIMOAkunk
Other
s d- t_AA ,resit
Imports
Mcport s
1.768067
129 9 374
49777
1,112
2.7
0.8
1,692
73
2,
1.16
225
Total
305,441
58889
1
9
1
6
7
977
?
97
,
2,874
116
Imports
Exports
1888024
131
539
5,51st
6
299
2,9400
2,774
185
153
Total
,
3198563
18
25
7
037
132
2
2
19280
180
-
165
8
,
39680
28954
185
318
318
Imports
Exports
928439
512
84
2,402
2.6
1,127
18107
97
T
,
1,266
145
951
151
otal
1761,9511
3v 668
2c1
2 ,078
a
1.
258
97
Jan-Se
8
235
5
Imports
9881.79
3
9132
2
3
1
201
Exports
968702
,
4
478
0
6
4
,9
1.873
8l
128
Total
194888].
,
7
610
9
3
9
8149
10253
-
76
8
3
4,350
3
126
81
8
204
Source; Ministry of National Econonr8 Directorate of Statistics, Damascus, 1956 tiati Attract of 33-ria l9
Ministry of National Economy, Directorate of Statiaticae S ri oaf Fa_ i~ Tt ., First
nine months 1956,, Damascus, 1957
5X1
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SECRET
kPPPENDIX? l
SinoffiSoviet Bloc- jcioa, tiorr in the D seas
Intern_t1ode F ire
1954-1956
Ma1or C+~+; ties Tlfaolr~d
Tractors
Agricultural
machinery
Machine tools
25X
Oil-refining equi nt
Ores
Chemicals
Agricultural equipment
Irrigation equipment
Sugar refineries
Grain elevators
Food processing plants
Diesel engines
Road-building equipment
Textile products
Machine tools
Textile machinery
Electrical equipment
Automobiles
Textile fabrics
Petroleum products
Timber products
Construction and
road building
machinery
Communist China Machine tools
Medical equip-
ment
Foodstuffs
Engines
Textile machinery
Electrical equip-
ment
Rubber products
Bearings
Bicycles
Sewing machines
Czechoslovakia Diesel engines
Tractors
Pumping equip-
ment
Motorcycles
Pumping equip-
ment
Electrical equip-
ment
Construction
-machinery
Diesel engines
fining equip-
Mont
Machine tools
Foodstuffs
Pharmaceuticals
Diesel engines
Mining equip-
ment
Construction
equipment
Machine tools
Printing machinery
Textile machinery
Electrical equipment
Iron and Steel products
Radios
Bicycles
Textile products
Pwaping equipment
Tea
Agricultural products
Tractors
Glassware
Textile machinery
Furniture
25X
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APPENDIX B continued
X1-
Co.
Czechoslovakia Jewelry
(Continued) Furniture
Hunting equip-
ment
Machine tools
Hungary Wood-working
equipment
Textiles
Freight loading
equipment
Buses
Electrical equip-
ment
Tractors
Houset*ware e
Railroad equip-
ment
Machine tools
Bulgaria Lumber products
Agricultural
machinery
Industrial
machinery
Tractors
Trucks
Motorcycles
Machine tools
Electrical equip=
meat
Sporting equip-
ment
Automobiles
Pumping equip
mnnt
Jewelry
Glassware
Electrical
machinery
Machine tools
Comxications
equipment
Textiles
Sporting goods
Pharmaceuticals
Motorcycles
Trucks
Construction
machinery
SECRET
aL6
Motors
Ducks and buses
Diesel pumps
Motorcycle a
Precision instr?-aments
Printing machinery
Shoe machinery
Musical instruments
Motorcycles
Machine tools
Precision instruments
Textile machinery
Electrical equipment
Motion picture equipment
Textile products
Diesel engines
Various consumer goods
Agricultural machine
lumber products
Ores
Agricultural products
Machine tools
Textile products
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No pavilion but
exhibited IFA
automobiles
and delivery
wagons
9MIM
East Germany
Poland
No exhibit
Irrigation and
pumping equip-
ment
Mining equip-
ment
Textile fabrics
Precision insstru-
monts
Steel products
Medical ep-
mont
Household
utensils
Sporting goods
Rumania
No exhibit
Agricultural
Food processing
machinery
machinery
Automobile a
moping equipment
Electrical
Glassware
machinery
Jewelry
Machine tools
Optical equipment
Chemicals
Cementing machine 9
Various consumer
goods
Machine tools
Trucks
Automobiles
Canned foods
Agricultural
machinery
Motorcycles
No exhibit
Cement
Glassware
Aicultural products
Mining equuipent
Machine tools
Wood products
Building materials
Chemicals
Pharmaceuticals
Housewares
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App B Continu d
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APPS ITYX B Cant tad
X1
om
Albania
IM
No exhibit
No exhibit
n6
Textile products
Mineral products
Building materials
Beverages9 tobacco
Leather products
Oil products
74
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W MT
Anoendix G
. C? 9~ rsr
Period CcI m2d
V
Albania
Sep 1956-Sep
Na A.
