Workshop Syrien

Wissenschaftliche Schriftenreihe: Band 4

Anthology, 2011

214 Pages

Grabau-Stiftung (Hrsg.) (Author)


Table of Contents

1. Preface

2. German Economy
2.1 Signs of Downswing
2.2 2009 is not 1929
2.3 Economic Situation in Future

3. The Health System in Syria
3.1 Excutive Summary
3.2 Health Status indicators
3.3 Health System Organisation
3.4 Health Care Finance & Expenditure
3.5 Human Resources
3.6 Health Service Delivery
3.7 Health System Reforms

4. The Syrian Tax system
4.1 Introduction
4.2 Historic Overview
4.3 Tax Revenues
4.4 Basis of Taxation
4.5. Kind of Taxes
4.6 Tax Evasion
4.7 Advancement of Tax System

5. German-Syrian-Families- Legal Aspects of Foreigners
5.1 Preface
5.2 Marriages between Muslims and Non-Muslims
5.3 Rights of Foreigners and Non-Muslims
5.5 Heritage
5.6 Appendix

6. The body politic of Syria - Overview
6.1 Historical Background
6.2 Body Politic Nowadays
6.3 Foreign Policy of Syria
6.4 Syria’s Relationship to Lebanon

7. The Banking System of Syria (private sector, creditpolicy)
7.1 Syria’s Banking History since the 1960s
7.2 Developments in recent years
7.3 Syria’s Banking System today
7.4 Islamic Banking in Syria Summary

8. Value-based Code for Managerial Staff

9. Business opportunities in Syria
9.1 Syria (Main Indicators) 2008
9.2 Relecommunication (Private Sector)

10. Export Control & Foreign Trade in Syria
10.1 Introduction
10.2. Concept and Nature of Syrian Foreign Trade
10.3 Foreign Trade Rate
10.4 Proposals and Recommendations

11. Leadership Behaviours in Western and Arabic Cultures: Empirical Evidence from Culture Consequences and the Study of GLOBE
11.1 Introduction
11.2 Understanding Culture
11.3 Culture’s Consequences Study
11.4 Study of the GLOBE
11.5 Management Styles in Arabic Countries: Research Published in Arabic
11.6 Conclusion

12. The Syrian Economy – An Overview
12.1 Introduction
12.2. Export / Import
12.3 Natural Resources
12.4 Energy Industry
12.5 Economic Development and Politics
12.6 EU Support
12.7 German Support
12.8 Outlook

13. Syrian – German Cooperation and Partnership; A Perspective For Joint Venture With The Private and Government Sectors
13.1 Measures Undertaken by the Syrian Government
13.2 Partnerships and Alliances in Syria
13.3 Syria
13.4 Priority Areas in Syria
13.5 Programs and Projects in Syria

14. Accounting Standards from an international prospective
14.1 Introduction
14.2 Regulating International Accounting Practice
14.3 International Accounting Differences
14.4 The International Standards and Accounting Systems of
14.5 Summary and Conclusion

15. Business behaviour in Arab Countries on Example Syria
15.1 Introduction
15.2 Theoretical Background
15.3 Practical Background
15.4 Conclusion - Intercultural Competency and Sensibility

16. Development of Islamic Financial Institutions in Syria
16.1 Abstract
16.2 The need for Islamic Financial Institution in Syria
16.3 Kind of Islamic Financial Institutions

17. What is Islamic Banking
17.1 What is Islamic Banking
17.2 Maqasid al Shari’a (orientations)
17.3 Sources of Islamic law
17.4 Rights of contracting parties

18. Islamic Finance: Murabaha, Musharaka
18.1 Islamic Finance: Murabaha
18.2 Islamic Finance: Musharaka
18.3 Islamic Bonds: Sukuk Islamic Finance Progress
18.4 Some Final Thoughts!

19. Limitations of Islamic Banking Services In Syria
19.1 Reasons for the Research
19.2 Methodology
19.3 Independent and Dependent Variables
19.4 Expected Limitations

20. The Banking System in Syria
20.1 Introduction
20.2. The Banking System’s Make-up
20.3 Monetary and Credit Council ‘MCC’
20.4 Interest Rates
20.5 Capital Reserves
20.6 The Way Forward (suggestions)

21. Development of Islamic Financial Institutions in Syria
21.1 Decade of Reformation
21.2 The Need for Islamic Finance
21.3 Kind of Islamic Financial Institutions
21.4 Islamic Banks
21.5 Problems
21.6 Islamic Insurance Companies
21.7 Islamic Brokerage Companies

22. Public and Private Sectors
22.1 Introduction
22.2 Rules and Regulations Governing Investment in Syria
22.3 The Structure of the Private Sector in Syria
22.4 Public Private Partnership
22. 5 Existing Joint Ventures
22.6 GTZ
22.7 Conclusion
22.8 Annexes

1. Preface

Prof. Dr.Fritz-René Grabau, University Magdeburg-Stendal

Es ist mir eine besondere Freude, den vorliegenden Sammelband zu präsentieren. Er enthält die insgesamt 21 Beiträge von syrischen und deutschen Wissenschaftlern, die sich hier zu allen Aspekten der den Leser interessierenden Fragen des syrisch-deutschen Handels äußern. Alle Vortäge wurden im Rahmen eines gemeinsamen Workshops der Hochschule Magdeburg-Stendal und der Arab-European-University (AEU) im September 2009 vorgestellt und teilweise heftig diskutiert.

Die Fertigstgellung dieses Sammelbandes verzögerte sich leider mehr als Anfangs angenommen. Umso glücklicher ist der Herausgeber nunmehr, dass seine Fertigstellung endlich gelungen ist und der Leserschaft sowohl in Deutschland wie in Syrien vorgestellt werden kann.

An dieser Stelle möchte ich auch im Namen aller mitreisenden Workshopteilnehmer allen Mitorganisatoren noch einmal herzlichen Dank sagen. Der größte Dank gilt heirbei meinem geschätzten Kollegen Prof. Dr. Mabareid, Präsident der AEU. Ohne seine Großzügigkeit und tatkräftigen Einatz wäre dieser Workshop niemals zustande gekommen.

Halle, im Januar 2011

Prof. Dr. Fritz-René Grabau

2. German Economy

Prof. Dr. Fritz-René Grabau

Germany expects the decline in real GDP to continue until mid-2009 at least. After GDP growth of 1.3% in 2008, the contraction forecast for the current year will probably amount to 5 ―%. This would represent the deepest recession in Germany's post-war history. Even in the wake of the two oil crises in the 1970s and 80s the German economy contracted by merely 0.9% and 0.4%, respectively. The recession periods that followed in 1993 (-0.8%) and 2003 (-0.2%) were also relatively mild.

2.1 Signs of Downswing

Although the world economy had already slowed markedly in 2007, the ifo business climate index remained surprisingly high up until early summer 2008. Only in mid-2008 did sentiment deteriorate considerably. When the financial crisis escalated further in September 2008, the index went into free fall. At present, it stands at its lowest level in 15 years. Other economic indicators such as order intake or the purchasing managers' index (PMI) also paint a dismal picture. The reasons for the downswing were not so much home-made as external in nature.

- In line with global demand, German exports weakened considerably in the course of the dramatic economic downturn in the US, which with a time lag also affected the dynamically growing emerging markets and the euro area.
- This development was exacerbated by the strength of the euro, which peaked around mid-2008, hurting German exporters’ price competitiveness.
- In addition the long period of high energy and food prices reduced households’ purchasing power, so private consumption once more failed to support the economy in 2008.
- The negative effects of the international financial crisis, which had taken a dramatic turn for the worse following the collapse of Lehman Brothers in mid-September 2008, brought money markets and markets for short-term corporate credit almost to a complete standstill.

2.1.1 External environment increasingly weaker

The issue of whether the global economy can decouple from developments in the US gave rise to heated debate again last year. It was hoped that major German sales markets would continue their dynamic growth trajectory. Many economists argued that the emerging markets were strong enough to keep the global economy afloat in the event of a US downswing. In fact, the emerging markets have gained considerable weight in the global economy in the past few years. Current developments show, however, that the saying that “the rest of the world catches cold when the US sneezes” is still applicable. Only this time, the US is seriously ill. It took some time for the US flu to spread to Asia and Europe. The strong downswing in the US which was triggered by the property market crisis infected the global economy not only through direct trade links – with by far the largest current account deficit in the world the Americans are still the most free-spending consumers of the world – but also through confidence and finance channels, which have become increasingly important over the past few years.

2.1.2 Global economy in 2009

The ifo business climate index for the world's regions reveals that economic activity slowed markedly on all continents in 2008. The decline was particularly pronounced in Asia. For 2009 we expect no more than about 4% growth in Asia, down from 7% in 2008 and almost 10% in 2007. But other regions, too, will see growth decelerate. All major industrialised countries are already in recession. In the euro zone, real GDP looks set to shrink by 2 ž%. The UK economy also expected to contract by 3%. All in all the world economy will shrink by a good 1% in 2009. This would be the worst performance in many decades, as growth was still positive even during the oil crises of the 1970s and 80s. In light of the obviously persisting strong dependence of the world economy on the US, an end to the US property market crisis is a precondition for a recovery of the global economy.

2.1.3 US property market

This may take more than a year, though. After the bubble burst on the US housing market, house prices slumped at double-digit rates, mortgage default rates rose to nearly 20% in the subprime segment and residential construction investment fell to its lowest level in 13 years. Property prices have not yet bottomed out. At present, new residential construction in the US is roughly 900,000 units short of demand, which implies that the gap between current vacancy rates and their trend rate of over 1 million units could be closed in around 1 year.

2.1.4 Negative wealth effects

Even though this would create a new equilibrium on the US residential market, it would also mean that overall economic growth remains clearly below potential, as negative wealth effects will continue to weigh on private consumption for a long time. The financial situation of households was very tight even before the financial crisis worsened recently. Due to easier lending standards especially in the mortgage segment, indebtedness had grown dramatically on rising property prices. This was used in part to finance consumption, with the savings ratio dropping to almost zero. We forecast house prices to fall by another 10% this year (-20% in 2008), bringing down households' real estate wealth by a total of 25% or USD 6,000 bn by the end of 2009. Through wealth effects this alone will dampen consumption expenditure by 1 ―%. As a result and in light of quickly rising unemployment we expect private consumption to shrink by around 2 ž%. Despite the new economic stimulus programme promised by the new US president, Barack Obama, with a volume of more than USD 800 bn or over 5 ―% of GDP, real GDP looks set to decline by nearly 2 ž% this year. This would be the deepest recession in post-war history also for the US. To be sure, we assume the situation in the US to stabilise in H2 2009 and the economy to return to a growth path in 2010. However, at a mere 1% growth will remain clearly below potential given the structural problems and ongoing adjustment.

2.2 2009 is not 1929

An IMF analysis shows that recessions turn out considerably longer and deeper if preceded by financial markets or banking crisis. The loss of growth in such a recession has averaged 4 ―% in the past. Similar or even higher shortfalls are also to be expected in the current crisis. However, we believe the current recession to be manageable so it will not result in a 1929-style depression. Certainly there are parallels to be drawn between 1929 and today. The origins of the current financial crisis lie in the US property market crisis which shook investors and financial markets through- out the world when the value of mortgage securitisations and special investment vehicles slumped. This led to global write-downs in the order of over USD 1,000 bn, with around USD 790 bn alone affecting banks, which led to tighter lending standards. Back in 1929 and this time the US property market experienced a boom which ended abruptly. Then and today, the crisis spread quickly because of financial innovations. In 1929 stocks were bought on credit; in the current crisis loans were securitised. However, there are also important differences between today and 1929. Back then the central banks even reduced the money supply and the US president as well as politicians in other countries stubbornly refused to counter the onset of the economic crisis with state support. By contrast, the last few months have seen dramatic cuts in interest rates, rescue packages for the banking sector and multiple measures to stimulate the economy almost all over the world and to a degree that has never been seen before. The US Fed, for instance, has brought down its key interest rate from 5.25% to 0-ž% (its lowest level ever) since September 2007, and the Bank of England has cut its base rate by 350 basis points over only three months. After some initialhesitation, the ECB also took determined action, cutting its refinancing rate by a total of 225 basis points to currently 2% since October 2008. We expect the ECB to continue to loosen the monetary reins until March 2009 with the refinancing rate likely to fall to 1%.

2.2.1 Collapsing oil price

Besides political action the marked decline in the price of oil over the last few weeks as well as considerably lower commodities prices have provided some hope for the consumer countries' economies. After having soared from mid-2007 and peaked at USD 146 per barrel, the price of North Sea oil (Brent Blend) has since dropped by more than 70% to temporarily below USD 40 bbl in only a few weeks on collapsing growth expectations. Moreover, food prices have fallen by an average 30% from their peak in mid-2008 (HWWI food price index). To be sure, the recent rollercoaster ride of oil prices demonstrated once again the considerable risks inherent in oil price forecasts. Should the oil price continue to fluctuate between USD 40 and 50 per barrel, however, its annual average would only be half as high as in 2008. This would bring relief of more than EUR 10 bn or nearly 1% of private consumption for German households, and thus help cushion the economic downturn.

