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Syria GROWTH AND STRUCTURE OF THE ECONOMY
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Figure 8. Growth and Structure of Gross Domestic Product, 1980-85
Source: Based on information from Syria, Central Bureau of Statistics, Statistical Abstract 1986, Damascus, 1986.
At independence Syria had a relatively well developed
economic base. Rapid economic growth began in the 1930s,
accelerated in the 1940s, and lasted until the late 1950s. Growth
was based primarily on the opening of new land to cultivation and
financed largely by wealthy urban merchants, particularly from
Aleppo. The new farms, which grew wheat, barley, and cotton as
main crops, were large, using mechanization and irrigation as
much as possible. Industry also expanded rapidly, stimulated by
the needs of Allied Forces in the area during World War II and
domestic shortages of goods. Most industries were small,
consisting of powered flour mills, bakeries, laundries, and
repair shops, but also including larger facilities, in particular
textile mills.
In the mid-1950s, a group of economists from the
World Bank (see Glossary) concluded that the period of
rapid growth based on
private sector investment was ending. The slowdown occurred
partly because the supply of new land that could easily be
cultivated was nearly exhausted. Further expansion of arable land
would require large public sector investments in irrigation,
drainage, and reclamation. Large public sector investments were
also needed in electric power, ports, and the transportation
system. Thus, economic conditions required an expanded role for
government at about the same time that socialist-oriented
political leaders became more influential.
Only the waning portion of this period of rapid growth is
reflected in contemporary official statistics because statistical
services developed late and reliability of data was uncertain.
Although statistics improved slowly over the years, problems
remained in the late 1980s. Many economic measurements were best
viewed as indicative rather than precise. Moreover, sharp yearly
fluctuations in agricultural output caused by variations in
rainfall further compounded economic analysis. Although
agriculture's share in the economy had declined over the years,
even in the late 1980s the wide swings in annual harvests had
pronounced effects on such sectors as trade, transportation,
finance, and industry.
Specific data concerning the growth of the economy extend
back to 1953. Such data, measured by GDP at market prices in
terms of constant 1963 prices, indicates that growth averaged 6.3
percent a year between 1953 and 1976. The period of rapid growth
led by the agricultural and industrial sectors ended in 1957
because of a prolonged, 4-year
drought that severely curtailed agricultural output. In the
1960s, land reform, nationalization of key industries, and the
socialist transformation of the economy affected the pace and
scope of economic development. Growth of the economy, measured by
GDP at market prices in terms of constant 1980 prices, averaged
9.7 percent a year during the 1970s. Real growth peaked at 10.2
percent in 1981 but steadily declined from 3.2 percent in 1982 to
-2.1 percent in 1984.
The pattern of growth by sectors was uneven. Between 1953 and
1976, the value of agricultural output (in constant 1963 prices)
increased by only 3.2 percent a year, slower growth than in other
sectors of the economy. In the late 1970s, the value of
agricultural output (in constant 1980 prices) increased by an
average of 9.3 percent a year, despite large weather-induced
fluctuations in output. From 1981 to 1984, output fell each year,
although 1985 levels surged to approximate 1983 yields.
Although agricultural output remained relatively fixed,
industry and construction rapidly increased in the mid-1970s,
stimulated in large part by the oil boom in the Persian Gulf
states. Construction grew 16.3 percent a year during the 1970s,
while output of the mining and manufacturing sectors increased
7.1 percent a year. In the early 1980s, average yearly growth in
these sectors was 5.6 percent and 7.9 percent, respectively. The
growth of electric power and the extractive industries,
particularly crude oil and phosphates, aided industrial
expansion.
The expansion of government services in the 1970s and 1980s
helped sustain economic growth. In the 1970s, government services
grew at an average of 12.4 percent, contributing 14.1 percent to
GDP in 1976 and rising to 19.6 percent in 1984. State commitment
to expanding the educational system, health care, and social
services, to extending public sector enterprises as part of the
nationalization program, to constructing new commercial,
industrial, and residential facilities, and increasing defense
expenditures contributed to this high rate of government service
growth.
As a result of the varying sectoral growth rates, the economy
gradually shifted from an agrarian-based structure prior to 1970
to an economy based on services and the commercial sector in the
1980s (See figure 1, Growth and Structure of GDP, 1980-85). In
1953, agriculture contributed nearly 40 percent of GDP compared
to 30 percent in 1963 and approximately 20 percent in 1984 (at
constant 1980 prices), according the World Bank figures. Official
Syrian government sources placed agriculture's share of GDP at
16.5 percent in 1984. From 1953 to 1976, industry, including
extractive industries and electric power, increased from about 10
to 22 percent of GDP. In 1984, industry contributed 15.1 percent
of GDP. Construction, trade, and transportation retained
approximately the same relative importance as they had had in the
mid- 1970s. By 1976, government services contributed over onehalf of GDP. In 1984, the GDP share from government services
increased to 61 percent, according to official Syrian statistics,
while the World Bank ranked that sector's 1984 constribution at
57 percent.
Data as of April 1987
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