1957
Bulgaria
June 1956.
No A,
June 1957
it,
( 4Comeunist
Nov 1955
No Ao
;`'China
Nov 1956
East Germany Nov 1955
Nov 1956
Syrian Trade Agreements with the Sino-Soviet Bloc
omm~ ties F sn
Syrian agricultural pro-
ducts for Albanian coal
and asphalt
Syrian agricultural
products for Bulgarian
industrial raw materials
and industrial products
Syria exports.ootton,
tobacco, wool,.cereal0
oil seeder silk and
rayon textiles. China
exports-machinery, tex-
tiles, antimony, liquors,
wines, chemicals
payments Other
n?emente AMRA t_ C ea Ross
First
agreement
Most-favored. First
nation treatment agreement
Establishment of
permanent delegations
t 250,000 awing Most-favored-nation First
limit treatmento Eetab- agreement
lishment of per-
manent agencies
Automatic renewal
Syria export otton, All payments in Mostafavoreddna- First
grain, oil seeds, oils, Syrian pounds tion treatment agreement
dried fruit, tobacco, through a special Establishment of
wool East Germany account. S 1~5 permanent agencies
exporta= achinery and million swing Automatic renewal
transport equipment,
medical equipment,
metal and chemical
products, photographic
equipmmnt
NO A.
C ,T
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 5X1
Mar 1955m
Mar 1956
A C
(Continued)
B1Qa Ce~vntxwr Pe od C v_ereed,
Czechoslovakia Mar 1953.
Mar 1954
Mar 1954
Mar 1955
;`'Hungary
Poland
5X1
May 1956=
May 1957
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17ments
vat Commodities Exsnrt~l Arraymeneata
~is e
N6 A. Syria exports hides, cotton, Payments as
fiber, agricultural proms provided in
ducts, Czechoslovakia private contracts;
exports industrial and countries auth-
agricultural equipment, orize transfer of
electrical equipment currencies
No Ao
N. A. Syrian exports-cotton,
wool, grain, olive oil,
leather; Hungarian
exports heavy industrial
goodsg electrical,equip
went, chemical products
Oct 1955= $10 -million Syrian exports--cotton,
Oct 1956
(eats )
fita, grain,,; textiles,
woolo Polish exports
machinery,, metal goods,
steel products, autos,
textiles# cement,,
chemicals
First
agreement
First
agreement
Clearing account Abet-favored-na- First
in US dollars tion treatment agreement
in both banks; Automatic renewal
$7509800 owing
limit; excess
payable in dollars on
demand; balance
at expiration
76
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Other
ant CIRUIDS Room"
Automatic renewal
 X1
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C
Continued
5X1
D120 Cou t
Rumania
dCo"
Yam? lug Cg hies E a d
Jan'Dec 1956 N. Ad
Nov 1955=
Nov 1956
Syrian exports cotton,
seed oils tobRooo, hides..
Rumanian exports timberfl
papers machine, chem-
icals, petroleum products.