2.2.2 Export Champion Germany

Exports, a particularly important sector for the German economy, have been hurt massively by the deteriorating external environment. Subtracting foreign inputs, goods exports contributed nearly 22% to GDP in 2007, and about one in four jobs depends on exporting industry in Germany. With an export volume in excess of EUR 1,000 bn, Germany narrowly claimed the title of world exports champion for the sixth time in a row. But over the last few months foreign orders have slumped as a result of the global downswing. Most recently, they were roughly one-quarter below their pre-year level. Hence, export growth – which had still amounted to more than 8% in 2007 – slowed noticeably in 2008 and even turned negative atthe end of the year. This is also reflected in export expectations thahit their lowest level in 33 years at the end of 2008. As the strongeuro – which peaked around the middle of 2008 – will likely continueto weigh on German exports for some time to come because of a 2-3 quarter lag, we expect the current year to see real exports of goods and services decline by a good 8%, following growth of 3.9%in 2008. This would be the first annual average decline in 16 years.

2.2.3 Export Slump

The slump of exports will also hurt investment, as German companies have begun to reconsider their investment plans in light of slowing global demand. We therefore expect investment in plant and equipment to fall by about 10% this year, after rising by 5.3% in 2008. This forecast is supported by declining capacity utilisation in manufacturing which recently returned to its long-term average after almost three years of over-utilisation. As industrial production con- tinues to decline – besides the slump in foreign orders there has also been a substantial drop in domestic orders below the pre-year level – capacity utilisation looks set to decline further. Moreover, corporate earnings will likely take a beating in many sectors. The financial crisis is also contributing to investment being scaled down. Numerous financial institutions have tightened lending conditions, resulting in generally higher financing costs. Construction activity, which had still flourished in early 2008, ground to a halt in the further course of the year. Given the increasingly uncertain income and employment outlook, private residential construction will likely shrink this year. Also, the planned economic stimulation measures including faster realisation of infrastructure investment will hardly suffice to compensate for this decline. So for 2009 we expect overall construction investment to fall by 4%, after an increase of over 2.7% in 2008.

2.2.4 Private Consumption

Hopes voiced at the end of 2007 that private consumption could rise more strongly on higher wage deals and rising employment and thus put overall economic growth on a broader basis were not fulfilled last year as a result of dramatically higher oil and commodity prices. Even though consumers are feeling considerable relief from the recent oil price slump, hopes for a noticeable boost to consumption will likely be disappointed again this year. Wages will likely rise as strongly as in 2008 (+3%) this year, as many collective agreements last from 2008 into 2009. In addition, the governments recently agreed stimulus packages and the relief from the reinstalled commuter allowance will increase private house- holds’ income. However, a negative wage drift, substantial job losses in the course of the recession and a rising savings ratio (expected to come in half of a percentage point higher given growing uncertainty) will likely cause real private consumption to grow only moderately.

2.2.5 Job Losses

Despite the recession the labour market proved robust up until the end of 2008, even though the increase in employment flattened in the course or last year and the jobless total rose in December for the first time in three years. However, the labour market is a lagging indicator which reacts with a time-lag to changes in economic growth. Most recent company surveys reveal a substantial decline in staffing plans, so we expect a good 750,000 jobs to be lost by the end of 2009. The jobless total will then likely exceed 4 million at the beginning of 2010, pushing up the unemployment rate to 9 ―% from close to 8% in 2008.

2.2.6 German Industry

Manufacturing in Germany benefited strongly from the last economic upswing. Production rose by an inflation-adjusted 6% in 2006 and by as much as 6.5% in 2007. Full order books still ensured stability in the first half of 2008. Especially capital goods sectors such as mechanical and electrical engineering were able to sell their pro- ducts easily on the world markets. But the first difficulties already became visible in the first half of last year: business expectations were cloudier and the high price of oil was an additional burden. The worsening economic outlook in many important export markets forced a large number of companies to reconsider their plans for expansion. Most existing orders were still completed but new orders failed to come in.

In the downturn, the heavy dependence on exports quickly became a boomerang: there is an obvious connection between a sector's reliance on exports and the degree to which it is hurt by slower business activity. Within a mere six months, order volumes fell by 13% in the car industry, by nearly 9% in mechanical engineering and by 11% in metal processing. For now, there is no evidence that the decline has bottomed out. Three aspects need to be considered in this connection: first, the adjustment took place from a very high level. The car industry had seen its longest ever upswing, and mechanical engineering had raised output volumes by as much as 30% since 2005. Second, many companies used the crisis as an opportunity for restructuring. They now have a stronger equity base and their production costs are internationally competitive thanks to the wage restraint exercised in earlier years. So many companies are now better equipped to withstand this deep recession. Third, there are automatic stabilisers at work (e.g. low oil prices and interest rates) which will help the capital goods sectors, in particular. Government measures to stimulate the economy will also cushion the downturn.

Nonetheless we expect output to slump in 2009: except for the food industry, which is nearly immune to economic downswings, all major sectors will likely head south in 2009. In the textile and clothing industry, the structural problems are being exacerbated by the recession. Raw materials and semi-finished goods (chemicals, plastics, metal products) reflect the enormous drop in output in the automobile sector. All in all, we expect manufacturing to see output decline by an inflation-adjusted 8%. In light of this strong contraction we do not look for positive impetus from the construction sector; construction output is likely to decrease strongly, too. However, given the stimulus packages and the fact that the construction sector did not boom in the recent years, the decline will come in smaller than in manufacturing. Output will be considerably weaker in 2009 than in the last downturn in 2002/2003 as there is not only a lack of foreign momentum but the situation in other countries even represents an additional burden. Only around the end of 2009 will the worst be over, and 2010 may even see modest growth again.

2.2.7 Public Finances

After a remarkable consolidation phase – the overall budget deficit of 4% of GDP in 2003 had disappeared entirely by 2008 – the economic downturn as well as government programmes to save banks and stimulate the economy will make public finances look considerably worse this year. The economic recession alone will likely create a budget deficit of 1 ―%. Taking the discretionary measures into consideration, the budget deficit will likely exceed markedly the Maastricht limit of 3% in 2009. However, this would not violate the reformed stability and growth pact. In 2010 the deficit will probably widen further to above 4% of GDP as our growth forecast of 1% still remains below potential. We believe the recently agreed package of measures to stimulate the economy to be a step in the right direction. Among other things, it foresees improved depreciation regulations for small and medium sized companies, higher tax deductions for private households for work done by tradespeople, a one-year exemption from vehicle tax following the purchase of a new car, an expansion of bank lending to SMEs, a prolongation of funding for short-time work and speedier realisation of infrastructure investment in the transport sector. At best, however, it will provide a small counterweight to the economic downturn. This has been recognised by the German government, which recently passed a second economic stimulus package worth EUR 50 bn, or roughly 2% of GDP. Major measures planned for 2009/2010 include additional infrastructure investment in the order of EUR 17.5 bn, cuts in personal income tax and social-security contributions to the tune of EUR 15.8 bn, a reduction in health insurance contributions by 0.6 of a percentage point as well as subsidies for individual industries and short-time work. Even though this package obviously caters to the interests of the various government coalition partners, such a bundle of measures could prove beneficial in light of the theoretical and empirical uncertainties in analysing the effects of different strategies.

2.2.8 Deflation Debate

After the spectre of inflation had haunted consumers and monetary policy decision-makers until the summer of last year – in July 2008 the rate of price increase stood at 3.5% – inflation slowed to slightly above 1 by the end of 2008. However, this slowdown in inflation, just like the preceding acceleration, was mostly due to oil price movements. Core inflation (excluding the volatile prices of energy and food) continued to hover around the 1% mark, which we also expect to see in the current year. So headline inflation will likely return to almost zero by the summer or will even be negative as a result of low oil prices, and amount to a good ―% on an annual average, down from 2.8% in 2008. This will fuel the recently intensified deflation debate further. In light of the stable core rate of inflation, however, we think this debate misses the point.

All in all we expect the German economy to continue to shrink at least until the middle of 2009. Stabilisation could set in gradually in the second half of the year, when the effects of monetary easing and fiscal stimulation kick in. Nonetheless, the economy will contract by about 2 ―% on average in 2009 and thus see the deepest recession in the post-war period. In 2010 the slight upturn will likely continue, but growth looks set to remain moderate, at 1%, as weak US growth rates will hardly provide a strong external impulse.

2.2.9 Risks to Growth

Given the uncertainty surrounding the financial crisis, there are very large downside risks to our growth outlook at this point in time. A new escalation of the financial crisis could speed up the economic downswing in the US once more and induce real US GDP to contract much more strongly than assumed so far. This would have repercussions for the emerging markets, Europe and of course Germany. However, the crises of 1987, 1997 and 2001 all turned out considerably less dramatic than forecast at their peak – so this should at least give rise to some hope.

Hopes that the situation on the financial markets, which had escalated dramatically following the collapse of Lehman Brothers, would calm down once the rescue packages for the banking sector had been agreed have so far failed to materialise. Most recently, market sentiment was clouded by drastically more pessimistic economic forecasts. The spreads between money market rates and key interest rates – reflecting the degree of uncertainty on the interbank market – have narrowed but are still much wider than the long-term average. Spreads between government and corporate bonds remain unchanged, at a level nearly three times as high as before the financial crisis. Even within EMU, yield spreads have widened to record levels since the introduction of the euro – and not only in the problem countries. Moreover, stock market volatility remains at crisis levels, which is a reflection of extreme uncertainty in the stock market and explains part of the low valuations. Up to now, safe investment in the form of government bonds of the most liquid markets have been sought after; accordingly, these yields have dropped temporarily to record lows (actual: 10Y Bund yields 3 ž%; 10Y Treasuries 2 ―%).

In our scenario depicting gradual recovery around the end of 2009, stocks with current P/E ratios of around 8 (Dax) are very attractive on a medium-term horizon, while bonds look set to lose out, especially if deflation forecasts prove wrong. Over the next few months, however, more bad news will probably pour in from the business and financial sectors, so bonds will likely continue to be overvalued compared with stocks for the time being.

2.3 Economic Situation in Future

Following the sharp declines in the gross domestic product in the winter half-year, there are now increasingly signs indicating a gradual stabilisation of the overall economy. In particular, there has been a recovery of ordering in industry. Thus, the outlook for industrial output has improved considerably. There are many indications that the overall economic output may have stabilised in the second quarter of this year.

In Germany, stimulus packages are increasingly having an impact. This substantially benefits consumer spending which may provide an additional boost to the economy. Consumer spending is being positively influenced by the calm price situation and the so far moderate downturn in the labour market, also compared to other European countries. However, the dampening effects resulting from the situation on the labour market are likely to increase in the coming months.

Foreign trade prospects seem to brighten up further. The signs indicating a gradual stabilisation of the global economy have increased. Various leading international short-term indicators of economic activity have improved, some of them for several successive months. In German industry, this has been reflected in a significant revival of foreign ordering. However, it remains to be seen whether this development will prove sustainable. A key influencing factor for the further course of economic activity is the situation on the international financial markets. The situation has calmed down in view of the continued major support schemes. However, many problems continue to persist. The cyclical risks therefore remain high.

The goods-producing sector has stabilised recently. Total output for May increased by 3.7 % (in price- and seasonally adjusted terms) [2]. While construction output fell recently by 3.2 %, industry saw a sharp rise by 5.1 %. The strongest contributions came from manufacturers of capital and upstream goods (+8.3 % and +4.3 %). At present, these producers benefit heavily from the stimulus provided by the eco premium for cars. Thus, the downward trend in industrial production has slowed significantly. Adjusted for working day variations, however, industrial output continues to remain far below the previous year's level (three-month comparison: -22.0 %).

The prospects for industry have clearly improved in the past months. New industrial orders rose substantially in price- and seasonally adjusted terms by 4.4 % in May, which constitutes the third rise in a row. Industrial orders are once again showing an uptrend for the first time in over a year (three-month comparison: +0.7 %), with "vehicle and vehicle component manufacturers" seeing a sharp rise in order intake. The less pessimistic mood among business indicates that industry has bottomed out. In the construction industry proper, order activity continued to fluctuate heavily. With the recent sharp rise of price- and seasonally adjusted 6.3 % in incoming orders in March, orders in the three-month comparison went slightly down by 0.5 %. The climate indicators still remain very weak. The building sector, however, is likely to profit strongly from the stimulus measures so that future prospects can be regarded as comparatively favourable.

Consumer spending continues to bolster the economic development. Along with the calm price climate, this is also due to the stimulus package measures which increase disposable income. This notwithstanding, retail sales turnover (excluding vehicles) fell further in May by seasonally adjusted 1.3 % but point upwards in the two-month comparison (+0.8 %). The large number of new passenger car registrations shows that the eco premium for cars continues to create strong buying incentives. This disproportionately benefits the small car dealers, which recently dampened overall sales. The brightening of the ifo retail business outlook and the GfK Consumer Climate Survey opens up hopes for further economic stimuli. The expected deterioration of the situation on the labour market is likely to increasingly affect consumer spending over the course of the year.

Exports in current prices recently rebounded slightly. In seasonally adjusted terms, there was a slight rise by 0.3 %. However, the strong downward trend still continues (two-month comparison: -4.7%). This year's figures were down again sharply on last year's, in April/May by -26.8 % (unadjusted). Recent imports contracted noticeably by 2.1% in seasonally adjusted terms and continue to point steeply downwards (two-month comparison: -6.8%). However, the outlook for German foreign trade has improved. There are growing signs for a stabilisation of the global economy, and following the sharp increase in foreign orders in industry, exports can again be expected to develop in a more steady way.

