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Syrian‐German Development Cooperation

Program for Sustainable Urban Development in Syria

Aleppo Urban Development Project

“Report on Local Economic Development in Aleppo”

By: Burkhard von Rabenau on behalf of Aleppo Urban Development Project

Aleppo, April 2010

This paper/report has been produced with the assistance of the Deutsche Gesellschaft für Technische Zusammenarbeit

(GTZ) GmbH on behalf of the Ministry of Economic Cooperation and Development of the Federal Republic of Germany

within the framework of the German Technical Cooperation. The content of the paper is the sole responsibility of the

author and can in no way to be taken to reflect the views of the GTZ (nor those of the Government of Syria).

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The Deutsche Gesellschaft für Technische Zusammenarbeit (GTZ) GmbH

Syria Urban Development Project (SUDP) Arab Republic of Syria

Municipality of Aleppo: LED Assessment

prepared for German Technical Assistance (GTZ)

by

Dr. Burkhard von Rabenau, Consultant

Damascus and Columbus 18 October 2009

Revised April 18, 2010

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The Deutsche Gesellschaft für Technische Zusammenarbeit (GTZ) GmbH

Syria Urban Development Project (SUDP) Arab Republic of Syria

Municipality of Aleppo: LED Assessment

Dr. Burkhard von Rabenau, Consultant

Damascus and Columbus 18 October 2009

Revised 18 April 2010 Disclaimer: The views, interpretations and recommendations of this study are those of the author and should not be attributed to the Old Damascus Urban Development Project, German Technical Assistance, or any of the organizations contacted during the Mission, as the content of this study does not imply official policy or endorsement.

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Municipality of Aleppo LED Assessment

TABLE OF CONTENT

Page

Table of Content List of Acronyms List of Abbreviations

i iv iv

Summary 1. Overall Assessment 2. Vision 3. Strategic Options 4. Activities with Short Term Results

1 1 3 4 9

Part I: Assessment

1. Purpose and Objectives

13

13 2. Approach and Limitations 14

3. A Socio-Economic Profile of Aleppo 3.1 Resident Population Count 3.2 Registered Population Count 3.3 Age and Gender Distribution 3.4 Literacy 3.5 Educational Attainment 3.6 Labor Force 3.7 Unemployment 3.8 Employment by Sector 3.9 Housing Profile 3.10 Business Establishments 3.11 Summary

17 17 18 18 18 19 19 20 20 21 21 21

4. Sector Analysis: Key Drivers of Local Economy 4.1 Manufacturing 4.2 Textile Industry 4.3 Chemical Industry 4.4 Pharmaceuticals 4.5 Agro-Processing Industry 4.6 Tourism Industry 4.7 Traditional Handicraft

21 21 27 34 35 37 38 42

5. Enabling Environment, Support Services, Factors 5.1 Business Support Services 5.2 Financial and Insurance Services 5.3 Transport and Logistics Sector 5.4 Other Infrastructure 5.5 Labor and Human Resources

45 46 49 51 54 55

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6. Spatial Issues 6.1 Zoning and Master Planning 6.2 Industrial City of Sheikh Najjar

59 59 61

Part II: A Way Forward – Principles and Management Plan

7. General Principles 7.1 Participatory Approach 7.2 Ownership 7.3 Cooperation and Collective Action

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67 67 68 68

8. Implementation Plan 8.1 Working Group Suggestions

a. Tourism Working Group b. Textile Industry Working Group c. Manufacturing Working Group d. Business Services Working Group e. Financial Services Working Group f. Industrial Area Managers Working Group g. Economic Development Unit in Mayor’s Office h. Local Economic Development Policy Working Group i. Economic Indicator Working Group j. Other Working Groups

8.2 Information Development and Analysis a. SEBC Analysis and Data Development Tasks b. Stakeholder Data Development c. Indicator Development

67 68 68 69 71 72 73 73 74 75 76 76 77 77 80 82

List of Annexes and Tables 83

Annex 1: Steering Committee Agenda and Talk 87

Annex 2: Tourism Workshop 97

Annex 3: National and Governorate Data, Statistical Abstract 2008 Table 1: Population—Registered and Actual Resident Population by Governorate Table 2: Population—Distribution and Growth Rates Table 3: Population—Rural and Urban Population by Governorate Table 4: Employment—by Sector and Gender Table 5: Domestic Product—at Factor Cost, by Sector, in Current Prices Table 6: Industr’l Prod’n—NDP by Industrial Sector, at Factor Cost in Current Prices Table 7: Industrial Production—NDP Index Numbers by Industrial Sector, 2004-07 Table 8: Industrial Production—Manufacturing Output (Physical Units) by Sector Table 9: Tourism—Arab and Foreign Arrivals, Syria 2003-07 Table 10: Tourism—Hotel Guests by Type of Hotel and Governorate Table 11: Tourism—Guest Nights by Type of Hotel and Governorate Table 12: Tourism—% Distribution of Guests and Guest Nights, and Average Stay Table 13: Services—Airports and Air Transport Table 14: Services—Water Production and Consumption by Governorate Table 15: Services—Use of Phone Services, Total and per Resident, by Governorate Table 16: Services—Telephone Lines, and Lines per 100 Population, by Governorate Table 17: Financial Sector—Banks and Branches by Governorate Table 18: Prices—Exchange Rates at Official and Market Prices, 2005-07

101 103 104 105 106 107 108 109 110 111 112 113 114 115 116 117 118 119 120

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Annex 4: 2004 Census Municipality Data, State Planning Commission Table 1: Demographic Profile of Aleppo and Selected Cities Table 2: Education Profile of Aleppo and Selected Cities Table 3: Labor Force Profile of Aleppo and Comparison Cities Table 4: Employment Profile of Aleppo Residents and Comparison Cities Table 5: Housing Profile of Aleppo and Comparison Cities Table 6: Business Establishment Profile for Aleppo and Comparison Cities

121 123 124 125 126 127 128

Annex 5: Aleppo Manufacturing Permit Data

Table 1: Summary of Aleppo Industry Distribution Estimates, Various Sources Table 2: Aleppo Industry Statistics based on Ministry of Industry Permits Table 3: Aleppo Govern’te Firms by Product Group, Textile and Agro-Food Industry Table 4: # Firms in Private Sector Industrial Establish’s, National and Governorate Table 5: Aleppo Members in Handicraft Associations

129 131 132 133 134 135

Annex 6: Data on Chamber of Commerce Export Permits Table 1: Aleppo Governorate Exports, by Major Industry Group Table 2.1: Aleppo Governorate Exports, by Detailed Product Type, Part 1 Table 2.2: Aleppo Governorate Exports, by Detailed Product Type, Part 2 Table 3: Aleppo Governorate Exports, by 2-Digit Product Class

137 139 140 141 142

Annex 7: Tourism Statistics Table 1: Selected Tourism Statistics Table 2: Aleppo Governorate Hotel Capacity, by Class of Hotel Table 3.1: Aleppo Hotels by Name and Class, Part I Table 3.1: Aleppo Hotels by Name and Class, Part II Table 4: Aleppo Hotels, mid 2009 Table 5: Aleppo Governorate Visitor Nights, by Type of Hotel (2006-08) Table 6: Questionnaire for Tourism Estimates by Type of Market Table 7: Aleppo Tourism by Type of Market, Survey Results

143 145 146 147 148 149 150 151 152

Annex 8: Old City of Aleppo Establishment Information Table 1: # CoC Members of Old City, by Type, 2008 Table 2.1: Chamber of Industry Members in Old City, by Type, 2008, Pt. I Table 2.2: Chamber of Industry Members in Old City, by Type, 2008, Pt. II Table 3: Old City Establishments by 2-Digit Industry, 2005 Survey Table 4: Old City Establishments by 3-Digit Industry, 2005 Survey

153 155 156 157 158 159

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LIST OF ACRONYMS GDP Gross Domestic Product CDS City Development Strategy FDI Foreign Direct Investment FYP Five Year Plan GAFTA Greater Arab Free Trade Agreement (2005) IMUP Industrial Modernization and Upgrading Program NGO Non-Government Organization TOR Terms of Reference RCDS Rapid City Development Strategy SAA Syrian Accountability Act (2004) SL Syrian Pound SOE State-owned enterprises SMME Small, medium and micro enterprise SWOT Strengths, Weaknesses, Opportunities, Threats LIST OF ABBREVIATIONS ACB Agricultural Cooperative Bank ACoC Aleppo Chamber of Commerce ACoI Aleppo Chamber of Industry ACoT Aleppo Chamber of Tourism ADoI Aleppo Department of Industry, Ministry of Industry ADoT Aleppo Department of Tourism, Ministry of Tourism AUDI Arab Urban Development Institute BMZ Bundesministerium füer Wirtschaftliche Zusammenarbeit und Entwicklung CA Cities Alliance CBS Central Bureau of Statistics CBS Central Bank of Syria CBWC Commercial Business Women Committee, Aleppo CTDC Clothing and Textile Development Center. Aleppo DOC Directorate of the Old City of Aleppo EU European Union EDU Economic Development (and Strategic Planning) Unit, Aleppo Mayor’s Office FIRDOS Fund for Integrated Rural Development of Syria FTC Foreign Trade Centre (involved in testing of Cotton and Cotton Products) GTZ Gesellschaft für Technische Zusammenarbeit IBWC Industrialist Business Women Committee, Aleppo IMUP Industrial Modernization and Upgrading Program IRTC Industrial Research and Testing Centre ITC International Trade Center. Geneva JICA Japan International Cooperation Agency LDSC Local Decision Support Center MAM Project for Municipal Administration and Modernization MAAR Ministry of Agriculture and Agrarian Reform MEFT Ministry of Economy and Foreign Trade MHU Ministry of Housing and Utilities MLA Ministry of Local Administration MOF Ministry of Finance MOP Ministry of Planning MoI Ministry of Industry MSEA Ministry of Environmental Affairs MVET Modernization of Vocational Education and Training Program

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OECD Organization for Economic Cooperation and Development (a club of high income countries)

REB Real Estate Bank SAR Syrian Arab Republic SATA Syrian Association of Travel Agents SCT Syrian Chamber of Tourism SMO Standarization and Metrology Organization SoCR State of Cities Report SPC State Planning Commission SSF Social Security Foundation STICP Syrian Turkish Interregional Cooperation Program SYEA Syrian Young Entrepreneurs Association UDP Urban Development Programme UNDP United Nations Development Programme UN-Habitat United Nations Human Settlements Programme UNIDO UN Industrial Development Organization Official Exchange Rate (October 2009) 100 SL = 1.89 US Dollar 1 US$ = 47 Syrian Pounds (SL) 1 Euro = 71 Syrian Pounds (SL)

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Municipality of Aleppo LED Assessment

Summary

1. Overall Assessment

Aleppo is Syria’s largest urban area with a population of 2.1 million; it is the country’s dominant manufacturing center, with a likely share of 35 percent of manufacturing employment and value added, and perhaps an even greater share of exports; it is a significant attraction to a growing tourism trade; and it is located in a highly productive agricultural region, for which it supplies agricultural inputs and processes much of its agricultural output. Despite these obvious strengths there are weaknesses and future threats:

Weaknesses and Threats: Aleppo’s competitive position is being seriously eroded and it is under threat.

• Metropolitan size matters: Damascus as a seat of central government will make it difficult to remain competitive. While Aleppo has a larger population than Damascus Governorate, economically it is the relative size of the metropolitan area that counts, and the Damascus Metropolitan Region is more than twice and by some accounts (see for example World Bank estimates) three time the size of Aleppo. Greater size usually goes in hand with greater agglomeration economies, in the form of a greater product variety and choice, which offers advantages to both producers and consumers.

• Proximity to Central Government matters: As a seat of central government Damascus has countless other advantages, in the form of proximity and access to government, and in the form of the numerous other organizations that locate near government. There are possibilities to counteract these forces, but most governments with strong central tendencies resist this, and efforts at decentralization then have only a modest effect.

• Long-term manufacturing trends point down: 70 years ago, several economists predicted the long-term decline in manufacturing. The employment share of manufacturing would peak at around 35-40 percent of the total employment, but then gradually decline to 10 percent as economies develop. While some economies temporarily have escaped these trends, the predictions have been remarkably prescient. Many industrial and manufacturing centers have seen a remarkable decline in their fortunes. Entire ‘old industries’ vanished and it has often been difficult to find new industries to replace them. Aleppo may well escape these trends, but it is something to watch out for.

• Finance and insurance growth is concentrated in Damas: As manufacturing declines, the tertiary sector in the form of retail and services takes its place, and indeed this is the case in Syria. However, while retail and wholesale functions have a great tradition in Aleppo, which once was the intermediary and wholesale center for much of the regional textile market, the new and coming finance and insurance market is headquartered exclusively in Damascus. As a strong manufacturing center, Aleppo has the potential to be as major banking customer for both trading and investment activities – but this segment of the insurance and finance market remains underdeveloped, and at any rate, Aleppo so far has attracted only branch offices of the emerging private insurance and banking industry.

• National and international access is weak: Aleppo’s airport has few international connections, and the frequency of its national flights is inadequate (though fares appear to be subsidized and hence, demand may be inflated and supply constrained by the fact that fares do not recover cost). International flights are a tiny fraction of those available from Damascus. As a result, much of the time businessmen must travel through Damascus. Economic development specialists have noticed the importance of direct flights to the

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business climate, and cities in some countries have started to subsidize carriers to assure that they have the carrier presence and links they need. Aleppo’s airport standards are also woefully inadequate, and an improvement program has been postponed. There are no international cargo flights.

• Aleppo is not widely known. The first part of image development is name recognition. Despite Aleppo’s long history on the Silk Road, its beautiful Old City, and its large size, its name is not widely recognized outside Syria. Aleppo textile manufacturers report from trade shows that again and again they are surprised to find textile merchants who are not familiar with Aleppo. Lack of name recognition is clearly a disadvantage in manufacturing as much as in tourism – but it is a problem that can be solved with proper product placement and strong public/private action.

• Aleppo’s labor force lacks a demographic dividend. Aleppo’s labor force is almost exclusively male. Female participation rates are only half those elsewhere. In addition, close to 40 percent of the population is 14 years or younger, a rate much higher than in say, Damascus. A transition to lower fertility rates and a rising working age share of the population would give Aleppo a demographic dividend that raises income and productivity. This however, is still some time off. Textile producers sorely lack a female labor force, who they claim would make them more competitive vis-à-vis China.

• Aleppo’s labor force is less trained and less educated than that of Damascus. Female illiteracy is more than twice that in Damascus, and educational attainment is significantly lower. 7.7 percent of the population 15 years and older have a college or university degree, as compared to 13.6 percent in Damascus and similar rates in Homs and Idleb. Some of this may be influenced by a greater share of rural population, but it is still something to watch out for.

• Leisure resources are limited. This limits Aleppo’s tourism potential, as convention tourism, business tourism and many other types of tourism depend on the availability of leisure resources to increase length of stay and return visits.

Strengths and Opportunities: Aleppo of course also has considerable strengths and opportunities that can be exploited in the future to defend and strengthen its competitive position.

• Entrepreneurship is strong. Aleppo’s greatest asset undoubtedly is its entrepreneurship. While the share of workers who are business owners is no higher than in Damascus and some other cities, a much greater share of its employment is in the private sector and in manufacturing. At the time of the last Census, close to 31 percent of workers were in the manufacturing sector, as compared to just 18 percent in Damascus and even lower rates in other comparison cities. More than 78 percent of businesses were in the non-public (mostly private) sector as compared to just 66 percent in Damascus and even lower rates in Homs and Idleb – two cities for which we have collected comparison data. The recent growth experience in the pharmaceutical sector suggests that businessmen will quickly identify new opportunities and fund new ventures, if they appear to promise a high rate of return.

• Cost of living is comparatively low. There are no published cost of living indices. However, it is possible to obtain data on the cost of a hotel night, for differently rated hotels. The cost of a hotel night reflects a multitude of factors, but the cost of land and labor are likely major factors. While wages are largely the same in the public sector, they can vary in the private sector. Lower wages and rent, and lower construction cost will make Aleppo a competitive site – particularly for manufacturing.

• Water resources are plentiful. Much of Syria suffers from severe water constraints, often requiring rationing in the form of water cuts that can extend for days. Water scarcity currently is not priced, and the same tariff is charged throughout Syria, independent of water limits. However, this will have to change, and climate change is likely to make future water conditions more critical, providing a boost to Aleppo’s competitiveness.

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• Aleppo’s large agricultural hinterland provides opportunities. Given the continuing strength of Syria’s agriculture all governorate capitals depend for their employment on their agricultural hinterland, by providing social services and inputs to farmers and by processing and wholesaling agricultural output. Food processing is an important part of Aleppo’s manufacturing sector. Its exports in recent years were as high as 8.4 percent of total Aleppo exports, and could have been significantly higher if some of the miscellaneous exports were in fact, exports of processed food.

• Syria’s SOE policies are an Aleppo advantage. State-owned enterprises (SOE) continue to make up a large but declining sector of the economy. As Central Government budgetary support for the sector diminishes, regions such as Aleppo with a small SOE sector will be at an advantage.

• Syria Turkey Free Trade Agreement has future potential: The agreement signed in 2004 (and in effect since 2007) provides the two countries with mutual access to their markets and lifting of custom duties. Syria expects to open a series of industrial zones to take advantage of Turkish investments in Syria. In general, areas close to the border with Turkey are expected to benefit most. So far, few Turkish investors have taken advantage of the potential of GAFTA access that comes with direct investment in Syria, but this is apt to change.

Summary: Syria’s economy is undergoing a shift in investment philosophy that will have a significant impact on its regional economic distribution. This makes it difficult to extrapolate from the past. Traditional socialist investments were as much guided by equity as efficiency concerns, with each region gaining a ‘fair share’ of state investments. While this did not stop some regions from losing ground, future regional disparities could easily become greater. As the example of the unified Germany illustrates so well, any amount of central government transfers may not be able to fully counter unfettered market forces. The most likely scenario is that both Aleppo and Damascus will remain economic power houses, based on their already large size and the agglomeration economies that come with it. However, Aleppo lacks some of the key advantages of Damascus as the political center of the country, the largest metropolitan region, quality and variety of labor, and accessibility. As an ‘old’ manufacturing center, Aleppo has to put in place the preconditions to fully participate in the ‘new’ service economy.

2. Vision

While Aleppo stakeholders have not yet had the opportunity to express their vision for the medium and long-term economic development of Aleppo, one assumes that it will aim at a vibrant economy able to (i) compete in domestic and international markets, (ii) adapt to changing demands for its products and services, and (iii) provide job opportunities for an increasingly educated citizenry including its women.

Hopefully, the vision will not insist on maintaining the status quo or to set specific industry targets – as this is usually futile. However, the vision should include putting in place the conditions for a shift from the secondary to the tertiary sector, i.e. it should emphasize strengthening the service sector, including in particular a private business service sector. Among the pre-conditions for such a shift are a better educated labor force, a much improved information infrastructure, greater access to information and opportunities for the private sector to generate, use and trade in information (something until now largely a state monopoly), and easing the conditions for business entry into this sector. The role of public and semi-public sector institutions in generating such business services is likely marginal, and at worst a hindrance.

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3. Strategic Options

The current draft is an assessment and does not provide a strategy. Still, it is good to think about strategic options as part of any assessment. The options must distinguish between those under local control (Municipality, Governorate, local stakeholders) and those under control by the Central Government. The following suggestions seem general, but still provide general directions. They are fleshed out with examples in the remainder of the Report. • Strengthen Decentralization: This initially is the task of the Central Government, which must

establish a framework that allows local government to make a greater share of decisions. But it is also a major task for Local Government, which must have the capacity – the financial resources, the institutions, the human resources and the political mechanism to make good decisions. The point of decentralization is greater efficiency related to local preferences and production opportunities. Local residents and stakeholders may have tastes that differ from those elsewhere in Syria, and will act on them. Local producers are better informed of local production possibilities and will be able to produce at a lower cost or greater quality when not required to follow national standards. Examples include:

Airport: Aleppo more so than others is heavily dependent on good transport linkages nationally and internationally. The business community and political establishment may be willing to invest more into Aleppo’s airport or railroad services than the national government, or other communities. When permitted to act on their own, there are numerous courses of action that can improve airport service, including airport investments and negotiations with airlines to obtain greater service, perhaps in exchange for traffic guarantees.

Investment Support: Aleppo may want to invest more into local economic development than others. This may require changes in its management structure and staff allocation not possible under central government organizational rules. An Economic Development (and Strategic Planning) Unit in the Mayor’s Office may prove essential to city strategy.

Budgetary Flexibility: There already exists some flexibility, though probably not enough for Aleppo to make significant infrastructure decisions important to a local economic development strategy.

Water: In Aleppo water is more plentiful than in many other locations. In communities with little water, cities would react by investing more in water conservation, raising the price of water, and attracting industries that consume little water. In Aleppo, the opposite might be true.

Unfortunately, decentralization is a long process, and it is unlikely to bear major fruit for some time to come. However, it still may be possible to take local initiatives within the current framework that deviate from national norms. Aleppo’s Local Council has repeatedly shown a willingness to do so, and the Central Government has shown a willingness to acquiesce.

• Establish Strategic Economic Development Unit close to Mayor: The tasks for this unit involve support for strategic initiatives, marketing and promotion, investment support, and intermediary functions to the business community.

In Syria, there is a long history of creating new institutions to solve problems. Many of the recent initiatives in the urban realm seem to follow this tradition. Yet these institutions may not be a good substitute for true reform. They do not change the way existing institutions work and they only add to an already convoluted and time-consuming decision making process. Staffing also is inadequate and wasteful. It is hoped that the proposed Strategic LED Unit will not follow this pattern, as it provides manpower that is currently lacking at the Office of the Mayor, rather than creating an external new institution with its own mandate. Still, it will require energetic and highly professional staffing if it is to make a difference.

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• Strengthen the Business Service Sector: This strategy has at least three broad components.

One involves chambers and other non-government or semi-public sector institutions. All too often these institutions provide few services and act more as an arm of government than as an interest group that supports the aims of its members. Chambers could provide better training, improved information services, export promotion, and financial services among many others.

Another involves the private sector. We do not know enough about the kind of business services already provided by the private sector. A highly developed private sector provides services related to market research, legal advice, publishing, conference services, export promotion, training, quality control, product design, logistics and transport, finance, investment facilitation and much more – and it does so without government support or funding. It is not clear whether there already is sufficient demand for these services, and to what extent businesses are willing to outsource these service demands.

A third involves the public sector, which sometimes impedes and destroys business services rather than promoting them. For example, we have argued that the forced relocation of small businesses to industrial estates disrupts existing business service relations, without offering much in exchange at the destination.

• Strengthen Aleppo national and international accessibility: This refers mainly to airport services, which appear wholly inadequate to the needs of Aleppo’s business and tourism sector. However, a detailed study would have to include also bus, car, trucking and rail services, and it would have to deal with both passenger and cargo demand (and therefore also include shipping alternatives through Lattakia and Tartous). More importantly, the study will have to frame its analysis broadly, by looking at both an incremental approach to service expansion, and a radical large scale upgrading alternative, which could put Aleppo on a more equal footing with Damascus.

Airport operations have large economies of scale and scope. Hence, in countries with a relatively small air travel market, it is usually more efficient to operate a single dominant airport with international connections and to operate others as feeder ports in a hub and spoke arrangement. However, there are examples of dual airport systems in countries with two dominant urban centers, in which service alternates between the two centers, or flights stop over at one or the other of the two airports.

The one thing certain is that any substantial improvement in Aleppo requires the firm backing and commitments from the business community. A case must be made that reliance on a single dominant airport not only puts Aleppo but the country at a disadvantage, as it undermines economic development opportunities outside Damascus, limits progress towards decentralization objectives, and continues strengthening Damascus as the primate city. It is only when the business community is able to make a plausible case for a large-scale shift in cargo and passenger demand from Damascus to Aleppo that the type of economies can be generated at the Aleppo port that would justify substantial improvements. Further, the argument must be couched in terms of the positive spillovers to economic development in the north and east of the country. Given that Damascus Airport still has large unused capacity (and will have even greater excess capacity with the realization of current improvement plans), limiting arguments to the most efficient airport operations will not suffice.

As in other cases, the way to start is to form a committed working group with members of the business community, Governorate, and Municipality, to both review the airport situation and to make a strong case to the Central Government for change.

• Improve human resource base: To modernize and adapt, economies must constantly strive to upgrade and adapt the skills of their labor force. This is true even more so in the case of Aleppo, both because its human resource base is already non-competitive and because of the inevitable relative manufacturing decline ahead. Generally speaking, a traditional manufacturing economy

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requires fewer skills than a service economy. Training can be provided in a matter of days, though reliability, thoroughness and good work habits are important and may require changes in attitude that take years to form. Service jobs however invariably require more than literacy – often a secondary school diploma or more.

The analysis and available data tell us little about the underlying causes for Aleppo’s relative low performance. The first step would therefore be to form a working group of officials familiar with the Syria’s educational system both nationally and in Aleppo. Traditional values as they relate to female education and labor force participation may be part of the problem, but are unlikely to be the complete story. Other sources may be a higher degree of rural-urban migration, a higher share of village populations annexed into municipal boundaries, or supply side issues. Once the causes are known, they can be addressed, though this may require years of sustained effort.

• Raise female participation: Only 5 percent of working age women participate in the labor force, a low rate even for Syria. A higher rate surely will increase the income and productivity of Aleppo’s economy. Many women have advanced degrees but without further encouragement, do not use the skills they have trained for. Manufacturers in the ready garment sector and others, would like to be able to attract women, but without them cannot compete with countries such as China and India, where women make up an important part of the labor force.

The choice to participate in the labor force is for each person to make. Both empirical and theoretical evidence suggests that as women’s educational level rises, so does the opportunity cost of remaining at home – and already, women with advanced degrees often remain in the labor force. Again, changing attitudes is a long-term process. The question that should be asked in Aleppo, is why female labor force participation rates are so much lower than elsewhere. Some of the remedial actions involve working with school children – bringing female role models to school, taking children to work for a day to experience the work environment, or facilitating child-bearing and child raising roles with work.

One problem in many countries is a high degree of gender inequality in pay. From the limited survey data available to this consultant, this seems less of a problem in Syria than elsewhere, though admittedly, his analysis did not adjust for skills, work experience, or level of education.

• Strengthen marketing, promotion and image building: As with other strategy options, preparation and implementation of this strategy is a continuing, long-term activity, but one that must be designed now with a clear vision and purpose in mind. Just three years ago, Aleppo was designated the Islamic City of the Year, though with little short or long-term effect. What remains from the event are statues in public spaces and signs throughout the Old Suq proclaiming Aleppo the Islamic City of the Year.

Developing a marketing strategy for the city will take at least a year under the lead of a partnership of municipal and business leaders assisted by a professional marketing specialist. A first step is to identify the purpose and audience of the strategy. There are synergies across sectors, and this is why the strategy must focus on an overall city image rather than individual products or sectors. Tourists are an obvious target, and the hotel and transport sector are obvious beneficiaries. But these facilities are used equally by tourists, businessmen, potential investors, and visiting expatriates, and hence a broad swath the city will benefit. The image of Aleppo as a cultural heritage site with leisure destinations nearby also attracts not just tourists but also conventions. A self-confident and positive image of Aleppo attracts workers and may even sway the location decision of a bank or insurance headquarter.

A good marketing department has strong and long-term relations with journalists and opinion makers; it regularly places articles in domestic and foreign newspapers; it makes sure that Aleppo has a presence in all national and international trade shows; it follows up on articles both positive and negative; it conducts surveys and opinion polls to identify Aleppo’s image; it provides information on Aleppo that may otherwise be difficult to obtain; and of course it maintains a

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presence on the web and makes sure that Aleppo is linked to many other web sites. But the specifics need to be part of a well designed overall strategy that looks at products, branding, price, positioning, place, and public relations and publicity alternatives.

• Reduce the regulatory burden: Business regulatory constraints run deep. By some measures it takes the average business four years to acquire all permits for legal operations and access to infrastructure. Some large businesses report that they are without land lines to phone, fax or the internet after ten years. Still, businesses in the Industrial City of Sheikh Najjar report that their plots come equipped with most of the required infrastructure, and that they can obtain temporary licenses within a month through a highly effective one-stop shop with representation from all relevant government organizations. This is a very positive development, and one that helps the metropolitan area to attract investments, and one that should be emulated elsewhere in Aleppo.

When regulation becomes excessive, few people comply, leading to a vicious circle of ineffective enforcement, rising non-compliance, and an unwillingness to comply because no other business complies.

In Syria, much of the regulatory framework is controlled by central government. Changing this framework cannot be the function of Aleppo’s LED strategy, which instead should focus on those elements of the regulatory framework that are under local control. This includes speeding-up the approval process, reducing paperwork and eliminating duplication, providing assistance through a well trained municipal and governorate staff, reducing corruption, and raising inter-agency cooperation when several agencies participate in the approval process. It also includes purely local codes related to zoning, building and the environment.

