Entrepreneurship policies in Syria

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This article covers the best practices and needs for reform in entrepreneurship policies in Syria .

Contents

Startup, ease of entry

For-profit companies

Best practices
Needed reforms

Finances

Access to finance remains one of the key problems for enterprises operating in Syria particularly for small and medium enterprises (SME's). In spite of the reforms initiated by the government and the Central Bank of Syria, the legal and regulatory environment remained relatively underdeveloped and the ranges of banking and financial services for the enterprise sector were limited. [6] Syria ranked 181st out of 183 economies worldwide in the ease of getting credit, putting the country in the bottom three. As of 2009, credit information services and credit guarantee schemes or credit bureau registry that could supported access to credit by reducing collateral requirements were not available in Syria. [2] Few microfinance facilities exist and most of these operate as pilot projects. Although the Commercial Bank of Syria (its largest state-owned bank) was officially charged in February 2009 with increasing loans for small business startups, a climate of corruption may deter many would-be entrepreneurs. [7]

Private equity

Syria has no legislation related to investment funds. There are no equity funds operating in the country as of 2009. The government has recently licensed a number of holding companies, in order to mobilize equity funds from private entrepreneurs.

Capital markets

The Damascus Stock Exchange (DSE) was inaugurated on 10 March 2009, based on plans for a stock market in Damascus stemming back to 2006. Its opening was delayed several times by claims of insufficient technology and a lack of human resources necessary for operating the exchange. [8] DSE started trading with five companies, with number of restrictions such as a limit of 2 percent on daily volatility in the price of stocks and a ban on the sell and a purchase of a stock in the same day. [9]

Informal investment

The rate of informal investment in Syria outperformed the rest of the region at 5% of GDP compared to Saudi Arabia -0.8%. As per the latest survey conducted by Global Entrepreneurship Monitor (GEM) in 2009, entrepreneurs have expected business start-up financing from informal investors varying from immediate family members (49.1%), other relatives (12.7%), colleague (41.8%) and friends/neighbors (21.8%). [10] [11]

Needed reforms

Contracts/Commercial Law

Enforcement of contracts in Syria requires 55 procedures, takes 872 days and costs 29.3% of claim to execute. The country ranked relatively low in this category at 176th according to the latest doing business report, placing the country in the bottom ten worldwide.

Bankruptcy

A summary of Doing Business report 2010 in the ease of closing business ranked Syria in 87th place. It evaluated the effectiveness of the insolvency regime in Syria along three dimensions: the average time (in years) to complete a bankruptcy proceeding, the average cost of such proceedings (as a percentage of the estate), and the recovery rate to creditors (expressed in cents on the dollar). For Syria, the time averages 4.1 years, and the cost is, on average, 9% of the estate. Creditors claim, on average, 29.3 cents on the dollar.

Taxes

In Syria, taxes and fees exceed 20% of the property value. It started on 2004 when Tax forms were unified, In 2006, paying taxes made easier by reducing the rate to encourage foreign and domestic investments and increase tax collection. In the same year, the Tax Evasion Law and other laws that carried stricter enforcement measures, including imprisonment was implemented. It was further simplified in 2007. Syria ranked 105th in the ease of paying taxes worldwide.

Labor market

In 2007-8 the United Nations Human Development Index (HDI) placed Syria 108 out of 177 countries, in its list of countries with medium human development, and 12 out of 20 Arab countries in the Arab Human Development Report ranking. [12]

Youth represent nearly 80 percent of the unemployed in Syria, the highest share among non-Gulf countries. Thus, unemployment in Syria is essentially a youth issue. The government is trying to reduce reliance on public sector jobs and to loosen regulatory controls on the private sector. Alissa [13]

Education

The education system in Syria is divided into three main levels: school, college, and university. Schooling is divided into six years of compulsory primary, three years of lower secondary (preparatory), and three years of upper secondary education. In recent years, a new system has seen the primary and preparatory levels combined into ‘basic education’. Lower and upper secondary schools provide general (which prepares for university entrance) or vocational curricula. Colleges are open to all students who wish to continue their education. Obtaining a college degree requires two years of college education, after completing the secondary education. University students have to attend a minimum of four years of education before obtaining a university degree. In addition, postgraduate education is also available in Syria. [13]