The negative underlying trends on the labour market were recently more pronounced again. In June, unemployment increased by 31,000 in seasonally adjusted terms. For seasonal reasons, the number of unemployed persons fell in June by 48,000 to 3.410 million. This was 250,000 up on last year's figure. The unemployment rate stood at 8.1%. The introduction of short-time work and the shrinking labour supply had an additional mitigating impact. Due to the late spring pick-up, total employment fell significantly less in May (by 12,000) in seasonally adjusted terms than over the course of the year so far. For seasonal reasons, total domestic employment expanded by 137,000 (unadjusted) to 40.098 million. In year-on-year terms, recent employment was down by 163,000.

The price climate in Germany has remained calm. In the month-on-month comparison, the consumer price index rose recently by 0.4% in June due to significant price increases in heating and transport fuels and increased prices for food and beverages. However, the core inflation rate for consumer prices (i.e. price increases excluding energy and seasonal foods) rose only slightly by 0.1 %. By year-on-year comparison, consumer prices went up only slightly by 0.1 %. Basic effects continue to have an impact due to the sharp rise in food and energy prices last year. Given the current economic situation, an accelerated rise in prices is not to be expected in the foreseeable future.

3. The Health System in Syria

Ute Ollenhauer / Stefan Reinhold

3.1 Excutive Summary

Syria is located in the Middle East, surrounded by Turkey in the North, Iraq in the East, Jordan, Saudi Arabia and Palestine in the South, Mediterranean and Lebanon in the West. Syria spreads over a total geographical area of 185.18 km2. The cultivable land is approximately 80.000 km. The remainder is comprised of deserts and Rocky Mountains. It is further divided into a coastal zone and a much larger eastern plateau. The climate is predominantly dry and about three-fifths of the country receives less than 25 centimeters of rain a year. Fertile part of the land is a rich natural resource. Efforts have been continuous, and in 1980s the efforts were accelerated to increase the amount of arable land through irrigation projects.

In 2004 the population estimated was 17.993.000. More than 50% population lives in urban area. Over 40% of all the Syrians are less than 15 years of age. Almost 57% are between the age of 15 and 64 years. Life expectancy has steadily increased over the last few years, up to 69 years of age for men and 73 years for women. From the administrative point of view, Syria is divided in to 14 Governorates (Muhafazat). Each one of these is normally divided into areas (Manatik), which are further divided into smaller units (Nawahi) and lastly the villages (Qura). These villages are the smallest administrative units.

Syria has medium-sized economy. The economy is dominated by the primary sector, with the vital financial achievements contributed by the agriculture and hydrocarbon extraction fields, together. It imparts more than 45% of the Gross Domestic Product (GDP). Some strategic sectors such as oil, cement production and power generation, are completely owned by the government. The government controls much of the cotton and grain production, also. There are certain other areas of economic activity such as fruit production and trade, which are considered to be less strategic thus, remain outside direct state control. The private sector despite its limited size and power generates a disproportionate share of the output. To limit prices and prevent illegal profiting the rigid economic laws introduced long ago, however, have driven much activity underground. Around 51% of the population 15 years and the elderly are estimated to be economically active, creating a labour force of over 5 million (2004). Officially, unemployment is 11%. In terms of economic activity workers are employed in the following sectors: 29, 6% in agriculture and forestry, 13, 5% in industry, 12, 3% in building and construction, 14, 5% in hotel, restaurants and trade, 5, 4% in transport and communication and 24, 7% in other services. The Syrian government is presently engaged in a process of economy liberalization process and of modernisation of the health sector with the support from European Union. While maintaining social protection to more vulnerable population, one of the key issues is to reform the health sector in order to address the growing demand for quality of health services in times of globalisation.

Under the leadership of President Bashar Al Assad, the Based on market-oriented reforms, the Syrian government has launched a program of economic modernisation that includes: reviving the private sector, attracting domestic and foreign investors. To make the financial system more efficient through; liberalisation of the banking sector, boosting trade, improving the operating efficiency of public sector enterprises, strengthening the administrative capacity of the Syrian institutions. Surely, it would up-lift the country’s level of growth and development. At present, there is a well established belief prevailing, that, the country must bridge-up the massive gap between its aspirations and its current economic status.Syria is considered to be a country passing through a “well advanced epidemiological transition”. This period is mainly characterized by:

- an overall decline in mortality rates
- declining rates of communicable diseases (although infectious and maternal/child related pathologies may still persist among disadvantaged population groups)
- a concurrent rise in the proportion of disease burden attributable to noncommunicable diseases
- a rise of aging pathologies

Keeping under view the prevailing scenario, the Ministry of Health (MoH) has developed a long-term policy / strategy (2000-2020), to develop the health sector. The strategy is based on three fundamental pillars: improve and strengthen the primary health care through the dissemination of Health Centres all over the country, increase the efficiency and the capacity of the secondary and tertiary delivery services in line with needs, enhance geographical and financial equity of the health care system, by allowing greater accessibility for the most disadvantaged people.

The setup of health services is categorized based on two fundamental features:

- Primary Health Care (PHC) services which are delivered and run through a governmental network of PHC centres and the private sector which has little in providing preventive care to the population.
- The curative services on the other hand are characterized by a mix of public and private sector. The structured form is mainly in the public sector with a difference of service provision. The data available on interaction and existence of a referral system are not available, although outlined or sketched out.

The financing or flow of resources that provision is primarily funded by the government through regular budget and then the other main method is out of Pocket payments to the private sector. Information of drugs at Public facilities although it can be tentatively asserted, they form part of the Out of Pocket Payments. The Constitution of Syria defines the right of all the population to comprehensive health coverage. The organizational structure of the statutory health system reveals to the Ministry of Health the responsibility for coordinating and managing health services provision. Further responsibilities for financing, administrating and providing health services are given to the following bodies: Ministry of Finance (MoF), Ministry of Local Administration (MoLA), State and Planning Commission (SPC), Ministry of Higher Education (MoHE), Ministry of Social Affairs and Labour (MoSAL) and Ministry of Defence (MoD). Additionally, the other ministries and state companies provide directly and indirectly health care services for their employees and dependents, as well as, the majority of the professional associations. The private role in delivering health care services has substantially increased, recently.

3.2 Health Status indicators

Table 2-1 Indicators of Health status

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(Source: MoH Data)

3.3 Health System Organisation

3.3.1 Public Health Care System

The health system is based on primary health care and it is delivered at three levels:

- At village level, there are rural health centers and health units.
- At district level, there are larger health centers including training facilities and specialized physicians. District health centers are staffed with at least one physician, one nurse, one public health technicians, obstetricians, pharmacy technicians, laboratory technicians, midwives and health visitors. On average, there are 10 health workers per district health center. A small district general hospital number of bed 50 also exists in each district.
- At provincial level, there are urban health centers staffed with specialized physicians and dentists in addition to various technicians, family planning services, control and prevention of communicable diseases, environmental control, preventive care for chronic non-communicable diseases, and health education. At the provincial level, there are also large general hospitals and specialized hospitals. At the national level, there is a network of ambulance, blood bank and drug distribution services. In order to decentralize health care delivery process a district health system was introduced in 1990. Each health directorate was allocated with its own budget provided by the Ministry of local affairs. An enough authority was given with certain flexibility to implement the programs within the scope of present development strategy.

The organizational chart of the MoH has been approved by the Government. The new chart shows a functional structure of the central level of the MoH, based on main regulatory functions. Boards and committees are meant to address various issues such as quality management, regulation of private sector, health insurance, accreditation, etc. This organization aims to overcome the constraint of the excessive specialization of the directorates who often are in charge of particular aspects of the same issue (e.g.: human resources). In this chart “regulation”, which belongs to boards and committees, is clearly separated from “administration”, which is a task of directorates. The organizational structure drives the mobilization of the agent (defined by qualification and position in the statutory grid) to a post (defined by tasks and duties). At this level recruitments match agents with posts. At this level also, training, basic or in-service, intervenes to qualify an agent for a given post. Defining training needs and programs demands the preliminary design of organizational structures with operational specificity in the description of the various posts.

Hospitals independent unit Financially & Administrative: the new orientation and priority objective of the Ministry of health to transfer all hospitals gradually in to independent unit. This unit would have its own budget, flexible management and participation from the local community included in its board. For that purpose, established 9 central hospitals with the objective of moving towards partial cost recovery and participatory management to improve the performance of the hospitals Accreditation, being essentially a regulatory tool, is usually a service provided by autonomous and impartial agencies. MoH should lead the definition of the national framework for accreditation; the role of “accrediting agency” should be given to an independent commission. Developing quality system and national accreditation framework would be a priority of the MoH.

Under the supervision of the National Committee for Quality ISO certification is provided by several private companies to some public and many private hospitals. The legal framework for licensing and the operational framework for ISO certification should be evaluated. Accounting for the existence of to improve the certification framework and to foster accreditation independent mutual health insurance schemes in which employer’s contract with providers for a given set of services Syria seems to be the most urgent issue.

3.3.2 Any planned organizational reforms in the public system

With the help of European commission (2002 to 2009), a big project termed as health sector modernization program will lend a hand to the health sector in Syria in 6 areas:

1. Policy and planning in central and regional,
2. Health care delivery,
3. Improve the performances of the hospitals,
4. Improve the management of health sector,
5. Quality of health services (accreditation) and
6. Health financing.

3.3.3 Overall Health Care System

The Syrian health care system is a mix of private and public provision. The government is working to ensure availability of services in urban as well as in rural areas. Although most of the villages in Syria have a government clinic or health center, rural areas have smaller number doctors and clinics. Doctors who have finished medical school and who do not intend to specialize are obliged to practice in rural areas for at least two years, usually through a government health center. The same is obligatory from the dentists and pharmacists. Since government salaries for doctors are quite low. They are allowed to set a private practice, while working in a government health center, also.

Services are offered free of cost to all the citizens at government clinics and health centers. Government employees and their dependents can also fully or partly reimburse their charges / claims incurred during private health care and medication. Some Syrians prefer to pay for high-quality private services, rather than using free public services.

Organization of health care structures:

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The health care delivery system in Syria is represented by the role played by a mix of public and private sectors providers:

1. Public service providers funded by the government budget are managed by the MoH, MoHE, MoD and MoSAL. The Ministry of Health is the prime health services provider, employing about 71.500 staff and operating in 67 hospitals (including specialist hospitals) with a total of 11.155 beds, and running 1.534 health centers as well as the medical points for primary and preventive care. The other parallel public sector system comprises of one hospital of the MoSAL, some hospitals run by the MoD, 12 university hospitals managed by the MoHE;

Private providers offer a wide range of ambulatory and secondary health care services in 376 small hospitals (6795 beds), more than 12.000 pharmacies and clinics.

3.4 Health Care Finance & Expenditure

3.4.1 Health Expenditure Data and Trends

Table 4-1 Health Expenditure

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(Source: World Health Organization)

The financing flowchart is opened in the figure. In general, there are three major types of financing agents: the public sector, the professional associations and the households. The public sector refers to the expenditures of various ministries, and it includes expenditures of owned state companies. In terms of the primary sources of funding, the public sector is mainly funded by the state budget through general taxes, while professional associations are funded by private funding (employees/workers).

- The first pathway of funding consists of MoF funding, which goes principally to other ministries (MoH, MoHE, MoD, and MoSAL) and state companies, which in turn transfer the money to government providers for the care.
- The second major pathway consists of direct household funding. The greater part of the household funding passes directly to private sector health care providers (private clinics, hospitals and pharmacies) without any financial intermediation, and for a more or lesser extent to the public sector by paying user fee / charges. Private insurance is not available in Syria. However it was reported that not many individual households are insured with Lebanese commercial insurance company.
- The third pathway consists of professional associations. A proportion of households funds, not yet identified, pass to the professional associations
- which in turn finance mostly private providers. In some specific cases they also finance services provided by it (usually primary health services).

3.4.2 Tax-based Financing

On health care 43-50% of the total expenditure is directly from derived from the government budget. The health care services are technically “free” at the public facilities in Syria. The sources of public health financing in SAR are mainly a combination of oil revenues and general tax revenues. Tax revenues are progressive from 10% to 45% for societies, and, from 5% to 15.5% for personal income. However, few data are available concerning how progressive is the health financing system in respect of income. Nonetheless, it has been reported that 60% of the economy does not contribute to income tax, and that private sector companies are evading high profit taxes. To drain resources from elusion and evasion toward the health sector may represent a double opportunity for the government as a larger income and profit basis will increase the source of public financing.

3.4.3 Insurance

The health care system in Syria is financed through government budget and the rest would be drawn, primarily from out of pocket expenditure. There are no large scale social or private insurance programs working.

3.4.4 Out-of-Pocket Payments

There are two main types of out-of-pocket payments made in Syria:

- The first and most relevant one is direct payment by the users to purchase private health care services and the drugs.
- The second one is demand–side cost-sharing: a co-payment for diagnostic procedures, outpatient visits and inpatient services that are becoming more and more important both in the MoH and MoHE, the providers units.

Private sector - direct payment

For the private hospital, 90% of the revenues are acquired from patient co-payments. The remaining 10% derived from donations. For the Red Crescent Hospital, 60% of the revenues come from patient co-payments, 30% approach from grants and donations, and 10% arrive from lab and pharmacy revenues. Private and NGO hospitals collect invoices directly. The usual mode of payment is through cash in Syria. Fee for services provided are known in advance in NGO and private hospitals. The private hospitals do not provide free of charge services. The NGO hospitals provide free of charges services to the children and poor families.