Nearby Homs appears to be a model in the implementation of a one-stop shop, and we have already mentioned Sheikh Najjar. There is no reason why the permit process in Aleppo should take any longer than in neighboring Sheik Najjar. It is not uncommon for permits and licenses to involve hundreds of steps. MAM studies in Damascus have documented more than a hundred steps involved in obtaining a simple Old City building permit, and more than likely, other permit and licensing procedures are similarly convoluted. A working group should be established that (i) surveys the most egregious examples of codes, permits and licensing requirements under local control and (ii) makes proposals for their review with the aim to simplify.

• Attract investment from abroad: As elsewhere, this is an obvious recommendation. The difficulty is to make suggestions on how to make it work and how to be successful. This requires first to understand the reasons foreign direct investment in Syria and second, the advantages that may make Aleppo the preferred location in Syria.

There are three obvious reasons for foreign direct investment in Syria – though surely the list can be expanded. One is to gain access to Syria’s domestic market, particularly in areas where markets are still protected or where transport costs are high. Since import barriers are declining, natural tariff barriers such as transport cost may be a greater factor in FDI decisions. Many of these types of products of course are already being manufactured by Syrian firms, but foreign firms may see ways to compete with new technologies or alternative marketing strategies.

A second reason for FDI inflows is the GAFTA access a Syrian location provides foreign firms. In this case however, Syria must compete with other GAFTA countries. Essentially, Syria would have to provide a better investment climate than alternatives such as Egypt, Tunisia or Morocco, all of which are touted by Aleppo entrepreneurs as potential relocation sites for their own companies. Of course, proximity matters, and Syria and Aleppo in particular, may be of interest to Turkish investors in particular, because the small distance makes them easier to manage.

A third reason relates less to the type of investment than to the nature of the investor. Syria has a large and entrepreneurial expatriate community, including many who out-migrated over the years but continue to keep close ties to their former homeland. Syria has already held a number of

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investor conferences, and a review of their results should provide some indication as to interest from such investors.

Sheikh Najjar management would be the appropriate organization to take a lead in developing relations with the expatriate community, developing investment ideas, and preparing and managing an investor conference.

• Improve business retention: Several Aleppo textile producers have already closed their factories or are considering moving to other GAFTA countries. Egypt, Tunisia, and Morocco are all said to provide a better business climate and are eager to attract firms willing to relocate in the region.

This should be of obvious concern to authorities. Yet it is also something that has a clear fix – assuming there is a government organization, likely within the Ministry of Industry that regularly looks at the Syria’s competitiveness relative to other Middle Eastern and Arab countries.

• Modify zoning and forced relocation policies: Syria has a relatively rigid system of zoning controls. After the 2004 Aleppo Master Plan was issued, more than 70 percent of businesses were located in areas that made them formally illegal, as there was no grandfather clause that automatically protected past location decisions.

Current law also allows cities to insist on the relocation of firms into specialized industrial areas. Sheikh Najjar expects to relocate several hundred firms from Aleppo proper into the Industrial City, with the result that it expects to run out of land by 2012. Elsewhere, most automotive repair shops are expected to relocate to a specialized industrial zone designed specifically for this purpose.

While environmental problems are easier to control, there is also a potentially great cost associated with this policy. It interrupts existing business relations; the cost of moving and relocating a business tends to be high, particularly for small informal niche market operators that do most of the automotive repairs in Syria; and the cost to the consumer will likely prove exorbitant, as even minor repairs require several trips across town.

These and similar other policies should be rethought, and their benefits carefully weighed against their cost.

• Develop a cooperative tourism action plan: Consultant has prepared a series of suggestions for a tourism strategy, as discussed elsewhere. However, much needs to be done by the tourism stakeholders themselves. It is the stakeholders together with the municipality and the Ministry of Tourism that must become better informed of their sector, including the markets currently being served. The initial estimates prepared by the consultant provide a first hint, but much more must be done to establish a solid base for a local tourism strategy. The initiative can only come from the Chamber of Tourism.

• Develop a textile sector strategy: The textile sector needs immediate attention. The recent downturn is as yet ill understood, but almost certainly is the result of a combination of several factors: (i) the short-term effect of the world-wide recession which has reduced demand in domestic and international markets, (ii) Syria’s political situation, which has reduced demand for all types of products in Europe and the US (US 2004 Syria Accountability Act, pressures on US and European partners not to buy from Syria), (iii) increased competition from China and other Asian suppliers both in domestic and European markets (tariff reductions in GAFTA countries including Syria; and elimination of quotas in Europe, allowing greater Chinese imports, though Europe One remains in effect that frees European importers of 10-12 percent tariffs on imports from Syria), and (iv) the Syrian Government’s recent increase in energy prices (though keeping prices below world market prices) and a 25% increase in public sector wages (matched by the private sector). While some of these factors are temporary, others are structural and bound to stay. Chinese producers enjoy lower energy and labor cost and have an ample supply of female labor

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(non-existent in Aleppo), and this is thought to make Aleppo’s labor-intensive garment sector non-competitive as long as it focuses on high-volume, low-cost items.

It is not clear however, that a shift into higher value-added niche markets is possible. As discussed elsewhere, the European Union has supported vocational training and education in the ready-made garment sector at a program cost of EUR 24 million over three years (though some of this also supported the engineering maintenance sector), and a UNIDO program has supported 36 firms in the textile sector focusing on ISO certification, export facilitation and moving products to higher value added segments. It is important to understand the experience of programs such as these before designing additional programs to assist the textile sector.

Consultant does not have ready-made answers for the textile sector. Back of the envelope calculation suggest that the sector accounts for 30 percent of Aleppo manufacturing employment, and that manufacturing is about 30.5 percent of total employment. Hence, it employs as many as 55,000 out of a total work force of 550,000. To estimate the total potential job losses one should assume a multiplier effect in the neighborhood of perhaps 2.0 – 2.5, so the total number of jobs in Aleppo dependent on the textile sector are 110-140,000. There is little likelihood that all of these jobs would be lost. However, even a loss of 20-30 percent of these jobs would be equivalent to job losses experienced by German or American mining and steel towns during deindustrialization, or by textile dependent cities in many parts of the world including Germany.

Certainly, the sector is worth additional study, and much greater study than can be afforded it here. It is strongly recommended to review Aleppo’s competitive position in detail, relative to other textile producing centers in the Middle East such as Egypt and relative to Asian producers. This is the first step in identifying products and markets where Syria can continue to compete.

• Develop an industrial location and management policy: The city pursues an industrial location policy without much of a strategy. As part of its Master Plan it has identified industrial areas, into which it wants to relocate most small and medium-sized companies. In addition, the Industrial City of Sheikh Najjar has been carved out of what originally was the Municipality of Aleppo, to become a separate city with an industrial focus. In principle, industries can locate only in areas zoned for them, but since this zoning comes after the fact, many or even most do not locate where they should. Sheikh Najjar management expects to have sold off its huge land supply in just three additional years (leading to a significant degree of land hoarding by companies that will not use their land for years to come). Sheikh Najjar management suggests that in the future, beyond the next few years, a new industrial city should be built somewhere in the country side, some 50 kilometers from Aleppo.

None of this suggests a well thought-out industrial strategy. There is a need to take stock of land and infrastructure resources, to prepare realistic projections of demand, and to establish a long-term management policy that both makes good use of existing resources, that aims at a clustering of industry and business services to generate complementarities, and that looks at resulting human resource and transport demands. The same assistance to start-up companies available in Sheikh Najjar should be offered in Aleppo’s smaller industrial areas. This currently is not the case. Services provided in Aleppo’s smaller industrial estates are perceived by industrialists as inadequate, and below service levels available in Sheikh Najjar.

4. Activities with Short-Term Results All of the options discussed so far require time to be implemented and will require several years to show measurable results. Consultant has been asked to provide suggestions for LED activities with possible immediate impact.

While this may not be the answer LED study leaders have in mind, the greatest possible short-term result would be a self-directed and self-motivated program of stakeholder activities. The current

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assessment and LED strategies will remain mostly paper, if they are not pursued by interested stakeholders. The following are meant only as examples of concrete activities that can be pursued by the tourism and textile sector. The list may eventually be extended to all other segments of the LED strategy.

Tourism Working Group under the Lead of the Chamber of Tourism

The hotel sector has had several exceptionally good years, filling 70 percent or more of its bed capacity. This is unlikely to continue, as this level of capacity use should attract new hotel capacity. Hence, this is not the time to be complacent. Some of the projects that the Chamber and its members may want to consider include:

• Establish a Chamber of Tourism Website: Consultant found websites for hotels but not a site maintained by the Chamber of Tourism. In general, websites were badly designed and not updated.

• Improve links of Syrian web sites to Aleppo hotels and CoT website: Tourists visit Aleppo for many reasons. When searching the web, many web sites should provide links to Aleppo hotels and tourism sites.

• Prepare a Tourism Survey at Aleppo Hotels: An initial short survey should be designed to establish the segmentation of Aleppo’s tourism, by class of hotel. Additional surveys can then be designed for particular purposes.

• Prepare a Study Paper on Convention Tourism: Review the existing level of convention tourism, facilities, success of past events, and opportunities. Identify initial steps to develop convention tourism and discuss with the Ministry of Tourism (MoT). Seek MoT funding for the study.

• Prepare a 5-Year Tourism Outlook to provide input for the national 5-Year Plan: This involves collecting information from the authorities on the growth of hotel beds, based on pending hotel projects.

• Prepare presentations promoting Aleppo at Tourism Trade Shows and elsewhere: The show should also be put on the web. Discussions with the Ministry should identify the format of the show.

• Establish a peer review facility for restaurants and hotels. A system of (voluntary) peer reviews could be used to assist hotels in preparing upgrading plans and to generally improve hotel standards.

• Develop a work plan: The above suggestions are ad-hoc ideas by the Consultant. It would be much better if these ideas came from Chamber members, and if the Chamber prioritized its agenda and linked it to available resources. CoT held several workshops, including one with the Consultant, though it is not clear that CoT has the strength to pursue an ambitious promotion strategy. CoT membership is small, and free rider problems could limit effectiveness. There may have to be a strong lead from the City and Ministry.

Industrial Cities and Industrial Areas

Aleppo’s industrial zones currently do not appear to have a unified management policy. While the Industrial City of Sheikh Najjar has the budget and management structure to support its industrialists, Aleppo’s smaller industrial zones have no similar support structure.

An activity of immediate benefit is the preparation of a survey of tenants at each of Aleppo’s industrial zones. Ideally the survey would be the same across all industrial areas, including Sheikh Najjar. The purpose of the survey is to both provide general information on the level of economic

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activity in the industrial sector (and its sub-sectors) and to provide specific information on the quality of services provided at each industrial area.

The survey would provide information that will allow Aleppo to substantially improve services to its industrial sector. This can be used to assist in attracting new investors or retaining existing companies. If run annually, it offers time series data on each industrial zone and on the overall level of activity in Aleppo. Each year, a few questions may be added on a one-time basis, to illuminate special issues, such as the commuting patterns of industrial workers, or the level of business services.

While a survey will not immediately lead to additional economic activity, the simple fact that the Municipality of Aleppo prepares such a survey, would put it miles ahead relative to competitors in its relation to the industrial sector. As the city asks firms to relocate to its industrial areas, it would show that it takes some responsibility for the active management of these areas and the welfare of its industrial tenants.

Textile Sector

The textile sector is in need of immediate attention. However, the sector is highly diverse, and as this Consultant discovered, it is difficult to know the true situation of the sector. Moreover, the sector is not well represented by any local organization in particular. Most textile companies likely are members of the Chamber of Industry, but there is also the Clothing and Textile Development Center (CTDC, established in 1997 in cooperation between UNDP and Chambers if Industry), and there may be other organizations with close ties to the sector. Most textile companies are family owned, many have long ties to the sector, and this makes for clannishness and a tradition of animosities that makes it difficult for companies to cooperate for the good of the sector. It will be difficult for firms to share information, and to take a united stand. In addition, different sub-sectors have experiences that differ from each other, with the ready-made garment sector doing far worse than other textile branches.

Proposal for Government Emergency Relief: There is one thing the sector can do to generate immediate impact. The suggestion is that the textile sector prepares a textile emergency plan for government action. This consists of three elements – all of which have been outlined in some level of detail by the Consultant. But they must be reviewed by members of the textile sector, which will also be able to add much needed detail not available to Consultant. Further, the impact at the national level of the steps outlined below will be much greater, if it comes from pillars of the textile community rather than a single, all-purpose LED consultant.

• Describe the existing situation of the textile sector. This includes a summary of its problems in plausible numbers and an analysis of the causes of its current problems. Numbers and case study material available to this consultant are outlined in several sections of this report.

• Provide a plausible scenario for the short and long-term situation. It is clear that the current sector problems include (i) the short-term effects of a world-wide recession, (ii) the medium-term effects of a difficult political situation that puts Syrian producers at a disadvantage in Europe and the US, and (iii) the long-term structural problems that make some traditional textile products or their methods of production non-sustainable. The question is how much each of these problems contributes to the current situation, and what will be the likely post-recession long-term output of the different textile branches. Based on conversations with textile representatives, Consultant has suggested that the labor intensive, high volume, low margin garment sector will not recover, but must be replaced by niche market products with short product cycles. It is not clear however, that the political and human resource base is in place to make this successful.

• Prepare proposals to Government for bridge relief: Proposals to the Government should argue for short-term bridge relief to overcome the current crisis. The industry has been arguing that a major part of its problem is the government’s increased energy prices (though these are still well below world market), plus a steep increase in public sector wages (typically matched by the private sector). Hence, the government is contemplating vouchers

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to cheapen the cost of energy and labor for the textile sector. It is not clear that this is the proper way to go however, for reasons discussed elsewhere.

• Prepare a proposal for structural adjustments: If some of the textile sector problems are structural as seems likely, particularly in the garment branch, then the proposals for short-term emergency relief must be accompanied by additional measures designed to make garment production competitive. If the garment branch cannot compete with Chinese labor and energy costs, it must move into higher quality niche markets and use Syria’s proximity to European markets to match the rapid product cycle required by high income markets.

It is up to the textile sector to develop plausible proposals and to present them to the government. The fact that two highly funded programs (MVET and IMUP) have failed to significantly raise the competitiveness of the textile sector suggests that the task is not easy.

Survey of Textile Companies: There is much uncertainty about the existing textile situation. While all textile companies surveyed thought that the situation was dire, Chamber of Commerce officials felt that there was little sign of a decline in exports. As our own analysis of data shows, there is in fact every indication of a severe downturn in the textile industry, though this does not spread evenly across all branches.

Textile companies can make their case more forcefully and with greater credibility, if they can refer to survey data. The survey however needs to be constructed to allow data aggregation across firms. This usually means that data should be available in Syrian Lira, rather than only in the form of percentages. Yet companies are loath to provide information on production, value added or exports in a form that could be used against them, even if being assured of the confidentiality of survey results. There are ways to overcome these problems, but it requires careful survey construction.

Municipality

There are things that the municipality should do immediately to take ownership of the LED process. This includes establishment of the Economic Development (and Strategic Planning) Unit at the Mayor’s Office. Rather than waiting for the Aleppo City Development Strategy to be completed, an Economic Development and Strategic Planning Team should be in place to participate in strategy preparation, and to support strategy development and the working group process.

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Part I: Assessment

Chapter 1: Purpose and Objectives The purpose of this report is to provide an assessment of Aleppos’ economy and to identify a possible vision for the City’s economic future. Based on this vision, the report suggests problems in reaching this vision and potential actions and strategic choices that might assist in reaching the vision.

The report has been prepared with the input of many stakeholders, including the three chambers, industry representatives from sectors such as textiles, pharmaceuticals, chemicals, agro-processing, engineering, tourism and handicrafts. Of particular importance has been the input of His Excellency, Mayor Dr. Chibli, Councilman Dr. Mahomoud Ramadan and the Head of the Local Economic Development (LED) Team, Ayman Al Chihabi. The Preliminary Report by the LED Team was invaluable in shaping the current report.1

Despite the input from a great number of local stakeholders, the assessment and vision have not been identified in a truly participatory manner and still lack local ownership. Ideally, the material in this report will be thoroughly discussed, validated and modified in line with the views of working groups and the Steering Committee. The report should be seen as providing the raw material for an economic assessment and vision, but it is up to the local community to use this raw material to express its own vision for Aleppo’s future. Similarly, the report identifies strategic options to attain this vision, but again it is up to the local community to decide on which of these strategic options it wishes to use and implement.

Thanks are also due the SEBC and GTZ consultants.

Put differently, the current report is merely paper that must still be molded by the local community.

Chapter 2 of the report describes the approach of the report and its limitations. Specifically, it suggests that the LED assessment in many ways is incomplete. The reason is both the limited time assigned to the assessment and severe data limitations. A lack of data can be overcome if there is sufficient time. This allows it to assemble data in a participatory manner from stakeholders through workshops, informal case studies, and focus groups. It also makes it possible to prepare data from administrative sources, or to undertake short surveys. Unfortunately, the draft is based on less than two weeks of field work, and a final report will have to be completed with less than an additional ten days. This is wholly insufficient for a city economy as complex as Aleppo’s.

The objectives of this report have therefore been scaled down. It is seen as a first draft – an initial attempt to understand Aleppo’s economic situation, and it provides a road map that will assist the Project to expand on this first assessment. It suggests the type of working groups that should be formed both to improve the assessment and to prepare a strategy. These working groups or some of their participating stakeholders would also be responsible for the implementation of the LED strategy.

Chapter 3 provides a brief socio-economic profile of Aleppo, based almost exclusively on 2004 Census data. This also includes Census data for several comparison cities to take a glimpse at Aleppo’s competitive position. It cannot be stressed too much, how difficult it has been to obtain these data, limited as they are, and this is the first time that a profile such as this is provided for a Syrian City. Additional comparison cities could be added to a future draft of this report.

1 See the Preliminary Report on Each of the Intervention Areas, The First Convention of Aleppo’s City Development Strategy, Aleppo, November 27th 2008, prepared by Ayman Al-Chihabi, Dr. Mazen Jabri, Talal Khoudeir, Aline Massarajian, Bana Kudsi, Kamel Hilal, and Khaldoon Azrak.

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Chapter 4 is a sector analysis that looks at the key drivers of the Aleppo Economy – mainly manufacturing (mainly textiles, agro-processing and case studies for chemical and engineering sectors) and tourism related industries. Again, this chapter is based on unique data, though their administrative source means that the quality may be limited. However, data refinements are possible in the future. Some of the sections include a tabular SWOT analysis.

Chapter 5 looks at the overall business environment to the key drivers. This includes business support services, human resources, infrastructure, and the enabling environment in the form of legal and institutional constraints. By necessity, the chapter must focus on issues that seemed important to Consultant. There is no attempt to be comprehensive.

Chapter 6 looks at spatial issues (as requested by the TOR), including the Industrial City of Sheikh Najjar, industrial zones, industrial zoning, labor force commuting, and in general, the issue of how to mobilize networking and agglomeration economies.

Chapter 7 suggests general principles for a way forward, in the form of a participatory approach and stakeholder ownership of the LED process. Chapter 8 provides a few examples of issues that can be examined by working groups.

The up-front summary has described Aleppo’s competitive position relative to Damascus. It also includes a brief statement of a possible city vision, strategic options, and immediate actions. The strategic options provide material for discussion – they are not yet a strategy, which should be prepared with stakeholders.

Chapter 2: Approach and Limitations Syria until recently was a country with severe data limitations. This has changed recently, though still few data are published for individual municipalities. CBS is willing to prepare data on request, but the cost is prohibitive even for government organizations, and the quality of data can be low. Most municipalities doubt their population data, to the extent that Damascus believes that its population is twice that counted by the Census. There seems little justification for some of these doubts, though there are many specific cases of data inconsistencies which each individually must be resolved.

A small set of municipal data has been secured from the State Planning Commission. The data set contains information by municipality (and for towns and villages) though some of the economic information is weak, as discussed below.

As a result, one must often rely on secondary data sources collected as part of administrative procedures. Some of these data are available from Local Decision Support Centers operating in each Governorate, including Aleppo. Administrative data however, have their own problems as they reflect the selection biases of the process being monitored, and hence there is a need to be aware of administrative procedures and the reasons for data collection to correctly interpret data.

The following briefly reviews key data sources available to us, at the time most of this report was written in mid-2009. Most of these data were obtained by Consultant as part of other work prepared in Syria. In a few cases they were supplied by SEBC, which has many years of work experience in Syria and in Aleppo in particular, but focuses its work mostly on individual firms, and hence does not have the data bases required for local economic analysis.

We start the report with a listing of available data for several reasons. It shows the limitations of the current analysis. One should not expect sound insight, if the analysis depends almost entirely on storytelling by individual stakeholders. Second, it will encourage further data development. There obviously is much room for an expanded data effort. As mentioned, the current draft report is based on a two week mission to Aleppo. It is likely possible to obtain additional information from a variety

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of sources, but this takes time and effort. While such data will come too late for this initial LED assessment, it may still be in time for follow-up studies and the preparation of the LED strategy.

The following lists available data sources and identifies what we consider the greatest data gaps. SEBC or other suitable consultants may be able to fill some of these gaps over time. Census Data: The 2004 Census is a major potential data source, but its use has been limited as the Central Bureau of Statistics publishes few of the data it collects, and makes them available only at great cost. A data set used by the State Planning Commission is being used to prepare a Socio Economic Profile of Aleppo, and to compare the City of Aleppo with other cities. The set of comparison cities could easily be expanded.

Most of the CBS data are the result of a 2004 Census of population, households and housing. There is however, no information on such sensitive subjects as income, poverty, or income inequality. The 2004 Census also included data collected on the business sector, through we have not been able to secure the survey form or instructions. All business data are at the one-digit level, i.e. it provides sector detail in the coarsest of details, such as aggregate manufacturing. Hence, based on these data it is impossible to say anything about the textile, pharmaceutical, or engineering sectors so important to Aleppo’s economy.

Recently, information has become available on-line on output and value added, at least at the national level, but there is no such information at the governorate or municipal level. Of course, many suggest that it would not be useful to collect such data, even if it were possible, as businesses keep several books and are extremely reluctant to divulge such information. Chamber Membership Data: All three chambers – the Chamber of Commerce, Industry, and Tourism – maintain data on their members. These data include the name of the member, a description of its industry, and information on products produced. In the case of CoI members are also graded by size of plant and other criteria, such as strategic importance of the enterprise, number of workers, and commercial reputation. Needless to say, the grading scheme provides little reliable information, as it is subjectively applied, and the trade-off between the different criteria is not clear. Hence, this information is not useful, though a simple listing of members by industry and product type may still be worth having.

Even with these data however, a problem is uneven coverage. For the Chamber of Industry, registration is compulsory for all individuals holding an industrial certificate (subject to certain age, literacy, nationality and residence conditions),2

Still, in a world without data, some information is better than none, and having detailed information on industries and products (for example the manufacture of ready-made clothing or other textile processes), would be useful. Therefore, when Consultant was given raw data on CoC and CoI members he analyzed it.

while for the Chamber of Commerce membership is an entitlement, i.e. not obligatory. Individuals may register with CoC, provided that they are in the Commercial Registry, have a business or workshop in Aleppo, and are engaged in commercial or industrial activities. Since registration is not mandatory (except for those who wish to obtain an export license), membership will be subject to self-selection biases: The industry distribution of members says little about the true distribution of businesses in Aleppo. Smaller businesses and those that do not export will likely be under-represented.

Unfortunately, the information was limited to members located in the Old City. However, this fact alone suggests that it might be possible to obtain information on the entire CoC and CoI membership

2 This does not mean however, that CoI members are necessarily industrial. Many reportedly are members of CoI mainly because of the import and export privileges this provides. There also exists dual membership in COI and CoC.

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and then analyze it by location (for example industrial estate, Sheikh Najjar, urban/rural area). At any rate, the CoC data for the Old City contained more than 6,500 members, and the CoI data contained another 350 members. We know that the Old City has at least 13,800 establishments, and hence, about half are members of a Chamber. This suggests that the complete data base of the two chambers may well contain information on at least 50,000 or so members (as the Census counts more than 90,000 establishments for the City of Aleppo alone, and CoC and CoI data include the rural areas of the Governorate).

Data tabulations are shown in Annexes 3-8, and explanations on the derivation of these tables are available from the author. CoC Export Data: All exports (no matter how small) require a permit by the CoC, which made the data available to the Consultant for the Years 2006 through 2009. The data include a description of the industry and the product of the export license, the country of destination, and the value of the export. Despite severe shortcomings, the data base is invaluable because it provides a time series of exports which makes it possible to track the current export recession. Summary tables are shown in Annex 6 and in Table 5 of Annex 5. Data limitations are discussed in the Report Section dealing with Aleppo exports. ITC Data: The International Trade Center (ITC) publishes trade data by product and origin/destination. They may be used in the future to deal with questions on Syria’s changes in trade balances but were not available in time to be used in this report. Sheikh Najjar Survey Data: Sheikh Najjar management surveys operating factories to ascertain the level of their current operations. The data identify (among others) the type of industry and type of product produced by the firm, the level of production and price per unit of production, and the number of workers and number of shifts operated. It is not clear how often the survey is taken (a monthly survey was mentioned). However, even if it were only annual, it would provide valuable time series information on production levels.

Unfortunately, it has not been possible to obtain these data, and it is not even clear whether they are processed and analyzed by management. One of the recommendations to the City of Aleppo is to conduct a similar (but enlarged) survey in all of Aleppo’s industrial areas, to provide the city with economic data for investors and to obtain feedback on the quality of services provided. Another recommendation is to compare permit data with actual data on employment and production, to see whether permit data are a good predictor of actual levels of operation.

Old City Survey Data: The REHALEB Old City Project in 2006 prepared a Census of all Old City establishments that provides information on the range of activities in the Old City. In addition, Consultant in 2006 prepared an in-depth survey that provides a greater wealth of economic data, including information on business income, inventories, and capital, again for the Old City. Both of these data are used where no substitutes exist. While not necessarily representative of Aleppo as a whole, they still provide detailed information on the range of issues found in the Old City, and probably have some resemblance to Aleppo.

Ministry of Industry Data: An Industrial License is required if machinery used in a business exceeds 4hp. Hence, it is not directly related to products being produced. The Ministry is present in each Governorate through a Department of Industry, which collects data by Governorate, though currently data for the Industrial City of Sheikh Najjar are collected separately. DoI does not use the standard industrial classification system of the Central Bureau of Statistics, but classifies industries into four types – agro-food, textiles, chemicals, and engineering, a system used throughout Syria for purposes of project classification. It further classifies businesses into large and small (called ‘industrial’ and ‘handicraft’). Licenses are given to private businesses. Public sector businesses obtain their license directly from the Ministry. License information includes data on the type of business, the planned

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capital investment and the planned employment. Location information is not coded, though coding would likely be feasible. The data are computerized, and in principle, it should be possible to get fairly detailed data quickly. Some data have been obtained by the Consultant during a short two-hour visit, see Tables 1-3 of Annex 5, but much more data could be mobilized. A review of relevant laws related to MoI industrial activities is provided in Georgi (2008), see the last Annex of his report.

Municipal Administrative Permit Data: A Municipal Administrative License is issued by the Municipality. Georgi (2009) suggests that all businesses, without exception must have an Administrative License, though Consultant based on repeated questioning was given many examples of small retail businesses that do not need a license. This is important, as it goes to the interpretation of the data from this source. If entire classes of businesses do not need a license, then they are not counted in the statistics, and hence biases result. In a detailed survey prepared (as part of another assignment) by Consultant in some 365 businesses in the Old City, only one third of all establishments acknowledged having an Municipal Administrative Permit, the remainder either did not (about 50 percent) or did not respond to the question (17 percent). An administrative permit will be issued only if all other licenses are in place. Data are not computerized, and hence their compilation is time consuming. In principle, data include location and sector detail, and detailed information has been requested, but none has yet been provided to Consultant.

Information from all of the above sources is summarized, to the extent available, in Annexes 3-8. It is discussed throughout this report, but particularly in Chapter 2 and Section 8.2.

Chapter 3: A Socio-Economic Profile of Aleppo This section provides a socio-economic profile based mostly on 2004 Census data, see Annex 4. This serves as an introduction, with additional analysis to follow in later sections. A great deal of work has gone into preparing these tables, which rely on a data set made available by the State Planning Commission (SPC). Using the data is fraught with some risk as there is no documentation available, variable descriptions in Arabic are often incomplete, translations are difficult to prepare, and some of the reported figures lack plausibility. However, the data are available for all settlements including the 128 municipalities (at the time the data set was created), all towns and all villages. This makes it possible to compare Aleppo with other cities, of which Damascus, Homs and Idleb were chosen. Throughout the data set, distributions do not add up to 100 percent even though they should. However, they are usually close to 100 percent. We believe that this may be due to missing observations. It is standard in these cases to recalculate the distribution so that the distribution for the available attributes adds to 100 percent. We have refrained from doing so until perhaps in the future there is more information available from CBS regarding the nature of the missing variables. 3.1 Resident Population Count

The 2004 Census is much questioned by cities, usually in the belief that the Central Bureau of Statistics has undercounted city populations. While this could be true in some cases, few question the overall validity of the national population count. Hence, for every undercount in some areas there should be a corresponding over-count elsewhere in Syria. However, this is not the case.