EPE and Training

The government under Ministry of Education/Directorate of Technical and Vocational Education, in coordination with businesses and industry associations, is taking the lead in the implementation of EPE teaching and learning experiences within the education and training system of Syria. Several programmes are being undertaken like “Starting My Own Small Business” modules (UNESCO), [14] the “SHABAB programme 2006-2007” supported fostering entrepreneurial culture, and the ILO package “Know About Business” (KAB) introduced entrepreneurship to secondary and vocational institutes with the aim of creating awareness of enterprises and self-employment as a career option for young people; and develop positive attitudes towards enterprises and self-employment among the population. [12]

Ranking for the Arab Countries

Economies Ease of Doing Business 2009/10 [1] Global Competitiveness Index 2010/11 (GCI) [15] Economic Freedom Score 2010 [16] Prosperity Index 2010 [17] Information and Communication Technology Index (ICT) 2009 [18] Innovation System Index 2009 [18] Human Development Index (HDI) Value 2010 [19] Education and Human Resources Index 2009 [18] Knowledge Economy Index (KEI) 2009 [18] Press Freedom Index 2010 [20]
Algeria 1368656.9793.463.590.6773.663.22133
Bahrain 283776.3n/a7.34.290.8015.826.04144
Djibouti 158n/a51.0n/a1.321.680.4020.881.47110
Egypt 948159.0893.924.440.6204.354.08127
Iran 1296943.4925.654.560.7023.803.75175
Iraq 166n/an/an/an/an/an/an/an/a130
Jordan 1116566.1744.955.590.6815.625.54120
Kuwait 743567.7316.964.980.7714.935.8587
Lebanon 1139259.5845.354.53n/a4.924.8178
Morocco 1147559.2624.373.720.5671.953.54135
Oman 573467.7n/a4.904.94n/a4.475.36124
Qatar 501769.0n/a8.066.450.8035.376.73121
Saudi Arabia 112164.1496.433.970.7524.895.31157
Syrian Arab Republic 1449749.4834.433.170.5893.103.09173
Tunisia 553258.9484.884.650.6834.084.42164
United Arab Emirates 402567.3308.596.690.8154.906.73n/a
West Bank and Gaza 135n/an/an/an/an/an/an/an/an/a
Yemen 105n/a54.41051.672.670.4391.792.20170

Notes:

Notes

  1. 1 2 3 4 5 6 World Bank 2010, Doing Business 2011 Making a Difference for Entrepreneurs, Washington D.C. World Bank Group
  2. 1 2 3 4 World Bank 2009, "Doing Business 2010", Washington D.C. World Bank Group, p. 19.
  3. World Bank 2006, Doing Business 2007 How to Reform, Washington D.C. World Bank Group, p. 10
  4. World Bank 2007, Doing Business 2008, Washington D.C. World Bank Group
  5. World Bank 2008, Doing Business 2009, Washington D.C. World Bank Group
  6. Euro-Mediterranean Charter for Enterprise December 16, 2009, 2008 Evaluation of the Implementation of the Euro-Mediterranean Charter for Enterprise, The case of Syria and comparative analysis: Results presented in the Meeting of the National Stakeholders– Damascus
  7. Marshall 2009, Syria and the Financial Crisis: Prospects for Reform? © 2010 Middle East Policy Council
  8. "Maybe This Time for the Damascus Stock Exchange,” Forward Magazine, September 2008
  9. SEBC 2009, Inauguration of Damascus Stock Exchange
  10. Global Entrepreneurship Monitor, GeM Report 2009
  11. Lois Stevenson 2010, OECD-MENA Investment Programme Working Group on SME Policy, Entrepreneurship and Human Capital Development Conference, ‘The Embryonic Phase Panel Session’, Tunisia
  12. 1 2 ILO, Decent Work Country Programme 2008-2010 Syria
  13. 1 2 Alissa 2007, The school-to-work transition of young people in Syria Employment Policy Department, ILO, Geneva,
  14. UNESCO and the StratREAL Foundation, United Kingdom, Entrepreneurship Education in the Arab States : Case Studies on the Arab States and Regional Synthesis Report”, 2010
  15. Klaus Schwab, The Global Competitiveness Report 2010–2011, World Economic Forum
  16. The Heritage Foundation and Wall Street Journal,The 2010 Index of Economic Freedom Archived 2009-07-20 at the Wayback Machine
  17. The 2010 Legatum Prosperity Index, The 2010 Legatum Prosperity Index, Legatum Institute, United Kingdom
  18. 1 2 3 4 World Bank, KAM 2009
  19. UNDP 2010, Human Development Report 2010
  20. Reporters Without Borders 2010, 2010 World Press Freedom Index

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