Public sector - informal payment

The current capacity and practices of management of public health expenditures will be analyzed through a public expenditure review activity. The review will be run by the National Health Accounts Team with the support of external resources. The results will be of the sequence mentioned as follows:

- A description and analysis of the practices of the legal and institutional framework, the budget process, budgetary procedures in force including procurement rules and on-going reforms.
- An analysis of financial flows within the health sector, with a spotlight on the social sectors and constraints affecting budget programming and budget implementation.
- An analysis and assessment of monitoring and reporting methods, as well as the internal and external control mechanisms of the budgetary process.
- Selection of key indicators for recognition of budget effectiveness and efficiency. The assessment of how well public expenditure is managed. It will include analysis of the existing situation and the prospects for improvement. Indicators must be specific by means of which progresses can be measured.

Cost Sharing

In 1996, a community development project (Healthy Villages), was established. This project aims at mainly for strengthening and preparing the community to achieve its tasks. The communities in the selected villages recognize their Needs, spotting the problem priorities and planning or conducting Specific programs to solve these problems (healthy, social, educational) etc.

This project depends mainly on the community who manages the Project through (Village Development Committee) and financing. The major areas covered by this project are PHC, basic education, healthy housing improving: income, safe food, safe water and sanitation. This experience started in 1996 in three governorates (a village in each governorate) as an initial phase. In 1997, the expansion phase started to cover all governorates (2-3 villages in each). This community-based developmental program, developed in affiliation with WHO and UNICEF, and in collaboration with the Ministries of Education and Municipalities, is managed by the community. This program aims to assure a sustainable development for the community and to assist the population to identify the felt and actual problems it faces and setting the priorities for action.

3.4.5 External Sources of Finance

In the last few years’ different programs in cooperation with bilateral and multilateral donor agencies have started in Syria. The biggest one is the “Health Sector Modernization Program” run by the EU in affiliation with the following:

1. WHO (42 health programs, Establishment of School for Public Health (1989), Establishment of Center of Health Systems Management (1997))
2. UNDP (Goal setting for health sector (National Millennium Goals), Human development report, AIDS, Healthy Village program
3. UNICEF: study on use of iodine salt, Mother and Child health care, Vaccination
4. UNFPA: Supporting family planning.
6. EC: Health Sector Modernisation Program (2004-2007), 30 Mio EURO
7. EIB: Loan for equipment of 17 MoH hospitals (each 120 to 200 beds), 100 Mio
8. Syrian Arab Red Crescent (SARC): Humanitarian activities
9. Greece: Support of the Brucellosis Program.
10. Italy (Italian Cooperation): Center for specialized nurses. Hospital equipment for Al-Marra Hospital in Idleb Governorate, 7 Mio US$
11. Japan (JICA): (Some hospital equipment for the Damascus Hospital, Hospital equipment for Al-Golan Hospital, 4.3 Mio US$, Support of the emergency system (delivery of ambulances with radio communication system), Community based primary care (including Family Planning) in North East Aleppo)
12. Cooperation with international institutions, universities and NGOs (Aga Khan: Training Nursing program in the hospital sector, standards for hospital nursing, training of nurses, support of the Red Crescent Hospital. Management of some new 200 beds hospitals in Syria, University of Liverpool: support of the Center of Health System Management)

3.4.6 Provider Payment Mechanism

National and local authorities together decided and chalked out the priorities of the hospitals. It is difficult to understand these priorities because of the intermingling of the authorities between the governorate health directorate and the Ministry of Health. Revenue for public hospitals is drawn from the central government and the municipal authorities, together. The financial relations are difficult to understand. These revenues come as block grants from the government. There is no established procedure for reviewing the basis for revenue calculation from pubic sources. There are no incentives for good financial performance.

In public hospitals, there is no real budgeting. The governorate and the health directorate prepare its budget as one lump sum for all its hospitals and health centers and other operating units. There are no separated budgets for hospitals. While drafting the budget there are no established procedures for consultation with operational departments within the hospital. Therefore, the budgetary process is not linked with departmental goals. Services are provided free of charges. Consequently, no revenues are collected. No reviews are made for the revenues and expenditure. Public hospitals cannot borrow. Private and NGO hospitals can, at least theoretically, borrow from banks.

The board of directors is responsible for preparing the annual budget in NGO and private hospitals dimension. For NGO and private hospitals, the financial staff prepares the budgets after consulting different departments. The board of directors approves the budget. The board of directors of each hospital sets the priorities. Again, there are no incentives for good financial performance, nor, there are sanctions against poor financial performance.

3.4.7 Payment to Health Care Personnel

Public sector workers are paid a monthly salary as per national pay scale in correspondence with their qualifications, degree of management responsibility and years of experience. The salary does not depend upon quality, quantity, type of service of number of patients treated. There are no clear financial incentives for health workers to increase productivity and possibility to provide cost-effective treatments. Payment methods are, however, in the process of being changed.

Nine new autonomous hospitals in the MoH will introduce specific incentives related to type and quantity of services performed. The very low salary level for the health care professionals is one of the biggest concerns of the Ministry of Health, and the majority of physicians supplement their salary by working in private clinics and hospitals (dual practice).

In addition to that MoH and MoHE submitted a new law to the parliament in the last nine months ago to give 200% of the existing salaries to the health workers. They will work only in public sector.

3.5 Human Resources

3.5.1 Human Resources Availability and Creation

Table 5-1 Health care personnel overall

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(Source: Central Bureau of Statistics)

The Syrian Arab republic has four public Faculties of Medicine and Dentistry and three Faculties of pharmacy (University of Damascus, Aleppo University, University of Tishreen in Lathakia and Al Baath University in Homs). In addition to two private Faculties of Medicine in rural area of Damascus and Tartous Nursing schools have been established in all the governorates of Syria. In addition to four schools in four governorates Damascus, Deir El Zour, Homs, Tartous, Al – Haskee- and Aleppo, where the universities, and paramedical educational institutions have been established.

Until now, no kind of Accreditation or some mechanism is available in the MoHE for universities or faculties; rather a new law started in 2001 to have private universities in Syria. It will enhance a need to have a special body in Syria to evaluate the situation in the universities and will give accredit.

3.5.2 Human Resources Policy and Reforms over the last 10 years

In the last ten years there has been a significant rise in the number of doctors, dentists, pharmacists, nurses and midwives. The greatest rise has been in the number of doctors, creating an imbalance between different kinds of staff in the health sector. From 2002 to 2004 physicians number rises by 14%, but the majority of them have chosen high degree for specialization (+26%), while general practitioner increased only by 4.5%.

This situation has helped to the growth of the private sector, without addressing the needs of the primary care sector. The numbers indicate 1,4 physicians and 2,0 nurses and midwives per 1000 persons, respectively. Theoretically, legislation requires full time employment for physicians and paramedics in public health sector, however part-time private practice by most physicians and nurses is widely and openly practiced.

In 2001, several departments were instituted to respond to the needs to develop human resources for health, at the following levels:

- University _ for physicians, Dentists and pharmacists
- Technology- For the graduates of the Health Institutes
- Technical - For the preparedness of Nurses and Midwives
- Health manpower planning unites a planning, advisory unit for health human resource development and training.
- Management Development- for quality assurance and control of health systems
- Examinations and Testing units to develop assess measures and conduct examinations.

3.5.3 Planned Reforms

Establishment of the Center for Strategic Health Studies (CSHS) with three main tasks: an advisory role towards the MoH, training and teaching, and a research function. The following four Centers will be established within the CSHS:

- Center for Population and Demographic,
- Center for Health System Management,
- Center for Health Economics and
- Institute for Public Health.

Establishment of special body under the prime minister call the Syrian Commission of Medical specializations and its responsibility are:

- Setup standards for training and the trainers.
- Setup specifications of the training centers.
- Establishment of specialized committee to accredit centers and hospitals.

3.6 Health Service Delivery

3.6.1 Primary Health Care

During the period of Eighties and Nineties the MoH of Syria has instituted some health programs to reduce infant and childhood mortalities, Control of Diarrheal Diseases, Expanded Program of Immunization, Control of Acute Respiratory Infections, Breastfeeding, etc. These programs led to reduction of child mortality from 99/1000 in 1980 to 24/1000 in 1999 to 18.1 in 2001. Acute Respiratory Infections (ARI) and Diarrheal diseases are still the major causes of morbidity and mortality among children 5 years in Syria. The vaccination coverage in Syria is high, the coverage reached to 100% for BCG and 98% for polio and DPT.

3.6.2 Infrastructure for Primary Health Care

The Primary Health Care (PHC) delivery system is the responsibility of the MoH. The services are provided through 1.534 health units and centers spread all over the country. These facilities include health centers, medical spots for preventive services, specialized centers (malaria, TB, Diabetes) and comprehensive PHC training centers. There is a good coverage of population by the health staff.

3.6.3 Public-Private Ownership

Most of the preventive and curative health services are provided by the government health sector. The new design from Ministry of Health in the year 2001 allowed the private sector to open private centers or clinics. Now they have 40 private centers in addition to that private sector, which provides 25% of curative services.

3.6.4 Private Sector

The private sector offers a complete range of services to those who can afford to pay. The lack of a coherent policy to be adopted by the MoH and the size and role of the private sector has enabled it to develop in a completely unregulated fashion. The private sector has seen a rapid growth in particular in the last decade in some urban areas (Damascus, Aleppo, Homs), putting additional strains on public sector service affected by constrains on public expenditure. Private sector health services provision derives from a significant private demand (patients directly paying or sponsored by employers) and it is facilitated by dual practice. It signifies that most of doctors practice both in public and private sectors. This creates serial distortion in equity.

Private sector plays a relevant role in the primary health sector through clinics and pharmacies accessible in urban and to a lesser extent in rural areas. In 2004, Syria had 376 private hospitals and 6.743 beds. Earlier than this, these hospitals are mainly small in size (on average equipped with less then 20 beds), representing a potential problem in terms of quality of care, as well as inefficiency in resource utilization.

In theory, private hospitals should apply official tariffs set up by the Ministry of Health. These tariffs are perceived highly underestimated. It is likely that these are not adhered and adopted by many facilities. The private sector has a particular fiscal regime, which allows private hospitals to be exempted from paying income taxes if they agree to keep 10% of their beds for uncompensated care.

3.6.5 Access to Primary Care

More than 95% of the rural population having access to the public health centers. There were 1.534 PHC centers reported in 2005. Currently, there is approximately one PHC Center available for 12.100 inhabitants. Public health centers are well accessible and a good number of staff is present in both public hospitals and health centers. The PHC network is really a remarkable strength of the MoH. There is a great potential for Public health programs and especially vaccination are nationally available, but need to be more strengthened to cover new risks, such as cancer, diabetes, cardiac diseases and provide basic curative care through PHC network.

3.6.6 Secondary/Tertiary Care

The Ministry of Health is responsible for provision of hospital services in collaboration with Ministry of Higher Education, Ministry of Defense, Ministry of Social Affairs and Labor and the private sector. As a matter of fact, the referral mechanism is not well developed. Hospitals are often utilized extensively for provision of primary care services. About 75% of the total beds are for public sector. 25% are intended for private sector. Allocation of the hospitals is as per the range of size for the year 2004. Public sector hospitals range lies between 20-800 beds. 62% of these have more than 100 beds, while private sector hospitals ranging from 10 to 100, 78% of them have less than 20 beds.

Table 6-1 Public private distribution of hospital beds

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(Source: MoH)

Hospitals in Syria are classified into three categories as per the level of the building and level of the facilities and furniture of the rooms and suites. The number of beds is not the foundation of classification. All types of hospitals have limited roles to play. Hospitals are working curative purpose only. Primary care services are among the responsibilities of an independent department of the Ministry of health. The relationship with social service departments is not well organized. In all the hospitals there is an out patients clinic. There is an emergency unit, where most of the injured persons are treated. At the district level (total 91 districts) there is a health center. There is a health center at a village level (not in all villages). There is normally no X- ray service available in the health centers. There are no financial surpluses in public hospitals, as there are no service charges. In Red Crescent Hospital, there are no financial surpluses too. The hospital is usually a financially balanced unit of care. In the private hospital, shareholders contribute to in the financial surpluses of the hospital. The services are available free of charge in public hospitals. In the private sector and NGO hospitals, the users of the service pay in cash. Teaching relationships does not exist between hospitals and clinics. Public hospitals have residency programs for medical graduates. Physicians are transferred from clinics to hospitals or otherwise depending upon the decision made by the governorate health director. There are no residency programs running in private and NGO hospitals.

3.6.7 MoH Hospitals

The Ministry of Health operates 67 hospitals equipped with 11.155 beds. The hospitals are usually administrated by a head doctor who is a practicing clinician along with a hospital administrator. The administrator acts as an assistant for monitoring and supervision of day-to-day activities. Both are appointed by the Ministry of Health, on candidacy indicated by the health directorates. The head doctor, usually, is appointed as per set criteria. The criteria are based on length of service and reputation and not necessarily upon the managerial abilities.

Capital planning (e.g. number and type of facilities) and current expenditures planning (e.g. human resources) are defined by the MoH in accordance with the Health Directorates, and eventually approved by the State and Planning Commission and the Ministry of Finance. Hospitals budget is determined according to historical expenditure (the budget is calculated on the basis of previous year’s expenditure).

3.6.8 Access to Secondary Care

The access to secondary care services is good with more than 70 % of the rural population having access to the secondary care services. There were 25.000 hospital beds reported in 2004. Currently, there is approximately one bed available for 680 inhabitants.

