Documentation Conference: Syria and the European Union: Dimensions of Cooperation October 31st – November 2nd 2008 2 FRIEDRICH-EBERT-STIFTUNG Conference Venue: Le Meridien Damascus P.O.Box 5531 - Damascus SYRIA Tel : (+963 11) 245 22 00 - 222 92 00 / 373 87 30 Fax : (+963 11) 223 33 03 - 373 86 61 Impressum About the Conference From October 31st to November 2nd 2008 the Friedrich-Ebert-Stiftung and the Syrian Ministry of Economy and Trade hosted the joint conference „Syria and the European Herausgeber: Union – Dimensions of Cooperation” under the auspices of the Syrian Deputy Prime Friedrich-Ebert-Stiftung Department for the Minister Abdallah al-Dardari in Damascus. The conference served as a forum for Middle East and North Africa dialogue between German, European and Syrian decision-makers and experts on Division for International the Syrian-European Relations and the Syrian Economic Reform Process. Development Corporation Hiroshimastraße 17 10785 Berlin © Friedrich-Ebert-Stiftung Documentation by: Nils Saniter, Ingrid Ross Photos: FES, dpa, PhotoAlto, Zohra Bensemra/Reuters Layout: Pellens Kommunikationsdesign, Bonn Print: Druckerei Molberg GmbH, Bonn Printed in Germany 2008 Syria and the European Union: Dimensions of Cooperation 3 PROGRAM 06:00 pm Welcome Reception 10:15 am I. Plenary Session for the participants of the conference 12:00 am The Economic Reform Process in Syria Concepts and Strategies of Political Keynote Speeches Economy Culture and Civilisation Syria and Terms of Reference: Examples for social market Europe from Historical Perspective economy under discussion; Interdependence to Future Cooperation between economic and administrative reform; Sequencing of reform steps; Balancing social and Terms of Reference: Role of history, common economic transformation; Discussing challenges cultural ground between Syria and Europe, of managing economic transformation; Syria as a Syria as a bridge between East and West, regional hub. tourism and communication as an engine for cultural exchange, examples for tolerant Aim of the Session: Identifying ways, strategies co-existence between different religions and and promising sectors for economic reform in sects. present Syria and elaborating proposals to fi ne-tune Dr. Riad Nassan Agha EU assistance programs. Minister of Culture The discussion to be introduced and chaired by Dr. Andreas Reinicke, Abdullah Al-Dardari Ambassador of the Federal Republic Deputy Prime Minister for Economic Affairs of Germany to the Syrian Arab Republic, of the Syrian Arab Republic, Damascus Damascus and co-chaired by 09:00 am Welcoming and Introduction Hajo Lanz 10:00 am Head of the Department for the Middle East Hajo Lanz and North Africa, Friedrich-Ebert-Stiftung, Head of the Department for the Berlin Middle East and North Africa, Friedrich-Ebert-Stiftung, Berlin Dr. Adnad Al-Soukhni Head of Planning Committee Abdullah Al-Dardari Deputy Prime Minister for Economic Veronique De Keyser Affairs of the Syrian Arab Republic, Member of the European Parliament, Damascus Member of Committee on Foreign Affairs, Brussels Walter Kolbow Member of the German Parliament, Anja Zorob Deputy Head SPD Parliamentary Group, Institute of Development Research and Berlin Development Policy, Bochum 4 FRIEDRICH-EBERT-STIFTUNG 12:15 am II. Plenary Session and perceptions on global governance; Discussing 02:00 pm the role of multilateral institutions; Infl uence of Business Sector Development the rising powers (as China and India) on domes Strategies for Sustainable and tic markets Pro-Poor Growth Aim of the Session: exchanging perspectives on globalisation and identifying strategies to fuel Terms of Reference: Examples for small and benefi ts from globalisation medium enterprise development; Creating a supportive and attractive environment for the The discussion to be introduced and business sector; Strategies for pro-poor-growth. chaired by Aim of the Session: Fostering a developmental Emil Lieser oriented business sector; Identifying strategies Friedrich-Ebert-Stiftung to promote the SME sector; Strengthening EU-Syrian business relations. Dr. Samir Al Taki The discussion to be introduced and General Coordinator, Orient Center chaired by for International Studies Dr. Amer Husni Lutfi Mr. Soulayman Haddad Minister of Economy and Trade Head of Committee of Arab and Foreign Poul Gadegaard Affairs Syrian Enterprise and Business Centre (SEBC) Dr. Boris Ruge Dr. Rateb Al Shallah Head, Middle East Department, Federal President, Federation of Syrian Chambers Foreign Offi ce of the Federal Republic of Commerce of Germany, Berlin Dr. Ulrich Thießen Leonidas Tezapsidis German Institute for Economic Research, Head of Unit Near East, Directorate-General Berlin External Relations, European Commission, Brussels Dr. Gerhard