According to the 2004 Census the Aleppo Municipality has a population of about 2.1 million. It is therefore the largest city in Syria, well ahead of Damascus with a population of 1.4 million (though Damascus believes that its true resident population was about twice that counted by the Census). Of course looking at Urban Damascus (i.e. Damascus Governorate) alone neglects the fact that the proper economic unit is Metropolitan Damascus, which consists of most of Rural (Rif) Damascus, Damascus Governorate proper, plus perhaps other areas. World Bank Reports regularly have put the size of the Damascus Metropolitan Area at more than 6.6 million, though the source of this estimate is not known, and it does not appear in any Syrian statistics.

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The relative size of Aleppo and Damascus is not just of interest to demographers. It is relevant to economists and those concerned with local economic development. Size can bestow competitive advantages, in terms of the size of the business service sector, and the level of agglomeration and industrialization economies, particularly when coupled – as in the case of Damascus – with the many advantages associated with being the national capital. 3.2 Registered Population Count

In addition to the resident population count, Syria uses a second concept to count its population: the registered population. This count reflects the family’s place of origin. When a child is born, typically it is registered at the place where family records are maintained, even if the family lives elsewhere. However, women often transfer their registration to the location of their husband, and over time, usually many years after their initial move, people may transfer their registration records to their place of residence. Hence in general, registration data lag residence data. In areas that experience outmigration, the registered population should exceed the residence population. In areas that experience in-migration, the registered population should be less than the residence population. The picture however is further muddied by differential birth rates and by the speed with which registration data are transferred to the new place of residence. For example, one might reasonably expect that individuals who have moved from rural areas to Damascus will more quickly transfer their registration records than someone who moves in the reverse direction.

In the case of Aleppo, the registered population in 2007 was 1.72 million, much below the resident count of 2.13 million. This would suggest a high in-migration rate to Aleppo. In Damascus instead – and somewhat unexpectedly – the registered population is 1.63 million, or greater than the resident population. Indeed, of the three comparison cities – Damascus, Homs, and Idleb, Aleppo is the only one with a resident population greater than its Census count. It is unclear what to make of this, particularly in the case of Damascus. Metropolitan Damascus certainly is the net recipient of migrants, though of course it is possible that central Damascus (much as the Old City) is losing population to commercialization and declining density (and decreasing household size). 3.3 Age and Gender Distribution:

Syria and its cities show the age distribution typical of countries with a high fertility rate. Each new generation is significantly larger than the previous one. This is true even more in Aleppo and nearby Idleb, suggesting that these two northern cities have higher fertility rates than Damascus. Close to 40 percent of Aleppo’s population is 14 years or younger, as compared to only 30.9 percent in Damascus. In addition, Damascus has a three times higher old-age share of the population than Aleppo – 7.7 percent of the population is 65 years and older, as compared to only 2.7 percent in Aleppo, see Table 1 of Annex 4.

In short, the population pyramid of Damascus resembles more that of higher income countries. While still a pyramid, it is evolving towards population cohorts of equal size.

These differences matter in two ways: Aleppo’s working age population is relatively small, and hence must support a greater number of dependents than is the case in Damascus. This reduces income and generates a smaller demographic dividend from declining fertility. Second, Aleppo faces a much greater task absorbing the young into its labor force. It must generate a far greater number of jobs relative to its working population if its young are to find a job in Aleppo. Of course, it is not clear that this matters much, as Syria’s population is relatively mobile. People that do not find a job in Aleppo may find one in Damascus or elsewhere. 3.4 Literacy

Aleppo analysts often point to City’s highly educated labor force as one of its key advantages. Census data however suggest that illiteracy rates are high in Aleppo, and indeed more than twice those in Damascus both for males and females. More than 20 percent of all women 15 years and older are illiterate, as compared to 9.6 percent in Damascus, and 41.6 percent of women are merely literacy

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aware, rather than literate. This may be partly explained by the fact that Aleppo Municipality apparently includes some rural population, while Damascus includes only Damascus City, and specifically excludes Rural Damascus may explain some of the difference.

Still, this requires follow-up and together with other facts suggests a lack of competitiveness in the quality of the labor force, something the city may have to address. 3.5 Educational Attainment

Educational attainments are also lower in Aleppo. Only 6.8 percent of the Aleppo population 15 years and older have a college or university degree, as compared to 12.4 percent in Damascus.

Consistent with lower educational attainment, Aleppo has a lower percent of its population in school attendance among all age groups, and a drop-out rate that is much higher than found elsewhere. 3.6 Labor Force

The labor force consists of the employed and the unemployed. A high labor force participation rate indicates a high willingness to hold or seek a job and to contribute to household income. All else equal, one would expect a higher labor force participation rate to translate into a higher household income.

The participation rate of women is of particular interest, as this rate varies much depending on culture, tradition, and level of education – and as it has a significant relationship to marriage age, fertility, and education. For women, the more educated they are, the higher the labor force participation.

Our data set includes rates for the economically active population, presented once as a net rate based on the working age population and once as a gross rate based on the total population. When these two rates are applied respectively to the population 15-64 years of age and the total population, the result is the same labor force, both for males and females. This is the economically active population 15-64 years of age, and the results are then further used to determine the employed and unemployed of working age, and the industry and sector distribution of the employed. While we cannot be totally certain of the age restrictions used by the Census (the information is not supplied in the tables) any possible error is too small to have any impact on our main conclusions.3

Aleppo’s population is both similar and different in important ways from that of other areas. The differences arise in the form of gender and demographic differences. Overall, as a percent of the total population, 27.9 percent of Aleppo’s population is economically active. This is the lowest rate among comparison cities, though very similar to the rate of Idleb. The reason for the low rate is twofold: First, only 5.1 percent of all women participate in the labor force, as compared to more than twice that rate in Damascus. Even Idleb’s rate is 9.3 percent, or some 80 percent higher than that of Aleppo. Put differently, Aleppo does not use a valuable and important part of its human resource potential. This has consequences for industry, and particular the competitiveness of the textile industry. Note that the overall participation rate is low even though the male participation rate is higher. 49.0 percent of all males are economically active, as compared to only 46.8 percent in Damascus. Second, the rate is low because the working age population is a relatively low percentage of the total population. As noted earlier, Aleppo has a large young-age population.

3 Syria follows international conventions and the economically active population equals the labor force (i.e. employed plus unemployed), older than 14 and younger than 65. However, since we have population data only by 5-year age interval, our estimates neglect those 14 years of age.

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This has economic consequences: Aleppo is not yet ready to cash-in on the demographic dividend available to areas with a declining fertility rate and a bulging working age population. More on this elsewhere.

The differences between Aleppo and comparison cities become even more pronounced when one looks only at the working age population. In Aleppo, 85.3 percent of all men 15-64 years of age are economically active, as compared to only 76.3 percent in Damascus. Among women however, the relationship is reversed. Only 8.9 percent participate in the labor force, as compared to 17.6 percent in Damascus. Indeed, the low participation rate of women is quite remarkable, as Homs and Idleb both have female participation rates almost twice those of Aleppo.

3.7 Unemployment

The unemployment rate is an important indicator of the well being of the population and the economy as a whole. A high unemployment rate invariably tells a story about individual’s lives – about jobs lost and income not earned. It also tells a story about an economy not able to generate jobs, about weak demand and a lack of production, and about idle capacity and wasted human resources.

Syria’s unemployment rate tends to be high, in large part because its economy must find jobs for many young people. It is the young who are first-time job seekers, who lack job experience and a track record, and whose unemployment rate tends to be high. Aleppo’s unemployment rate is 7.1 percent – higher than in Damascus – but significantly lower than the 12.1 percent of Homs. There is little difference in the unemployment rate between those who are educated and those who are not, suggesting an economy with a large informal sector that makes few educational demands. However, the unemployment rate varies significantly by age. Those 15-24 years of age have an unemployment rate of 17 percent, as compare to those 25-34 years of age with a rate of 4.6 percent, and still lower rates for higher age groups.

Unemployment also varies much by gender, with women experiencing an unemployment rate about twice that of men. 3.8 Employment by Sector

Our data set also includes information on employment by type, sector, and industry, see Table 4 of Annex 4. We briefly look at each of these data, but will return to them throughout the report. The key point of these data is that Aleppo has a much greater orientation to the private sector and manufacturing than other areas, including in particular Damascus.

• Type of Employment: Aleppo has a greater share of persons in self-employment than Damascus, though the difference is small. In general, a high rate of business owners, self-employed, and workers without a salary suggests a high degree of uncertainty, and hence vulnerability.

• Public/Private Sector Distribution: Only 21.4 percent of Aleppo’s employment is in the private sector, as compared to 34.2 percent in Damascus and 41.1 percent in Homs. The suggestion is that Aleppo is much more entrepreneurial than much of Syria.

• Industry Distribution of Employment: Aleppo is known as the manufacturing center of Syria and the numbers bear this out. 30.5 percent of Aleppo’s employment is in manufacturing, as compared to 18.0 percent in Damascus and 13.9 percent in Homs. On the other hand, 2.1 percent of Aleppo’s employment is in Finance and Insurance, and another 22.7 percent in Services. These are the sectors that will experience the fastest growth in the future, and that already make up a much higher share in the comparison cities. Damascus employs 4.5 percent of its workers in Finance and Real Estate and 34.6 percent in the Service Sector.

• Occupations: Aleppo’s specialization in manufacturing is reflected in the occupational distribution of its workforce. 60.2 percent of its workers are production workers, as compared to only 38.1 percent in Damascus, and 45.7 percent in its close neighbor Idleb.

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3.9 Housing Profile

Table 5 of Annex 4 provides a profile of Aleppo’s housing stock, including its access to safe water, sewerage and public electricity network, construction material, ownership type, occupancy and vacancy rates, size of average dwelling, and indicators of crowding. There is little difference among the cities, though we note that relative to Damascus, Aleppo’s average housing size is smaller, conditions are a bit more crowded, there is less new construction, there is more multi-family and less Arabic-style housing, and ownership rates are higher. None of these attributes seem significant in the LED context of this report. 3.10 Business Establishments

Table 6 (Annex 4) provides a profile of Aleppo’s establishments. There are 97,767 establishments in operation (Line 303) – or about one establishment for every 22 city residents. The establishment density is similar in comparison cities. It is slightly higher in Damascus with 19 residents per establishment, but much the same in Homs and Idleb. Put differently, while many indicators suggest that Aleppo is more entrepreneurial than other cities, in fact the density of its businesses is less or about the same as that of other cities. Of course, being a businessman is not the same as being an entrepreneur, and this will need to be discussed later. Some of the establishment attributes are:

• Size Distribution: On average, Aleppo’s establishments are larger than those in all comparison cities: 27.1 percent have more than two workers as compared to just 18.5 percent in Damascus; 4.3 percent have 6-9 workers as compared to just 2.1 percent in Damascus; and 1.4 percent have 10-50 workers, as compared to 0.9 percent in Damascus.

• Ownership Distribution: A smaller percentage of Aleppo’s business establishments is publicly owned – just 1.8 percent as compared to 2.8 percent in Damascus and 4.1 percent in Idleb.

• Industry Distribution: As expected and true to its reputation, Aleppo has a much higher share of manufacturing establishments than any of the comparison cities: 24.3 percent are in manufacturing as compared to 15.1 percent in Damascus. Of course, in all three cities the trade sector dominates.4

3.11 Summary

The above confirms many of our expectations about Aleppo. Aleppo’s traditions run deeper than those in much of the country and in particular in Damascus. Educational levels are low, illiteracy is high, and women rarely participate in the labor force – all likely to contribute to lower income levels. Manufacturing and the private sector dominate the economy, suggesting a high degree of entrepreneurship. The average firm has a greater number of workers than comparison cities, suggesting that its overall share of the Syrian economy is even larger than the 30 percent share in the number of manufacturing firms.

4 It is unfortunate, that throughout the data set, Trade is mislabeled as Hotels and Restaurants. In Aleppo, 56 percent of all establishments are said to be in the hotel and restaurant sector, while the trade sector is never mentioned. Instead, apparently, 56 percent of establishments are trade, while the hotel and restaurant sector is included in the services sector, based on information from Dr. Srouji of Aleppo’s Branch Office of the Central Bureau of Statistics.

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Chapter 4: Sector Analysis: Key Drivers of the Local Economy This chapter is designed to provide information on the key drivers of Aleppo’s economy. Aleppo has long been identified with the textile sector and in the textile sector has long had a leading role as a market maker and intermediary for the Middle East, though this role is now much diminished. Other sectors have sprung up in recent years including chemicals and pharmaceuticals, while the textile sector is experiencing its worst recession in a long time.

There is a traditional view of an urban economy, which views its growth and decline as determined by its export sector. In Aleppo, key export drivers are the tourism and manufacturing sector, such as textiles, pharma, engineering, chemical, and agro products. As the rest of the world demands more of these products or services, the size of these sectors grows, and with it the rest of the economy or ‘local sector’, which provides business services and needs in demand by the local population. While we lack precise estimates, in Aleppo the export sector perhaps accounts for say, 25 percent of all jobs and the local sector for the remaining 75 percent. If so then each additional export job generates an additional three local jobs, and the ‘export multiplier’ is four. Urban economists sometimes use this multiplier to estimate the impact of export losses or gains on the economy. If recent events have led to a loss of 20,000 jobs in the textile sector, one may expect total job losses of 80,000 – though it usually takes several years for the multiplier effect to be fully felt.

There is an alternative and more recent view of urban economies. This views growth as generated by internal forces. It is the local or service sector that is the true driver of the economy. This is the sector that generates the variety of services essential for innovation, business creation, and business growth. It generates a virtuous cycle of growth and agglomeration economies. As the sector becomes more diversified and productive, the economy becomes more competitive and is able to attract further business growth.

In this second view, the growth of Aleppo does not depend on the export demand previously described as the primary driver of growth. Rather, Aleppo’s growth is driven by its business climate, its business services, its creativity and capacity to create new businesses. As it becomes larger, more diversified, and richer in the variety of business services it is able to offer, all its industries are lifted up and become more competitive. This in turn will allow them to compete in export markets.

The two views should be viewed as complementary. The current section takes the first view and reviews four key drivers of past growth: textiles, pharmaceutics, agro-processing, and tourism. There are probably others, but we do not have sufficient information to provide a detailed picture. A later section looks at business services, infrastructure, and business climate.

4.1 Manufacturing

More than 30 percent of the workers of the Aleppo Municipality work for industry – mostly manufacturing as there is little mining in the city. To put this into perspective, at the national level industry accounts for only 14.2 percent of employment (based on the 2007 Labor Force Survey, see Table 4 of Annex 3). The following looks first at the national situation. This helps us to better understand Aleppo, both because Aleppo is a large part of national manufacturing (generally thought to account for 30-40 percent of it) and because at the national level, there exists additional data not available locally.

A key issue is to clarify the current manufacturing situation. The most recent data are for the Year 2007, so it is difficult to describe current activity levels. Based on this outdated information, international consultants have been gushing about Syria’s manufacturing prospects, suggesting export growth rates as high as 50 percent per year. However, many industrialists in Aleppo see the current picture as bleak and dismiss Government statistics, particularly in the textile sector.

Another advantage of looking at the national situation first, is that the national level has an accounting system to check data validity and plausibility. This would not be possible at the city level. The only problem is that our review will suggest serious data deficiencies, even at the national level. In part

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these are the result of fundamental data collection problems. Almost all private firms in Syria keep at least two and perhaps more books to escape various government rules, taxes and intrusions. As a result, data sometimes make little sense. For example, manufacturing produces very little per employee (in terms of net domestic product), and indeed less than the agricultural sector. Indeed, according to national statistics, manufacturing contributes only 6.3 percent of net domestic product but employs a much higher share of workers.

In addition, our national review suggests orders of magnitudes for the four principal manufacturing sectors often used in administrative statistics (though not by the Central Bureau of Statistics). Specifically, at the national level the four sectors contribute to manufacturing net domestic product as follows (2007 data from the Statistical Yearbook):

• Agro-food industry. 21.0 percent; • Textile sector including clothing and leather industry, 26.1 percent; • Chemical sector, including pharmaceuticals, 2.4 percent; • Engineering sector (wood, paper, metal, and non-metal) 38.7 percent • Miscellaneous, 14.2 percent.

National Situation: According to the Oxford Business Group’s The Report: Syria 2009 (OBS 2009), industry makes up 35.3 percent of Syrian GDP (p. 116, 2007)5

Looking at this report with the benefit of hindsight, little of the rosy predictions seems quite right and even the base numbers can be questioned. The article seems to imply that industry consists of the manufacturing sector – divided in Syria into the agro-food, textile, engineering and chemical sector. But industry in Syria also entails mining (mainly petroleum) and water and electricity generation – with the bulk of sector product (almost 75 percent) coming from the petroleum sector (see the Statistical Abstract 2008, available on the internet). This is true, whether measured in market prices or at factor cost, and whether one uses GDP or NDP. Manufacturing generally is only 22 percent or so of the industry total. Since manufacturing details seems to be available only as net national product at factor cost, we cite all figures in this way (see the Chapters on Industry and National Accounts of the Statistical Abstract).

; production has been growing at a rate of 4.5%; and between 2005 and 2007 exports have been growing at an astonishing 53 percent annually. It suggests that the expansion has been the result of encouraging private investment under the 10th 5-Year Plan, international agreements, and a series of new laws with others in the pipeline, which are only now impacting investment and are likely to positively impact growth for years to come.

The result then is (see Table 5 of Annex 3) that industry accounts for 28.6 percent of Syria’s NDP, but of this only 22.2 percent are manufacturing, or 6.3 percent of NDP. This is much smaller than it should be, given Syria’s development status and anecdotal evidence. It is also much smaller than the share of manufacturing workers. While we do not have direct information on workers employed in manufacturing, we know that industry accounts for 14.2 percent of them – and since mining and utilities employ relatively few workers, most should be in manufacturing. A good guess would be 12-13 percent. But in this case, it is extremely unlikely that manufacturing produces only 6.3 percent of NDP.6

In summary, we suggest that nationally 12-13 percent of employment is in manufacturing, and that the manufacturing sector produces at least 15-16 percent of NDP, perhaps more. We know that Aleppo’s

5 See p.116 of The Report 2009. This source specifically mentions that 35.3 percent of GDP comes from industry, which includes the petroleum sector and water and electricity generation. But the report then continues to talk only about textiles, chemicals, engineering and the agro-food industry, so from the context it seems that the reference here is to manufacturing. 6 In general, manufacturing workers are more productive than the national average worker. But the figures of Syria’s Statistical Yearbook suggest that agricultural workers are more productive than manufacturing workers.

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manufacturing employment is around 30 percent – suggesting a very high degree of manufacturing specialization in Aleppo.

Recent Developments: Recent manufacturing development is impacted by a number of developments, some positive and some not so. They include the following:

• The Greater Arab Free Trade Agreement (GAFTA) in 2005, which has substantially reduced dependence on the EU market, so that now (according to OBS 2009) GAFTA countries account for more than 50 percent of Syria’s industrial exports. If OBS is correct, GAFTA would be of particular importance to Aleppo’s economy, as Aleppo’s export share likely hovers around 35 percent of Syria’s total non-oil exports, and is substantially higher for some sectors.

• The US Syrian Accountability Act of 2004 that bans the import of US technology to Syria, and has led industry to diversify away from European and US technology. The Act has negatively impacted Aleppo’s exports to the United States. Clearly, some exports continue, but others are severely curtailed. Anecdotal evidence suggests that Syrian Airlines had to severely curtail its flight schedule, in part because of its inability to obtain spare parts for its Boeing fleet of planes. Another airline could not start service to Aleppo because of its use of Boeing equipment.

• The Industrial Modernization and Upgrading Program (IMUP), which is jointly implemented by Syria and the UN Industrial Development Organization (UNIDO) under the Ministry of Industry. IMUP focuses on foreign direct investment promotion (FDI), productivity growth, and export facilitation. In its first phase launched on a pilot basis in July 2008, it has assisted 36 firms in the textile sector including three public sector firms, focusing on ISO certification, investment and technology partnerships, and moving products to higher value added segments to avoid direct competition with imports from China.

Given the importance of Aleppo in the textile sector (with a manufacturing share likely well above 50 percent of the national total), IMUP should have had a major impact in Aleppo. However, of the 36 companies assisted, only 9 were located in Aleppo, 21 in Damascus, and the remainder in Homs and Hama. The reason for the asymmetry in coverage is unclear. The reason may have been that Damascus companies were perceived to be in greater need of international assistance, or that assistance in Damascus is more effective.

A second 2-year IMUP phase will focus on agro-business. According to OBS 2009 (p. 120) the program document has been signed. It is unclear whether the phase has already started. Given Aleppo’s sizeable agro business sector, one would again expect a major impact there.

• The Modernization of Vocational Education and Training Program (MVET) is based on an initiative of the European Union and the Government of Syria designed to improve the competitiveness of Syrian enterprises and to improve vocational training and education in two sectors: ready-made garments and engineering maintenance. As such, it has direct relevance to the current crises of the textile garment sector. Funded at a level of EUR 25 million over three years (Sep 05-Dec 08) it involved the Chambers of Industry in Damascus, Homs and Aleppo, the State Planning Commission and a number of other ministries (see the Appraisal Report of Eng. Elias Georgi for further information). Consultant was unable to learn about the experience of the program, and whether programs such as this could make a future contribution to the garment sector.

• The Syrian Investment Commission (SIC) launched in 2007 facilitates application and licensing procedures via a One-Stop-Shop introduced in 2009. This has led to the establishment of a One-Stop-Shop at the SIC Damascus site with branches in Hama and Raqqa. In addition, the General Managers of the Industrial Cities have been given the right to establish One-Stop-Shops under the authority of the SIC, and this is in operation at Sheikh Najjar.

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• Legislative Decree No. 8 of 2007 (superseding Investment Law No. 10 of 1991) has continued a process initiated by Law No. 10 to gradually open the country to foreign investment. Foreign investors may now own 100% of industrial land and real estate and enjoy greater privileges than before. These include the right to take residence in Syria, to transfer after-tax profits abroad, and the right of its foreign workers to transfer out of the country up to 50 percent of their net wages. Enterprises can take advantage of tax exemptions under the Income Tax Law and have the right to import free of custom duties equipment used exclusively for the enterprise.

• A new Labor Law was discussed in 2009, which allows the lay-off of workers. At the same time a new Industrial Organization Law is being mentioned, which would profoundly affect the informal sector, by requiring them to legalize their status and to register with the Chamber of Industry, or risk being shut down. Neither of these laws has yet been approved, information remains uncertain, and their impact remains to be seen, though the potential seems to be there to make labor markets more open, but also to reduce the flexibility currently enjoyed by the informal sector.

As a result of these changes, the private sector is now the main driver of production and employment growth. Still, substantial hurdles remain, in particular for foreign investors, who have greater difficulty interpreting the law and finding their way through the application process. Many laws are new, and hence precedent is limited or non-existent, raising risks and uncertainties. As important, in a highly centralized government, the need to be close to the center for all decision making remains large. While there is the intent to devolve public sector decision making to lower levels, this still has not happened, and disadvantages remain for investors locating away from Damascus.7

Aleppo Situation: Aleppo is the manufacturing powerhouse of Syria, with a substantial presence in all four subsectors used to divide the sector: textiles, chemical, engineering and agro-food sector. According to local sources, Aleppo dominates both textiles and pharmaceuticals (as part of the chemical sector), with national export shares that could exceed 70 percent. The evidence comes from several sources:

• Industry Share of Employment: Based on Census 2004 data, 30.5 percent of Aleppo Municipality workers are employed in industry, see Table 4 of Annex 4.8

• Manufacturing Employment: Based on an Aleppo labor force participation rate of 47.7 percent, and an unemployment rate of 7.1 percent, we estimate total employment at about 552,000 in 2004, of which 168,000 workers would be in industry, mostly manufacturing. Note that these are place of resident employment numbers. Some of these workers could work outside the City. The Population Census does not yield place of work employment data.

This is high when compared to Damascus (18.0%) and the national average (14.2%). Since mining and water/electricity generation are likely small, the manufacturing share should not be much smaller, and will in the remainder quote a share of 30.5 percent.

• Manufacturing Sub-Sectors: There are several data sources that may make it possible to estimate the subsector shares (textile, chemical, engineering and agro-processing) in total manufacturing: data from the Governorate’s Department of Industry (DoI), Municipal Permits, membership of the Chambers of Commerce and Industry, Sheikh Najjar permits, and Chamber of Commerce exports licenses. Most of the information simply reports on the

7 As discussed, the Industrial Cities and Sheikh Najjar in particular, provide excellent one-stop services that assist investors to overcome administrative and licensing hurdles, despite the distance to Damascus. 8 Note that the table likely involves a translation error, and that the 30.5 percent refers to industry rather than manufacturing. However, the difference may be small, as Aleppo’s employs few workers in mining or water/electricity generation.

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number of firms. However, DoI data also include employment and capital estimates contained on the license. The same is true for Sheikh Najjar permit data. Finally, the export data report estimated dollar values. Available data are summarized in Table 1 of Annex 5 derived from other tables. n/The following briefly discusses the overall picture.

A plausible estimate is that manufacturing accounts for some 150,000 out of 550,000 jobs among residents of Aleppo Municipality. This simply reflects 2004 Census residence data.

It is also likely that Aleppo Municipality and its immediate suburban hinterland have more jobs than employed residents. The Municipality including Sheikh Najjar attracts a substantial number of net-incommuters from surrounding rural areas. This is likely to continue and is typical of large metropolitan areas. So the total number of jobs in Metropolitan Aleppo could easily top 600,000, and manufacturing jobs may well exceed 170-180,000.

The above manufacturing numbers are consistent with Department of Industry data, which show 134,400 industrial jobs in the Governorate (excluding Sheikh Najjar). These are jobs mentioned in the industrial license. These licenses can data back many years, and hence, actual jobs today can be vastly different from those on an industrial license. Further, DoI data are only for the private sector, as DoI does not give public sector licenses. Hence, public sector firms are not included. Finally, DoI data are for the Governorate, not the Municipality. Hence, they are not strictly comparable. However, the numbers are consistent in terms of their order of magnitude.

The Engineering Sector dominates manufacturing. 40.9 percent of all DoI permits and 37.9 percent of DoI jobs (as per industrial license) are in the engineering sector. This is larger than expected, as common wisdom puts the textile sector ahead of all others. However, the engineering sector is relatively small in Sheikh Najjar, with just 15.5 percent of permanent licenses granted so far, and 21.8 percent of the jobs quoted per license.

The Textile Sector is the second largest manufacturing sector but dominates in Sheikh Najjar. 32.9 percent of DoI permits and 28.9 percent of DoI jobs (as per industrial license) are in the textile sector. The situation is more extreme for Sheikh Najjar. There the textile sector accounts for 54.1 percent of planned capital investments, 42.8 percent of the jobs, and 45.9 percent of the licenses. It is possible however, that many of these plans date to a time when the textile sector was at its peak, and it is not clear that they will be sustainable.

The Chemical Sector accounts for 14.7 percent of permits and 21.2 percent of manufacturing jobs, both according to DoI license data. The Chemical Sector includes Pharmaceuticals, which have seen phenomenal export growth, as will be discussed in a moment. In Sheikh Najjar the sector accounts for 16.7 percent of permits and a similar percent of (license) jobs.

The Agro-Food Industry is the smallest of the four sectors, with 11.5 percent of industrial licenses and the same percent of (license) jobs. The small size of this sector is surprising, given the importance of Aleppo as a food producing governorate. Perhaps this hints as growth potential.

Exports are not proportional to sector size and fluctuate much over time. Put differently, a larger sector does not necessarily make for larger exports. Hence, textile exports have been surprisingly small – 6.4 percent of total exports in 2006 and an estimated 9.4 percent in 2009. Note that all export shares reported here omit agricultural exports, including textile raw material.

Unfortunately, export data suffer from a key problem. The Chamber of Commerce does not know how to classify products or their producers. While there has been some improvement over time, even in the first half of 2009, 50 percent of exports were classified as miscellaneous. The summary table therefore gives two estimates of export shares – one that includes a miscellaneous sector, and another that eliminates it and distributes its exports over the four manufacturing sectors in proportion to their respective known exports. Essentially, this assumes that exports from an unknown sector are distributed the same way as exports from known sectors. Exports are discussed in greater detail below, but the key results are (using export shares based on the second method above):

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• Total manufacturing exports have been relatively stable over time, varying between US$ 250,000 and US$ 320,000 over the last four years (assuming that the second half of 2009 will be the same as the first half).

• Textiles have had an export boom in 2007 and 2008, but in 2009 will fall back to their 2006 level at about half their 2008 peak.

• Chemicals and in particular pharmaceuticals have experienced sustained growth, and now make up more than 50 percent of Aleppo’s total manufacturing exports, far greater than textiles. Indeed, Pharmaceuticals in 2009 are on their way to having larger exports than textiles ever had.

• Agro-Food exports have collapsed in the last four years, and now make up just 8 percent of total manufacturing exports.

The above summary suggests that much of the popular information may not be quite correct. Numbers matter, and it matters, that Aleppo is not completely dominated by the textile sector, but has alternative industries available that can provide jobs when other sectors fail. While the data are not perfect, and many questions remain, at least there is a framework of plausible numbers.

SWOT Summary: The following are highlights for an overall assessment of the manufacturing sector. This should be extended, time permitting. Some of these points are repeated in an analysis of individual manufacturing sectors.