Efforts for introducing quality management (QM) in health facilities are not yet successful. Syrian pharmaceutical sector proved to be receptive to introduce quality tools. The reasons for the poor acceptance of quality initiatives in the health sector have to be understood. For certain ensured enforcement of Standard Operational Procedures (SOP) may encounter some resistance in reasoning of necessary change in working styles or of investments to satisfy conditions. QM initiatives failure in the Syrian health sector is also probably due to a top-down approach in introducing this management technique, which is essentially consensual, or to the fact that the agents supposed to accept QM were not the good targets. Advantages of applying QM techniques or Quality Improvement Plans should be appraised, in terms of better services and reward such as personal satisfaction or other incentives. Policy for QM should follow a period of pilot introduction in some possible volunteer hospitals and health centers, and after that results may be divulgated. The MoH should evaluate what kinds of instruments are needed to manage quality. The status of the public hospital sector is not brilliant. Buildings and equipment need renovation, internal organization is not oriented to performance, and hospitals are overstaffed. Within the objective of increasing the efficiency of the hospitals, autonomy may help provided that a strong hospital policy enforces reorganization and promote performance.

The main problem will be designing an effective and fair policy of conversion or preretirement of staff as an answer to the necessary reorganization of these services. This may be the major constraint to contribute efficiency of the hospitals by putting public hospitals on a competitive ground, and avoiding that public hospital to become empty shells or second choice providers for low income groups with no other choice.

The second problem will be assuring sufficient financing to provide quality care, without overcharging prices, and considering that cost recovery should not imply decreasing of budget subvention. If prices are to be kept at a fair level, billing of services will not cover more than 30% of global costs (i.e. inclusive of salaries), but even more than 100% of costs not inclusive of salaries. Staffing is really a sensitive issue.

3.6.9 Reforms introduced over last 10 years, and Effects

In 1998, in order to improve effectiveness, efficiency and quality the MoH lunched a reform to gradually grant “autonomous status” to public hospitals. The first hospital to achieve this status was the Al-Bassel Institute for Hearth Disease and Surgery. In 2003 other four hospitals have been added:

1. General Organism of “Martyr Mamdouh Abazza” Hospital in Qunaitra;
2. General Organism of Damascus Hospital
3. General Organism of “Ibn Khaldoun” Hospital in Aleppo
4. General Organism of “Avicenna” Hospital.

The main characteristics of the new “autonomous model” are:

- Establishment of a Board of Directors composed by seven representatives, normally including three people from the local community to help ensuring consistency with community’s expectations,
- Autonomy on financial and administrative matters,
- Appointment of professional managers or physicians who possess adequate management skills,
- Autonomy in recruiting personnel and in determining (at least to some extent), financial incentives for the employees and
- Possibility to generate revenues from fees charged to outpatient and inpatient.

3.6.10 Pharmaceuticals

Syria has an important national pharmaceutical industry that has registered a substantial growth from a number of 11 manufactures (with about 100 pharmaceutical items) in 1970, to the number of 54 (with 3.214 products) in 2005, reducing considerably its dependence on imported pharmaceuticals. All of the manufacturers have reached the international standard of Good Manufacturing Practices (GMP) and ISO certified. Currently 88% of these manufacturers belong to the private sector, and 12% to the public sector. Syria produces about 4.600 drugs, covering 90 % of the needs and the export to 42 different countries. Imported drugs are mainly limited to oncology products, insulin, vaccines and injected hormones.

A 14 member Technical Committee is the decision making body for matters concerning drugs under the purview of the Ministry of Health. The committee is headed and chaired by the Minister of Health. It meets for two hours on every Sunday and Tuesday nights. They have to decide about drug policy formulation and implementation, importation plans and the control or licensing of factories. Besides they look for results of inspection and drug sampling, for drug registration and pricing and for revision of the essential drug list. The Ministry of Health is officially responsible for drug applications; drug control, inspection, and quality control analyses play very much an advisory and not a policy role in their quality assurance work with the manufacturers. Strict compliance with internationally accepted standards and norms is however mandatory before a manufacturer gets a license to produce. The Ministry of Industry can only issue a license for manufacturing after inspection of the Ministry of Health Evaluation committee and the approval by the Ministry of Health Technical Committee. The manufacturer will then be given the permission to file an application for product registration. Special requirements for batch analyses of product certain therapeutic classes such as cardiovascular drugs or sterile products are laid down by law.

The Directorate of pharmaceutical Affairs is responsible for implementation of regulations. For drug product pricing, for issuing of import licenses for pharmaceutical raw materials needed for local industry, for registration of imported drugs approved by the Technical Committee and for issuing certificates of origin for locally manufactured drugs. Syria's National Drug Quality Control and Research Laboratories have a well trained staff which has increased from 14 in 1989 to 140 in 1997. With the help of a UNDP grant, executed by WHO with UNIDO cooperation. The laboratories have been fully equipped with modern instruments and equipment. Short term consultant support under the UNDP grant, and also from the German bilateral assistance (GTZ), has been implemented very effectively through national and external collaboration. The government has provided premises and organized flow of administrative, and managerial procedures have been instituted for sample analysis, statistics and reporting.

3.7 Health System Reforms

The process of modernization of the health sector in Syria began in 2000. The following main reform steps have been started:

a) Rethinking the role of the MoH and its organizational structure. Capacity building at MoH headquarters
b) Developing an integrated district delivery system (healthy district)
c) Implementing the Healthy Villages Program
d) Extending the degree of public hospital authorities, 9 hospitals received the status of a partially independent hospital through Presidential Decrees.
e) Establishing the national Health Research Center and preparation of the establishment of the Center for Strategic Health Studies (CSHS) with three main tasks: an advisory role towards the MoH, training and teaching, and a research function. The following four institutes will be established within the CSHS:

- Institute of Population and Demographic
- Center for Health System Management
- Institute of Health Economics
- Institute of Public Health.

f) Developing modern managerial skills: A Master Courses in Health System Management and short course in Hospital Management are developed and performed.

g) Developing a reliable Health Information System including a Decision Support Service.

h) Upgrading of Nurses Education System

i) Developing a Quality Assurance Program

j) Establishing the National Health Account program

k) Promoting the local Pharmaceutical Industry and introducing quality improvement measures such as the Good Manufacturing Practice (GMP).

l) Continuing the different programs in the health sector such as (Iodine deficiency control, Chronic and Non-communicable Diseases Control, Heart diseases control, Diabetes control, Tumour control, Domestic and Communicable Diseases Control Programs, National Immunisation Program to add additional vaccines such as Hepatitis (Hep A and B, HIb), Meningitis (ACWY), Rubella and Mumps.

m) European Commission started in 2002 a big project call Health sector Modernization program. They deal with the following areas:

- Policy, planning and regulation
- Health care delivery system
- Management capacity building
- Performance of hospitals
- Quality management
- Health care financing

The review should make recommendations at a minimum in the following points:

- Allocative efficiency of the health sector
- Institutional organization and capacity
- Private sector development and regulation
- Infrastructure investment policy
- Hospital policy and outpatient care policy
- Health promotion and public health activities
- Different aspects of management from financial management to management of health facilities
- Human resources development
- Management of quality and certification/accreditation of facilities
- Health care financing

It is very difficult to monitor and evaluate the impact of reforms in a complex, multiproduct organization. If modernization objectives are not clearly stated or difficult to measure, evaluation of success or failure in achieving the objectives may be difficult or impossible.

The process of modernization must lead to changes in the behavior of providers and the patients before their net effect shows up in final impact indicators in terms of health outcomes, efficiency, equity and quality. Changes in the behavior of providers and patients provide proxies for impact. Attention must be spent in “quick wins” that would increase public confidence in the reform process; shorter waiting lists, shorter waiting time, good availability of drugs, friendly staff, good guidance in the hospital, easy access, good parking space, friendly exterior and welcoming colors, good recreation areas with canteens, etc. It is indispensable to address and assess patient satisfaction and to ask patients/relatives, for the changes they greet most and identification of the most missed elements. The normally slow process of change may become visible and understandable to the patients and their relatives.

Changes have occurred in the relationship between care and cure, between nursing and medical personnel. Nursing care has become an equivalent part of patient care besides medical interventions. This means accepting nurses not as assistants of the physician but as an equal partner, having the common goals in helping the patient to pass through a stressful, often unpleasant time being hospitalized and getting the best health outcome for the patient.

Future reforms - Modernization of the Hospital Sector

Improve the performance of government-owned services, particularly hospitals, through organizational modernization of the service providers themselves. This modernization has included:

- Increasing the managerial autonomy of the health facility.
- Transforming the hierarchical and centralized bureaucracy into parasitical corporations that are exposed to market-like pressures.
- Changing the owner and/or holder by selling out entire health facility (privatization) or transferring the management from the public sector to the private company.

They are often referred to as “new public management” or “marketeering” reforms, which rely on the combination of increased independence, and market-based performance pressures. A core concern of these reforms is good hospital governance. Even well designed modernization processes will fail without the political consensus to implement it, or if strong stakeholders as e.g. the medical profession and labor unions are not brought on board, or if the political cycle is too short and subsequent governments reverse or dilute the reform policies. Compromises on labor reforms and political interference with decision rights and accountability arrangements were among the most damaging factors for the process of modernization. Winning support from the medical profession and hospital management was critical to the more successful reforms.

Groups in society that have deep-rooted “anti-market” value systems can negatively influence the modernization environment especially in the case of complex reforms aimed at efficiency gains without easily identifiable “short-term wins”.

There is also a political governance which issues how the representative bodies (e.g. The Parliament) are holding ministries accountable for health sector and hospital performance and governance within the hospitals (how hospital managers are holding departments accountable).

The environment of private sector activities, especially, in terms of contracting and regulatory enforcement, directly influences the feasibility of autonomy and cooperation processes. It is particularly important to examine what is already going on in the private sector as an important predictor of what will be the outcome of hospital reforms. It is not recommendable to go through the “big bang” and radical changes. The incremental approach – on the other side - runs the risk of going over at least five to ten years. But it passes through a process with a learning phase by using more limited hospital autonomy or piloting a limited number of hospitals, an approach which is actually applied in the hospital sector in Syria.

Source documents

- Health System Profile – Syria, World Health Organization, 2006
- Trade in Health related Services and GATS, World Health Organization
- Central Bureau of statistics abstracts 2000-2001-2002-2003
- National Center for Information
- Ministry of Health

4. The Syrian Tax system

Jens Sperling/Jana Tschilsche

4.1 Introduction

According to the World Bank taxes are essential for a properly functioning economy. Without them there would be no money to provide public amenities, infrastructure and services. Simple moderate taxes and fast cheap administration mean less hassle for businesses, and also more revenue collected and better public services. More burdensome tax regimes create an incentive to evade taxes. Particularly small and medium size companies may opt out and choose to operate in the inofficial sector. A way to enhance tax compliance is to ease and simplify the process of paying taxes for such businesses.[1]

Syrians believe the tax system is a major fact capable of contributing to country’s growth. The government has long canalised oil revenues as substitutes for an efficient and functioning tax system. However, the country of Syria suffers for weaknesses in tax administration thereby.[2] Hence, the construction and implementation of an effective and efficient tax administration are challenges for the government.

Tax system of the Syrian Arab Republic should be described in this paper in its main features. Historical development of the country and the tax system are shown at first to the understanding of the present situation of taxation. Afterwards the impact of the tax revenue is indicated with refer to the state budget in 2008 for the economic situation of the country. After the explanation of general taxation bases most important tax kinds are explained.

An obstacle for an efficient tax system in Syria is the practise widespread of the current tax evasion. Although tax evasion is made a punishable offence by the government with a law published in 2003, the methods experienced in decades are furthermore in use and furthermore practise.

Finally should be given a view of necessary advancements and with it a basis for discussion of this work to the tax system. Advancements of the tax system are partial already in planning by the Syrian government or in conversion. The persecuted aim is to be endangered the urgently necessary growth of the economy by an outdated tax system.

4.2 Historic Overview

To the representation of the Syrian Tax System some explanations about the history and source terms must be sends ahead. This is necessary for the understanding of the tax relations and the present situation of the taxation.

