Economy, Business And Markets

New Page in Iran-Syria Economic Relations

Five memorandums of understanding were signed during the visit of Syrian Prime Minister Imad Khamis to Tehran on Tuesday
New Page in Iran-Syria Economic RelationsNew Page in Iran-Syria Economic Relations
Tehran and Damascus also signed a memorandum of understanding to cooperate in a phosphate mine in Syria’s al-Sharqiya

Iran has signed major economic contracts with Syria in what Tehran and Damascus have hailed as “a new page” in economic ties.

Syria’s economy is shrinking fast as industrial and agricultural output falls after six years of civil war, and almost two-thirds of the population live in extreme poverty.

Five memorandums of understanding were signed during a visit by Syrian Prime Minister Imad Khamis to Tehran on Tuesday, including a license for Iran to become a mobile phone service operator in Syria, and phosphate mining contracts, Reuters reported.

Syrian state news agency SANA quoted Khamis as saying the deals reflect the special relationship between the two nations.

“We greatly appreciate Iran’s major role in combating terrorism and standing by the Syrian people in every way, politically and economically,” he said.

Syria will give Iran 5,000 hectares of land for farming and 1,000 hectares for setting up oil and gas terminals, IRNA reported.

A deal was also signed on providing lands for animal husbandry.

Syria is increasingly indebted to Iran financially: Tehran opened a $3.5 billion credit line in 2013 and extended it by $1 billion in 2015, which economists say has helped keep the Syrian economy afloat.

SANA quoted Iran’s First Vice President Es’haq Jahangiri as saying Tehran was ready to “implement a new credit line between Syrian Trade Bank and Export Development Bank of Iran” to help trade.

Tehran and Damascus also signed a memorandum of understanding to cooperate in a phosphate mine in Syria’s al-Sharqiya.

Syria is among the world’s largest exporters of the rock phosphate, a raw material used in the production of phosphatic fertilizers, although the war has marred its ability to mine and market its supply.

In 2015, the self-styled Islamic State terrorist group seized al-Sharqiya mine, one of the largest in Syria, located 50 kilometers (30 miles) southwest of the ancient city of Palmyra, the Syrian Observatory for Human rights monitoring group reported. 

In a meeting on Wednesday with Ali Akbar Velayati, the top adviser to the Leader of Iran’s Islamic Revolution, the Syrian premier called for investment in reconstruction projects in Syria, as “the infrastructure has been destroyed by war”.

Tehran has already shown interest in helping Syria rebuild its roads, airports, power stations and ports.

SANA reported that Tehran and Damascus intend to sign a deal within two weeks to pave the way for investments by Iranian companies in a Syrian port, although it did not say which one.

The Iranian energy minister said Tehran is ready to sign a long-term agreement with Damascus in the energy sector.

Iranian firms are already involved in a series of electricity projects worth $660 million in Syria.

Iran aims to export electricity to Syria and create the biggest power network in the Muslim world by hooking up Iran’s national grid with those of Iraq and Lebanon.

According to Syria’s Economy and Foreign Trade Minister Adib Mayyaleh, Syria currently exports close to $1 million worth of goods to Iran annually and imports around $750 million in return.

This is while IRNA cited Trade Promotion Organization of Iran has reported that Syria’s exports to Iran during the seven months to October 21 stood at $5.16 million, while Iran exported more than $105.4 million worth of goods to Syria over the same period.

The Islamic Republic of Iran Customs Administration’s data show Iran exported $149 million worth of goods to Syria in the last Iranian year that ended in March 2016, posting a 45% rise over the preceding year. 

In return, it imported goods worth $7.8 million, which shows a 22% decline.

Iranian exports to Syria include chemicals, electronic parts, pharmaceuticals, auto parts, baby formula and faucets. Imports include olive, olive oil, apparel, yarn and fabrics. 


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