Weaknesses • Limited education of labor force • Low female labor force participation • Non-competitive transport and logistics sector, low

quality airport and limited air services • Limited business services • Limited access to business finance • Red tape limits business creation, leading to delays

with registration and licensing • Foreign Direct Investment low • Political limits on markets in US and OECD countries

Strengths • Turkish Syrian Trade Agreement • Access to GAFTA markets • Strong entrepreneurial culture • Little indebtedness as result of owner finance • Good services and one-stop shop licensing at Sheik

Najjar

Threats • De-industrialization trends • High dependency (30% of jobs) on vulnerable textile

sector • Syrian trade liberalization threat to domestic market • Foreign trade liberalization in Europe threatens export

market via trade diversion • Energy prices to rise to levels of world market

Opportunities • Economic Development Unit at Mayor’s Office opens

public sector dialog with private sector • Decentralization may raise Aleppo competitiveness • Central Government change in attitude towards and

support of private sector • Private sector business climate will improve with

reduced red tape and regulation • Aleppo branding and name recognition • Proximity to European market provides edge where

fast reaction times matter

4.2 Textile Sector

National Situation: Nationally, more than 30,000 (out of a total 100,000) firms work in the textile sector (both formal and informal), producing a little over one third of the manufacturing production and employing 4.5 percent of all workers.9

9 All of these are rough estimates. The Central Bureau of Statistics reports that in 2007 there were 99,404 private industrial sector establishments, see Table 4 of Annex 5. These were mostly in the manufacturing sector.

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According to the Oxford Business Group’s 2009 Syria Report (OBS 2009), Syria’s textile exports increased from US$ 0.4 billion in 2005 to US$2.4 billion – an annual increase of 145 percent for each of the two years following 2005. Since then however, textile producers report a collapse of the market, for which data remain largely missing. The principal evidence comes from a reported decline of the domestic market, where ready-made garment producers have lost much market share (though exactly how much is not known) and from the export data prepared by Consultant, based on Aleppo Chamber of Commerce license data – which likely are representative of those for the country as a whole. They suggest that textile exports have grown by 92.4 percent annually between 2006 and 2008 but declined by 54 percent between 2008 and 2009 (assuming that the second half of 2009 duplicates the first half). Hence, while exports indeed declined hugely in 2009, exports in 2009 remain well above those in 2006.

The key question for the sector concerns the sources of the decline, and whether the decline suggests permanent changes or is simply a short-term phenomenon as a result of the world-wide recession. We will try to answer these questions for Aleppo below. Aleppo Situation: Textiles are the traditional backbone of Aleppo’s economy, going back hundreds and perhaps thousands of years. Located on the Silk Road, Aleppo was an early importer of silk, and in nearby Homs produced its own silk for more than a thousand years. Even today, Aleppo’s textile sector is extraordinarily diversified with a presence in all stages of manufacture and trade, starting with the processing of raw materials, including wool, cotton, and silk; the production of yarns; production of a diversified range of cloth from traditional hand looms to weaving with Jacquard attachments and modern cloth production; dyeing and printing, and the manufacture of all type of clothing. It also remains a player in trading and in the Old City maintains a bourse, which traditionally was a price maker for the Middle East of yarns and cloth.

Aleppo likely is the home to about 35 percent of Syria’s textile firms, and perhaps a slightly higher share of textile employment and value added.10

There are no statistics yet that show the impact of the recent downturn on employment and production. The only solid evidence comes from export data. However, many textile producers have reported severe losses; some have closed business; some are considering moving to other markets such as Egypt. Most have halved the number of shifts or even closed down part time with a severe impact on employment.

However, the industry today is a small player internationally, as China and India dominate the textile market and many smaller countries have raised their export share, such as Pakistan and Bangladesh.

The following looks first at the reasons for the decline. It then asks whether the decline will be short-term or long-term. It is argued that this varies by textile subsector, and that some are more vulnerable than others. Finally, it asks what to do. This is divided into immediate emergency actions and long-term actions.

a) Reasons for Downturn

Reasons for the recent downturn likely are the result of a combination of several factors:

Between 2004 and 2007, textiles accounted for 28.0 - 35.8 percent of net domestic manufacturing production. Textiles have a bit higher than average number of workers per establishment, so 30,000 establishments is a rough estimate of the establishments nationally. In 2007, industrial employment was 14.2 percent of total employment (see Table 4 of Annex 3) and since textile employment will also have been about one third of this, this would have the textile sector use about 4.5 percent of total employment or 225,000 of the almost 5 million workers residing in Syria in 2007. 10 Aleppo industrialists often claim much higher shares. We have not been able to verify this. Our estimates are based on DoI’s reported 10,277 textile permits (5,100 of industrial level and 5,177 of handicraft level), see Table 2 of Annex 5, which would be 10 percent of industrial permits nationwide, and 34 percent of textile permits nationwide, see the previous footnote.

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• World-wide Recession: The short-term effect of the world-wide recession has reduced demand for all type of consumer goods both in domestic and international markets. The strength of this effect in the textile market is unclear. While not considered durables, they in fact are. Hence, their life can be stretched and purchase of replacements can be postponed.

• Syria’s Political Situation: Developments in Lebanon and other issues have led to a significant cooling of relations with a number of trading partner, including the US, European Union, and France. While the situation has improved recently, all industrialists report that they have greater difficulty selling in Europe, and that their partners often tell them that the political situation makes it difficult to buy Syrian imports. It is not clear how strong this effect has been though. The problem with this explanation is that the export sector enjoyed boom years in 2007 and 2008, i.e. for some time after these difficulties started. For example, the US Syria Accountability Act dates to 2004, and hence, predates the textile boom – and the bust of 2009 coincides with a significant thawing in political relations.

• Competition from China: Syria in recent years has faced growing competition from China, particularly in Europe but also in Middle Eastern markets traditionally served by Syria including Saudi Arabia, Jordan, UAE and Iraq).11

• Increase in Government-set Syrian Prices: The Government has raised the price of energy (though keeping them below border prices)

This competition accelerated in 2005, when China joined the WTO, leading to the elimination of quotas (with several agreements on temporary quotas that eased the transition). Under a bilateral agreement of 1977 (eventually to be replaced by an association agreement), Syrian exports to Europe are free of quotas and tariffs, though this has not helped Syria to protect market share. Another factor was the signing of the Qualified Industrial Zones agreement between the US, Jordan and Egypt, which meant that goods produced in Jordan and Egypt would not have any tariff and quota restrictions to the US market, which Syrian goods are subjected to 35% tariff duties. Finally, Syria has lowered its import tariffs on textiles, and increased quotas. Local industrialists also claim that there is a flood of illegal imports in contravention of quotas – something that by definition is difficult to verify. Industrialists estimate that their share in the Syrian domestic market has declined from a virtual monopoly to perhaps less than 30 percent, at least in some product categories – and it would be of interest to learn more about the timing of this decline and the specific products involved. It should be noted that Syria remains a beneficiary of Euro-One agreements that free European importers of 10-12 percent tariffs on Syrian imports. However, this seems insufficient to compensate for the lower prices of Chinese competitors.

12 and the wages of public workers.13

A final point worth noting is that in Syria the cotton market remains government controlled, and until recently, government charged cotton prices above those in the world market. This added to producer cost (who therefore preferred imported mixed yarns to the Government’s cotton).

Both have significantly raised production costs and led to a significant rise in consumer prices both in 2008 and 2009. The private sector usually matches public sector wages (though anecdotal and survey evidence suggests that on a per hour basis, private sector wages remain much lower than public sector wages). At any rate the effect has been to raise production cost.

11 This section greatly benefits from input from the SEBC. 12 The price of diesel heating oil rose from 9SP to 20.65 SP; the price of bottled gas from 165 SP to 250 SP. The price of electricity had already been raised according to a schedule dated 1 September 2007. 13 According to the SEBC, the last increase in public wages was in May 2008 based on legislative decree No. 24. The decree raised salaries and wages for civil servants and military personnel in ministries, departments and public institutions, companies and public sector enterprises, municipalities and local government units by 25%. The decree also instructed “to increase the salaries and wages by 25% for private sector workers, cooperative and joint ownership companies not covered by the provisions of the Basic Law for state employees.”

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However, the pricing practice was recently discontinued, and hence, this should reduce this part of the cost structure.

• Other factors: Industrialists suggest that the investment climate in Syria is much worse than in Egypt, Tunisia, or Morocco – all alternative sites for their plants. However, it is clear that the climate for the private sector has improved in Syria, and that a host of measures have made it easier to do business. Hence, this cannot have contributed to the recent downturn. It is however, well worth analyzing how and why these places are perceived to have a better business climate – despite the fact that their labor cost is not likely to be lower.

Another factor mentioned is an excessive reliance during the 1990s on Russian and ex-Soviet Union markets. This is said to have contributed to a lowering of quality that has made the industry non-competitive. There were also a number of large-scale barter trades, which made it possible to return relatively shoddy textiles for equipment purchases made in Russia. This is difficult to evaluate, though it is clear that at least some of the recent export growth was driven by exports to Europe, so at least some producers produce goods competitive in OECD countries.

Finally, several firms mentioned difficulties with authorities that assess profit taxes based on turnover, rather than actual profits. Hence, that for 2008 they had to pay high taxes despite evidence of losses. This again raises questions as to the quality of administrative data (as these numbers enter the national accounts). It also suggests that an immediate way to assist the industry is to not charge for non-existing profits.

b) Nature of Downturn

While there is no denying the significance of the downturn, it is important to note that this was from a short-term boom. In fact, the Years 2007 and 2008 appear to have been an exception rather than a rule. Exports in 2006 were a mere US$ 16 million, but tripled in 2007 and 2008 to US$ 51 and 59 million. The expected ‘downturn’ in 2009 therefore leaves export volumes at US$ 27 million, or at a level higher than in 2006 (assuming that the second half of 2009 duplicates the first half). Put differently, the downturn does not seem to be as harsh as it is made out to be. If there is a lot of over-capacity, then it is based on investments made based on exceptional boom years.

Of course, in Syria numbers always need a lot of interpretation, and nothing is quite as it seems. Industrialists suggest that the earlier export figures may significantly undercount true exports. Put differently, exports were much higher before 2007 than recorded. The reason is that Syrian export laws required that exporters repatriate revenues from their exports at the official exchange rate. While the free market rate in 2005 and 2006 stood SL 52-53 per US dollar, the official exchange rate during these years (until at least 2007) was SL 11.2 per US dollar, see Table 18 of Annex 3. This meant that exporters under-declared the value of their exports, to minimize exchange penalties based on their export declaration. However, during the period 2006-08 government requirements changed in several steps the share of export earnings that had to be exchanged at the official rate. As this share declined, incentives to under-declare the value of exports decreased.

The point here is first that export figures cannot be trusted, but more specifically, the export boom of 2007 and 2008 may be an artifact. Exports may have been just as high in 2005 and 2006. This of course is significant, as the current export bust is not a decline from a two year boom, but a decline from long-term export levels. It also illustrates just how difficult it is to rely on administrative, secondary data sources, and how misleading the results can be, see OBS 2009.

Our own take is that over the last 5-6 years, there was significant export growth and that this growth was real, but that it was lower than the export data suggest, i.e. the export figures prior to 2007 significantly understated the true level of exports. Sheikh Najjar’s investment projects suggest that the export sector felt extremely confident of its future as late as 2006, and this is the reason for the fact that the textile industry so clearly dominates in Sheikh Najjar. However, industrialists did not

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anticipate adequately the threat of China, and that its WTO entry would have real effects on Syria through trade diversion.

The current bust is real, and not simply a short-term problem, at least for some textile products. Syria is likely sitting on significant excess capacity that must be reduced, and that will leave the textile sector with significant lower employment.

c) Subsector Variations by Product

Not all products are similarly affected. Table 3 of Annex 6 shows the export experience by textile product at the 2-digit level. Two product groups have had by far the greatest share of exports – ready-made garments and textile fabrics, yarns and upholstery.

Of these, ready-made garments have suffered the most. Reported exports in 2006 were US$7.6 million climbing to US$13.1 million in one year and to US$ 16.3 million in two. Since then however, industry exports have collapsed. The first half saw exports of US$2.2 million making it likely that exports will have dropped at least 75 percent in a year, and even more if exports decline still further in the second half of 2009. There is widespread agreement that ready-made garments will not recover in their current form. The sector is very labor intensive, and labor costs are much lower in China and labor quality is higher. Industrialists in particular point to the absence of women from their work force, which they claim makes them non-competitive. The way out is a move toward higher value products and niche markets, where Syria can compete both because of its proximity to European markets and because of its long textile expertise.

The other sector is the textile and yarn production, which tends to be much more capital intensive. This sector saw even higher growth, from US$ 4.5 million in 2006 to US$ 31.1 and US$ 32.4 million for 2007 and 2008 respectively. Yet in 2009 exports will likely have dropped by 39 percent. This would leave the sector with a respectable US$19.7 million, but only if the second half of 2009 yields similar export levels as the first half.

An increasing share of exports in both sectors goes to GAFTA countries and Eastern Europe. To compete in Europe, producers must move to higher-end market niches that require increased quality, rapid reaction, a short term market cycle, small production numbers (rather than the major production runs that seem to be the Syrian business model now), close contacts with markets and buyers, an excellent logistic system that brings products to market quickly, improved design capacity that relies less on traditional Syrian design (or better incorporates modern ideas into traditional Syrian design ideas for a distinctive flavor), close contacts with international designers, and a more skilled labor force. This holds both in the garment and the yarn/textile sector.

The threat to Aleppo from non-action is significant. Aleppo, more than any other city in Syria, relies on the manufacturing sector for its economic base. Textiles are a large part of manufacturing. The greatest threat to Aleppo is the type of de-industrialization experienced by many European and American cities. The second greatest threat is policies to mitigate this threat by prolonging the life of a sector that is ultimately doomed, and as a result to prevent the growth of new more viable industries. Unfortunately right now, we cannot tell, where the textile sector falls. Learning more about the sector, and its capacity to rejuvenate, is one of the immediate actions required.

d) Immediate Actions

Immediate actions should be of two types. First, they should plan and prepare long-term actions, and second, they should tie-over the industry through emergency actions that allow it to implement long-term plans for reform and changes in business model. Here we address the former immediate action. The initiation of long-term actions is discussed together with these actions themselves in the following point.

Most proposals for emergency immediate actions rely on some type of subsidies or protective actions. Among the proposals are:

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• Raising tariffs on textile imports to protect the domestic market;

• Putting quotas on imports from low-cost countries;

• Export assistance, such as reduced profit tax rates (something already available for the pharmaceutical industry);

• Vouchers or subsidies for the cost of labor;

• Vouchers or subsidies for the cost of energy.

Textiles and quotas are likely difficult to implement, as Syria is bound by reciprocity and other agreements, though of course they can be defended as an intermediate measure to ready the sector to competition. In that way and despite their maturity, they are no different from an infant industry agreement or from the transitional tariff and quota regime negotiated by the European Union with China several years ago. If this is possible, then it needs to be restricted to a specific time period such as 18 months, during which one would aim to increase textile sector competitiveness. However, this would help only in the domestic market; it would not help with exports which would require export assistance. These might require export assistance.

It is important however to ensure against fraud and gaming the system. Almost any kind of incentive is likely to be abused, and corruption and lack of transparency in business accounting will add further problems.

As to subsidies on input costs, such as labor and energy (currently being discussed by Government as voucher programs), these seem to be difficult to administer and will result in requests for similar action by other industries. In addition, they are easily abused. For example, what prevents a firm from hiring lots of labor, which it then hires out to non-textile firms? The two firms then share the government subsidy. In addition, energy prices remain below world market prices, and subsidizing energy would collide with other policy objectives.

Export assistance seems to have been very successful in the case of the pharmaceutical industry. In that case, Government exempts 50 percent of profits from its profit tax. We do not know whether other industries benefit from this type of incentive, and whether it is a driving force behind the phenomenal growth of pharmaceutical exports, which have quadrupled in four years, from 2006 to 2009. If so, then this is a subsidy worth considering.

Key is that the textile industry acts jointly. This likely requires a working group at the national level, rather than only from Aleppo. The working group must then act to prepare a good analysis of the existing situation – one that goes well beyond the information put together in this report. It would include a good analysis of the markets lost, the reasons for the loss in each market, and the efficiency gains required to regain market share. In addition, it should include a plan for long-term action that shows, how the industry will overcome its problems over a period of say 2-3 year, i.e. the short-term emergency proposal to the government must already address the long-term strategy for the sector.

e) Long-term Actions

As suggested earlier, a long-term strategy may involve shifting production to higher-end niche market that require increased quality, rapid reaction, a short term market cycle, low production batches, close contacts with markets and buyers, excellent transport and logistics to bring products to market quickly, improved design capacity, and a more skilled labor force. Many of these suggestions are not new, and some have been the justification behind two programs already in place, MVET and IMUP. Both were well funded and have been in place for some time, see the discussion elsewhere. In addition several institutions have been established to assist with modernization. This includes the Clothing and Textile Development Center (under Aleppo’s Chamber of Industry), which provides training of trainers (and may have a role in the implementation of IMUP and MVET). SEBC provides incubator, design, training and other business services. The Syrian Turkish Interregional Cooperation Program (STICP) was established in 2005 funded at the level of US$20 million to assist in

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establishing promising projects that will contribute to employment and economic development (in cooperation between the Governorate of Aleppo on the Syrian side and the Governorates of Killes, Onkobinar Gate and Gaziantep on the Turkish side). The Arab Textile Union representing textile producing countries operates in Aleppo. GTZ is considering establishing The Aleppo Textile House, which would act as a textile and handicraft incubator, and establish an archive for traditional textile design and techniques assisted by the University of Halle.

Hence, there are already a lot of initiatives that could build capacity in the textile sector. A first step would be to review the results of these programs, to evaluate their effectiveness, and to use this information to build better long-term interventions. Beyond this, there are likely no simple recipes. It will take many small steps to revitalize the textile sector – but it is not clear that move to higher-value niche markets will sustain the industry at current employment level. Key elements of a move to a higher value market will include:

• Change in Entrepreneurial Attitude: Anecdotal evidence suggests that in the past, Aleppo entrepreneurs enjoyed high profit margins and short payback periods. They would not invest unless they could recover an investment in three years or less. This may in part be because of the high risks of an uncertain political and economic environment. In the future investors may have to develop a longer term perspective, though it is not clear that this can be taught.

• Increased market exposure: Many of Aleppo’s entrepreneurs likely are very well tied into the international market. Some lived abroad during the height of socialism, when private entrepreneurship was eschewed or their companies had been nationalized. Still, there is likely a need to provide greater opportunity to participate in fairs, international exhibitions, congresses and other vehicles of networking. Embassies can support their businessmen.

• Improved Education: Education differs from training. It is a public sector role, and as discussed elsewhere, Aleppo’s education lags behind. Obviously, this is a long-term issue and not textile specific. Still, firms must review whether their current workforce is appropriate to a new business model that may require a higher share of better educated personnel.

• Training: The problem here is that most firms do not want to invest in their employees, citing labor mobility. Once the employee has been trained, he quite possibly will move to a better paying job elsewhere, and the investment is lost for the firm that funded the training. Still, the entire industry will gain from a better trained workforce, and other funding models need to be developed.

• Increased job relevance of training: A number of training institutions and the university provide training related to the textile sector. It is not clear though that their graduates fit industry needs. This needs to be reviewed. Of course, firms will never be happy with the output provided by universities or training institutions. But a focus on job relevance helps.

• Imitation and Innovation: Few firms will be innovators, but most will be able to copy a successful business model. Both innovation and imitation have a role in successful cluster development. Over the last few years, entrepreneurs in India and China have shown that they can grow their own business models, and often they succeed in businesses where once mighty entrepreneurs from high-income countries have failed.

• Link to Buyers: Ideally, firms will have a product that is sold through retailers such as a large catalog businesses, department store chains, or wholesalers. This requires products that stand out in terms of design, but it also requires connection to buyers. This may need government help, or help from well connected individuals and international organizations.

• Design Skills: These most likely will have to come from an outsider. Since designs can be copied easily, Aleppo firms have invested little. There are a few exceptions, but these are at a very small scale. In future niche markets, a change in design should not be considered a one-time investment. Rather, firms must develop a capacity to change their design each year, or they must build relations with designers abroad, to implement their design in each season or

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each year. While a design can be copied, the capacity to design and change constantly is more difficult to copy.

• Cooperation with Local Universities: This type of cooperation can be useful, but often is not. Few university professors have the professional skills to do practical work, and university staff usually is not very innovative in providing practical solutions. It usually will be better to identify university staff for specific skills and to hire them as consultants.

f) SWOT Summary

Which firms have benefited from the Industrial Modernization and Upgrading Program (IMUP)? What have been the results? How many of the 40 firms assisted in the textile sector have been located in Aleppo? Have they been successful in receiving ISO certification, establishing investment and technology partnerships, and moving products to higher value added segments to avoid direct competition with imports from China?

Weaknesses • Unmotivated labor force with skills below those in

Damascus • Labor costs set by excessive public sector wages • Recent increase in energy prices • Political limits on markets in US and OECD countries • Lack of finance • Products mainly high volume, low value not

competitive with China and India • Lack of expertise with high value niche markets • Limited design skills related to modern textile needs • Lack of competitiveness in domestic market • Lack of good business and economic indicators • Available indicators are unreliable and untimely

Strengths • Long tradition in textiles, deep knowledge of market • Entrepreneurial culture • Low indebtedness as a result of owner finance • Access to GAFTA markets • Strong domestic forward and backward linkages to all

elements of textile production, cluster effects

Threats • Further liberalization of trade threatens remaining

share of domestic market • Reduced import tariffs • Further rise in domestic energy price (still below

world market level)

Opportunities • Proximity and access to European market • Access to international technical assistance for

training and design

4.3 Chemical Industry

The chemical sector has a long tradition in Aleppo, as it supplies cosmetics, perfumes and soaps (for which Aleppo is famous), as well as dyes for textiles and other products. Today, the chemical sector produces a growing variety of products, mostly for the domestic and GAFTA market. Information available for Old City members of the Chamber of Industry show plastic products; plastic textile linens; rubber products; adhesives; shampoos, soaps and cleaners; cosmetics. Products produced outside the Old City must have a broader range and include fertilizers and pesticides for agriculture as well as pharmaceuticals. Unfortunately, an analysis of membership data has not been possible. Petrochemicals: The sector produces plastic products for domestic household and industrial use. Historically protected from imports, about 60 percent of production is for the Syrian markets and another 40 percent for the export sector – mainly Iraq and Eastern Europe. Most of the production is located in Aleppo, though a number of smaller niche market producers are located in Damascus.

While imports from most countries remain restricted, GAFTA and the Syria-Turkey Trade Agreement permit imports. This has already had a salutary effect on prices, even though imports remain minimal.

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As economic studies have shown, a potential market entry is often as effective as an actual entry in generating competition and lowering prices. Hence, it is not surprising that Syrian producers would have lowered their prices to a perceived threat from a Turkish market entry, as confirmed by one of the Aleppo industrialists. Turkish production capacity is many times that of Syria, and as a result can produce at a lower cost. It may also have more modern equipment and production methods, making it unlikely that Syrian firms would be able to enter its market. Exports: Despite its small size, the chemical sector in the first half of 2009 accounted for an astonishing 52.3 percent of all exports from Aleppo (after re-allocation of miscellaneous exports), see Table 1 of Annex 5 and the source data in Annex 6. This includes pharmaceuticals, which made up most of these exports, and which are discussed separately in the next section. Chemicals other than pharmaceuticals, but including cosmetics accounted for just 2.9 percent of all exports. Consistently the best export performance comes from Formica products (a construction and furniture material) probably exported to surrounding GAFTA countries. In addition, a consistently high export performance comes from detergents and soaps, though we do not know the distribution between the two. As mentioned, Aleppo’s soap is world famous, and it is the only product strongly associated with the Aleppo name. Still, these types of exports are small. If the second half of 2009 matches its first half, detergents and soaps will account for US$ 1.8 million and Formica for US$ 7.3 million. SWOT Analysis and Strategic Options: There is too little information, at this time, for a SWOT analysis or policy recommendations.

4.4 Pharmaceuticals National Situation: The industry is a relatively recent arrival in Syria, dating back just 20 years to the late 1980s, when the Government decided to develop a domestic pharmaceutical industry ready to supply domestic markets with standard medical needs. There are currently 60 private sector companies, plus a small number of public sector companies producing mostly generics under manufacturing license from the Ministry of Health, and sometimes under a brand name with branding license from foreign owners. According to the OBS Syria Report (2009), this represents the largest number of drug manufacturers in the Arab world, suggesting considerable concentration and perhaps competitive advantages. The industry does not yet produce high tech products such as vaccines, oncology products, hormones, or blood derivatives but is present in all types of medications that can be taken in tablet form.

According to Aleppo sources, the total domestic market is valued at US$ 700 million, and total domestic employment is estimated at 8,000 employees, of which 40 percent represent university graduates. As a result, the industry has the highest value added per worker.

Prices are set by government, usually equal to or slightly higher than the prices at which generics could be produced by foreign companies. This means that an eventual market liberalization accompanied by the elimination of import restrictions might prove difficult for some firms, though some of the more efficient firms already manage to export, mainly to GAFTA countries.

At the end of the 9th Five Year Plan, exports stood at about 10 percent of total production, though currently exports were estimated by Aleppo sources at about 15 percent of total output. A precise accounting is available from CoC export permits, which show exports of US$ 66.4 million (assuming the 2nd Half of 2009 matches the 1st Half). This would mean that exports are still about 10 percent of the domestic market (assuming the US$700 million total is correct). However, a reallocation of the miscellaneous exports might substantially raise pharmaceutical exports, see Tables 1 and 2.1 of Annex 6. The 10th Five Year Plan calls for exports to grow to 20 percent. To facilitate export growth, the Government passed Law 37 in July 2008, which among other provisions makes it possible to conduct in-house laboratory tests, a provision that had been strongly advocated by the industry.

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Syria’s domestic market is small, and some producers feel that it is too large to support the 60 private companies currently operating in it. Hence, some consolidation is expected. However, expansion to foreign markets is possible, and indeed, of the 60 companies, 20-25 already export. Exports are interesting as exports carry a 50 percent profit tax exemption, and currently about 20-25 of the 60 firms export some of their products. As standards in different countries vary, exports require licenses from each destination country. In addition, each batch destined for export must be tested in Syria by the Ministry of Health, which does not yet permit sampling. A standard complaint is with the Certification of Pharmaceutical Product (CPP), a description of the medicine that accompanies each medicine package sold at the retail level. CPP forms include information on the domestic sales price of the product (set by the Ministry of Health), making it difficult to export at higher prices, even when this is possible or warranted. Other countries allow for dual CPP forms, one designed to accompany exported products and another for domestic markets. Alternatively, they do not contain pricing information.

The industry is under the oversight of the Ministry of Health, which licenses manufacturers and their products. Firms operate in line with WHO supported Current General Manufacturing Practice (CGMP) and in line with written internal Standard Operating Procedures (SOP), with compliance checked randomly by the Ministry of Health (related to water quality, sterility of environment and equipment used, laboratory analysis and monitoring).

The Ministry meets regularly with industry representatives through the Higher Scientific Body for Pharmaceuticals, which consists half of representative from the Ministry of Health and half from the industry.

Aleppo: About half of the 60 national firms are located in Aleppo, including seven of the larger ones, making Aleppo the producer of 60 percent of pharmaceutical production in value terms. Of the Aleppo companies, some 20 have chosen to locate on the road to San Simeon, some 8 km outside the city. The argument for locating in the area was the need for clean and unpolluted air, which could not be guaranteed in Sheikh Najjar (though Sheikh Najjar has made provisions for a pharmaceutical area behind a greenbelt, see Section 6.2). A disadvantage of their current location is that firms continue to have only a temporary site license, rather than the permanent one that would be available at Sheikh Najjar.

Industrial waste management is under the supervision of local authorities. By law, each firm is asked to create an in-house recycling unit for liquids which should upgrade waste water to a level sufficient for use as irrigation water in nearby farming. However, many firms do not comply and there is no consistent enforcement, particularly for smaller firms. Solids are gathered once a month for disposal by the Municipality.

All firms are supplied with electricity from the national grid, supplemented by generators. However, other essential infrastructure is missing, including access to the internet, which surely must be a problem for a high-tech industry with export ambitions. As in the case of Sheikh Najjar, workers come from Aleppo and in a few cases, nearby villages. The universities provide an adequate supply of graduates.

Support industries exist in Aleppo in the form of agents for foreign equipment suppliers (production machinery, laboratory equipment) who provide after sale services in the form of equipment installation, maintenance, spare parts and lubricants needed in operations. Additional support industry exists in the transport/logistics and construction sector.

Problems cited include extensive paperwork requirements, in particular in the case of exports, which costs a fixed $300 for each shipment. Other countries are said to be less bureaucratic. Nonetheless, long-term chances for the industry are judged positively, despite the fact that both India and China provide similar products at prices comparable to those charged in Syria. Hence, relaxation of import tariffs would likely see international competitors enter the Syrian market, leading to consolidation of domestic producers and some plant closures. There are however, opportunities in export markets and

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perhaps, in expanding into closely related sectors, such as the veterinarian market and eventually, into technically more advanced production.