Heimpold Halle Institute for Economic Research Closing Remarks 03:30 pm III. Plenary Session Hajo Lanz Head of the Department for the Middle East 05:00 pm Globalisation: Challenges and and North Africa, Friedrich-Ebert-Stiftung, Opportunities Berlin Terms of Reference: Integration into the world market; protectionism vs. liberalisation; Effects of 07:00 pm Reception globalisation in the EU and Middle East and on the Invitation of the German Ambassador strategies to cope with these effects; Prospects Dr. Andreas Reinicke SYRIA AND THE EUROPEAN UNION: DIMENSIONS OF COOPERATION 5 Syria in Times of Economic Restructuring Presently, Syria undergoes far-reaching economic The considerable speed at which the government pursues reform and a repositioning in the landscape of inter- to implement the reforms is attributable to severe macro- national economic and political relationships. economic imbalances that threaten to become even worse in the future if there is no profound change in eco- Since the succession of Bashar Al-Assad in 2000, the nomic policy: Oil reserves are dwindling rapidly and the Syr ian government has embarked on a course of econo- Syrian economy is burdened by an oversized public sec- mic reform to restructure its economy which, in the long tor with ineffi cient public enterprises. Other challenges lie run, may add up to a full transformation from centrally in the small amount of non-oil revenues to the state planned economy to market economy. At the same time budget due to a poor taxation system and a heavy fi scal Syria seeks to alleviate poverty and promote human de- burden caused by large subsidies. Moreover, future velopment. The tenth and most recent Five Year Plan (10th FYP) covering the years 2006–10 sets out the funda- mental priorities on which the reforms are based: Most emphasis is being placed on macroeconomic stabilisa- tion policies through fi scal adjustments focussing on re- ducing the budgetary defi cit. Other measures include reforms in the fi nancial sector to promote private invest- ment and economic growth, liberalisation of interna tional trade to increasingly profi t from border-crossing division of labour, and labour market reforms towards more com- petition. It is widely accepted that, in order to absorb potential adverse effects stemming from the economic adjustments, efforts must also concentrate on the estab- lishment of new measures of social security. 6 FRIEDRICH-EBERT-STIFTUNG problems could arise from demographic changes, as an spirit in Syria towards international co-operation and, increasing share of the population is under the age of hence, the willingness of the Syrian government to aban- 20 and already confronted with high rates of unemploy- don obsolete economic and political isolation. In return, ment and social inequality. the United States and some European countries should refrain from military interventions. At the global level, the Syria undergoes “interesting times, perhaps too interest- currently troubled world economy poses a new challenge ing, defi nitely challenging”, as Abdallah Al-Dardari, to the economic reforms in Syria. Meanwhile, the shift Depu ty Prime Minister for Economic Affairs of the Syrian towards a multipolar international system grants Syria a Arab Republic and former Head of the Syrian State Plan- leading role as a regional economic and political power in ning Commission commented in his opening speech. the Middle East. Al-Dardari: “Syria experiences dramatic economic Walter Kolbow, Deputy Head of the Social Democratic changes with direct social impacts on poverty Party’s (SPD) Parliamentary Group underlined Syria’s role alleviation and equality.” in the region as a bridge between the orient and occident and an outstanding example of peaceful co-existence of Mr. Al-Dardari briefl y outlined the main challenges that different religions. He assured continued German support Syria faces at three different levels: At the national level to Syria’s transformation process towards a social market dramatic economic changes determine the political economy acknowledging, however, that it would be a agenda, which will have a direct impact on poverty alle- diffi cult task as sustaining a just social and economic viation and equality and consequences in the fi elds of order under conditions of globalization also poses a chal- society and culture. At the regional level the pending lenge to Germany’s government. Mr. Kolbow made clear European-Sy rian Association Agreement (ESAA) promises that Germany’s support for economic reform in Syria is many economic opportunities. At the same time the risks combined with the expectation that it will produce it entails must not be ignored. European-Syrian trade sub stantial results. Political freedom and human rights co-operation