~l
1~. AG ~n expootYong
tobmeco, oil seeds9 tel.
t exports=industrial
products, agrioultural
machinery, vehicles
171flents
Arrange ntc
0300, CO0 swing
IS 300,000 swing
limit; imbalance
settlement in
goods within six
months of ter-
mination
Other
~mrortant Clauses rks
Most-favored-nag First
tion treatment agreement
Establishment of
permanent delegations
2 ost?favora -na=, First
tion treatment agreement
Automatic renewal
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25X
A
+nta D ec o Un C 3Nd;tiee-
Deus
Shukri Asaad
(Aleppo)
Attar, Plansour//~~&..,, 0%,
Yabya.Ayish & (O
Abdalish Chnhine
Issatt Diarbakirli
A1-Fallah Agricultural Machinery Co.
Khalik Fattal & Sons
Ghandour & Habba l
(Aleppo, F3am* , Iartaki.a )
Antoine & George Channage
Ahmed Rarastani
Khoury & Co.
(Aleppo)
Naccache Bros,.
Elie Naafash & Co,,
Zaki M hfoue Nashid
Umbras Papasrandes
Rafleh Shaghuri & Co,
Yassiu Tabbaa
1' hjoub & Lababidi
Joseph R..ayl
iAhham Freres
Malass et F eanaTh i
Naggash Freres
Sauwaf Freres
Maison Ara et Cie
(Aleppo)
Adel Mandia Co,,
MAX
Leather equipment
Bicycles
Machine tools
Auto equipmat
Telephone equipznt
Motorcycles and bicycles
Musical instruments
Furniture
Water Pampa
Furniture, textiles
Skoda and Tatra vehicles
Machine tools
Agricultural machinery
Pimping equipment
Medical equipment
Leather goods
Sporting equipment
Glassware,, porcelain fixtures
Chinaware
Artificial flowers
Je iry, glaaereare
Radio receiving sets
Electric motors, flour mills
Canned foods, beer
Buttons
Bicycles, motorcycles
Tire pumps and accessories
Sewing machines
Bathroom fixtures
Chins re bathroom fixtures
Textiles
Photomap c equipment
Sewing machines
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 Approved For Re
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(Continued),
X-t
Zeccache Bros,
Bayhum,, A jam.;, Kitabi et Cie
(Aleppo)
Tawfig Senadiki
Eastern Economic Development Corp.
Alpo
Ara and Co,,
Zahid Rd, Elin1
Nuri Hneidi & Co
Kate ph coo
Haa
,%fe , Ha.shveh & Dirg3-
Te mini & Zt. vj
(Home)
Dxor
Abd allBagi Jaud & Braa.,
Aa ad Madad
amwbab
Antoun Baia
Hamdi Dlaiwi & Bon
FEW
Rislan & Shah]
79
Building; materials
Machinery, motors
Skoda automobiles
Textile machinery
Photographic equipment
Precision instruments
Electrical equipment
Motorcycles,, bicycles
Printing equipment
Refrigerators, heavy road
construction equipment,
washing machines?
Motorcycles and bicycles
Refrigerators, heavy road
construction equipment,,
washing machines
.Motorcycles, bicycles
Motorcyolee, bicycles
Refrigerators, ua?ehing
machines, heavy road con-
struction equipment
Refrigerators, washing
machines, heavy road building
equipment n
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 Approved For Release 2003/10/01 : CIA-RDP79TO1049AO01500190002-3
25X1
X1
I#.it
Muhumd Said Shreigi
QWAAU
Bustani Bros,
R?enta for Ee Geer ramrnnAi+.je8
DGMgCufi
Toufik Sanadiki
Sawwaj Freree
Khalil Fattal et Fils
Marcel Karah
Hisham Haean Jaffen
Mai j id Kusberi
Moison Mara.'.
boar Fawsi alv 'ai
(Aleppo)
Finan Masali
Nazih T arab ayn
Photo Dpi
Arts at P'mai.Quua
Shtfig Nahas
Abdl..Karim Naji al-Masarani.