Syria was centuries under the rule of the Ottoman Empire[3]. Prime after the end of the First World War, Syria originated in his today's territorial form. In April, 1920 France became the mandatory power over Syria and also today's Lebanon. After long discussions between the French mandatory power and the Syrian national movement was formed the formally independent of Syrian Arabian Republic in 1943.[4] In 1946 Syria received his full sovereignty.[5]

In the area of the legal system being existed in Syria Ottoman as well as French laws up to the time of the independence of Syria. This was valid also for the tax legislation. On this occasion, the taxes were raised in the form of direct and indirect taxes. They served, primarily, the application of funds for the French mandatory power. Besides, the fulfilment of society, economic and socio-political duties in Syria was not considered at all.[6]

After the independence the tax system was regenerated in Syria. The Syrian legislator abolished various tax kinds from which existed since then of the French mandate rule. In addition, new tax kinds were introduced, the most important from these is the income tax. The enacting of the income tax law in 1949 was a determining step to the reorganisation of the Syrian Tax System.[7]

The transformation phase takes time after enacting even further 15 years.[8] Since then the Syrian tax system exists without appreciable changes. Since 2001, the government has initiated a series of tax reforms.[9] For example the taxation of the income became reformed in 2001, in 2003, in 2006 and 2009.[10]

Another important target of the tax revision was the rise of the tax amount within the scope of the direct taxes. This could not be reached up to now yet.[11]

A few years ago, the taxation system used to be a major barrier before investment and business in Syria, but now the taxation policy and tax rates are among Syria‘s attractive competitive advantages. In 2006, the Decree 51 was issued, which lowered the tax rates on individual incomes and on companies to become one of the lowest rates in the region. The decree included many incentives and reductions in taxes, as well, thus, making taxes no longer a barrier to investment and business.[12]

4.3 Tax Revenues

The Syrian gross domestic product (GDP) amounted in 2008, 83 billion US $ with a change from plus 6.88 percent.[13] The share of the tax revenues at the gross domestic product is not essential with approximately 10 percent.[14]

Budgetary revenues in Syria (21.4 percent of GDP) consist of three main categories: oil related proceeds, non-oil tax revenues and non-oil non-tax revenues (mainly public enterprise surplus contributions). In the period of 2008 oil related proceeds accounted for 22 percent of public revenues, non-oil tax revenues accounted for 48 percent and non-oil non-tax revenues accounted for 30 percent.[15]

Non-Oil Tax Revenues Total non-oil tax revenues constituted 10.3 percent of GDP in 2008. Therefore taxes on income and profit constituted about 34 percent of the non-oil tax revenues, taxes on international trade accounted for another 11 percent, and indirect taxes for 55 percent in the period of 2008. Of the remainder, the majority comes from stamp fees and surcharges on tobacco and construction materials.[16]

Taxes on income and profit consist of taxes on business, on wages and salaries, on rental income and on interest and dividends. Taxes on business are significantly low. This low level is mainly due to economic stagnation, to the wide use of exemptions, tax evasion, and the large inofficial sector.[17]

4. 4 Basis of Taxation

Natural person like legal entities are subjected to taxation by the income tax duty for income from industrial, commercial-business as well as not commercial-business income. A differentiation between person and legal entities is not carried out in the tax law in Syria.[18]

Also no differentiation is carried out by the Syrian legislator after limited and unrestricted liability of tax as it is the case in Germany. The income tax liability encloses only the income mentioned on top, provided that these were achieved exclusively in Syria. Unimportant is present whether the juridical or natural person is resident in Syria or owns the Syrian nationality. For income which was achieved abroad no income tax liability enters.[19]

Objective income tax liability. Tax object or tax item within the scope of the Syrian income tax are industrial, commercial-business and non commercial-business activities of natural person or legal entities. The exercise of the above activities is a condition for the raising of the income from the activities to taxation.[20]

This is the case if the tax payer has fulfilled all exercise conditions prescribed by the Ministry of Finance. These are the follows:

- professional and uninterrupted exercise of the activity;
- to achieve exercise of the activity with the intention of income;
- Exercise of the activity at own expenses as well as on own risk.[21]

If a person does not bear the full risk for the activity, so the activity is arranged as a non-independent activity and is defeated by the tax on wages and salaries.[22]

Assessment basis of income tax. The following income is subsumed under income for the purposes of §7 paragraph 1 of the main income tax law: company income, jobbing incomes[23] and disposal income. The legislator tries to define with it the assessment basis the income tax to expand.[24]

Administration. The fiscal year is normally the calendar year of the Gregorian calendar. If a taxpayer wants to use a divergent tax year, he will request permission from the Ministry of Finance.

Tax forms and tax returns must fill by the end of March with exemption of joint stock and limited liability companies. They have to fill the tax returns by the end of May which following the end of tax year. An extension of these deadlines may be allowed of up to 60 days in exceptional circumstances.

Tax must be paid within 30 days of the date on which tax returns are due. The taxpayer has thirty-day time to file an objection against an assessment, otherwise it is emanated from approval of the taxpayer. Appeals are initially made to the Tax Imposition Committee. If the taxpayer is not satisfied with the decision of the committee, he may take the case to the Revision Committee. The decision of this Committee is final.[25]

“The right of the government to claim additional tax due ceases after five years from the date of the original tax filling deadline.”[26]

Double taxation agreements. To avoid a double taxation of income in different countries, so-called double taxation agreements are closed between different countries. An agreement between Germany and Syria is negotiated currently and, hence, is not existent yet.[27]

4.5. Kind of Taxes

Public revenues without direct consideration of the state in favour of tax payers are called taxes in Syria.The taxes are raised for cover the financial requirements.[28] The most important Syrian tax is the income tax. On the part of the Syrian legislator an income tax system was built up of which no uniform taxation about the whole income forms based them, as it is the case in other countries (e.g. in Germany and Egypt). In Syria the different types of revenue have its own taxation basis and their own taxation procedure.[29]

4.5.1 Income Tax

The income tax was new implemented in 1949. The adopted law contains different kinds of income as well as their taxation basis. Three kinds of incomes are to be distinguished in Syria which are to be taxed:

- Tax on income from industrial, commercial-business and not commercial-business activities (business profits tax);
- Tax on wages and salaries.
- Tax on income from movable capital.[30]

Business Profits Tax. The standard progressive corporate income tax rate range from 10 percent to 28 percent, with the first SYP 50,000 of taxable income is exempt. Certain companies are taxed at flat rates.[31] For instance, the public economic sector department and Syrian Gas Company are subject to tax at a flat rate of 28 percent.[32] An additional municipality surcharge tax of 4 percent to 10 percent is levied on the normal tax due. Capital gains are included in taxable income and are taxed at the normal rates.[33]

Real profit taxation. Basis of the profit taxation within the scope of the income tax is the comparison of capital. This are provided under considering general rules of orderly bookkeeping. This inquiry method is comparable with the regulation in article 4 paragraph 1 income tax law in Germany.[34]

To the taxation method for the purposes of the real profit tax the natural and legal entities are consulted if they own an economically big potential.[35] In article 2 paragraph 1 Income Tax Law 24 are registered and enumerated entities which are subjected to this method.

This are, for example, public sector establishment and its companies, the financial establishments including banks and insurance companies, importers and exporters, alcohol factories, private universities and others.

The taxation assumes the inquiry of a tax profit after the following principles beside a proper accountancy: the territoriality principle, the calendar year principle, the one-time principle and the separation principle of taxation.[36]

Fixed income tax. With implementation of the income tax law in 1949 the legislator found out that a large part of the tax duties with the method of the real profit taxation was demanded too much. For economic and cultural reasons the tax payers could not keep the necessary books. Hence, the possibility was put away for tax payers to pay tax on a fixed income.[37]

The most important attribute of the fixed income taxation is the profit definition based on simplification and estimate of the taxable basis. Tax payers must keep neither books nor recordings. The estimate occurs through so-called classification commissions of the financial administration for a period of 5 years. For the estimate exist the procedure rules which are regulated partly in juridical norms.[38]

Tax on wages and salaries

The wages and salaries tax is imposed upon individuals who derive income

- From a private treasury if they are Syrian residents or if the amount paid is for compensation of rendered services in Syria
- Or from a public treasury, regardless of their residence status in Syria.

As a Syrian resident are considered a national of Syria or an Arab or foreign person legally residing in Syria. Gross income is based on the actual amount of salaries, special assigned amounts, returns, wages, compensations and bonuses and all monetary utilities or in kind utilities. The tax is progressive from 5 percent to 20 percent with the first SYP 5,000 of annual income exempt. This is also valid for foreign employees. The tax is withheld by the employer (payroll tax).[39] For individuals there is no specific tax on capital gains.

Tax on income from movable capital

Tax on income from movable capital is withheld at source with a rate of 7.5 percent on various types of income paid to resident and nonresident companies and individuals. The tax is imposed on the following types of income:

- Dividends received from non-Syrian companies;
- Interest on bonds and loans issued by Syrian institutions;
- Interests on bonds issued by Syrian or foreign governments;
- Interest on all types of deposits;
- Interest on guarantees and monetary bonds issued by legal entities;
- Interest on liabilities documented with a guarantee, such as a mortgage on real estate or a lien on vehicles; and
- Lottery prizes exceeding SYP 1 million.

A municipality surcharge tax of 4 percent to 10 percent is imposed on the tax rate.[40]

Therefore it is clearly, the Syrian taxation system has three different kinds of income taxes. Today this model of taxation you will find in the world not so often. But the reason is a bad developed and qualified Syrian financial administration.[41]

Several different taxes

There are several special taxes, stamp duties and municipal taxes in Syria, such as:

- Consumption taxes of 3 to 30 percent in luxury goods and services, including high-class hotel and restaurant bills.
- Stamp duty on contracts, at 0.4 % of the contract value.[42]
- Tax on real estate proceeds ranges from 14% to 60% depending on the type of property.[43]

4.6 Tax Evasio n

Syria suffers for weaknesses in tax administration. Tax evasion is practice occurring throughout the economy. Therefore, more than 70 percent of all economic activities are hidden in Syria. Foreign enterprises don’t declare income account for an estimated 4 billion Syrian Pounds in lost taxes each year. Additionally, there is significant tax evasion, which occurs not simply through avoidance but through active bribery and corruption[44] of state officials.[45]

There are also tens of thousands of small businesses that operate without licences and permits, thus falling outside the tax system. A reason for the large inofficial sector is bureaucratic overregulation in the form of licensing, certification, registration and other numerous administrative procedures, in addition to shortcomings in the tax system. Absorbing the inofficial sector into the regulated economy is vital to recouping additional tax revenues.[46]

A major reason for tax evasion was excessive top marginal rates[47] in the past. Better tax administration is also needed to ensure the effective and equitable enforcement of tax laws. There is also a need to enhance the trust between the state and the private sector in order to raise tax compliance and efficiently and equitably for the benefit of the public.[48]

It is commonly stated in Syria that there are four sets of account books:

- The first is for the tax Authorities.
- The second is for the Banks.
- The third is for the Family or Friends.
- The fourth is for the Brothers.

This is in addition to the fact that profits are understated to evade taxes. Finally, and perhaps the worst problem, the asset base in Syria is totally distorted.[49]

Law No. 25 (Law for Combating Tax Evasion), was issued in 2003 a few days after income tax law No. 24. It imposed penalties on tax evaders, including fines of up to 200 percent of taxes due and a one month jail sentence.[50] With this law the fight against tax evasion was announced officially. Nevertheless, tax avoidance methods are used furthermore. A reason for this is negative experiences from the past. Tax regulations were already more often changed suddenly and unexpectedly what generates mistrust at the enterprises. Penal threats have caused, on this occasion, also no effective change.[51]

Besides, the danger for enterprises to be discovered with tax evasion is currently still slightly. Hence, this is given up only when it makes sense from enterprise view. This will be the case when the tax load to be paid does not exceed the costs of evasion taking into account the risks significantly.[52]

4.7 Advancement of Tax System

The government initiated in 2005 some tax revisions to improve the investment climate during the next following five years and to generate economic growth. The tax system should be reformed and a value added tax be introduced. Since that time the tax rates were lowered for local and foreign enterprises.[53]

The low level by international standards of the national tax to GDP ratio leaves considerable room to increase taxes without impeding economic development.[54]

A central problem of the Syrian economic policy is the big budget deficit of the state which endangers the internal economic stability. The following factors are responsible for this:

- high subsidies;
- high employment in the civil service;
- low income from the non-oil sector;
- Inefficiency of many state expenses;
- big magnitude of the black or inofficial economy.[55]

VAT (value added tax). To reduce the non-oil fiscal deficit through mobilization of non-oil revenue the authorities plans to introduce a value added tax.[56] The implementation of the value added tax would raise above all the tax revenue from the sectors not depending on the oil. Indeed, this would load the big portion of the population near the poverty border. Therefore, a system is to be set up first to the support of destitute people.[57]

In 2008, the minister of finance said that the ministry was thinking of exempting a variety of products including food, drugs, health services, education, real estate and banking operations. He said also, tax would not be implemented before 2010 and that there is not a schedule for implementation.[58] Although this tax does not currently exist in Syria, it is believed that it will be developed within the next few years.[59] The authorities are keen to complete sufficient preparatory work to ensure the readiness of tax administration and the public for the introduction of VAT.[60]

In the last years the income tax has been simplified and marginal rates lowered substantially.Additionally, various specific taxes were consolidated into a single “ad valorum” consumption tax, and much of the remaining tax legislation has been reviewed and streamlined. Nonetheless, the tax regime is still complex, with widespread exemptions and tax liabilities which are subject to negotiations between tax collectors and taxpayers.[61]

Future. For the future the tax system is contemplated to develop from the current point of view that the business improvement is further promoted. For this it is recommended:

- No double taxation of dividends;
- Exemption from capital gain tax;
- Syria should enter into double taxation agreement with as many countries as are willing;
- No taxation of foreign currency gains on foreign currency brought into the country by foreign investors.[62]


Abboud, S. (2009): The transition paradigm and the case of Syria, in: Abboud, S./ Arslanian, F., Syria's economy and the transition paradigm, Fife, pp. 3-31.

Aldali, S. (2008): Die Einkommensbesteuerung der gewerblich oder freiberuflich tätigen Kleinunternehmer in Deutschland und die Problematik ihrer Übertragung auf Syrien, data set available at <> (04 May 2009).

Amann, J. M. (2007): Mythos Interkulturalität? Die besondere Problematik deutsch-syrischer Unternehmenskooperationen, München.

AMEInfo (2008): Finance minister says no timetable set for VAT, data set available at <> (24 May 2009).

Deloitte (2009): Syria Highlights, data set available at <> (21 May 2009).

Deutsches Institut für Wirtschaftsforschung (2008): Tabus verzögern

Wirtschaftsreformen in Syrien; data set available at <> (21 May 2009).

Economic Research Forum (2005): The Road Ahead for Syria, data set available at <> (21 May 2009).

