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Syria Budget
With the progressive transfer of economic power from private
enterprise to the state, public finance became a major economic
determinant. Even though the government's fiscal responsibilities
increased during the early 1960s, budgetary practices changed
little until 1967, when legislation established a single,
consolidated, and centralized annual budget that covered all
spending units of the public sector. This budget was closely
geared to development plans and complemented a reorganization of
the banking system. Under the law each budgeted outlay was to be
matched by the funds required to finance it.
The budget legislation was accompanied by a reorganization of
the Ministry of Finance and of auditing and statistical services.
An annual foreign exchange budget was instituted to preview
probable foreign exchange receipts and expenditures, thus
allowing the Ministry of Finance and the planning organization to
anticipate the government's needs in foreign and local
currencies.
The new law required that budget accounts be closed 30 days
after the end of the fiscal year. Unused funds were to be
returned to the treasury, although those already committed were
to be place in special, segregated accounts in the treasury. This
stopped the previous practice whereby transactions continued to
be recorded on budget accounts for several years after the end of
a fiscal year.
Since 1970, when the state introduced the consolidated
budget, all expenditures and receipts of the ministries, the
central public sector administrative agencies, the public sector
economic enterprises, and the local, municipal, and religious
administrative units have been combined into one budget.
Expenditures and receipts of the ministries and central
government administrative units were included in the general
budget in full; other units were represented by inclusion of the
net total surplus or deficit of their respective budgets.
Economic units financed almost none of their own expansion.
Instead they turned any surplus (profit) back to the government
and received funds via budget expenditures for investments.
Although budgetary practices improved and the budget became a
more useful tool for officials, published budget data in the late
1980s remained a difficult source from which to interpret
developments in the economy. Expenditures and receipts continued
to be published as proposals only. Actual expenditures and
receipts were not available, although fragmentary data gave
indications of shortfalls; moreover, the proposed budgets were
balanced, and such important balancing items as proposed domestic
borrowing and anticipated foreign aid were not clearly
designated. Thus it was impossible to determine how effective the
government was in implementing programs, whether deficits were
incurred and, if so, their size, and how dependent the government
was on external assistance. The uncertainties may have been
intentional for security reasons.
The budget gave few clues about the extent of Syria's
economic malaise in the mid-1980s. For example, it did not
reflect the rapid depreciation of the Syrian pound, the steep
rise in prices, the shortages of basic commodities, nor the acute
foreign exchange crisis which compelled the government to reduce
imports. However, budget data during the mid-1980s clearly
depicted the mood of austerity underlying economic policy as well
as the government's commitment to reducing expenditures. The 1986
budget revealed a major decrease in expenditure in real terms for
the third consecutive year, as inflation--estimated at between 20
to 30 percent--negated the 2 percent increase in spending
(see table 7,
Summary of Proposed Budget Expenditures, 1983-1985, Appendix).
Defense spending towered above all other budgetary
allocations in the 1980s
(see
The Armed Forces and Society
, ch. 5).
The cost of Syria's military presence in Lebanon since 1976,
coupled with the government's desire to reach strategic parity
with Israel, accounted for the level of spending
(see
Regional Foreign Relations
, ch. 5). Defense spending averaged over 50 percent of
current expenditures in the mid-1980s, accounting for about 30
percent of total spending.
Agricultural development also benefited from high allocations
in the mid-1980s designed to counteract the governmental neglect
of the 1970s. In 1985 allocations rose 22 percent above 1984
figures, amounting to 20 percent of total spending. In 1986
figures indicated a 5 percent investment increase for the
agricultural sector.
Allocations for the mining industry (including petroleum)
increased substantially in the 1986 investment budget. The 1986
allocations rose 46 percent above 1985 levels as government
officials targeted increased petroleum and phosphate production
and export in the Sixth Five-Year Plan.
However, budget deficits continued in the 1980s because of
the rapid increase in defense expenditures and falling revenues
from exports. The government financed the deficit through
domestic borrowing and foreign aid. However, in the mid 1980s,
budgeted foreign aid grants greatly exceeded actual disbursements
by donors because of depressed economic conditions in the Arab
oil-exporting states. Although Syria budgeted LS1.96 billion (for
value of the
Syrian pound--see Glossary) in foreign aid grants in
1986, the country expected to receive only about one-fifth of
this figure and to incur a substantial budget deficit. However,
the country's internal and external public debt remained moderate
and did not impose an oppressive annual repayment burden.
Data as of April 1987
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