4.5 Agro-Processing Industry National Situation: Syria remains an agricultural country with ample opportunities to add value through multi-stage processing. About 21 percent of GDP (2007) is earned in the agricultural sector (Table not shown), much of it exported without significant processing. The agro-food industry produces 24.5 percent (2007) of manufacturing net domestic production (see Table 5, Annex 3), and 23 percent of agricultural exports. Exports have grown from US$ 300 million in 2005 to US$ 1.1 billion in 2007 (according to the OBS 2009 Report, p. 118).

21 companies are publicly owned, under the General Organization of Food Industries (GOFI). The private sector is gaining share however. For example, the Binladen group in a Joint Venture with Spain’s Aceites del Sur owns Syria’s largest olive oil processing plant, located in Idleb near Aleppo. Several new ventures are moving to higher value products, including the Natural Al Jabal Juice Company of Sweda, producing juices, jams and vinegar mostly for export to the Middle East, Europe and the US. This company in June 2008 became the first Arab juice company to receive ISO certification.

The sector is slated for upgrading through the second stage of IMUP, though this will start only in 2010. Of the 100 products licensed nationally in 2007, 45 were in the food sector – the sector that has attracted the greatest number of firms by far in recent years. Aleppo: Agro processing products can be broadly divided into two types. One is involved in primary processing, and is usually located close to its agricultural sources. The bigger the size of the agricultural sector the larger the need for this type of processing. The other type of agro-processing is at the secondary and tertiary stage located closer to residential endusers (who consume soft drinks, biscuits, bakery goods and similar). The larger the urban population the greater the need for these firms. In Aleppo, we expect both types of processing. With an urban population of 2.1 million there is much need for secondary processing, and with its large agricultural hinterland (and a total governorate population of 4.4 million according to 2004 Census data), there is much opportunity for primary processing.

Indeed, Aleppo is surrounded by rich agricultural lands, supported by an annual rainfall of 360mm and an irrigation system supplied by Al Assad Lake and Al-Thawra Dam, that provides the Eastern part of the Governorate with water stopping just 20km short of the Aleppo City. Among the main agricultural products are barley, wheat, chickpeas and cotton. In addition, the olive production of Aleppo and Idleb combined accounts for more than 50 percent of Syria’s total production. Wheat, barley and cotton are still controlled by government, which sets prices and limits the conversion of land to alternative uses.

Of Aleppo’s 31,200 firms, some 3,600 or 11.5 percent of the total operate in agro-food processing. Of these, about one third are classified as industrial (i.e. relatively large) and two third as handicraft. DoI has provided information on the circa 1,200 larger firms and their products, see Table 2 of Annex 5. This suggests that 40 percent operate in primary processing, and many of these likely use some of Aleppo’s agricultural production as input. The principal firms are olive mills (366), canning and packaging firms (10), warehouses (74) and various other type of seed oil mills (cotton seeds, sunflower seeds). Some 29 firms are producing animal feed, and the remainder produces for the population (sweets, drinks, yoghurt, icecream, biscuit, potato chips, bakery goods, chocolate, and similar). Case Study: Consultant looked in detail at one firm, the Chihabi and Jazzar House of Olives Company. The firm produces virgin and extra virgin olive oil mostly for export. Nationally, there are 103 producers of olive oil, though most are small establishments rather than factories. There are 30

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factories nationally, of which 8-10 are located in Aleppo. Of these, two produce for exports, including House of Olives Company. The company holds ISO certification (indicating that it produces according to international standards), as well as the more important HACCP and SMP certificate of the international food industry. The triple certification assists with exports, which are to the Far East including China and Korea, to the Americas including Canada and the US, to the Middle East including Saudi Arabia, UAE, Kuwait, Qatar, and Iran, and to traditional Mediterranean oil producing countries such as Italy and Spain.

There are backward and forward linkages with local producers. The company relies on a local public sector producer of bottles. It receives its olive oil from Aleppo and nearby Idleb, but also buys on the national market or internationally when the price situation requires. It owns large storage facilities which it needs to mix olive oil for consistent taste and aroma, and to manufacture in line with the taste and aroma requirements of different markets. Buying requires elaborate laboratory facilities and training as taster. Equipment is foreign.

Some of the weaknesses identified by management include weak worker qualifications, and the high price of domestic olive oil. Presently, the price of olive oil in Syria is higher than that in other olive oil producing countries, as high temperatures have destroyed part of the Syrian harvest, and as the recession has cut into demand of some foreign producers, leading to a decline in their price. SWOT Analysis and Strategic Options: The case study illustrates several points. First, there is the importance of know-how and long traditions. Olive production and the use of olive oil in many different forms have a long tradition in Syria. At the same time, there is strong competition from other countries. The case study shows that this competition can be overcome, based on high standards, international certifications, production in relatively small batches for niche markets, and careful utilization of raw materials. The company buys its non-refined olive oil not only in Aleppo, but internationally, making use of price differences when possible. Most important, it requires detailed knowledge of the taste palate and preferences of many different markets. Finally, it requires a willingness to invest in high-quality equipment, in this case laboratories and storage facilities that meet high international standards.

Presumably, the same type of criteria can be applied to a range of agricultural products though it is not clear that aiming at higher value niche markets is the only concept appropriate for Aleppo.

4.6 Tourism Industry Syria’s civilization is one of the most ancient on earth, easily reaching back 5 millennia to early city states in northern Syria, and linked over the centuries to the empires of the Phoenicians, Arameans, Assyrians, Babylonians, Hittites, Greeks, Romans, Byzantines, and eventually the Umayyad Caliphate, with the first caliph making Damascus his residence. Most of Syria’s cities have an ancient history, and several such as Aleppo continue to this day to have an old city center that reaches to Roman or earlier times, having been continuously inhabited for six thousand years or more.

Many of its sites have important connections to the great religions of today, including Sunni and Shiite Islam, Christianity and others. As a result, Syria has virtually unlimited tourism potential, a potential that goes much beyond current levels despite recent significant growth. Its coast, mountains and desert areas further add to this potential. Hence, the 10th Five Year Plan foresees significant growth, both to replace the declining potential of oil revenues and to add to overall foreign exchange earnings. Syria’s National Tourism Situation: Foreign arrivals totaled about 6.0 million in 2007, representing annual growth of 8.1 percent over 2003 arrivals of 4.4 million, see Table 9 of Annex 3. Of this, 21.2 percent (1.27 million) were non-Arab foreign nationals, and 78.8 percent (4.7 million) were nationals from Arab countries including 1.45 million from Lebanon and 1.53 million from Iraq. Among the non-Arab arrivals, those travelling on a Turkish and Iranian passport dominate with 486,000 and

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330,000 respectively. The number of all other nationalities is small, with Russian passports the next largest with 44,000.

These numbers are listed here not to fill the pages, but because they tell a story. A significant proportion of Iranian nationals likely visit for religious reasons, as Syria is home to a number of important Shiite shrines; Turkish nationals likely include a large amount of businessmen and individuals engaged in border traffic; Iraqis include a large number of refugees who in recent years have made their home in Syria, but who continue to travel between the countries to take care of remaining business at home; Lebanese likely include a large number of businessmen, as relations have long been strong between the countries. Likely only a small number of tourists visit Syria for its culture or scenery. These are mostly foreign nationals from upper income OECD countries which make up less than 400,000. Aleppo’s Share in National Tourism: Aleppo’s share in total tourism is unexpectedly small: Aleppo Governorate accounts for 22.7 percent of Syria’s resident population, but it accounts for only 16.7 percent (416,498 in 2007) of hotel guests and 11.7 percent of hotel nights, see Tables 10-12 of Annex 3. In short, it has a relatively small share of guests, and those guests that come to Aleppo, do not stay very long. The average guest nights per guest in Syria is 4.6 – the average guest nights in Aleppo is the smallest of all governorates – only 3.2. Moreover, these results are largely consistent across guest nationality. Nationally, the number of nights is shortest for Syrian guests (1.64) and longest for Foreign Guests (6.11) with Arab Guests falling somewhere in between (5.52). But hotel nights for Aleppo are generally shorter than the national average, and shorter than for most other governorates for all three groups of nationalities.

There are several explanations, though none convincing. In general, only three cities stand out in the tourism sector: Damascus, Lattakia and Tartous in that order. Per 100 population, Damascus leads with 53 guests, followed by Lattakia (36.7 guests) and Tartous (24.3 guests). Aleppo has 9.5 guests. This is more than most governorates, suggesting that there is some tourism appeal. However, it likely specializes in cultural and business tourism, which do not require a long stay (as would for example, beach tourism). Aleppo Tourism Market Segments: Aleppo should prepare a full tourism assessment. GTZ prepared an initial assessment in 2004, but this did not build on any original survey data. No assessment is possible without understanding both the market segments that Aleppo currently serves, and those it could potentially serve.

As a start, Consultant in a Tourism Workshop at the Chamber of Tourism asked workshop members to estimate the share of ten different market segments: Cultural tourism; Religious Christian and Religious Shiite tourism; Business, Convention (defined to include all types of events including sport events), and Expatriate tourism; Urban Entertainment tourism (considered particularly relevant to Damascus and Lattakia, which often attract visitors from more conservative Arab countries for their entertainment value); Beach and Mountain tourism; Weekend tourism, and Personal tourism (defined as visits motivated by family affairs, everything from funerals to weddings and other reasons). Participants were given information on the number of Syrian, Arab and Foreign visitors to Aleppo, and they were asked to estimate market shares for each group separately. The results are summarized in Table 7 of Annex 7. Interestingly, the estimate suggested that only about 11 percent of all Aleppo guests were cultural tourists; 25 percent each were business and expatriate tourists and another 15 percent were convention/event tourists.

Translating the shares into number of guests, about 45,000 hotel guests are cultural tourists; 100,000 each business and expatriate tourists; and about 60,000 convention/event tourists. At this point, these numbers must be considered simply an educated guess. To develop a tourism strategy, the Chamber of Tourism should conduct a survey of guests that (perhaps over a period of a year, as the size of different market segments fluctuates with the season), that aims to identify tourist activities and motivations.

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Assuming for a moment that the market shares are correct, they have immediate applications for a tourism strategy. Specifically, most of Aleppo’s tourism is not related to its cultural, religious or historical assets, but rather either to its business and conventions, or to the size of its resident population (which motivates expatriates and leads to visits for personal and family reasons). These segments likely are rather unaffected by typical tourism advertizing highlighting Aleppo’s historical and cultural sites. On the other hand, it may be possible to lengthen the stay of businessmen, or to attract more business conventions by highlighting these sites. At any rate, conventions and business visitors deserve a lot more attention in a tourism strategy than they have received. Expatriate visits also may be largely immune to advertizing, as are visitors who come for personal and family related reasons. Still, the tourism strategy must be designed to reach these types of visitors, most of which likely arrive independent of tour operators. Tourism Capacity and Potential: Aleppo’s tourism potential varies by market segment. We will not review here Aleppo’s well known cultural and historical sites (Citadel, Citadel Museum, Old City, Popular Arts Museum, National Museum, and nearby sites including the Dead Cities and San Simeon). Most cultural tourists visiting Syria for at least 7 days will likely visit Aleppo for one or two nights. Aleppo is attractive as a hub from which one can easily visit nearby sites (San Simeon, northern dead cities) in a half-day trip, and Aleppo has the advantage of hotel rates that are lower than those of Damascus (a claim generally made by tourism professionals, though more precise estimates remain to be prepared). An unweighted listing prepared by SEBC of rates from several hotels in Damascus and Syria shows only a modest difference for hotels of similar ranking.

The potential of the expatriate and personal market segment is related to the size of the population including the size of its rural hinterland (as some tourists will stay in Aleppo hotels, even if their destination lies in surrounding areas). The potential of the business segment is related to the size of Aleppo’s domestic and international export sector – and Aleppo should be doing very well in this segment. The potential for the convention sector is related to the quality and size of hotel and convention facilities available – which should be reviewed in greater detail by the Chamber of Tourism (or local consultants such as SEBC) as part of the assessment (in particular their competitive position relative to Damascus). Cultural facilities also have a bearing on convention business, as convention guests like to visit interesting places that provide for non-convention activities. As important for the convention business is the city’s reputation for urban activities, nightlife, and restaurants – none a traditional Aleppo strength, particularly when compared to Damascus. However, Aleppo’s conservative image and lack of nightlife (the city closes down at 10pm or earlier) may play well to visitors interested in family values and a visit that involves family and children. Hotel Capacity and Utilization: Aleppo’s potential also is determined by the availability of hotels, hotel prices, the cost and availability of transport, marketing and promotion, tourism friendliness of the population and other similar factors. Tables 2-5 of Annex 7 provide information on hotel room and bed capacity.

Perhaps the most interesting piece of information is found at the bottom of Table 5 of Annex 7, which shows Aleppo bed occupancy rates by year. The data suggest that Aleppo’s tourism potential is seriously constrained by hotel capacity. If the data are correct, the bed occupancy rate in 2007 (the last year for which data are available), was 76.5 percent. At the 1-star level, it was even higher with an incredible 80.3 percent, while at the 5-star international level it was still a respectable 61.5 percent. To reach such levels requires an almost 100 percent room occupancy rate. Aleppo’s hotels report a little over two beds per room. However, many businessmen travel single and will occupy only one bed in a two-bed room. Hence, in this case a 50 percent bed occupancy rate actually means a 100 percent room occupancy rate.

In short, Aleppo is seriously short of hotel capacity. Additional hotels have been at the permit stage or under construction for many years, often held up by administrative hurdles. While current hotel owners enjoy boom years, the tourism sector as a whole operates much below capacity, constrained by insufficient hotel capacity. In general, a 50 percent room occupancy rate year-round should be

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sufficient for economic profitability (generating sufficient income to recover capital and operating cost and to provide an adequate return on the initial investment). A 25 percent room occupancy rate should be sufficient to break even on operating cost. The demand is clearly there to suggest a major expansion in hotel capacity.

We do not know what has happened to hotel capacity and occupancy rates in the past two years – though sources at the Chamber of Tourism should have information on new hotel openings since 2007. A 2009 list of hotels is annexed as Table 3.1 and 3.2 of Annex 7. There is also the possibility that the world recession of 2009 will have significantly reduced tourist levels – though the prediction by the LED Team that this will lead to price wars to fill capacity seems overly pessimistic. Aleppo’s past utilization rates were so excessive, that even a substantial decline in visitor levels would leave most hotels well set for profitability. Casual observations for the 2010 season by this Consultant suggest no downturn in the cultural tourism segment. Air Transport: Tourists will spend at least one additional night on average in the city where they arrive and depart. In the case of Syria, 8.8 out of 10 international tourists arrive in Damascus, and only the remaining 1.2 tourists will arrive in Aleppo. This, together with much greater scheduling flexibility, gives Damascus a huge advantage. Human Resources: Chamber of Tourism meetings with Consultant (as early as 2006) suggested the need for a better educated labor force and a private, foreign-assisted Hospitality School. Highly rated hotels often rely on foreign management (or Syrian managers with international experience). Participants in a tourism workshop (July 1 2009) also identified a lack of qualified workers, poor English and foreign language skills, and weak training and workforce development. The LED Team suggested an insufficient local culture and acceptance of tourism. Public and Private Infrastructure: The LED Team identified a range of problems including a lack of parks; poorly maintained public toilets; insufficient or inoperable public telephones; a lack of good street lighting; insufficient parking near tourist areas; the absence of tourist information (including information centers, maps and brochures, appropriate signing at the airport, railroad station, in the Old City and at other tourist destinations); a lack of emergency assistance services for stranded tourists; and the absence of modern technology used to provide tourism services (electronic visual and audio devices to replace tour guides).

The Team also mentions that important Old City buildings remain uninhabited or remain un/misused as a result of inadequate inheritance laws, which make it difficult to transfer ownership or to lease buildings. Buildings owned by the Municipality also sometimes remain vacant or in uses not appropriate to their historical status.

Finally, the Team deplores the status of the entertainment industry including a lack of festivals, theaters (in line with Aleppo’s multi-ethnic mix), music events (with folklore or religious musical performances), nightlife, family oriented activities (including the inadequate promotion of sport events), and fireworks/light and laser shows.

These deficiencies suggest a rich agenda for Municipal and Chamber of Tourism work – though it is clear that the activities implicit in this list, will not always generate good tourism returns.

SWOT Analysis: The following suggests a summary of strengths and weakness of the tourism sector, and some of the threats and opportunities for the future.

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Weaknesses • Limited airport size, quality and flight destination

flexibility • Limited hotel capacity as a result of administrative

hurdles • Severe hotel constraints at the 3rd Class level and

below • Limited night life and entertainment • Lack of marketing and promotion • Lack of web presence • Weak presence at international tourism fairs • Limited human resource capacity (language,

hospitality services) and limited training capacity • Limited local acceptance of tourism • Lack of branding of handicraft products

Strengths • Important cultural sites, UNESCO World Heritage

Site, suggests strong potential for cultural tourism • Strong cultural attractions in Aleppo hinterland,

potential as hub and excursion tourism • Large export sector suggests high potential for

business and convention tourism • Conservative family value orientation suggests

potential for family tourism • Reputed low hotel prices, relative to Damascus,

despite high occupancy rates

Threats • Political constraints and lack of international

acceptance of Syria as tourism destination • Risks of conflict and instability in the region • Displacement of local handicrafts by imports from

China, India, and Pakistan

Opportunities • Multi-country tourism and increased interest in region

by China and Korea • Cooperation with Turkish tour operators • Regional religious tourism • Growing competitiveness from private sector

liberalization and initiatives • Development of tourism sites • Incentive programs for Old City preservation • Marketing and promotion • Greater use of Chamber initiatives

4.7 Traditional Handicraft Sector The traditional handicraft sector produces a wide range of goods based on many different materials including textiles, garments, leather goods, embroidery, wooden boxes, furniture, copper, and metal goods. Crafts or professions are organized in 36 associations, affiliated with the General Federation of Handicraft Associations. Most of these however, are not handicrafts but really represent small business and professional trades, such as the Association of Real Estate Agents, the Association of Truck Transporting, the Association of Attorneys, or the Association of Restaurants and Cafes. A full list of these associations and the number of their members is shown in Table 5 of Annex 5. The 36 associations have over 17,000 members in the Governorate of Aleppo.

Traditional Crafts: Of the 36 associations, only a few are likely to include a significant number of traditional craftsmen as we use the term here. These may include the Association for Carpentry and Wooden Furniture (1,572 members), Jewelers and Jewelry making (1,248), Textiles, Embroidery and Dying (361), Arabic Upholstery (116), Soaps, Detergents and Cleaners (133), Hand-made Glass (318), Sewing, Tailoring and Ironing (1,208), Metal Decorating and Oriental Artifacts (57), and Leathers and Tannery (103).

More detailed information can be obtained from an Old City 2005 Census and from a sample survey in 2006. Both were limited to the Old City (though likely, this is where handicrafts are concentrated). The Census suggested a total of 14,000 business establishments in the Old City, of which 14.2 percent or roughly 1,960 represented production activities. The 14,000 businesses employed some 18,000 workers, of which 20.9 percent or a bit over 5,000 were employed in production establishments. Hence, the average such establishment had about 2.5 workers including owners. Of the 1,960 production establishments, 466 or 23.8 percent were engaged in the production of textiles, and another 266 or 13.6 percent in the production of clothes and garments. Together, textiles represent 37.3 percent of all businesses, and 44.7 percent of all workers. Of the other production establishments, four trades stand out:

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• Leather products, which at the time made up 209 or 10.7 percent of all handicraft establishments, and 12.9 percent of all handicraft workers;

• Wood products, which made up 194 or 9.9 percent of all handicraft establishments representing 8.4 percent of all handicraft workers;

• Engineering products including steel and iron, metal products, and machine and tool products, which combined made up 370 or 18.9 percent of all handicraft establishments, representing 13.5 percent of all handicraft workers; and

• Furniture, which represent 12.2 percent of handicraft establishments and 9.1 percent of handicraft workers.

Demand for Handicrafts: Though we lack good data, an informal review suggests several types of customers for the traditional handicraft sector:

• Demand for traditional upholstery textiles. These are usually produced of a mixture of cotton and synthetic (for a lower cost and greater durability) yarns. These textiles come in complex patterns, produced through the use of punch cards by the equivalent of a Jacquard loom. Given the high cost of the cards, patterns are used for many years.

• Demand by Syrian residents for traditional garments, still worn in mainly rural areas, or to family functions such as weddings, funerals and other life cycle events. While patterns may have been simplified or are implemented with embroidery machines, they still involve handicraft and are reminders of long-established traditions that often vary from village to village.

• Demand by Syrian urban residents for home furnishings, which still have many traditional elements. Aleppo still has an entire market with wood furnishings, that represent a mixture of Victorian and traditional carvings, upholstery and inlay work.

• Demand by Syrian urban residents and businessmen for gifts, presented either to domestic or international friends and clients. These items often are new interpretations of old handicraft items, which can take a wide variety of forms, including wood carvings, leather goods, textiles, inlay, basket weaving, and copper. As in the case of home furnishings, they are of unmistakable local taste, and address a very different market than tourist items.

• Demand by Middle Eastern customers, often from high income countries on the Saudi Arabian peninsula. Their demand is similar to that of the demand by Syrian urban residents and it is served in the same shops.

• Demand by tourists, mostly cultural tourists who buy keep sakes to remind them of their trip or to bring home as gifts. These items have a folklore quality. They must be representative of perceived local culture, yet fit into the home milieu of a typical higher income OECD country. Increasingly however, these items are imports from other countries, including India and Pakistan. This is true in particular for textiles such as shawls, napkins, ready-made jackets and other ‘Syrian’ flavored dresses, where Syrian producers have lost much market share.

• Demand by tourists in high income niche markets. Some innovative shop owners have developed new niche markets, that provide quite pricey items, in a range of $50 - $400, manufactured by women in Palestinian camps, older Armenian women, or Syrian women that have benefited from handicraft training (for example UNDP training in Jabal al Hoss). This involves mostly elaborate shawls, but also painted bone boxes and other items made to the foreign tourist market, sometimes with high quality designer input.

• Demand for Aleppo traditional (ghar) soap. Eng. Georgi’s paper has a lengthy section on Aleppo’s traditional soap manufacture, and reports that 50 large soap workshops produce as much as 20,000 tons annually. The soap is made of olive oil and laurel leaf oil, with the

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addition today of industrially produced alkali soda ash, though in a few cases and for the luxury export market, bars may still be produced using the soda ash obtained from a desert plant, the salsola kali found in the region of Palmyra. In general the higher the laurel leaf ratio, the more expensive the soap. Consultant found Aleppo soap offered on at least a dozen sites on the internet, including at Amazon.com for $14.00 a bar, which likely would cost SL 500, or $ 1.00 in Aleppo.

The point here is that the ‘traditional’ handicraft sector is constantly evolving. Except for the soap market, it is traditional only in the sense that producers use selectively traditional styles and materials. However, production methods have changed to allow multiplication at a low cost, designs are constantly being adapted, and the market is being increasingly specialized and non-traditional, often surviving only because of initiatives of innovative shop keepers who receive direct feedback from their customers and employ women and men in rural areas to produce items to their specifications. SWOT Analysis and Policy Options: Almost certainly, traditional handicrafts have lost much business, and the number of craftsmen that practice these crafts is constantly declining. The LED Team attributes this to several reasons, all worth a discussion:

• Illegal imports: Imports clearly have affected handicrafts. However, while some imports may be illegal, most likely are not. Syria has made a fundamental decision to allow for greater trade and imports as part of the price it feels must be paid for greater access to export markets and to increase domestic competitiveness.

• Lack of innovation: There is much evidence to support a lack of innovation. Consultant purchased five years ago upholstery textiles, which had been produced in a major production run ten years earlier, and which are still being sold today. In the world of textiles, fabrics change by the season, and constant design innovation is a must. It is not clear however, that universities should be involved as innovators (as sometimes suggested). Innovation will likely come from retailers that have a very good understanding of their customers, and that provide innovative designs for craftsmen/women to execute. Alternatively these designs come by hiring regional international design expertise. There are several good examples of innovative retailers with the capacity to design and innovate.

• Lack of international exposure: There is much to support this suggestion. Most craftsmen operate on a small scale that does not permit participation in international exhibitions or fairs without government support. The problem however, runs deeper. Large export orders to international buyers are not likely unless one can compete on price. Handicrafts have a huge advantage with tourists in their own country. If they cannot successfully compete with imports in their home market, they are unlikely to export, given the large margins involved in the export trade. Still, more can likely be done to increase awareness of export markets and to link Aleppo craftsmen to international buyers. A start is a visit to the many internet sites that promote fair trade and the international handicraft trade in particular (see for example HomecraftsHome.org, CreativeHandicrafts.org, the Fair Trade Organization, International Fair Trade Association, Ten Thousand Villages, and many more). Ties to high ranking international sponsors also would help.

• Communication barriers: Poor language skills are indeed a major impediment. There is a strong correlation between a retailer’s success with foreign customers and his ability to explain his products. The LED Team suggests free language courses in addition to basic business lessons. English or French are of course, already being taught in school, and retailers in the Old City have great opportunities to practice their language skills. There is no better way to learn a language than to practice it daily with customers in one’s store.

• Lack of Branding: Branding can take many forms and requires several inputs such as promotion, repetition, and creative naming or sloganeering: • Promotion: This requires extended advertizing and repeated association of Aleppo with

certain products such as in Aleppo Textiles, Aleppo Soap (similar to Alaskan Trout or

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Maine Lobster). This is relatively easy to do but requires a long-term and sustained effort. As the brand is not protected, everyone else can compete for the same product.

• Certification: Here one should focus on the best, i.e. the top 30 percent or so of certain type of categories. This is limited to products of high quality and it may be possible for Certified Aleppo Soap – though few other products come to mind. There must be clear criteria that the product must meet to meet certification standards.

• Naming: Here a name is associated with a particular product. Names can be copy righted, such as Champaign, or Burgundy Wine which must come from the region to which the name refers. Names could be Pure Aleppo Soap, Old Aleppo Soap, or Historic Aleppo. For example, only restaurants and hotels in the Old City could use the name of their hotel, followed by Historic Aleppo.

• Slogan: A slogan goes beyond a name, but rather includes desirable associations with the product to be sold, such as Aleppo: The Way it Used to Be; or Aleppo: City on the Silk Road; or Aleppo Soap: All natural and soft.

• Funding: All branding campaigns require funding for registration, certification, invention and testing of names and slogans, and marketing and promotion. Funding could come from the city, if only to make sure that names and certificates are given fairly rather than those who paid for them.

It should be noted that a search on the internet finds a strong association between Aleppo and its soap, but little evidence that Aleppo is known for much else. The LED Team suggests that promotional campaigns be related to Aleppo’s four season climate, warm and welcoming population, close proximity to Europe and Turkey, historic bazaar, all-natural soap, world-known traditional textiles, famous rich cuisine, world renowned school of music, and traditional craftsmanship and art movement.

Chapter 5: Enabling Environment, Support Services, Factors Businesses do not operate in a vacuum. To be successful they need a dense network of business support services and good factor supplies including high quality labor. As mentioned at the start of the previous chapter, there is some evidence that cities grow and thrive, not because of the particular goods they export, but because of the business environment that supports its export industry. For a city to grow, it should have an environment that is supportive of business, that offers a large variety of business services making it easy to start or grow a business, and that attracts innovative people which like the place not just for its job but for the quality of life it provides. In general, as an agglomeration grows in size, it is able to attract more specialized businesses and services. This in turn reduces the cost of doing business and offers consumers greater choice, raising business productivity and consumer satisfaction. In turn, this attracts more business and in-migration, generating a virtuous cycle of growth and increasing agglomeration economies.

Unfortunately, much of the evidence for Aleppo remains anecdotal. There are no easily available statistics that would show the variety of businesses available or how Aleppo compares with Damascus or other cities. Reality is much more differentiated than can be captured by statistics. Ice cream vendors sell their product in an infinite variety of tastes and locations, at many different prices and with a variety of amenities. It is difficult to compare how one city compares with another in its offerings. Still, it is possible to make a few qualitative generalizations:

• City size: The larger an economy, the greater the variety of services on offer. This of course is all else being equal. In general, towns dominated by one or two large enterprises tend to have less variety. At any rate, Aleppo has the size and agglomeration economies to provide excellent business services.

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• Private and public sector: The private sector is singularly well suited to generate variety, as many different businessmen constantly assess the situation and aim to better others. Cities with large public sector will generally do less well. This should favor Aleppo.

• Rules and regulations: Some rules are essential to business, to create a level playing field and to establish the playbook, by which business must act. However, too many rules stifle innovation and reduce business creation. Syria probably has the worst of these worlds – too many rules, but very few that people actually abide by. Both the central and local level of government can contribute to a reduction of paperwork, plus a more even enforcement of those rules that matter. This is a long-term project, and as mentioned elsewhere, it goes well beyond the establishment of one-stop shops and similar efforts.