Ernst & Young (2008): The 2008 worldwide corporate tax guide, data set available at <$FILE/2008_world_wide_corporate_tax_guide.pdf> (21 May 2009).

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European Investment Bank (2006): Feasibility Study to develop new options for private sector investment financing in the Syrian Arab Republic, data set available at <> (21 May 2009).

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Index Mundi (2008): Syrien Bruttoinlandsprodukt (BIP), data set available at <> (22 August 2009).

International Monetary Fund (2009): Syrian Arab Republic - 2008 Article IV Consultation, data set available at <> (17 May 2009).

Müller, K.-D. (1994): Unternehmensbesteuerung in Staaten des arabischen Raums, in: Internationales Steuerrecht, Vol. 3, No. 3, pp. 117-124.

Schweizerische Eidgenossenschaft (2009): Syrien, data set available at <,lnp6I0NTU042l2Z6ln1ah2oZn4Z2qZpnO2Yuq2Z6gpJCDdIJ6gGym162dpYbUzd,Gpd6emK2Oz9aGodetmqaN19XI2IdvoaCVZ,s->(17 May 2009).

United Nations Development Programme (2007): The First National Competitiveness Report of the Syrian Economy 2007, data set available at <> (17 May 2009).

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Zorob, A. (2005): Entwicklung und Defizite des wirtschaftlichen Reformprozesses in Syrien, p. 97, in Wippel, S. (Ed.), Wirtschaft im Vorderen Orient, Berlin, pp. 77-111.

5. German-Syrian-Families- Legal Aspects of Foreigners

Anke Meyer/Stephanie Bahsitta

5.1 Preface

Syria has 20 Million inhabitants and 80% of them are Muslims.[63] The capital Damascus is one of the oldest continuously inhabited towns on earth[64] “Damascus as town was first mentioned by Pharaohs Thutmosis III. and Amenophis III. as Tamasqu (tmsq), later by Duma_qu. In the period of Echnatons when the Armarna[65] letters were written the name of the prince Namiawaza (at that time prince of Damascus) were twice mentioned.”[66] That shows the excitement of the history of Damascus and Syria itself.

“Syrians often think that Germans are honest, faithful, reliable, decent, diligent and fair. A good Muslims should have all of these characteristics. I often heard from pious Muslims, thatGermans are Muslims without Islam.” [67]

Like the Syrian Ambassador had dealt with the Syrian – German relationship, where discussion about the different values are absolutely necessary, so did Germans already before him. Goethe wrote for example in “West – östliches Divan” in 1819:

“Who knows himself and others, will recognise that Orient and Occident are not dividable anymore.” [68]

Goethe interprets the Oriental – Islamic poetry and takes “Diwan” written by Hafis for his conclusion. But it was not only Goethe writing about Islam and its values, it was also like the German writer Lessing in “Nathan the wise” talking about the differences.Knowing theses comparisons between the Orient and Occident, it will be interesting to show rights of Germans and non-Muslims in Syria when it comes to Syrian laws, which are written after the rules of the Islam.

5.2 Marriages between Muslims and Non-Muslims

The Marriage after Islam is a contract, which validity is not dependent on religious rites. However, marriage takes in the community as “the smallest” unity a central and important place. Allah makes no difference between man and woman, and calls both his “creation”. That is why family itself after the Koran is a peaceful unity and is based on love, mercy and even-temperedness.

The Koran says: “And it shall be his sign, that HE made your wife’s from you, so you will find peace together; and HE has put love and mercy between both.” (30:21) Concurring to this ideal, man and woman have the same protection in marriage for each other: “She (your wife’s) shall be like a garment for you, like you are a garment for her.” (2:187)

“For the first marriage is it necessary to have a guardian for the woman, so say most of the legal school after Koran. Is the guardian the father or grandfather on fathers side of her, is he allowed entering her into a marriage, which she does not want. (Marriage of compulsion – wladi mudschbir)”[69]

The Koran allows for men to have more than one marriage at the same time: “so marry, what you like on women, two, three or four; and when you fear not being cheap, just marry one […]. It will be the easiest way to avoid unfairness.” (4:3)

“Normally” both partners are Muslims. Following constellations show what happens if one partner is non-Muslim:

A Muslim man wants to marry a non-Muslim woman:

The Koran divides between non-believers and woman, who believe in a religion with written texts. A marriage with non-Muslim woman is forbidden by Koran, but if the man wants to marry one, he should at least marry a woman who believes in “something”. He is not allowed to marry a heathen or servant of an idol, but he is allowed to marry a Christian or Jewish. The Koran says following: “do not marry aheathen before she will be religious, and a religious slave is much better than a heathen (even if you like the heathen better).” [Koran 2:221]

The conflict between Muslims and Christians should not be underestimated and arises because of the different norms and values of each party. Alcohol for example is not forbidden for a Christian woman, but if she is married to a Muslim the man has to take care, that she follows the rules of Islam even if she is not converted to Islam and still a Christian.

A Muslim woman wants to marry a non-Muslim man:

Such a marriage is completely forbidden.[70] Reasons are for example that woman stand under the control of man after the Koran. This should not be taken as an advantage by men, but he has to support the family and “brings the money home”. That is why the man or husband is like a guardian for the woman or wife and that is why she has no rights to leave her religion and has to follow a man who has the “right” religion and to educate her children after Islam.[71]

The Koran says: “Do not allow your daughters to marry heathens before they are religious; and a religious slave is much better than a heathen (even if you like the heathen better). They only invite to fire, but Allah invites to paradise and forgiveness.” [Koran 2:221]

Children of mixed-marriages have to be educated after Islam; for example a baptism is not allowed. Men after Islam and also in mixed-marriages have to support the family and they are the “religion-giver”. The way they live the “right” religion the child has to follow and even when the wife does not have to follow the religion in mixed-marriages, she has to take care that her children will follow.[72] “The nationality of the child derives from the nationality of the father and depends of the place of birth of the child.”[73]

Necessary documents for marriage[74]:

- Passport
- Birth certificate
- Registration certificate which includes the religion
- Marriage-ability-certificate

The Marriage-ability-certificate is available at registry office in the home country. It is needed in Germany when a German wants to marry a foreigner, same need when a German wants to marry somebody in Syria.[75] It certifies that a person is allowed and able to marry someone.

5.3 Rights of Foreigners and Non-Muslims

5.3.1 Generall y

A residence permit in Syria will be given for following cases:

- Marriage with a Syrian
- Start of studies
- Start of work

The requirement of working in Syria is good Arabic. Also is a foreigner only allowed to work in Syria if he or she has qualification for the job which no Syrian worker has, who is unemployed and this has to be checked at the Ministry of Social Affairs.

This Ministry needs following documents to check:

- Copy of the passport
- Certificates from schools and universities
- Work contract
- Duty for national insurance
- Report of national security

Certificate of house or flat made by Muktars (highest religious man of the district)

If the Ministry of Social Affairs finds no unemployed Syrian who could take the work, they will give the allowance to work to the foreigner and with the allowance to work the foreigner gets the residence permit from the Ministry of Immigration.[76]

After the Syrian law will be every foreigner thrown out of the country, when the foreigner seems dangerous or the foreigner did something illegal.[77]

“Stateless persons, have to register in special registry and have no civil rights if they live in Syria.”[78] Theses persons are mostly Kurdish, from which the citizenship were taken away in 1962. The have no rights to vote, buy land or work in state-run offices; but they are allowed to go to school and to have health insurance (if they pay).

5.3.2 Acquisition of Land by Purchase, Donation and Heritage

It is forbidden by Syrian law for foreigners to buy or own land in Syria. There is a difference only in some cases and exemptions can be made. Foreigners can buy land only in the capitals of the provinces, but they need a permit of the Minister of Interior. To get the permit foreigners will need the following documents[79]:

- birth certificate or passport of the buyer
- personal ID of seller,
- permit of residence of the buyer,
- sales agreement,
- land register record,
- embassy document about buying-allowance

The land (with house) is for private use only and should not be bigger then 200m². The land register record needs to contain that a foreigner buys. There are possibilities for official representations or international organisations to buy property, but therefore the permit of the Prime Minister will be needed.Foreigners are allowed to sell their property after five years; after the law against speculations.[80] In rural territories is it forbidden for foreigners to buy or own land (like said before); but that is a problem for the Kurdish people. They have no civil rights after Syrian law and not even being allowed to buy land close to the border, they are not even allowed to buy land where other foreigner can (in the capitals of provinces).[81] Donations of land to non-Muslims are forbidden.

5.3.3 Renting of Property by Foreigners

In 2001 was a reform of renting properties in Syria; existing rent-contracts were changed as well as rent-contracts for future. The landlords could before the reform rise the price of rent per year by 5% for private use und by 7% for commercial use. After the reform the reconciliation court is responsible for percentages, if the landlord takes action at the court. [82]

Written rent-contracts are rare in Syria and the conditions are made verbally most of the times. That is why most of the rent-contracts in Syria are for one year, because this way they can make price changes more easily. The maximum period of a rent-contract is 15 years for foreigners and the contracts cannot be renewed after 15 years.

Deposits are normally not higher then one month rent, but can be up to three month. If the tenant or the landlord does mistakes or does not do their duties, the other party can be sued. Rents can be paid in front maximum three month. The period of notice is three month. Death of one of the contractors does not break the contract and the contract goes on with the heir.

Other changes by the reform in 2001 were:

- Suing by not paying rent
- Renting a rented property to someone else
- Giving notice for “own-use”
- Foreigners “own property”

5.3.4 Business in Syria

Companies which want do deal in Syria need a trade mission since 2002. Before 2002 foreign companies could name a trader in Syria, but that is not allowed anymore. The trade missions comes after the "Legislative Decree No. 15 of the President of the Republic" (2001-07-03) and it says that neither Syrian companies nor federal offices are allowed to trade with a company which has no trade mission in Syria. The trade mission has to be registered and only companies which have a permanent branch in Syria are freed from that law. [83]

There are several documents necessary to set up a trade mission in Syria, like for example balance sheets of the company and a declaration of the management about the reasons to set up a trade mission. Also has to be shown that it is a complete private compy without any governmental interference. All of theses documents need to be ratified by the Ministry of Trade, Syrian Embassy and from the Foreign Ministry of the country where the company comes from and also from the Syrian Foreign Ministry.

5.4 Divorces in Islam

Divorce in Islam is possible from each side, which means woman as well as man can get divorced; only the conditions to get divorced are different between them. Both of them need to do “everything” to keep the marriage before asking for divorce.[84]

When it comes to marriage in Islam not the person itself is important, but the name of the family, the reputation and piety. Due to Islam, even in “bad times” both partners have to stand to each other and have to be faithful. A high piety is necessary to put the idea of getting divorced to zero, which means “the more religious the partners the less they want to get divorced in future” (Islamic saying). Before getting married both partner should ask friends and other people of their future partners about the ability of their future partner to get married and how religious they are.

It is necessary to look at the living together before looking at the part of getting divorce in Islam. Different values and norm are making the living together different in comparison to Germany. For example a woman is not allowed to let a man into her flat when her husband is not at home. That gives conflicts especially in mixed-marriages, where the woman is used to male friends and she wants to have coffee with them; the conflict which most of the time comes up is about the reputation of the family name – and about “what the neighbours say”.

There are different phases after the Islamic law to be able to get divorced:

Phases for Nusuz (Rebellion) of the husband Phase of reflection and kind warning: The man should appeal to his wifes conscience and tell her that she should follow Allah rules. He should let her know about the consequences.

Phase of Hagr (Leaving the bed): This should be a painful experience for the wife, because it shows that he does not want her anymore. The man is not allowed to leave the flat, otherwise he would cause too much pain for her. The period of not using the same bed should not be longer than four month, because it is painful for the man, too.

Phase of desperation: In this phase the man is allowed to beat up his wife by Koran. The Koran says: “The men have the responsibility for women, because Allah stands for the ones who gave their money and likes them because they gave. Good women are the ones who obey and do what they have to do after Allah. And the others, because they do not do what you want, they need warnings, leave the bed and if it does not work, beat them! If they follow your words, everything will be good.” (4:34)

Phases for Nusuz (Rebeillion) of the woman: Phase of reflection and kind warning: The woman should appeal to her husband’s conscience and tell him that he should follow Allah rules. She should let him know about the consequences.

Phase of Hagr (Leaving the bed): This should be a painful experience for the husband, because it shows that she does not want him anymore. The woman is not allowed to leave the flat, otherwise she would cause to much pain for him. The period of not using the same bed should not be longer than four month, because it is painful for the woman, too.

Phase of desperation: The woman is allowed to talk to her family about her situation and her problems. If that does not change something, she will be allowed to go to court. Her husband will get from the court a kind warning, if that does not help the court can give penalties like prison or having him beaten up.

Divorce by me: The man is allowed to do a “divorce till recall”; that means when he did the three phases and nothing got better with his wife he can take the “divorce till recall”. The “divorce till recall” will give a three month period of time called “Iddah”, in which both partners can think about what happened and at the end they have to decide what to do. In this time period they will not be living in the same house.

In case the couple tries it again, the man will be allowed to do the “Iddah” again if he did three phases. But if he does the “Iddah” for the third time, they are divorced.

Divorce by women: The divorce of a woman is only possible with the help of a court. She has to proof that the man is guilty of the failure of their marriage. If she can do that the man will be forced to pay alimony.

5.5 Heritage

In Islam are the heritage and the rights in a certain order:

- costs for funeral
- debts of testator
- Testamentary legacy
- Koran succession

Generally Muslims and non-Muslims are not entitled to inherit by Koran. Fortunately, the Muslim is allowed to give 1/3 of the general legacy to a non-Muslim if the costs and debts are paid; even when they were married or blood related.

