EconSource: Syria Government Scrapes Barrel Amid Economic Woes

More than four years into a grinding civil war, the Syrian government is seeking to boost its revenues with everything from taxes on shawarma sandwiches to telephone lines.

Experts say much of the $18 billion of foreign reserves Syria had when the war began has been used up, although it is impossible to know how much remains. Revenues have slowed to a trickle, particularly as the government has come under sanctions that prevent exports and has lost control of much of the country’s oil and gas resources. The oil ministry acknowledged some $58 billion in direct and indirect losses to the oil and gas sector. Syria’s 2016 budget projects a 31 percent deficit, prompting the government to rein in spending and impose new taxes. It has instructed all public administrations to reduce their energy consumption by 30 percent and to eliminate thousands of temporary government employee contracts. The state telecommunications company has also doubled monthly subscription fees for its 4.5 million subscribers. Property rents also face new taxes of between 500-1,000 Syrian lira a month, and the tourism ministry has begun taxing restaurants based on the number of diners they can accommodate. In other news, Islamic State militants have made more than $500 million trading oil, with significant volumes sold to the government of Syrian President Bashar al-Assad, senior US Treasury official Adam Szubin said. [AFP, Al Monitor, 12/11/2015]

Tunisia parliament approves 2016 budget law
Tunisia’s parliament has approved a 29.2 billion dinar ($14.5 billion) national budget for next year forecasting economic growth of 2.5 percent and a narrowing in the budget deficit to 3.9 percent. The bill was passed late on Thursday night even though most opposition parties walked out of the budget discussions to protest what they said were unconstitutional parts of the proposed law. The 2016 budget sees an increase in security spending in the defense and interior ministries. The government has said it will hire more troops and police. [Reuters, 12/11/2015]

Egypt plans talks with Gulf allies for more aid, official says
Egyptian authorities plan to hold talks with Saudi Arabia, Kuwait, and the United Arab Emirates to secure more aid and investments, a government official said. The planned talks will focus on “areas of cooperation” including investments, development aid, possible foreign-exchange deposits at the central bank, and the supply of oil and non-oil products. The official, who asked not to be named, did not say when the talks will start or how much Egypt aims to secure. Fresh funds would provide crucial dollars needed for businesses to import capital goods and raw materials and help authorities avoid an uncontrolled currency devaluation. Meanwhile, Egypt’s total budget deficit rose to 2.8 percent of the country’s gross domestic product during the first quarter of the 2015/2016 fiscal year as the government spent more money on subsidies. [Bloomberg, 12/11/2015]

In Turkey’s economic plan, investors see drive for votes, not discipline
Investors dumped Turkish assets for the second straight day on Friday, spurning a new government economic program. Financial markets had been looking for Prime Minister Ahmet Davutoglu and his Justice and Development Party (AKP) to deliver on promises to stick to fiscal discipline and outline plans to boost labor productivity and household savings. Instead, Davutoglu rolled out an economic plan on Thursday more in line with populist, consumption-led policies favored by President Tayyip Erdogan. Some critics see the measures as aimed at raising popularity ahead of a possible referendum on a new constitution that would increase Erdogan’s presidential powers. Investors sent the lira currency to its weakest since mid-October and the stock market down about 5 percent in two days. Although the net cost of the new policies has yet to be calculated, analysts said the plan signals a significant burden on public finance. [Reuters, 12/11/2015]

EU court annuls Morocco trade deal over Western Sahara
The European Court of Justice on Thursday annulled a farm trade deal between the European Union and Morocco because it illegally involved the disputed region of Western Sahara. The decision said the trade deal, signed in March 2012, failed to explicitly refer to Western Sahara, leaving open the possibility that the accord would apply in the disputed region. “We are examining the ruling carefully. We need to do that in order to consider carefully how to proceed further, including on the possibility of an appeal,” a spokeswoman for the European Commission said. The case was brought to the court by the Polisario Front, a movement in Western Sahara that has been campaigning for independence for decades with the backing of Algeria. [AFP, WSJ, 12/10/2015]

Also of interest
UN cuts 2015 global economic growth forecast to 2.4 percent | Reuters
IEA sees oil glut worsening as demand growth slows | Reuters
McKinsey says Saudi Arabia cannot wait for oil prices to recover | Bloomberg
Factories, jobs destroyed in Yemen war | VOA
Egypt’s president approves $400 million loan from IBRD| Ahram Online
Turkey runs October current account deficit of $133 million | Anadolu Agency