• Openness to differences: Recent research suggests that the most innovative individuals like a climate of openness and tolerance. Immigrants from Iraq, Palestine and other areas, and a variety of cultures flourish when people are tolerant and give each group its space. These types of results do not easily traverse to different countries, but it is without doubt that Syria’s multi-cultural and multi-religious society allows for a great variety of contributions. Encouraging these contributions and making them welcome is important. Consultant is reminded of the embroidery he finds in one Old City gift shop from old Armenian women and from a nearby refugee camp – very different but each contributing to the variety on display in the Old City of Aleppo.

• City image: Many businesses thrive based on the image of the city of which they are a part. Aleppo is too little known outside Syria to have much of an image, either positive or negative. And yet it has much of what it takes to build a positive image, based on its Old City, its long history, a station on the silk road, and a central location in Syria teeming with multi-cultural people. It is industrious, and a place in which one could easily spend a week discovering new places each and every day. It should be easy to build an image based on these elements. Yet it requires a sustained effort supported by the tourism and business sector. Both benefit. As mentioned earlier, cities with a great image have an easier time to attract businessmen to conventions and to attract innovative people, and they can do so at a lower wage.

The above notes cannot substitute for solid empirical analysis, or at least evidence based on surveys and focus groups. But they can provide some guidance as to where to look. 5.1 Business Support Services

There are many reasons why a dense network of business services makes a region more competitive. Any time a manufacturer has access to a service, it need not supply this service itself. This makes business start-ups easier, it reduces the level of investment needed for business creation or expansion, and it has the potential to raise efficiency.

Most businesses do not need a particular service all the time, or if they do, they do not always need the service at the same level. Hence, buying the service (rather than producing it in-house) reduces idleness and raises efficiency. While there are sometimes good reasons to provide the service in-house, it will always be better to have a choice. Given a choice, the business can either provide the service itself or contract it out. Having a choice in the frequency, quality level, and type of service is worth something.

Unfortunately, we know relatively little about the level of business services available in Aleppo or in other cities in Syria. The data simply are not sufficiently detailed – though an analysis of chamber membership data for Damascus and Aleppo may provide this type of information. Given the lack of statistical information, we must rely on anecdotal evidence and reasoning based on plausibility, though this tells us little about the competitiveness of Aleppo in this area relative, to say other cities such as Damascus.

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It may help to list some of the services a manufacturing firm depends on. These include financial services including letters of credit and loans; advertizing, promotion and printing services; translation and legal services; office services such as data management, computer, editing and writing, word processing, filing, and secretarial services; recruiting and staffing services; repair services for machinery, office equipment and cars; computer services related to software, hardware, data storage and backup, imaging, and business systems; transport and logistical services; event planning services; insurance services and risk management; signage; consumer information such as survey information, focus groups, demand analysis. The list of such services is endless. There are only two comments:

• Impact of forced relocations: First, Aleppo is in the process of requiring the forced relocation of many firms to Sheikh Najjar or other industrial areas. This tends to be expensive and disruptive to existing business service networks. Manufacturing firms in Sheikh Najjar report they have to take lengthy trips home or to Aleppo whenever they are lacking rudimentary office supplies, repair services, or other inputs essential to their pencil, paper, or other services or inputs. This is further described in a section dealing with spatial issues below.

• Financial Services and Loans: Virtually all manufacturing investment is based on equity capital supplied by entrepreneurs and their family or investor friends. Few businesses have access to business loans. The problem is similar throughout Syria of course – given continuing limitations of the finance sector. However, it would be a much greater constraint to the economic development of Aleppo, which relies for its job generation predominantly on the private sector.

Public Sector Business Services: Some business services can be provided by the public sector or by semi-public institutions, such as the three Aleppo chambers. A report by Eng. Elias Georgi14

• Export promotion: This can take the form of national and international trade fairs, presence on the web, facilitation of export licensing, product placement and numerous other activities. It is not clear which organization actively promotes Aleppo exports such as food products (olive oil), pharmaceuticals, textile products, or chemical and engineering products, other than the interested entrepreneurs. According to SEBC, Aleppo participation in international trade fairs remains small. SEBC in 2000 became the first Syrian institution to offer export promotion services, mainly for the textile and agrofood sectors, by choosing the fair and participating companies, training staff, preparing booths, arranging logistics and offering financial assistance.

lists some of the following business services as missing from the offerings of public service organizations (Chamber and others, see below). Notes and comments have been added by this Consultant:

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• International business matchmaking

In 2009 the Syrian Export Development and Promotion Agency created.

• Information about international trade and law

• Information about international trade practices

• International arbitration and dispute settlement

• Training on decisive factors to increase international competitiveness

• Product design: SEBC likely is able to provide research required for design specifications – but actual product design often comes from the client or highly specialized firms. In discussions with Consultant, chemical firms producing plastic furniture and equipment reported that they rely on the design of their clients. The same held in for engineering firms

14 Eng. Elias Georgi, Appraisal of Business Umbrella Institutions in regard ot Economic Development in the Old City of Aleppo, Aleppo (April 2008) 15 Examples of fair participation supported by SEBC include in the agrofood sector Anuga, SIAL, SIAL China and Canada, Alimentaria (Spain), Gulfood (Dubai); and in the textile sector CPD, Fatex and Heimtextil.

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surveyed by Consultant. A producer of high-quality olive oil had a detailed knowledge of the oil tastes of different markets throughout the region, and it seems unlikely that anyone other than he would be able to ‘design’ the correct olive oil flavor and packaging.

• Technical product development: The situation here is likely similar to that for product design. Again, entrepreneurs receive technical advice from many different sources, including the sales representatives of the equipment they purchase. These representatives often provide long-term assistance in the form of maintenance and spare parts, but also may bring other information to the table, including information on the use of the equipment elsewhere, that may be useful to product development.

• Quality control and quality assurance in the manufacturing process

• International management training: Training could be a function of the Ministry of Industry, or other ministries. It could also be pursued at the local level by the chambers. But there is little indication on Chamber websites of any activity.

• Training for international marketing: Ditto.

• International market research: This is likely something that SEBC does, based on individual firm’s requests.

• Export insurance: Insurance is underdeveloped, and I am not sure of the type of insurance available to firms.

• Export loans: The Commercial Bank provides export loans.

• Incubator services for new companies: SEBC provides incubator services with the aim to help young entrepreneurs with start-up projects.16

• Product testing: Among the product testing institutions are the Industrial Research and Testing Centre (IRTC), the Laboratory of the Syrian Customs Authority, the Laboratory of the Syrian Arab Standards and Metrology Organization (SASMO), the Pharmaceutical Control Laboratory under the Ministry of Health (pharmaceutical firms must test each product batch as a precondition for export), the Laboratory of the Olive Oil Bureau, and testing facilities of the Foreign Trade Centre (FTC). SMO, IRTC and FTC appear to have a role in the testing of cotton and cotton products. All of these are located in Damascus. Additional laboratories are located at Aleppo and Damascus University, and in the Research and Scientific Studies Centres located in Damascus and Aleppo. It clear however, that Aleppo is at a disadvantage in terms of the ease of access to testing facilities.

The Industrial City of Sheikh Najjar assists new enterprises with its One-Stop Shop, in addition to providing land with ready infrastructure services. However, it ultimately is simply a land development agency, without special knowledge in incubation services.

• Infrastructure services: The Industrial City of Sheikh Najjar provides infrastructure services, and indeed, this is its main attraction. There is also the General Establishment for Free Zones and the Investment Office, though Consultant knows little about their role in Aleppo. In the future, it is hoped that the Strategic Economic Planning Unit in the Mayor’s Office will have a central role in pointing national and international investors to institutions that can assist them, whether with infrastructure, serviced land, or other business services needed.

The Georgi Report also reviews organizations that could provide additional business services, though all of them are semi-public sector organizations. His review includes the three Chambers, the Clothing and Textile Development Center (CTDC), the Industrialist and the Commercial Business Women Committees (IBWC and CBWC), the Syrian Young Entrepreneur’s Association (SYEA), the Pilot

16 SEBC lists 7 start-ups assisted so far, including companies that provide a search engine, a website, a business directory, event management, digital advertizing, and human resource management.

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Syrian Apprenticeship Scheme, the Modernization of Vocational Education and Training Programme (MVET), the Syrian Enterprise and Business Centre (SEBC) and various international cooperation programs, such as the PUM Nederland Senior Expert Management Cooperation Program, the Japan International Cooperation Agency (JICA), and the Syrian-Turkish Interregional Cooperation Program. Strangely, neither MAM nor GTZ are mentioned, though both are active in local economic development, including Aleppo.

Unfortunately, there is little information on what exactly any of these institutions have done during recent years in providing business services, or whether in fact they consider this one of their responsibilities or objectives. Most likely, a more thorough review will come up with relatively little (this Consultant reviewed activities reported on the web sites of some of the institutions).

The recommendation therefore is to establish a LED Working Group that will identify the demand for different business services, the institutions that could supply them, and to develop a plan of action.

Private Sector Business Services: The Georgi Report notes that there is a paucity of private sector suppliers of business services such as training services, marketing, feasibility studies, product design and export promotion services (though clearly, many of these services exist, even if they do not operate at a best practice level). For purposes of the LED strategy, the question is which services exist, why some do not exist, and whether the issue is a lack of demand, or government constraints.

Based on Consultant’s experience, any business service involving the gathering of information, can be constrained by government regulations. For example, almost all marketing and promotion requires some type of survey activity, yet it is illegal to conduct a survey without express permission from the Central Bureau of Statistics (CBS). Since CBS conducts surveys itself against substantial fees, there is a conflict of interest in granting such permission.

Similar problems may exist in many areas, making it difficult for private business services to develop and flourish. The public sector extends to numerous services that elsewhere would be provided by the private sector. Quality and service is often very low, but hiring such firms may make it easier to secure permits. Public officials entrusted with licensing and permit tasks during the day, may run their private business at night, often working on the very products that require a permit during the day. These constraints to the development of the sector and the economy at large, cannot be easily overcome, and may limit the effectiveness of working groups and the interest of stakeholders to participate in them. 5.2 Financial and Insurance Services

Financial and insurance services are essential to the functioning of a modern economy. Following the bank reform of 2003, an increasing number of international banks have established Syrian affiliates since 2004, see Table 17 of Annex 3. Enactment in 2009 of a new law for Microfinance Institutions also has seen the establishment of the First Microfinance Institution (MFI) related to the Aga Khan Foundation. The insurance industry also is seeing rapid growth, though Consultant has little information on the sector. These changes already are a major stimulus to the availability of credit and to rapid product innovation, particularly in the consumer market. It is now possible to obtain loans for a variety of consumer products such as cars, and private banks have started to offer loans for housing and housing rehabilitation, though much of this is mainly for the well to do. Public sector banks also have started to experiment with new loan products, though interest rates remain unrealistically low for a country with consumer price inflation rates between 12% (2007) and 15% (estimate for 2008) Bank Business Lending: Aleppo industrialists report little change in business lending. Central Bank limits the maximum term of a business loan to 7 years, and the maximum size of a loan to 20 percent of a bank’s core capital (essentially, paid up capital or common stock plus retained earnings). Since most private banks remain small, they cannot lend in volumes needed for Aleppo’s businesses. Even loans of $ 5 million would usually exceed bank capacity under these rules. However, there also has been little appetite for risk among lenders, and even smaller business lending is limited. Hence,

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Aleppo businesses continue to rely on their own funds or draw capital from informal networks of friends, family and business partners. As the Central Bank plans to raise paid-up capital requirements for conventional banks to $50 million (and for Islamic Banks to $100 million), larger loans should become feasible, though as we suggest later, it takes numerous services to make the financial sector successful, and these services will have to come on-line over time. Branch and Headquarter Location: For Aleppo, a larger problem is that all banks and insurance companies are headquartered in Damascus. Both private and public sector banks are strictly hierarchical in their organization, leaving local bankers with little decision making power other than routine consumer lending. Yet most of the sector growth and innovation will be at headquarters, and unless Aleppo is able to attract headquarters of some bank and insurance companies, it will lose out on much of this growth potential.

The number of branch offices is also small. As shown in Table 17 of Annex 3, Damascus including Rural Damascus, usually attracts 2-3 times the public sector branch offices as Aleppo, and the relationship is likely worse for private sector banks, which so far have a much smaller branch network than the public sector banks. Of course, private bank branch locations reflect business opportunities. Since private banks cannot yet lend to most businesses and since consumer borrowing in Aleppo is more constrained by tradition and religious prohibition than in Damascus, they prefer to locate elsewhere. This needs follow-up and confirmation. There is now at least one Islamic Bank, and other banks offer Islamic products, so traditional objections to interest should no longer matter. Sector Potential: Finally a note on the overall growth potential of the financial service and insurance sector. This potential is much larger than many may expect. A fully developed financial sector leads to numerous new services currently not available or not fully developed in Syria. To give a loan, banks need information from credit rating agencies (which in turn must have available to them a credit history, which in turn requires a general public that buys on credit – none of the conditions likely to be met in many years); they need underwriters and insurance companies to spread risk; they need to insure against fire, flood, and other eventualities; and they must be able offer borrowers insurance against a loss of job, life and injury; they need to obtain title insurance, and title insurance specialists need to be able to assess the risks associated with title; they need a well developed and efficient court system able to quickly adjudicate and an executive branch quickly able to enforce court judgments in case of default and foreclosure; they need to be able to rate the risks associated with business lending, and hence, need to critically evaluate business proposals and markets, and to make use of services of rating agencies; they need honest appraisal services for property and businesses and investigative services to deal with fraud. This list probably could easily be doubled, and it generally takes many years to develop the legal and institutional environment for such a system, and the private sector capacity that delivers these services efficiently. The point here is that many of these services will locate in Damascus unless Aleppo will make a much bigger effort to attract such services.

The first step in this process is to raise awareness – both in the business community and the government of the opportunities available in the service sector. It will be up to a working group to identify how to take advantage of these opportunities. Aleppo Stock Exchange: Damascus is scheduled to launch a stock exchange, and Sheik Najjar Industrial City says that it will soon follow with its own exchange. Stock companies have an additional source of finance. Instead of relying on a close circle of friends and family, their own funds, or loans from banks, they issue common stock that can be traded.

As noted by the LED Team, this can benefit Aleppo’s economy by transforming successful family-owned businesses into publicly-owned limited liability companies. It is a way for families to sell their equity, to cash-in their ownership, or to generate additional capital with which to modernize, expand, or generate new business lines. It allows small investors to own part of the economy, and to participate in the gains of the stock (or in its losses, as the matter may be). No longer will a limited few be the sole owners of all directly productive capital. It may also allow foreigners to invest in

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Syria, though many countries and perhaps Syria, will have some restrictions on foreign ownership (Consultant does not know). Perhaps most importantly, it will offer investment vehicles to insurance companies. Life insurance companies collect funds those insured for many years against a promise to make payments at a later stage, upon death or once the person reaches a certain age or encounters other problems. In the mean time, insurance companies must look for a safe way to earn a return on these funds. In the past, Syrian insurers would have had few investment options, and a well diversified stock market portfolio would provide this option.

Of course, it usually takes many years before a stock exchange reaches some scale and scope. Initially, few family companies will want to give up control and few may want to expose the firm to the public scrutiny that comes with public ownership. In Germany, where family held businesses have a long tradition, few of these families have converted their form of ownership.

There is also a question of whether Aleppo should have its own stock exchange. Given the small number of common stock companies, it may be best to limit trading to a single exchange in Damascus. Aleppo would still benefit, but of course, it is another step in making Damascus the financial center of Syria. A few years back, Consultant observed the workings of the Textile Exchange in an Old City Khan that had been the home of Aleppo’s Textile Exchange for years. This Textile Exchange established current prices and future markets, it allowed to take out loans against future delivery of merchandize, and provided quite a number of financial services. At its height, this Textile Exchange set prices for much of the Middle East, so Consultant was told. It is sad to see that these services will inevitably move to Damascus. It is clear that Aleppo once was a powerhouse in the financial and trading sector – and it would be good to establish a Financial Working Group as part of the LED preparation to review possible strategies that may benefit Aleppo and strengthen Aleppo’s financial sector development.

5.3 Transport and Logistics Sector

Transport and logistics are largely owned and operated by government. As observed by the LED Team, ‘government restrictions and subsidies have paralyzed and limited the participation of the private sector even on the subcontracting level’. The Team also observes that the system remains largely traditional, though when queried none of the Aleppo exporters in the textile, chemical, or pharmaceutical sector reported any problems in getting products to market. This requires further review by a Chamber of Industry Committee, which should review current transport and logistics practices, and how they impact new niche market models that require much reduced product cycles, lean inventory management, efficient warehouse distribution and management, and a much greater level of integration into the world logistics system. Simple problems such as government restrictions to internet access, restrictions on access to certain internet suppliers or sites, or constraints imposed by the United States on the use of its logistics services all impact efficiency. The following review is limited to the airport, but a much more extensive review of the transport system and its business use is needed, as it impacts the competitiveness of Aleppo relative to alternative sites such as Damascus.

Aleppo International Airport: Airports provide business with the main source of international access. Good airport connections are essential both for businessmen flying in and for Aleppo exporters and importers to keep in touch.

• Airport Economics: Unfortunately, Syria’s air traffic is too small to support two international airports with similar service levels, and hence, Damascus as the seat of government holds a huge advantage over Aleppo, with four times the number of planes landing, eight times the passenger throughput, and 40 times the freight throughput per day. As shown in Table 13 of Annex 3, Aleppo landed roughly 10 planes a day, and had 1,136 passenger arrivals and departures daily, as compared to Damascus’ 42 planes and 9,220 passenger arrivals plus departures. No cargo was unloaded in Aleppo and the total freight throughput was 2.3 tons per day, as compared to 85.2 tons in Damascus.

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Since Aleppo is the leading manufacturing center of the country, having very few direct connections to the rest of the world and virtually no freight connections, must put it at a considerable disadvantage. SEBC reports that 13 airlines fly from Aleppo to 26 distinct destinations. Instead, 37 airlines fly from Damascus to 55 distinct destinations.

Airports have large economies of scale and scope. The length of the airstrip, the electronics and much else is a fixed cost. Hence, until congestion sets in – and neither Damascus nor Aleppo are anywhere close to that point, capital cost per passenger and per landing decline rapidly with increased transport volume. Hence, it makes sense for airport authorities to rely on one airport, and to use other airports as feeder ports to the main international airport.

Airlines also are likely to have little incentive to land in Aleppo. Airport authorities charge the same landing fees at both airports. However, passengers per landing, i.e. arriving plus departing passengers per landing are more than twice as high in Damascus as in Aleppo. Hence, the cost per passenger of landing fees is twice as high in Aleppo as in Damascus. Of course, passengers likely do not mind paying a higher price, as a direct international trip without transit in Damascus represents a gain in convenience and time savings.

What matters even more is economies of scope. From a passenger’s point of view, the advantage of Damascus airport is the range of destinations, the frequency of flights, and the quality of connection. From an airline’s point of view is the greater predictability of flight volumes that comes with a larger market, and the greater capacity utilization. This translates directly to profits.

• Physical and Management Problems: The LED Team identifies other airport problems including:

• A small airport size, and an outdated layout and lack of character – though of course, the airport size is more sufficient for the current small volume of traffic. There are no expansion or modernization plans in the near future.

• Lack of a business lounge and other services for business class travelers, including a lack of internet services;

• Management problems including broken phones and poor hygiene of toilets and public facilities;

• Lack of travel services including information and transfer desks;

• Lack of an airport hotel to handle late arriving or transit passengers.

• Key Problem: To this one may add a broader problem. All Syrian airports are owned and managed by public authorities – the General Civil Aviation Authority under the Syrian Transport Ministry. There is no competition for passengers or freight, and hence little incentive to produce better services, to attract a greater number of passengers, or a greater number of airlines. There is no price competition as prices are set by national authorities with little regard to demand or supply. Syrian Airlines suffers from severe constraints in its aircraft, as a result of the Syria Accountability Act mentioned earlier, that makes it difficult to obtain parts and to adequately service its planes. This may also impact domestic service if air tickets are subsidized and private providers cannot compete. A one-way ticket Aleppo-Damascus costs SP 1,750, or about $40, though it is not clear whether this covers cost. Syrian Arab Airlines is responsible for airport and airplane services, including catering to all airlines, ticket operations at the airport, and other services.

• Possible Solutions: Ideally, the Aleppo airport would be planned, managed and operated on behalf of the Aleppo community. The local community may have a much greater interest in good air services than is reflected by the current level of service. Yet Aleppo currently has no means to express this interest, either administratively through a political decision making process, or in the market place. If airport services were decentralized, the municipality or

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governorate could improve airport management and the quality of maintenance and operations. It could invest in airport improvements; or it may be able to outsource airport management and operations in exchange for agreed investments and service standards.

If the market were a substantial part of the decision making process, it may be possible for the community to express its interest in better service by agreeing to higher ticket prices or higher airport fees. At present these prices are set centrally, and probably are highly subsidized. But potential travelers may be willing to pay more for direct international flights from Aleppo than for flights requiring a stopover in Damascus. The point is that we do not know – or better, Consultant does not know, as studies may have been prepared that deal with these issues. So there is a need for decentralized decision making and for experimentation with improved service.

A second key requirement is a long-term comprehensive plan, prepared in cooperation with airlines and airport management that simultaneously looks at the improvement of facilities and operations and the level of airline services. This would also look at double-landing options (already in use) where airlines land in both Damascus and Aleppo. Ideally, there will be a commitment by the municipality, airlines, and central government on airport financing and management – which almost certainly will require substantial subsidies.

Railroad: As with other parts of the transport and logistics system, railroads require additional study. Government seems in the process to substantially expand the rail system and with international assistance, is improving the quality of service – though Consultant is not aware of the specific plans affecting Aleppo.

The LED Team mentions that current service from Aleppo (via the centrally located historical Baghdad Railway Station) delivers service via first class and economy trains. First class trains are modern and relatively inexpensive (compared to bus or taxi service) and economy trains use old equipment but are even cheaper and make many more stops.

The problem with both types of trains however, is the frequency of service. Air conditioned buses (with movie service) are operated by private companies, and cost just SP 300-400 per trip (i.e. $6-7), depart every half hour or more often, usually filled to capacity, and make the trip in 4 hours. The first class train needs roughly the same time, but there are only a few trains per day and capacity utilization remains low.

There is some international service by rail, such as a once-weekly passenger train to Istanbul,17

There are some that see the railway system as having great potential both for tourism and Aleppo’s economy, as it has the potential to link Aleppo with Lebanon, Jordan, Iraq, Saudi Arabia, Turkey and Europe. However, for the moment much of this remains a project for the future. The greatest potential undoubtedly is the Aleppo-Damascus link. Rail is more efficient than trucking over long distances. But long distances in the case of Syria mean border crossings that traditionally lead to additional delays. None of the businessmen in Aleppo reported using rail service, but a more extensive review is needed to comment. A place to start is to investigate rail service and use to/from the ports of Lattakia and Tartous.

which takes 22 hours and makes many stops along the way. Most likely therefore, it is used by tourists that want to relive the experience of the historical Orient Express from Berlin or Paris to Istanbul and Cairo. We have no information on the amount of freight service.

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17 The service was mentioned in newspaper articles in 2009, but in fact does not operate.

18 SEBC contributed the following information: Syrian railways have great potential being one of the densest in the Arab World. Total freight volume increased from 8.2 million tons in 2005 to 9.3 million tons in 2008; total passenger volume increased from 2.0 million to 3.4 million over the same years. Plans by the Syrian Railway Company call for a total passenger volume of 10 million and total freight of 30.7 million ton by Year 2025 – a

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Intercity Bus Service: Bus service is provided by private companies, through prices are set by a Committee of the Union of Transport Workers and the Ministry of Transport. Competition therefore is mainly via the quality of service, scheduling, and sometimes, minor discounts. To avoid central city congestion, bus stations in recent years have been relocated to the outskirts of cities, located some 5km from the City Center in Aleppo and some 10km in Damascus. As discussed, bus service is highly competitive with train and air service, and hence holds a dominant share on the all important Aleppo-Damascus route.

5.4 Other Infrastructure

Phone Services: We look at phone services mainly because they can be suggestive of the level of economic activity and in particular the level of international networking (and they have been used in academic studies in that way). Obviously, in an age of mobile phones, land lines have lost much of their importance and some of their indicator value. Still, much international business is still conducted through land lines, which provide access to fax and internet services – though even here communication via satellites is increasingly common.

Having said this, it is surprising that Aleppo phone services and their use are relatively weak, see Table 15 and 16 of Annex 3. Aleppo residents and businesses make fewer calls than the national average, both domestic and international, and call fewer minutes. While statistics are for the Governorate, they are likely to be indicative of municipal phone use too, as the Municipality represents 50 percent of the Governorate population. Specifically, Aleppo business and residents make 6.7 long-distance domestic and 2.1 international calls annually per person, as compared to 21.1 and 2.6 calls for the country average. The number of land lines per resident is one of the lowest among all governorates, with 14.2 lines per 100 population, as compared to 35.8 lines in Urban Damascus, 19.7 in Rural Damascus, and 17.8 as a national average. This is lower despite the fact that the Aleppo Governorate is more urban than all but two governorates, Urban and Rural Damascus: 62.4 percent of Aleppo’s population lives in urban areas, as compared to 53.5 percent as a national average.

The point here then is that Aleppo’s communication records do not seem to reflect its status as eminent international business center. While one would expect much lower service levels than in Damascus, it is not clear why it should be lower than in most other governorates. While a greater use of mobile phone services may be one of the reasons, it also is possible that the indicator reflects accurately a more inward looking economic system with fewer international networking than the business record would suggest.

Water, Wastewater, Electricity Access: A final note relates to other infrastructure services. Access to safe water, wastewater, and the public electricity network is roughly the same for all municipalities throughout Syria – though a bit higher in Municipal Aleppo than the Governorate of Damascus. Hence, 97.3 percent of housing units have access to safe water, 96.8 percent to wastewater, and 98.7 percent to electricity, as compared to respectively 94.9, 91.6 and 95.0 percent in Damascus. However, access indicators say little about differences in service quality and reliability.

Availability of reliable water and electricity are hugely important for industry. To guarantee reliable supplies, some companies have their own wells or large water storage tanks, and virtually all have

threefold increase in passengers and tenfold increase in freight from current levels. Among the plans are an improved signaling system and new or improved lines from Deir Al Zor to Palmyra; a line to Amman (upgraded from current narrow gauge service); a line from Kamishly on the Turkish border to Bukamal and Iraq; and a link from Tripoli to Tartous. SEBC also mentions a line planned to Gaziantep, though newspaper accounts suggest that this line is operational since 2009.

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their own electric generators. Still, the short time required to switch from network electricity to the generator can lead to large losses and waste products, estimated at 5-6 percent of production for some chemical products and probably higher for some textile products that rely on sensitive machinery.

Unfortunately, no data on electricity outages are published, though surely they must be available in company records.

As to water, there are two surprises: First, while Aleppo is generally regarded as water rich relative to the rest of the country (largely because of the proximity of Lake Assad), per capita consumption is about average: 109 liters per capita per day, as compared to a national average of 114 l/c/d. At the same time, while Damascus is considered water-poor, its consumption is 227 l/c/d – by far the highest in the country. However, the consumption in Rural Damascus is only 78 l/c/d and hence consistent with limited water supplies. One of the reasons for the high consumption in Urban Damascus may be that 32 percent of water is not ‘priced’, i.e. is taken free of charge.19

The second surprise is the high water loss rate – second only to that of Rural Damascus. 41 percent of the water produced is lost, as compared to a country wide average of 33 percent. A high loss rate is indicative of very old water delivery systems or more likely, low maintenance and significant management problems.

At any rate, Aleppo competitive advantage related to water may be limited.

It is difficult to generalize from this evidence. However, there is additional anecdotal evidence from businessmen to suggest considerable service problems. These suggest that in Aleppo it can take many years before services become available. Indeed, a lack of good services is a major reason for the success of Sheikh Najjar and a motivation to locate there. Unfortunately, there is no comparative anecdotal evidence from other municipalities, and hence Aleppo’s competitive position is difficult to assess.

5.5 Labor and Human Resources

Among the many relevant LED issues, two or three stand out. One concerns the quality of the labor force and ways to prepare workers for the job market. Some of this preparation comes from colleges and universities, but for most prospective workers, this comes from primary and secondary schools, vocational training institutions, and private technical institutes offering specific skill training.

Another concerns the quality and efficiency of the job market, which must match job seekers to available jobs, something that in Aleppo remains largely informal and family-based. Yet another concern is gender issues, particularly in light of Aleppo’s low female labor force participation rate. Finally, a LED strategy would be concerned with job informality and the division between formal and informal labor market. Social legislation strongly impacts business behavior, as many firms strive to remain below the employment threshold that would require them to participate in the social security system. Strong efforts are currently being made to reduce the division between the two, first by making it possible to lay-off redundant workers and by reducing job security in the formal sector, and second by forcing greater participation in the social security system of formerly informal businesses. Literacy and Attainment: As already discussed, Aleppo’s human resource base is weak in terms of literacy and educational attainment, particularly for women, see Section 3.4 and 3.5.

The subject is important for Aleppo’s future. As discussed, over time Aleppo will have to shift its economic focus to manufacturing niche markets, some of which will require greater skills. In addition, manufacturing overall will decline, initially as a share of the economy, but eventually even in absolute numbers. Traditional manufacturing jobs have limited educational requirements – and even a lack of

19 The translation is that water is free. We do not know whether this means it is taken illegally, or it is simply not metered but a fixed access fee is being paid.