Nicola and Musa Debai
Hinkieh Freres
Elian et Rabbath
Motorcycles, bicycles
Tractors, refrigerators
Road construction equipment:
Agricultural equint
Photographic equipment
Rugs, kitchenware
Optical equint
Textiles
Watches,, calculating machines
Typewriters
Adding machines
Dental equipment
Rubber products
Printing equipment
Motion picture equipment
Musical instrmente
Textile machinery
Motorcycles
Drugs
Foodatuffaa
Writing equipment
Approved For Release 2003/10/01 : CIA-RDP79TO1049AO01500190002-3
 Approved For Release 2003/10/01 : CIA-RDP79TO1049AO01500190002-3
SKMT
nu D
(Continued)
C rQ. a t2r m r~ lYf Cr..rwiclit t 22
D=Wljm
Khalil Fattal & Sons
Jo Suvayd
Sakkatex
Arab Trading and Engineering Company
Sayjal-Din Tabb kh
Sawwah & Co,
George & Antoun Ahannage
Hasan Maher Hamwieh
Khouri, Saoumeh & Co,
Eastern Trading and Agency
Baghadi & Accad
Haffar & Mallas
Jallad Mahammc1 Haul
Biter Co.
Mulbaki Co.
Swear Co,.
Eastern Trading and Agency Co,
Beehir & Mustafa War
Elian Rabbat
Avedis Milletbachian
X1
Pharmaceuticals
Furniture
Textile products
Rubber products
Hardware
Medical instruments
Buses
Medical equipment
Preciaion instruments
Motorcycles
Bicycles,, motion picture
equipment
Machine tools
Radios
Sewing machineg9 kitchenware,
electrical equipment
Approved For Release 2003/10/08i CIA-RDP79TO1049AO01500190002-3
 Approved For Release 2003/10/01 : CIA-RDP79TO1049AO01500190002-3
Nicolas Matuq - Daaoascus Wood products
wkU- ' PIS ieh C2=2dkU
Maayaao Khatar & Co,, Flour mills
CoraIrcial Agents Tor Run an
Kalai Bros-, Damascus Various industrial and agri-
cultural machinery
arc a A n1?B far t CoModitiW
George Uwayshig Automobiles
G$
Syrian Oil Refining and Distributing
Company Petroleum products
Nazih al-Hakim (E1- afeer Agency) Coordinating Bloc advertising
Approved For Release 2003/10/0 CIA-RDP79TO1049AO01500190002-3
 Approved For Release 2003/10/01 : CIA-RDP79TO1049AO01500190002-3
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(Contracts and Offers.
Czechoslovakia Sugar refinery including dis-
tillery, power p 1, and
LIU*jUgn Sg
other ash.1iary Mani#:e, U 1.7
Chug fac wry U 02
Cement plants Two; estimated cost at 2*21F
each
Engi.teering surrey Hama Bement plant (43,000)
Airport
.%1131, ro d
D ias us International Airport
Lata is-A1eppo iezirah
25X1
5X1
SECRET
83
4-5
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 Approved For Release 2003/10/01 : CIA-RDP79TO1049AO01500190002-3
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East GeaV a nt plant
Cement plant
Weaving mill Textile factory
Machinery for a textile
factory
Cotton spinning mill
Shoe factory
Cotton spinning min
ydroelectric plant
A1uminplant
unitions plant
Rai road
Roam 200 tons daily capacity U
Aleppo; 600 tons daily capacity,,
price c.i.f a Beirut; delivery
completed within 15 months 1.3
Delivery during 1956
Aleppo; 3,800 spindled
..-NAWASILIZ =.I
.5
?3
.5
Output of 500 pains daily
U
Puma
Vanufacture of 20 = shells
and gnruade casings
Latakia-Aleppo
2.8
5X1
MGM
Approved For Release 2003/10/01 : CIA-RDP79TO1049AO01500190002-3
 Approved For Release 2003/10/01 : CIA-RDP79TO1049AO01500190002-3
. SECRET
91oc Cauntrv le Mt -PM Hungary Flour mills
Aleppo-one Eton wheat TQUr
mill
Homs-one 90 -ton wheat flour mill
Home-one 100=ton wheat flour mill U
Probably Aleppo-Jezirah
Northern Syria; principally
Latakia; 17 Oct 56; completion
in 14 months
To be constructed in Latakia U
To be constructed at Dum yr- 1*4
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Next 10 Page(s) In Document Exempt
Approved For Release 2003/10/01 : CIA-RDP79TO1049AO01500190002-3