To inherit property is for non-Muslim only allowed in capitals of the provinces. If a non-Muslim inherits a property in a rural territory, the property will go into federal “hand” and the inheritor will get payment for the property by the government. If the property is in one of the capitals of the provinces, than the inheritor needs a document from the German government which certifies that the inheritor is allowed to inherit. A non-Muslim is never allowed to bequeath property in Syria and should sell her/his property before he/she dies.

5.6 Appendix

For somebody form the Occident the Orient seems to be different. Honestly, it is true and Goethe was already right when he said that Orient and Occident can not go alone anymore. Looking with the eyes of an female European to Syria and its laws, all the values and norms seem weird; especially what they seem to do to woman and how they treat them. But looking closer and being an open minded female European, Syria becomes an interesting country with a wonderful an interesting history which is completely different to Europe.

It seems looking closer at Syria, makes a life Europe even better and more worth then it was ever before. Seeing different places on earth in comparison to our comfortable life in Europe … who wants to complain anymore?

Talking about globalisation and working in Syria … Syria has goods which Europe needs and Syria from Europe. But working and trading with a Muslim as a non-Muslim is not as easy a it seems, like this essay tried to show by putting the differences in social life and families for Muslims and non-Muslims together.


[1] Cf. World Bank, Doing Business 2009 - country profile for Syria, 2008, p. 32.

[2] Cf. Abboud, S, The transition paradigm and the case of Syria, 2009, p. 24.

[3] According to Perthes, V., Syrien, 1990, p. 38f.; Schmauder, K., Das Darlehen, 1998, p. 108f., as cited in Aldali, S., Die Einkommensbesteuerung der gewerblich oder freiberuflich tätigen Kleinunternehmer in Deutschland und die Problematik ihrer Übertragung auf Syrien, 2008, p. 83.

[4] According to Perthes, V., Syrien, 1990, p. 43f., as cited in Aldali, S., Die Einkommensbesteuerung der gewerblich oder freiberuflich tätigen Kleinunternehmer in Deutschland und die Problematik ihrer Übertragung auf Syrien, 2008, p. 83.

[5] Cf. Aldali, S., Die Einkommensbesteuerung der gewerblich oder freiberuflich tätigen Kleinunternehmer in Deutschland und die Problematik ihrer Übertragung auf Syrien, 2008, p. 83.

[6] Cf. Aldali, S., Die Einkommensbesteuerung der gewerblich oder freiberuflich tätigen Kleinunternehmer in Deutschland und die Problematik ihrer Übertragung auf Syrien, 2008, p. 84.

[7] Cf. Aldali, S., Die Einkommensbesteuerung der gewerblich oder freiberuflich tätigen Kleinunternehmer in Deutschland und die Problematik ihrer Übertragung auf Syrien, 2008, p. 84.

[8] According to Algaza, H., Steuersystem, Damaskus, 1973, p. 22f., as cited in Aldali, S., Die Einkommensbesteuerung der gewerblich oder freiberuflich tätigen Kleinunternehmer in Deutschland und die Problematik ihrer Übertragung auf Syrien, 2008, p. 84.

[9] Cf. Abboud, S., The transition paradigm and the case of Syria, 2009, p.24.

[10] Cf. Aldali, S., Die Einkommensbesteuerung der gewerblich oder freiberuflich tätigen Kleinunternehmer in Deutschland und die Problematik ihrer Übertragung auf Syrien, 2008, p. 84.

[11] Cf. Aldali, S., Die Einkommensbesteuerung der gewerblich oder freiberuflich tätigen Kleinunternehmer in Deutschland und die Problematik ihrer Übertragung auf Syrien, 2008, p. 84f.

[12] Cf. United Nations Development Programme, The First National Competitiveness Report of the Syrian Economy 2007, 2007, p. 67.

[13] See <> (22 August 2009).

[14] Cf. International Monetary Fund, Syrian Arab Republic - 2008 Article IV Consultation, 2009, p. 17.

[15] Cf. International Monetary Fund, Syrian Arab Republic - 2008 Article IV Consultation, 2009, p. 17.

[16] Cf. Economic Research Forum, The Road Ahead for Syria, 2005, p. 20; International Monetary Fund, 2008 Article IV Consultation, 2009, p. 17.

[17] Cf. Economic Research Forum, The Road Ahead for Syria, 2005, p. 20.

[18] Cf. Aldali, S., Die Einkommensbesteuerung der gewerblich oder freiberuflich tätigen Kleinunternehmer in Deutschland und die Problematik ihrer Übertragung auf Syrien, 2008, p. 88.

[19] Cf. Aldali, S., Die Einkommensbesteuerung der gewerblich oder freiberuflich tätigen Kleinunternehmer in Deutschland und die Problematik ihrer Übertragung auf Syrien, 2008, p. 89.

[20] Cf. Aldali, S., Die Einkommensbesteuerung der gewerblich oder freiberuflich tätigen Kleinunternehmer in Deutschland und die Problematik ihrer Übertragung auf Syrien, 2008, p. 90.

[21] Cf. Aldali, S., Die Einkommensbesteuerung der gewerblich oder freiberuflich tätigen Kleinunternehmer in Deutschland und die Problematik ihrer Übertragung auf Syrien, 2008, p. 91.

[22] Cf. Aldali, S., Die Einkommensbesteuerung der gewerblich oder freiberuflich tätigen Kleinunternehmer in Deutschland und die Problematik ihrer Übertragung auf Syrien, 2008, p. 91.

[23] Income from accidental and uncontrollable incidents, for example, indemnities of assurances..

[24] Cf. Aldali, S., Die Einkommensbesteuerung der gewerblich oder freiberuflich tätigen Kleinunternehmer in Deutschland und die Problematik ihrer Übertragung auf Syrien, 2008, pp. 92 f.

[25] Cf. Ernst & Young, Corporate taxation in Middle East, 2009, p.76.

[26] Cf. Ernst & Young, Corporate taxation in Middle East, 2009, p.77.

[27] Cf. Aldali, S., Die Einkommensbesteuerung der gewerblich oder freiberuflich tätigen Kleinunternehmer in Deutschland und die Problematik ihrer Übertragung auf Syrien, 2008, p. 93.

[28] According to Baschur, I., Finanzen, Damaskus, 1981, p. 202 as cited in Aldali, S., Die Einkommensbesteuerung der gewerblich oder freiberuflich tätigen Kleinunternehmer in Deutschland und die Problematik ihrer Übertragung auf Syrien, 2008, pp. 86 f.

[29] Cf. Aldali, S., Die Einkommensbesteuerung der gewerblich oder freiberuflich tätigen Kleinunternehmer in Deutschland und die Problematik ihrer Übertragung auf Syrien, 2008, p. 87.

[30] Cf. Müller, K.-D., Unternehmensbesteuerung in Staaten des arabischen Raums, 1994, p. 123.

[31] Cf. Ernst & Young, The 2008 worldwide corporate tax guide, 2008, p. 931.

[32] Cf. Ernst & Young, Corporate taxation in Middle East, 2009, p.75.

[33] Cf. Ernst & Young, The 2008 worldwide corporate tax guide, 2008, pp. 931 f.

[34] Cf. Aldali, S., Die Einkommensbesteuerung der gewerblich oder freiberuflich tätigen Kleinunternehmer in Deutschland und die Problematik ihrer Übertragung auf Syrien, 2008 pp. 92 f.

[35] Cf. Aldali, S., Die Einkommensbesteuerung der gewerblich oder freiberuflich tätigen Kleinunternehmer in Deutschland und die Problematik ihrer Übertragung auf Syrien, 2008 p. 94.

[36] Cf. Aldali, S., Die Einkommensbesteuerung der gewerblich oder freiberuflich tätigen Kleinunternehmer in Deutschland und die Problematik ihrer Übertragung auf Syrien, 2008 pp. 94 f.

[37] Cf. Aldali, S., Die Einkommensbesteuerung der gewerblich oder freiberuflich tätigen Kleinunternehmer in Deutschland und die Problematik ihrer Übertragung auf Syrien, 2008 pp. 93 f.

[38] Cf. Aldali, S., Die Einkommensbesteuerung der gewerblich oder freiberuflich tätigen Kleinunternehmer in Deutschland und die Problematik ihrer Übertragung auf Syrien, 2008 pp. 96 f.

[39] Cf. Deloitte, Syria Highlights, 2009, pp. 1 f.

[40] Cf. Ernst & Young, The 2008 worldwide corporate tax guide, 2008, pp. 932 f.

[41] According to Baschur, I., Finanzen, Damaskus, 1981, p. 202 as cited in Aldali, S., Die Einkommensbesteuerung der gewerblich oder freiberuflich tätigen Kleinunternehmer in Deutschland und die Problematik ihrer Übertragung auf Syrien, 2008 pp. 86 f.

[42] Cf. Ernst & Young, Corporate taxation in Middle East, 2009, p. 79.

[43] Cf. Deloitte, Syria Highlights, 2009, pp. 1 f.

[44] Based on a survey of Syrian businesses, the World Bank has determined that 70 percent of firm interactions with tax inspectors involve inofficial payments. Cf. World Bank, Syrian investment climate assessment: unlocking the potential of the private sector, 2005, p. 31.

[45] Cf. Abboud, S., The transition paradigm and the case of Syria, 2009, p. 24.

[46] Cf. Economic Research Forum, The Road Ahead for Syria, 2005, p. 32.

[47] According to Zorob, the top marginal rate for corporate income tax amounted to 63% before the law 24/2003. Cf. Zorob, A., Entwicklung und Defizite des wirtschaftlichen Reformprozesses in Syrien, 2005, p. 97.

[48] Cf. Economic Research Forum, The Road Ahead for Syria, 2005, pp. 28 f.

[49] Cf. European Investment Bank, Feasibility Study to develop new options for private sector investment financing in the Syrian Arab Republic, 2006, p. 63.

[50] Cf. Economic Research Forum, The Road Ahead for Syria, 2005, p. 26.

[51] Cf. Amann, J. M., Mythos Interkulturalität? Die besondere Problematik deutsch-syrischer Unternehmenskooperationen, 2007, p. 175.

[52] Cf. Amann, J. M., Mythos Interkulturalität? Die besondere Problematik deutsch-syrischer Unternehmenskooperationen, 2007, p. 175.

[53] Cf. Schweizerische Eidgenossenschaft, Syrien, 2009, p. 3.

[54] Cf. European Neighbourhood and Partnership instrument, Syrian Arab Republic, Strategy paper 2007 – 2013, 2007, p. 9.

[55] Cf. Deutsches Institut für Wirtschaftsforschung, Tabus verzögern Wirtschaftsreformen in Syrien, 2008, p. 71.

[56] Cf. International Monetary Fund, Syrian Arab Republic - 2008 Article IV Consultation, 2009, p. 3.

[57] Cf. Deutsches Institut für Wirtschaftsforschung, Tabus verzögern Wirtschaftsreformen in Syrien, 2008, p. 71.

[58] Cf. AMEInfo, Finance minister says no timetable set for VAT, 2008, p. 1.

[59] Cf. European Investment Bank, Feasibility Study to develop new options for private sector investment financing in the Syrian Arab Republic, 2006, pp. 140 f.

[60] Cf. International Monetary Fund, Syrian Arab Republic - 2008 Article IV Consultation, 2009, p. 10.

[61] Cf. European Investment Bank, Feasibility Study to develop new options for private sector investment financing in the Syrian Arab Republic, 2006, p. 34.

[62] Cf. European Investment Bank, Feasibility Study to develop new options for private sector investment financing in the Syrian Arab Republic, 2006, p. 157.

[63] (retrieved 2009-08-31)

[64] (retrieved 2009-08-31)

[65] Quelle: - The Amarna letters are clay tables. (retrieved 2009-08-31)

[66] (retrieved 2009-08-31)

[67] Speech of the Ambassador of the Syrain Arabic Republic S.E. Herr Dr. Hussein Omran, who spoke at the “Society of International Understanding”, Leipzig 2005-01-28

[68] Johann-Wolfgang von Goethe: „West-östlicher Diwan“, Stuttgart 1819

[69] (retrieved 2009-08-31)

[70] Memri, 2007-10-11

[71] (retrieved 2009-08-31)

[72] (retrieved 2009-08-31)

[73] Document of the Ministry of Interior, Berlin, to the President of the West German Parliament, 2009-02-11

[74] After the foreign Office, Berlin

[75] § 1309 BGB

[76] (retrieved 2009-08-31)

[77] Compare: Document of Refugee-commissioner of the United Nations(Berlin), October 2002

[78] Document of the Ministry of Interior, Berlin, to the President of the West German Parliament, 2009-02-11

[79] Source: German Embassy in Syrien

[80] Ministry of foreign Trading, Article about: „Damaskus regelt Grunderwerb durch Ausländer neu“, 2008-08-04

[81] (retrieved 2009-08-31)

[82] Compare: (retrieved 2009-08-31)

[83] Compare: Federal Office for foreign Trading, Article:„Geschäfte mit Syriens Staatssektor nur über Handelsvertreter“, 2002-03-06

[84] Muhammad Ibn Ahmad Ibn Rassoul: „Die Scheidung nach islamischen Recht“, 1999; Das islamische Unterhaltsrecht nach al-Kasani, 1989; Salim El-Bahnassawi: „Die Stellung der Frau“, 1994

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