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literacy often does not preclude being an excellent factory worker. However, this changes as a job’s skill content rises. Aleppo must prepare itself by encouraging rising graduation rates at the preparatory and secondary school level, and by improving job relevant training. Universities, Colleges, Technical Schools: Traditionally, the public sector has provided jobs to university graduates that wanted it. As a result, universities have grown considerably, often much faster than faculty. Most faculty teach as a second job, and while there have been attempts to raise faculty qualifications, universities in much of the Middle East lag woefully behind in international standards. None are ranked among the top 500,20

With more than 65,000 (mostly undergraduate) students, Aleppo University is the second largest in the country, behind Damascus University (which until the end of French rule was the only university in the country). With over 2,400 faculty members it was created in 1958 and opened in 1960. Business however, complains about the quality and relevance of the education. The Chamber of Tourism has attempted for a number of years to establish its own institution in gastronomic and tourism services as it feels that public institutions are not responsive to market needs.

and Syrian universities rank in the bottom one third of over 6,000 universities based on academic qualifications. An alternative ranking system based on web presence however, shows that Aleppo University is ranked 703 out of more than 9,000, as compared to Damascus University ranked only 2748.

In recent years an increasing number of Syrians have sought an education abroad. At the same time, Syria has passed enabling legislations to open private universities, and a number of institutions have opened in or near Damascus. According to SEBC, private universities with a presence in Aleppo include Al Batraa University, Private University of Science and Arts, Ittihad University, Al Maamoun University, Al Khaleej University, and Ebla University. However, some of these may be quite small, and it remains to be seen whether private universities provide a better education, as there is no ranking information yet.

The Aleppo LED Team strongly recommended that the Municipality support the establishment of private universities in or near Aleppo, including research centers with good ties to both government and local business. It also notes the need for professional and technical institutions to provide professional skills in the areas of tourism, medicine and nursing, business administration and IT, textiles, foreign languages, and film and cinema.

As an additional comment, Consultant notes that much can be learned from reforms introduced in Jordan during the 1990s. As in Syria, Jordan sought an educational system that was more closely related to job skills. Universities often provide skills that have little relation to available jobs. Elaborate vocational training institutions modeled after the German apprentice system also fail to satisfy job needs, as a three year education in many areas is not rewarded by higher earnings. There is a need for much closer cooperation between the business and educational sector. There is also a possibility to provide incentives to qualified businesses for on-the-job training, and perhaps, job related training through evening schools. While some of this requires national initiatives, cooperation between college/universities and the business sector (represented by chambers and leading business groups) is largely a local matter that could be encouraged by the Municipality and the Governorate. Given that many professors already hold a job in the business world, establishing this type of relationship should be easy. Gender Issues: In Aleppo, only 8.9 percent of women of working-age participate in the labor force, as compared to 85.3 percent of men. In much of urban Syria and in our comparison cities, these rates are much higher and often double this, see Table 3 of Annex 4. At the same time, businesses in the

20 Based on the most widely used ranking system, the Academic Ranking of World Universities (ARWU) prepared annually by Shanghai Jiao Tong University.

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textile industry, ready-made garments in particular, complain about their lack of competitiveness with Asian producers, in part because they lack access to a female labor force.

There are likely several reasons for the low participation rate of women. One is tradition and cultural attitude. Women may simply feel that their place is with the children at home. If this is the major reason, then clearly traditions run much deeper in Aleppo than elsewhere. Another is that opportunities may be limited. While textile producers are interested in hiring women, they will not employ both genders on the same shift. But to make a switch to an entirely female labor force may be difficult. Having men and women on the same shift may still run into cultural barriers. Third, there is the role of pay and unemployment. In virtually all parts of the world, female pay is lower than that of men. While that seemingly is less of a problem in Syria (based on two surveys conducted by the Consultant in Old Aleppo and Old Damascus), unemployment rates are at least twice those of men. Once women have experienced a prolonged spell of unemployment, early in their career, they may simply give up and never return to the labor market. Fourth there is the problem of labor market inefficiencies. There are no employment or placement agencies that link jobs to job seekers. Most jobs are found through an extensive network of families and friends, but this will not make sure that the best person receives the job. Finally and perhaps most importantly, there is a lack of role models for young women. There is so far a lack of a virtuous circle: Women advancing in a career, becoming a role model for younger women, who in turn remain in school longer and strive for a better education, marry and have children later, and remain in the labor force longer. Some statistics continue to put the total fertility rate terrifyingly high – at 3.12 according to some estimates, and this almost certainly would be higher in Aleppo.

Only a few of these problems can be approached through local policies. Examples are:

• Preferences for women: Both in the political and government administrative arena, there could be a much larger presence of women. It is up to local authorities to nominate a greater number of women to positions of authority.

• Increased access to schooling for women: Women often stop school early because of a lack of home support for continued schooling, distance to schools, and other impediments. Promotion of continued schooling is an appropriate and long-term effort.

• Female networking, support groups and placement centers: Some of these already exist, for example the Industrialist Business Women Committee under the Chamber of Industry, but presumably, much broader networks could be formed.

• Placement Services: One agency charged with providing placement services is the former Agency to Combat Unemployment (ACU), now under a new name. This presumably could be more effective in providing placement services. Entire new instruments could be developed through the internet and mobile phone services.

Informal Sector: Social legislation has had a profound impact on the labor market. Firms with more than 4 or more employees must enroll their workers in the Social Security Foundation (SSF). Associated with this are restrictions on firing, an excessive administrative burden, high contributions to the SSF combined with perceived low benefits. As a result, most employers under declare their employees, often by wide margins. Employer contributions are 17.1 percent of salary and employee contributions another 7 percent. As a result, both employer and employee are often happy to avoid these contributions, all the more so as the expected payback in the form of retirement benefits is thought to be low and medical services offered by SSF are minimal.21

21 Consultant has not analyzed this point and does not know whether this is the case. What matters for the argument is simply that people believe it to be the case.

Consultant has not analyzed this point and does not know whether this is the case. What matters for the argument is simply that people believe it to be the case.

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It may also have led to grueling schedules of plant operations. Most employers indicated that they operate their plants (demand permitting) in two 12 hour shifts six days a week, rather than the internationally more common three 8-hour shifts daily. As a result, private industrial workers work 72 hours per week, as compared to 35 hours in the public sector – at roughly the same level of pay. The rationale for this mode of operations is not fully understood, though likely it is the result of fixed costs, either related to SSF or the cost of busing workers from home to workplace (a common practice, given an inadequate public transport system, and the location practices of industrial zones).

As already mentioned, new legislation recently proposed will make it easier to lay-off workers, but will also make it more difficult for firms to avoid contributing towards SSF. This would, if implemented, substantially reduce the number of workers outside SSF though it may not eliminate other forms of informality related to illegality. Depending on the type of business, permits may be required related to the environment, health, location, industry, municipal administration, exports, and building construction. Other definitions of informality relate more to the size of a business, with the literature sometimes considering all employment in businesses with less than 10 workers as small and informal. Either way, much of Syria’s current employment is informal by either standard.

In general, informality should not be seen as a vice, but a virtue – particularly in the Syrian context. While we do not have good empirical data for Syria, lessons from the rest of the world suggest that it is the informal sector that generates most of the job growth. It does so at a much lower cost per job than the formal sector. Evidence from permit data suggests that investments in industrial zones and new industrial cities runs in excess of $50,000 per worker – an amount much too high to lead to the full employment of Syria’s labor force growth, estimated to be close to 4 percent annually.

The informal sector also is an important part of the formal sector’s supply chain which uses it for its maintenance and repair services, for numerous inputs, and to outsource small jobs that it can deliver more cheaply than the formal sector. The informal sector assumes important training functions for the labor force, including training in behavior and attitude related to punctuality, reliability, industriousness, the implementation of orders, and the monitoring and reporting on their implementation – all important part of the learning for a young and in many ways, developing labor force. The informal sector with its small number of workers, most likely is in a much better position to provide this type of training than large enterprises. Consultant re-iterates these points because he recently has seen reports from influential foreign advisers denigrating the contributions of the informal sector, thus feeding into government attitudes already set against the informal sector. In fact, informal sector wages are as high as those of the formal sector – though not as high as those in the vastly pampered and overpaid (particularly given its low efficiency and productivity) public sector.

The proper place to start in reducing the formal sector is in the review and elimination of the numerous unworkable rules and regulations that have given rise to a large informal sector. This does not mean a one stop shop – which essentially retains unworkable and inefficient rules, but tries to make their administration more efficient. A more fundamental change is needed than that, which asks questions about rules – their purpose, the benefits and costs of their implementation, and the benefits and costs of having them on the books if in fact they cannot be implemented.

Much of this goes well beyond what Aleppo’s LED strategy can accomplish. Much of it requires central government action. Still, there is a substantial degree of freedom at the local level on how central government rules are implemented, and of course the Local Government adds its own maize of rules. To the extent that it has control over these rules, it should sit together with the business sector (with adequate representation from the informal sector – and not just the government installed functionaries of the informal sector) and review ways to ease on rules and regulations. This can be done through a working group established during strategy development.

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Chapter 6: Spatial Issues The CDS Steering Committee has asked for advice on spatial issues within the context of the economic development strategy. The spatial organization of a city can have a strong impact on its efficiency, ease of job generation, the productivity of its firms, and the quality of life of its resident consumers. The following are some of the questions one may want to address:

• What is the impact in Aleppo of industrial zoning, including in particular the relocation of industry into a variety of specialized industrial zones and the new Industrial City Sheikh Najjar? Is this helpful to the overall task of job creation? What type of jobs is likely to be created in this manner? Will it result in excessive commuting? How does it impact the generation of agglomeration economies?

• How can industrial area be made to work better, given that some (such as areas for car repairs or other small workshops and repair shops) are not easily accessible to consumers? Given that Government has already invested heavily in these areas, how can these be operated to be least disruptive of the economic life of the city?

• What is the impact of rising sprawl at the urban fringe, and the suburbanization of commercial activities? What about the emergence of suburban shopping centers? Is this a good idea, and what is their long-term impact on the Old City and current City Center?

The following addresses only two of these issues. It deals with some aspects of Aleppo’s industrial zones and the Industrial City of Sheikh Najjar, and it briefly comments on master planning in general. Aleppo’s previous master plan came into force only in 2004, but revisions started almost immediately afterwards. A new Master Plan is ready for approval but it sometimes takes several years, before final signatures are obtained. Consultant has not sufficiently studied the new Master Plan to comment, and hence, his notes remain generic, based on a review of master plans in several cities.

6.1 Zoning and Master Planning

Urban master planning and the planning for the industrial cities follows a traditional 20th century, heavily interventionist, zoning approach that strictly separates residential from commercial and industrial uses. Industrial uses must usually locate in industrial areas, separated by size and sector. Until recently, most industrial users located outside industrial zones, but they are increasingly asked to re-locate into industrial zones. Since 2003 a new Industrial City, located in Aleppo’s northeast, has attracted most new industrial companies, particularly if they are large, with a lot area of at least 450 m2. Smaller workshops remain in the City of Aleppo, though in specially designed industrial zones. Master Planning: In Syria, spatial issues are addressed through a master plan. Each municipality and most towns have an approved master plan to guide their spatial development, which after approval at the local and national level (by signature of the Minister of Local Administration and Environment) has the force of law. However, master plans are being produced by physical planners with no training in economics or finance. They often include large infrastructure projects, yet never address the question of financial and economic feasibility. Because funding is usually thought to come from Central Government, it does not enter local decision making. Reality is not addressed. Planners plan and build in line with ideal standards, whether affordable or not. If people are too poor to afford these standards, this is not the planners’ concern. As a result, in Aleppo (and in many other cities), as much of half of the population lives in informal settlements, which originally were built outside the master plan area. At a later point, these areas often are made part of the master plan area. However, they remain informal settlements. While their land is now zoned residential, the buildings have no building permit, and it is usually difficult to retrofit them to conform to building standards.

Beyond this numerous other establishments do not fit the regulatory framework. For example, workshops and industrial firms often are located in areas not zoned for this purpose. According to the Department of Municipal Permits, when Consultant inquired in 2004, as many as 70 percent of all

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workshop found themselves in illegal locations, following the passing of the 2004 Aleppo Master Plan. Syrian law does not have a grandfather clause (which makes illegal uses legal if they were in place prior to the issue of new codes or regulations). As a result, workshops and informal settlements in general, often face a great deal of uncertainty. Zoning: There are of course, good reasons for separating land uses, and such separation has been considered ‘best practice’ for over a century. Land uses have neighborhood effects, both positive and negative. Industrial uses sometimes pollute through noise, smell, or solid and liquid wastes. Commercial uses impact their neighbors through congestion and parking problems, but also have a positive effect on other commercial uses nearby, as shoppers like to browse and compare, and hence are attracted to larger shopping areas. Hence city planners seek to zone land uses so that negative neighborhood effects are avoided, and positive neighborhood effects are enhanced. Industrial land uses are located so that their pollution does not negatively impact nearby residents, and commercial uses are located so as to generate economies for retail customers.

In recent years however, a new school of planners has advocated the mixing of land uses (in what is called New Urbanism), so as to put shops and jobs within walking distance of residential areas and to increase density.

There are several points here:

• Urban Density: First, Syrian cities (Damascus and Aleppo in particular) remain very dense and often mix land uses. So there is no need for a new urbanism, since dense mixed use development was never abandoned (with some caveat later).

• Residential and Commercial Zoning: Second however, land uses are mixed in Syria not because planners had greater foresight. In fact planners in Syria have been more rigid about separating land uses than those in many other countries. They are mixed because it is relatively easy to be illegal. For example, planners in Aleppo and Damascus have long built entire residential neighborhoods (4-8 story apartment blocks) without shopping facilities. However, as part of their building codes planners require a strip of 4-5 meters green area between sidewalk and building. This area was then used illegally to construct countless shops in the building’s basement or ground floor. Very little of this development is legal, though it has resulted in mixed land use that serves a good purpose, and it has substantially raised the residential quality of life.

• Industrial Zoning: Third, planners in Syria are also overly rigid about separating industrial from other land uses. Each master plan requires that all workshops and industry move into industrial zones. Zones are designed to separate large from small businesses, and sometimes according to other differences. For example, all car repair shops are to locate in one or two specialized industrial areas. Residents from all over the city would have to tow their car there, pick it up there, or visit more often if questions arose about the nature of the repair. As in the residential example, this is a form of planning that does not consider the private cost it imposes on society and that does not ask fundamental questions about benefits and costs of the regulations it imposes.

• Relocation Cost: Fourth, there are increasing pressures on firms to relocate to industrial areas or the Industrial City of Sheikh Najjar. The manager of Sheikh Najjar mentions the relocation of several hundred firms from Aleppo proper to Sheikh Najjar over the next 2-3 years. Again, planners do not consider the cost they impose on firms (and indirectly on society), and they have not weighed benefits against cost. These are not merely cash cost, but cost in terms of networks destroyed and jobs lost.

• Sprawl and Suburbanization: Fifth, while we noted Aleppo’s high urban density, recent planning may encourage sprawl and low density development similar to that found in other countries. Part of this is inevitable – as income and car ownership rise, people can afford to live further away and demand more space. It is not clear however, that planners should lead

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this change. In Aleppo, they do through land uses that leap-frog into surrounding rural areas (shopping centers, amusement parks, the new Industrial City of Sheikh Najjar).

Recommendations: The spatial planning, master planning and zoning deserves much greater attention. Here are a few suggestions and recommendations.

Allow for mixed uses unless counter-indicated by good analysis. We do not see any reason why all or even most workshops should be moved into industrial areas. New industrial areas lack the diversity and multiplier effects of older areas. The simple fact that all buildings and capital is new means a tremendous reduction in diversity.

• Many land uses cannot afford the high rents associated with new construction. Even within the same trade, there is usually a variety of producers and suppliers, and a traditional city will generate a wide variety of options in terms of price, quality, and technology used.

• Many land uses prefer to locate in central cities or close to residential areas, rather than in industrial cities or zones far from the center.

• Many suppliers will be deprived of their traditional source of demand, yet will not be able to follow to the suburb or to an industrial zone for reasons of finance, age of owner, or other reasons.

• New establishments use different technologies, and in virtually all cases, will operate much more capital intensively than establishments elsewhere. The literature proves convincingly the much higher capital intensity (by a factor as high as 10) of new establishments in new cities or new industrial areas. Opportunities for outsourcing also will be more limited.

• Given high capital intensity, job generation will be lower.

Consider the private cost of land use decisions, prepare a B-C analysis where appropriate. There is little indication that planners are aware of economic decision making rules. However, they must consider the private cost they impose on business and residents. There is need for judgment rather than blind implementation of rules.

Stage infrastructure. Aleppo’s master plan area is much larger than required for the next 10 or maybe, even 20 years. This is fine, as long as the master plan indicates priority areas for development, or the staging of infrastructure.

Polycentric development: Aleppo remains a mono-centric city, on the way to poly-centric development (for example, through a new center at Sheikh Najjar). Research does not yet show clear benefits (in terms of shorter average commuting times) for polycentric cities. Consultant doubts that such benefits will exist in the case of Sheikh Najjar, as most of the workers will come from the metropolitan region, with higher than average commuting times. At least, that is the anecdotal evidence suggested so far.

Limit relocation requirements for existing industry. As in much of the world, existing locations should be respected, i.e. grandfather clauses should eliminate the forced relocation, unless there is a good reason to require it, in terms of the health of city residents. A better approach is to test and monitor the environmental performance of establishments. It is possible to set high standards, and then to leave it to the individual firm how to meet them. It can do so by moving to a location where standards are less demanding, or it can meet them through mitigation and reduction of its pollution.

6.2 Industrial City of Sheikh Najjar

This section looks at the planning and implementation of Sheikh Najjar. The city is on land originally part of Aleppo Municipality, but it is now a separate industrial city, which in the long-term will be governed by a Local Council, much like other municipalities. The city is being discussed here as part of the spatial planning and industrial development of Aleppo Municipality.

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Planning: Under legislation dating from the late 1990s there are today three industrial cities: Adra in the Governorate of Rural Damascus, Hassia some 40 km from the City of Homs in the Governorate of Homs, and Sheikh Najjar, some 10 km outside Aleppo city boundaries in the Governorate of Aleppo. A fourth city is currently being implemented in the Governorate of Deir Ezzor, and in the long-term, each Governorate is to develop an industrial city. Similar to the industrial cities developed in Egypt during the 1980s, the cities are located outside city boundaries, and eventually will have nearby commercial and residential development.

Planning for Sheikh Najjar started in 2000 and infrastructure development commenced in 2002. The first industrial licenses were granted in 2003, and construction and operation of factories started shortly thereafter. Under Decree 57 of 2004, Sheikh Najjar became a city independent of the Aleppo City Council. Development of industrial cities and industrial zones (including those inside Aleppo municipal boundaries) are overseen by a Directorate of Industrial Cities in the Ministry of Local Administration (MLA). Najjar operates under a Board with 15 members headed by the Governor, and managed by a General Manager who is also the Vice-chairman of the Board and signs all contracts. Six members of the Board are from the private sector, and of these 4 are voted to their position by the industries of the city. Also members are the presidents of the Chambers of Commerce and Industry (both Governorate institutions).

Sheikh Najjar has a gross area of 4,412 hectares (44.1 million square meters). Of this, 45.0% or 1985 hectares on 6,132 plots are saleable industrial land; another 19.2 percent are housing; and 7.2 percent are infrastructure.22

• Zone 1 is for light and non-polluting industry, with 19.8 percent or 393 hectares of the industrial land on 2,216 plots. Plot sizes vary between 450 and 600 m2, and 60 percent of the land has been sold. The area is served with all utilities including roads, water, electricity, sewerage and telecom.

The remainder is for green area, commercial, administrative and other uses. The industrial area is divided into three zones.

• Zone 2 is for medium sized industry and includes separate sections for polluting and non-polluting firms, on a total of 579 hectares with 3071 plots of 1,000, 2,000 and 4,000 m2. The zone is fully served, and has a separate sewer system for polluting and non-polluting non-industrial waste. 90-95 percent of the land is sold. Sewerage currently is served by the Aleppo Municipality, though industrial owners claim that they must treat their own wastewater, and that water is designed to serve as irrigation water for surrounding agricultural areas.

• Zone 3 is for Heavy Industry on 1,012 hectares of land with 681 plots of 6-8,000m2, 12,000m2 and 15,000m2 – though some investors bought several adjacent plots amounting to as much as 100,000m2 or 10 hectares. Of this land, about 50 percent has been sold. Again, all land is said to have full infrastructure service, though this may not apply to some of the land that remains unsold.

Syria divides industry into four groups – textile, engineering, chemical and agro-food – and Najjar follows this classification in dividing its land to locate similar firms in close proximity to each other. Textiles make up the biggest share of the planned land allocation, with 37 percent of the industrial land, followed by engineering (30 percent), chemical with 20 percent and agro-food with 13 percent. The pharmaceutical industry is part of the chemical sector, but because of its clean-air requirements is being offered land in isolation from other industries behind a green belt. A small amount of land has been introduced for an additional industry, software (actually a service industry that likely encompasses a range of maintenance and computer services). Other land uses include 68 has for an Administration Center with the municipality administration, a one-stop-shop, a technology incubator, a conference and symposium hall, hotel, the stock exchange,

22 The small infrastructure share is explained by the large industrial lot sizes.

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and services such as fire and police stations among others; and 150 has for a Media and Exhibition City. About 30 service centers are distributed throughout the city, each equipped with a shopping center to provide food and commercial services, a fire station and a clinic. Finally, 1,108 has (or more than 25 percent of the total land) are green areas, both along all major roads and to the south of the city. A train station is planned to be linked to existing tracks either at some 7km distance serving Jabrin Industrial Zone or at some 4km distance serving Muselmia Free Zone. Other transport and logistics plans involve the relocation of most trucking firms to Najjar City, and the establishment of warehousing services. Housing rounds out current plans. The City expects to generate 125,000 jobs of which perhaps half might be filled locally, for a total of 62,500, generating a total population of over 300,000. Implementation: Implementation progress has been impressive. By the start of June 2009, 413 industrial firms were operating and an additional 1,129 were under construction, for a combined total of 1,542. Najjar management has sold land to 2,619 investors, and since some have purchased several plots, the number of plots sold is even larger. Indeed, about 60 percent of all land has been sold, leaving only 40 percent unsold (mostly in Zone 3) – and management is confident that Najjar will be fully occupied (i.e. all land will have been sold) by 2013, in just four additional years. The price of land has been raised and is now SL 2,000 per m2. According to industrialists, this is about ten times the price of agricultural land, which sells at SL 200 per m2 – though this of course lacks services.

Of the 1,542 firms under construction (or in operation), 587 or 38 percent are in the textile sector. This seems to correspond roughly to expectations, and it does not seem to suggest a textile sector retrenchment. Another 455 or 30 percent represent engineering firms, again very close to the objective of selling 30 percent of land to engineering firms.

The quality of services in Sheikh Najjar is a major draw. Several industrialists suggested that it takes many years to obtain infrastructure services outside Sheikh Najjar. Those sensitive to electricity outages (a large number of textile and chemical firms) suggest that electricity service is more reliable in Najjar than elsewhere. Perhaps most importantly, Sheikh Najjar’s one-stop shop operates with on-site representatives from all departments involved in the issue of the necessary permits, and hence is able to give temporary operating permits in just one month. Hence, the initial application process is relatively painless, though industrialists interviewed suggest that it still would be very difficult for a foreign investor to find his way through the application process. Hence, it is not surprising that only a small number of firms represent foreign direct investment. Of the 420 firms now operating, 12 are FDI and of the 1,129 now under construction, another 13 are FDI.

By the start of June 2009, total investment put in place is said to have reached US$ 2 billion. Of this $220 million was FDI, and $212 million was government’s cost of infrastructure works and administrative buildings. Current Operating Experience: Relatively little is as yet known about the current experience of the firms operating in Najjar. Still, some feedback is available:

• Sheikh Najjar’s service quality is relatively high, and certainly higher than in other locations. Firms have access to most services. Wastewater is the responsibility of individual firms, though there is also a connection to the City of Aleppo wastewater system, though the City still does not have a functioning wastewater treatment plant. But overall all firms asked indicated that reliability and access was higher than elsewhere.

• Temporary permits are quickly granted through a one-stop shop. Permanent permits take longer – but elsewhere, outside industrial zones, temporary permits is all that is available.

• Employment remains minimal. Najjar management cites employment of 27,200, but this includes construction workers. We do not know the number of workers that work in the industrial establishments. However, firms mention the number of workers they hope to hire in their permit request, and according to these documents, the 233 firms which had been granted

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a permanent license by the end of 2008, indicated plans to hire 2,909 workers. However, there is no information whether the actual number was higher or lower.

• Factory operations are very capital intensive. Estimates based on permit requests of the 233 firms with a permanent license show a capital investment of $59,000 or SL 2.8 million.

• As already discussed, industrialists point to the quick granting of temporary permit and the higher quality of infrastructure services as benefits of locating in Sheikh Najjar. There are however, few complementarities between the firms, and input-output relations remain weak (though a number of firms located in Sheikh Najjar provide building supplies to factories under construction.)

• Land is being sold quickly, but there is considerable land hoarding, with some industrialists buying much more land than they need. Sheikh Najjar is hoping to have sold all land by 2012 or 2013. However, this clearly does not mean that the City is fully occupied – though the distinction is not being made clearly. City management expects the need for an additional city following 2013.

Najjar management undertakes regular surveys that provide information on the types of products being produced, the electricity and water consumed, the number of shifts operated by individual firms, the number of employees and amount of production. These results however, are not available for use by others.23

In this context, there are several recommendations:

• First, make the survey results from Sheikh Najjar available to the Mayor’s Economic Development Team, i.e. Aleppo’s EDU. The information can assist to identify economic problems, to shape economic policy, to provide background information to investors, and to assist with marketing and promotion.

• Second, expand the survey to include additional topics of interest. For example, Sheikh Najjar likely would have an interest in obtaining feedback on the quality of the services it provides, on difficulties encountered, and on special issues such as worker’s journey to work. To keep the survey short, one part of the survey would remain fixed to provide time series data; a second part of the survey would change annually and deal with a subject of interest, such as commuting problems, problems with suppliers, or input-output relations between firms located in Sheikh Najjar.

• Third, expand the survey to cover not just Sheikh Najjar but also Aleppo’s industrial areas. Surely, Aleppo would want to know about problems with services encountered by the firms that continue to locate in Aleppo. It would also use this information for investors and to market and promote its industrial areas and Aleppo in general.

• Fourth, Aleppo may want to know how customers feel about some of its industrial location policies. Are customers happy that all car repair shops are located in only a single industrial area? Is this something that customers want? What is the cost to customers?

The remainder summarizes advantages and disadvantages and a SWOT analysis, based on Consultant’s review (and biases). This should be repeated by participants in the LED assessment.

Summary of Advantages and Disadvantages and SWOT Analysis: There are both advantages and disadvantages to the Industrial City strategy, both to investors and government.

23 A special effort was made to obtain survey results, involving high officials, though results have not been shared.

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To industrialists, a key advantage is the much greater access to and reliability of infrastructure. Electric outages are reportedly less frequent than elsewhere. There is an ample supply of developed land, and even though only a small percentage of total land is fully developed, there is an ample supply of developed land ready for sale (though all land is expected to be sold by 2012).

Another major advantage is the speed and ease of obtaining the needed licenses. One industrialist thought that he can receive the preliminary licenses ready for start-up within a month, through a one-stop shop maintained by City Management, operated with on-site representatives of all of the directorates and national agencies that have a role in licensing new ventures. As importantly, the Government issues permanent operating licenses only in Industrial Zones or the Industrial City. Licenses elsewhere are temporary, and hence carry with them the risk of an eventual relocation.

From the Government’s point of view, the industrial areas provide an efficient way to provide needed infrastructure and regulatory control. Another consideration may be complementarities and synergies that result from the co-location of many industries – though little of this has yet been realized. By locating far from residential areas, there may also be environmental benefits, in the form of lower pollution to residents.

There are also disadvantages however, including the high cost of worker commuting, which must be supported by individual firms, the distance to smaller suppliers, and limited interaction among firms. Workers live in Aleppo, often at a great distance, and there is no public transportation to Sheikh Najjar. Most firms transport their workers with buses, in trips that can take 1-2 hours in each direction. For workers, the trip usually involves a long trip to the bus pick-up station, and a total daily commute of 3 or more hours, in addition to a 12 hour work shift six times per week.

While commercial centers will eventually be implemented, industrialists currently must travel to the city center some 30 km away for any repair, maintenance, or supply, whether a printer cartridge, paper, or the repair of a computer.

From a social point of view, urban economists have long argued the substantial benefits of industrialization and agglomeration economies – economies that arise from the great diversity of urban co-location, from networking and dense input-output relations between small and large firms, informal and formal sector producers, and capital and labor intensive methods of production. It is this diversity and the advantages it brings that the industrial city destroys, and that must be recreated over many years.

It is Syria and its residents which will pay the price. This is already apparent. Most firms in the industrial zone operate in a highly capital intensive form. The investment per worker is higher than $50,000 per worker, as compared to just a few thousand dollars in the informal sector (admittedly, often with lower infrastructure). Firms that might have otherwise outsourced some elements of their production, will not be able to do so in the relative isolation of Sheikh Najjar. The same is true – though perhaps to a lesser extent – with other industrial zones. A final point concerns a key reason for industrial cities often mentioned by planners. New cities are designed to reduce rural urban migration to already overcrowded metropolitan areas. For this reason, they are usually placed in rural areas at some distance from metropolitan areas. The idea however, solves a problem of the past, not the future. Rural urban migration in Syria was at its height some 30 years ago. In the future, most of Aleppo’s growth will come from natural sources and not migration.24

24 The reason is simple. Already 60 percent of more of Syria’s population lives in urban areas. So rural areas no longer are the same source of migration they once were, and urban areas are now much larger, relative to any potential migration stream.

Further, the idea neglects the tremendous benefits of large urban areas in terms of job creation and productivity growth. While it is possible in theory, that Aleppo and Damascus are too large, there is no evidence of this.

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Weaknesses • Insufficient infrastructure staging, large tracts of

serviced land sitting idle; land hoarding • Excessive infrastructure standards, e.g. in roads • High capital labor ratio, reduction job creation • High commuting cost • Lack of public transport • Lack of SMEs nearby, lack of land use mix, lack of

business services • Forced relocation • Long distances to suppliers • Lack of input-output relations and complementarities

among firms locating in the Industrial City

Strengths • Infrastructure availability higher than in alternative

locations in Aleppo • Infrastructure reliability higher than elsewhere • One stop shop for business start-ups operates well,

generating licensing quickly

Threats • Innovators are not attracted by the public sector

dominance in Sheikh Najjar design and management • Business services develop with little scope and

variety, thus constraining efficiency • Manufacturing declines, so less land is used than

available • Job creation is seriously reduced • Forced relocation leads to significant efficiency and

job losses

Opportunities • Turkish and GAFTA FDI is attracted by land and

infrastructure • There is cluster development in one of the

manufacturing sectors, such as engineering, food processing or chemical products

• Agglomeration economies result in virtuous cycle

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Part II A Way Forward: Principles and Management Plan

Chapter 7: General Principles The LED assessment and strategic options in this document should be read as a first draft and as a set of ideas and talking points. They represent a starting point for discussion with government, business community and other stakeholders. Typically, LED strategies are developed in close cooperation with local stakeholders. However, this often requires developing information up front to start and motivate the discussion. Largely, this is the point of the current document.

The further preparation and implementation of the LED strategy is in several steps. The first step is to acquaint the stakeholder community with the work done so far. This can be through a ‘Grand Workshop’ designed to motivate and to seek a maximum of participation for the longer-term implementation process. Second, based on interest and priorities established at this Workshop, groups of stakeholders establish working groups and hold smaller workshops. It is these working groups that formulate priorities and strategies, prepare a plan for future work, and initiate implementation – each within their own area. An additional ‘Grand Workshop’ may follow some time later to review the findings of the working groups, to re-motivate stakeholders and perhaps, to announce initial results, such as a decision to form an association, to start improvement projects, or to initiate specific planning activities.

The actual implementation of the LED strategy is largely in the hand of interested stakeholders. Government has a role to play in facilitating this process, in motivating stakeholders, and in implementing activities that require Government action, such as the construction of infrastructure, the collection of certain data, the establishment of a LED Group within Government, or other initiatives. However, much of Local Economic Development is in the hands of the community. If the community has no interest, the Government cannot substitute for this lack of interest.

Consultant has provided the Project with several reports written in South America that deal with participatory appraisals, the community assessment of economic potential, and the participatory appraisal of competitive advantage (PACA) popular in South America. These provide ideas for the conduct of workshops that can be adapted to the Syrian situation. Many other such guidelines are available on the internet.

The following outlines some of the principles involved in the implementation process, followed by a chapter that outlines discussion points for possible working groups in an effort to get the process started.

7.1 Participatory Approach

Local economic development depends on the close cooperation between state and business community. In Aleppo, the Project early on established teams for each of its working areas, including a LED Team with representation from the business community, Chamber officials and the public sector. This LED Team held a series of meetings and prepared a LED Report presented at a workshop November 27, 2008. Its report also was presented to the President of the Republic, HE President Assad, who discussed it extensively with the Mayor of Aleppo, HE Dr. Chibli.

The current report also was prepared in a participatory manner, though limited by time constraints. Workshops were held with stakeholders in the tourism sector, industrialists and the CDS Steering Committee. However, there has not yet been a systematic vetting of the report results as they pertain to the assessment, vision, problem statement and potential strategies. An outcome of the current report must be to hold workshops that receive input from the community on each of these steps, change or validate the conclusions of this report and lead into the formulation of an economic strategy. To make

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this process not too abstract, there is also a need for stakeholder interest groups to commence work on immediate initiatives. The next chapter deals with ideas on how to proceed with these tasks.

7.2 Ownership

The Draft Report includes a LED Assessment, a Vision and strategic options. For further action the community must ‘buy-into’ the assessment and proposals. It is not sufficient that the community ‘participates’ in what otherwise is regarded as a government undertaking.

This does not mean that the Government and perhaps, Syrian/German Cooperation do not have a role in implementation. Indeed, some proposals for infrastructure improvements, taxes and subsidies, or regulatory actions can be implemented only by government. The Government also has a huge role to play in facilitation, intermediation and in motivation. But where Local Economic Development is most successful, the private sector rather than the Government acts as a driving force and constant source of pressure. There is little tradition in Syria of consultative municipal-industry partnerships to establish municipal economic policy. Hence, Consultant would consider it a huge success, if on the one hand Aleppo Municipality established an Economic Development (and Strategic Planning) Unit (EDU) in the Mayor’s Office that pursued some of the strategic options discussed in this paper, and if on the other hand, several private sector working groups worked on their own agenda and pursued its implementation with the Municipality, Governor, and Central Government.

7.3 Cooperation and Collective Action

Implementation requires cooperation among businessmen and their collective action.

The need for cooperation requires some explanation, as in general, most development theory emphasizes competition, creative destruction, and self-interest as the motor of development. There is not much precedent for economic cooperation in Syrian business communities; chambers are not seen as promoting the interest of their members; and the public sector is seen often as an adversary rather promoter of the private sector, particularly when it comes to small and medium enterprise.

The need for collective action arises from phenomena described in terms of externalities, spillover effects, neighborhood effects, collective goods, free rider issues, or the curse of the commons. In addition, there are many situations when all businesses benefit from establishing rules of the game though government regulatory bodies, umbrella organizations, and trade associations. Several examples may illustrate the benefits of cooperation:

• Marketing: Marketing and promotion are activities often done better jointly than by individual businesses in isolation. If a hotel promotes the attractions of Aleppo and the Old City, all hotels will benefit. The hotel will bear the full cost but others will enjoy a free ride on the benefits. Hence, individual hotels, particularly small ones, typically do not heavily promote and market themselves, but leave this to their trade organizations or government. The same holds in other trade sectors. Yet all would be better off if they established a joint campaign, a joint web site, web linkages to other sites, or improved tourism sites.

• Neighborhood: All businesses benefit from a well maintained and business friendly neighborhood. But making sure that a neighborhood has these attributes is not a task for an individual business. It requires community pressure and action. A neighborhood’s appearance is a common resource, not that different from other resources such as fishing resources or common grazing land. Such resources suffer from the ‘curse of the common’ – too little maintenance and investment, and too much use. It requires common action to assure that the resource is used properly. In many countries, businesses form business improvement districts or tax themselves, to assure that they collectively can compete with other business centers or cities. Consultant is not aware of such initiatives in Aleppo or Syria.

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• Market Operations: Stores often benefit from locating close together and following common customer policies, such as common opening and closing times; common rules towards advertising, maintenance and cleaning; common market days; and similar. Implementing such rules requires a coordinating body, such as a guild or an industry or neighborhood association. Historically, these organizations have existed, but they have fallen in disuse over the last 60 years.

• Risk Pooling: Benefits arise from the pooling of risks. Individually, many events such as the break of equipment or the loss of a person with rare skills, are impossible to predict. But in a large group of people or businesses they become perfectly predictable – making them much less costly to deal with. In Aleppo therefore, it is much cheaper to maintain the needed inventory of spare parts that would be the case in a small city. The same benefits exist for groups of businesses, such as the textile sector.

• Training: Many trade groups are interested in bettering the capacity of their members, and for this purpose train their members or oversee the standards to which members work. A better trained workforce benefits the entire industry, but since skills can easily move to a new employer, no individual firm will invest much into them. Trade groups must act jointly to ensure that as a group, they have available the skills needed for their business.

• Advocacy: Jointly, interest groups have a much greater impact on the political process than alone. Chambers of Commerce consistently will advocate the point of view of their business members. Trade groups will make their voice heard in all regulations of concern to them. Advocacy is one of the main motivations for the formation of associations.

• Trade Agreements: Often, trade associations can establish agreements that benefit all of their members. For example, in the case of the tourism sector, all members would benefit from an agreement with airlines that provide Aleppo with better and more frequent service.

Cooperation among members of a trade group or a neighborhood is not designed to eliminate competition. Members continue to compete in terms of price, quality, type of goods/service offered. They still have to keep up with competitors and loose-out if they do not. But they benefit from cooperation in areas where non-rivalrous and non-exclusive goods are involved – because in these cases, if each business were to act on its own, the result would be sub-optimal and lead to less development than is possible. LED strategies are designed both to allow for a maximum of competition and for cooperation where this benefits all.

Chapter 8: Implementation Plan Local economic development is not a one-time effort. The present report provides an initial assessment of the situation and it hints towards a possible strategy. But it is not the final answer. It is the result of less than two weeks in the field and while it involved key stakeholders in numerous meetings from the start, it included only two workshops. Second, it was to generate an assessment of the economic situation, not the strategy itself. Third, it represents only the first stage of a more continuous and more participatory assessment. Syria is notoriously short of good data and at the start of the mission virtually no data were available. Even now few exist at the city level. Much information remains anecdotal. Hence, there is every reason to continue adding to the assessment and to elaborate in greater detail a strategy.

The first section outlines possible tasks for several working groups leading to (i) their own LED assessment, (ii) increased stakeholder involvement, (iii) implementation of immediate activities, and (iv) adoption of a LED strategy by the working group. The second section looks at the development of LED indicators as required by Consultant’s TOR.

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8.1 Working Group Suggestions

A working group requires stakeholders that are motivated and self-starters. The following suggests working groups for tourism, textiles, manufacturing, and several other areas. The LED Team can assist in the initial establishment and motivation, but it will be up to the individual groups to follow through with their initiatives.

a. Tourism Working Group

Tourism is a very small part of Aleppo’s economic base – unlikely to make up more than 5 percent of Aleppo’s jobs (mainly in the hotel sector and a small share of jobs in restaurants, travel agencies, taxis and transport services, retail stores, handicraft workshops, and others sectors that directly or indirectly sell to tourists).25

The tourism sector – more than almost any other sector – benefits from collective action and cooperation with the public sector. Yet, Aleppo has no marketing or promotion initiatives, and the Chamber of Tourism has not yet prepared a strategy to strengthen tourism.

However, there is the hope that tourism could become a much larger source of earnings in the future. As discussed, cultural tourism is a small part of the total sector, probably not more than 20 percent of all tourists (though perhaps 30 percent of sector income).

Objectives

• Prepare proposals to raise the level of tourism consistent with Aleppo as business center and world heritage site;

• Contribute to tourism assessment and preparation of strategy

Possible Tasks • Review the tourism assessment and suggested options of this and other documents, and

prioritize tasks; change and adjust assessment; assist in the preparation of a tourism strategy;

• Survey tourists at the facilities of Chamber of Tourism members with the aim to identify Aleppo’s market segments including complementarities with other destinations and non-tourism activities (such as attendance of conferences, business meetings, visit of family and friends by expatriates, and similar);

• Analyze the results of tourism survey with an aim to identify tourism market segments, and tourism sector weaknesses and strengths as input into formulation of a strategy;

• Agree on the establishment of a peer review mechanisms to improve service quality in Aleppo’s hotel and restaurant sector;

• Improve web presence; link Aleppo tourism web site to other sites;

• Establish a plan for Aleppo tourism promotion and work with Ministry of Tourism to obtain finance and national buy-in;

• Work with industry and Municipality to strengthen Aleppo’s convention business; review the convention business in Syria and Aleppo’s potential relative to Damascus;

• Prepare under the guidance of the Chamber of Tourism a comprehensive assessment of the Aleppo tourism sector, using the resources of the members augmented by the City of Aleppo and international donors.

• Review business and convention tourism as a key ingredient in the tourism market, and establish a capacity to build a business tourism market.

25 The share might be higher, say in the neighborhood of 12 percent, assuming a propensity to consume locally of 0.6.

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• Work with the Municipality and Chamber of Tourism on an Aleppo image, to be used in marketing and promotion (brochures, internet, tourism conventions, international advertizing);

• Investigate ways to integrate Aleppo tourism into broader national strategies, through cooperation with tourism operators, airlines, and Ministry of Tourism activities.

• Broaden the appeal of the Chamber of Tourism to include a broader cross-section of tourism enterprises (many of which are currently not members) including all hotels, tourism agencies, tour operators, and tour guides, and a portion of museums, restaurant sector, transport and logistics, handicrafts, and retail.

b. Textile Working Group

Traditionally, the textile sector has dominated Aleppo’s economy with an employment that we have estimated to have been about 55,000 at the time of the 2004 Census. Recently however, the sector has fallen on hard times. It is possible that by the end of 2009, the number of jobs will have dropped by 20-30 percent from their 2004 level and perhaps more from their 2007 peak. This report has discussed at length the evidence available on the magnitude of the decline and its reasons. However, only a few industrialists have contributed to this assessment, and it is time to consult a larger group of sector stakeholders.

The working group can move in a number of directions. It can assess the reasons for the recent sector decline, and determine whether it is a short- or long-term problem. Tentatively, we have concluded that the problem is a bit of both and that some of the structural problems are reversible with the correct mixture of public sector policies and industry change. However, these suggestions have not been validated by the industry, and it will be important to listen to a range of opinions from the textile sector.

Objectives

• Validate, modify or rewrite the assessment of the textile sector provided in this report. • Prepare an emergency plan for presentation to the Central Government, based on policy

positions related to import tariffs, energy and labor cost, export promotion, and other tools thought to be relevant to industrialists.

• Formulate a longer-term strategy that addresses structural issues, such as the cost of labor, a lack of finance, capacity building to move upscale market, or other ways to reposition itself better compete with Chinese and other Asian producers.

Possible Tasks

• Review information made available in this report as a basis of discussion.

• Use focus groups for an assessment, or alternatively, prepare a survey. A representative group of textile industrialists may be able to shed a great deal of light on the textile sector and its difficulties – though given the competitiveness of the sector and the ego of the industrialists involved, it may be difficult for individuals to openly talk about their difficulties. Instead, it may be better to commission a short and confidential survey through a trusted source which examines the current situation and individual’s assessment of business prospects.

• Ask to look at survey data from Sheikh Najjar for corroboration of the Chamber of Commerce export data and a more detailed assessment of the textile situation.

• Prepare advocacy positions for presentation to the Central Government. Speaking with one voice would likely have a significant impact on Government policy.

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• Review the impact of existing capacity building programs already implemented by Government (IMUP, MVET) to strengthen and modernize the textile sector to see whether they have been effective, or how to modify such programs to increase their effectiveness.

c. Manufacturing Working Group

The manufacturing sector has been identified as the key driver of Aleppo’s past growth. It is responsible for 30 percent of all City jobs. At the same time Consultant has suggested that manufacturing will decline as Syria develops. The world over, many industrial cities have fallen on hard times as de-industrialization has reduced job opportunities. Often this has been an adjustment that extended over 30 years or more, and many have never re-gained their former prominence.

We do not believe that this necessarily must be the future of Aleppo – but it is clear that this is a possibility, as the recent decline of the textile sector suggests. The purpose of this working group is to deal with issues common to the entire manufacturing sector, such as export policies, permits and licensing, business climate, and government support for the private sector. It should closely coordinate with the Business Services Working Group and perhaps, the Financial Services Working Group – or perhaps all three working groups could be folded into one. Objectives

• Contribute to the manufacturing sector assessment and preparation of a strategy.

Possible Tasks • Develop a manufacturing agenda for discussion with the Mayor’s EDU. The agenda will

reflect priority issues of industrialists in their dealings with the Municipality. Examples may be the quality of Municipal and Governorate services, one stop shop facilities, municipal licensing rules and procedures, location policies related to industrial areas, the quality of transportation related to worker’s commute.

• Work with Chamber of Industry to make the Chamber a more effective organization on behalf of the manufacturing sector.

• Review government programs designed to build private sector manufacturing capacity, such as IMUP and MVET and make suggestions to increase their effectiveness.

• Validate the assessments made in the Consultant’s LED Report and provide input into a Strategy.

d. Business Services Working Group

The working group consists of users and providers of business services, including Chambers and perhaps, representative managers of industrial zones or Sheikh Najjar. This Report suggests that business services are important to the growth and productivity of Aleppo. It also concurs with the assessment of another Consultant, Eng. Georgi that so far the quality and variety of Aleppo business services is limited and that semi-public organizations such as the chambers, could provide business services, but have largely failed to do so. There was widespread agreement among members consulted during the assessment process that the Chambers could do a much better job presenting member interests. Objectives

• Contribute to an assessment of the business service sector and preparation of a strategy. • Identify immediate actions that could strengthen business services.

Possible Tasks

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• Review the businesses services being provided through Chambers and other semi-public institutions.

• Survey (through a small sample survey or through focus groups) the demand for and current use of a range of business services, as provided by the private sector and public (or semi-public) organizations. An initial survey could review the Chamber of Commerce membership list and identify businesses that provide business services, perhaps in a few key areas such as: marketing and promotion including survey services, printing and advertizing; internet providers, maintenance and repair services; and training services;

• Identify constraints on the private provision of business services (similar to some of these identified in this report), and means to reduce such constraints and limitations;

• Review with the Municipality and Sheikh Najjar policies to strengthen business services in industrial zones or the industrial city, including attitudes towards the informal sector;

• Review informally or through a survey the demand for business services and the role informal suppliers play in it.

• Prepare an annual business survey which among others identifies the quality of business services in Aleppo and Aleppo’s competitive position in the supply of such services.

• Publish an annual business almanac with survey information and issue papers.

• Support an internet and hardcopy listing of business service with customer rating

e. Working Group on Financial Services

This Working Group may operate as part of the Business Services Working Group, rather than as a separate Working Group. In part this depends on stakeholder interest.

Recent reforms of the financial sector have raised substantially the presence of international banks in Syria and the range of financial product offerings. However, the entire banking sector is head-quartered in Damascus, depriving Aleppo of direct access to headquarter decision making and a major source of economic growth. Financial services are closely tied to insurance and information services – all of which are also likely to locate in Damascus. The key interest of Aleppo should be to strengthen its presence in this sector.

The working group should represent both the demand and supply side of the financial services sector. On the supply side this may include one or two private sector banking representatives, and on the demand side at least one commercial and one industrial establishment. Objectives

• Formulate a strategy for increased financial services in Aleppo, both at the retail and headquarter level.

Possible Tasks

• Identify existing financial and insurance services in Aleppo, both at the headquarter and branch level. Identify the impact of limited headquarter presence.

• Identify constraints on attracting headquarter level services to Aleppo.

• Contribute to the business services strategy for Aleppo, in the area of financial services.

f. Working Group of Industrial Area Managers

Already a large share of Aleppo’s industry is located in industrial areas including the Industrial City of Sheikh Najjar. The City’s intention is to move many of the remaining industrial establishments to

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these areas within the next 2-3 years. This includes many of the smaller and medium sized workshops. However, there has been no analysis of the cost of these actions both on the city and the private sector, or its impact on job generation.

Industrial area managers may also contribute through the information they already collect or potentially could collect, about industrial and other activities, and their knowledge about employment generation and business promotion. Objectives

• Identify means of cooperation among industrial areas and EDU • Contribute to industrial strategy as it relates to access and quality of services, availability of

land, and data base/indicator development

Possible Tasks

• Develop an industrial location policy (or if the policy exists, a statement of this policy) that can be presented to domestic and foreign investors;

• Review information on service levels by industrial area (both infrastructure services and business services);

• Develop an instrument to regularly survey establishments located in industrial areas as an input into EDU marketing strategies (and to identify potential problems in each area);

• Review available administrative data for their potential in economic development analysis

• Work with consultants on economic indicators and the role of industrial areas in developing panel data;

• Identify potential areas of cooperation among industrial areas and between Sheikh Najjar and Aleppo’s industrial areas;

• Develop a long-term industrial area strategy to better service industrial establishments.

g. Municipal Working Group on Economic Development Unit in Mayor’s Office

The Municipality has already decided to establish an Economic Development Unit (EDU) close to the Mayor’s Office. However, the exact objective, its mandate, and its activities remain to be determined. There is no precedent in Syria for such an office, and it must be filled with content. The purpose of the Working Group is to prepare TOR that outline the mandate, responsibilities and obligations of this Unit including staffing levels and resources required.

Working Group members will likely be chosen by the Mayor himself, and might consist of at least one member of the Local Council, the head of one or two municipal offices, an official of the Chamber of Commerce and the Chamber of Industry, and one or two additional members of the Mayor’s choosing. Objectives

• Prepare terms of reference for the Mayor’s Economic Development Unit outlining mandate, responsibilities, obligation, and indicators for success.

Possible Tasks

• Review possible tasks for an economic development office. These may include some of the following: • advising the Mayor on the economic impact of municipal policies; • responding to investor inquiries; liaising with offices in the municipality, governorate and

central government level on behalf of investors;

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• preparing regular meetings with an economic council and keeping minutes of meetings; • promoting Aleppo through brochures, radio, television and newspaper communication;

and regularly supplying journalists with newsworthy facts, particularly international journalists;

• organizing investor forums and other events; • identifying investment projects that can be advertized on the investment opportunity link

of the City’s web site; • developing and regularly updating the Aleppo website with links and news stories; • preparing statistics and data material to interested city clients; promoting the city through

event and convention planning; regular progress review on the Local Economic Development Strategy;

• making presentations to Local Council on matters affecting the economy; representing the City at local, regional, national and international meetings or preparing others;

• being informed on legal and regulatory instances that require investor assistance; • evaluating investment and infrastructure proposals with the help of experts; • networking with cities in Syria and representing Aleppo at city conferences through

power point presentations, movies, brochures and other material; • networking with national and international institutions, including sister cities in Europe

and throughout the Middle East; • developing project ideas that will benefit Aleppo’s image and promote Aleppo’s national

and international appeal to investors; • annual (or half-annual) publication of a newsletter distributed to the expatriate

community and other individuals and organizations to remain in contact with the City of Aleppo;

• counteracting negative publicity; • implementing the economic development policy of Local Council;

• Review the mandate of similar offices in the Middle East and perhaps visit one or two such offices in neighboring countries to learn from their experience;

• Prepare in outline form an office manual that describes EDU tasks;

• Suggest indicators for to annually measure progress towards EDU key objectives.

h. Working Group on Local Economic Development Policy

There is a need for a working group to prepare and coordinate the overall LED strategy. Most working groups deal with a single sector (textiles, manufacturing, tourism, business services) or a single issue (EDU, industrial areas, indicators). The LED working group would collect ideas from all groups, and prepare the overall strategy. It might also deal with cross-cutting issues, such as a marketing campaign for Aleppo or Aleppo’s image.

The coordinating working group most likely is simply the LED Team that prepared the draft report of November 27, 2008.

Being a coordinator does not mean that this working group directs other working groups. Ideally, many working groups will develop a life of their own, i.e. they contribute to the implementation of LED policies under their own initiative, rather than because the Mayor or the LED Team has asked them to. Hence, the Tourism Working Group works on behalf members of the tourism sector, rather than merely to provide input to the LED strategy. Similarly, the Working Group on Textiles would be working on behalf of its textile sector members. Which working groups will develop based on their own initiative – and what their life may be – is not clear however. Some working groups likely will quickly disband once they have completed a limited agenda.

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Objectives • Prepare the Aleppo LED strategy, with input from working groups and local consultants; • Assume coordination function to complete a participatory LED strategy.

Possible Tasks

• Work with working groups to receive their input into the LED strategy.

• Work with consultants to prepare LED strategy;

• Prepare other cross-sectional initiatives. For example, the group may work with a marketing and promotion firm to review Aleppo’s image in Syria and abroad and to develop a campaign to improve Aleppo’s image (used on the web, in brochures and promotional campaigns, in video clips, and elsewhere.

i. Economic Indicator Working Group

Preparing indicators is largely a technical task best left to experts and perhaps the Local Decision Support Center.

Quite possibly however, the task will have greater support if several institutions are seen to cooperate and to commit jointly to its development. For example, it may be easier for the Chambers of Commerce and Industry to act jointly in improving its data. Both might agree jointly to improve its member data base, or to jointly prepare annual surveys of their members. Similarly, it may be easier for industrial area managers to agree to regularly survey its establishments, if this seen as a joint effort to which all industrial areas agree, than if they act alone.

In general, there is an advantage for institutions to share data and to jointly contribute to a data basis (though confidentiality issues will arise for larger enterprises that must be resolved). For example, each industrial area gains from having information not only about its own area but also on other areas. It puts the development in each industrial area into perspective, and it allows to compare and contrast. on other industrial areas when it based on a greater share of the community, and each general, this is a task that will not be started immediately. It may also benefit much from MAM work in Homs, as discussed elsewhere.

Objectives

• Agree on economic indicators to be collected and shared by economic development stakeholders, including the chambers and managers of industrial zones.

Possible Tasks

• Review current data collection efforts at the Chambers of Commerce, Industry and Tourism with a view to increase their usability.

• Review the survey data being collected at Sheikh Najjar and the possibility of sharing its results; review survey opportunities in the industrial zones;

• Develop a survey instrument to be used by industrial areas – possibly with content as suggested by this report;

• Make suggestions for economic indicators and their future collection.

j. Other Working Groups

Additional ideas for working groups will likely be developed by stakeholders. At this time, of course, it is unclear that any working groups will establish themselves, or that they will be able to do serious work. There is little history in Syria of the spontaneous establishment of stakeholder initiatives.

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8.2 Information Development and Analysis

The Consultant’s TOR ask that Consultant make suggestions on additional data collection and indicator preparation. Several data development tasks were initiated by Consultant but could not be completed within the available time. SEBC however, holds a contract to assist in the LED assessment and strategy preparation, which may permit it to complete these tasks. SEBC is well known not just for data collection but also the analysis of data. It is perfectly suited, within its already existing contract, to work with the LED Team and the key stakeholders in moving the LED assessment and strategy development forward. The following gives examples of these tasks. This is followed by a description of additional analysis to be completed by key stakeholders.

a. Analysis and Data Development Tasks

Consultant and SEBC have linked forces to develop information on Aleppo’s economic activities. Some of the information represents simple base data. For example, one would want to know which sectors dominate Aleppo economic activity and how they have been doing over time. Traditionally, Aleppo’s has been taken to be a city dominated by its textile sector, though Census data are not published at this level of detail, at least not at the City or even Governorate level. As discussed, textile entrepreneurs claim that the sector has been in free-fall with some firms closing or moving to other Mediterranean countries. However, there have been few data to support this and it is even more difficult to identify its causes. For strategic planning purposes, the question is whether the decline observed in 2009 is structural or short term.

The Statistical Yearbook publishes data at the national level with some 2-digit industry detail, but this information does not extend beyond 2007.

Many of these arguments cannot be resolved at this time, and indeed, it is wrong to think of strategic planning as a one-time exercise. Rather, the current effort should be seen as a start of a continuous effort. It should establish baseline data, it should establish means to regularly update data, and it should identify indicators for regular monitoring to assist with future strategic planning. Municipal Permit Data: Some businesses must obtain a municipal permit to operate. The municipality has extensive data on where these businesses are located and the nature of these businesses. The Municipal Permit Department has made a great effort to cooperate with this Consultant to make these data available. However, these data are not computerized, they are not coded, and they are not easy to analyze. SEBC was asked as part of its consulting effort to enter these data in their summary form on Excel sheets for more ready analysis.

More importantly however, SEBC should prepare a short proposal on how this database can be utilized in the future as a basis for indicator development. The following are some suggestions:

• Computerization: The data should be computerized. This is a long-term task. Recent developments in Homs suggest that this is something already being pursued, at least at the conceptual level. The Homs effort however also suggests that implementation will take years.

• Analytical Quality of Time Series Data: It is one thing to collect data, but quite another to associate meaning with these data. One way in which data obtain meaning is through time series. Put differently, looking at data point of municipal permit data will tell us little. But once we have several years of permit data, one is able to observe trends and changes in trends that can be indicative of future economic activity. For example, initial permit applications are lead indicators for growth one or two years ahead.

• Other Analytical Issues: Municipal permit data are collected for administrative purposes and must be used with caution. They include some businesses and not others, and they change each time regulations change. For example, starting a one-stop-shop may reduce time to permit and generate a bunching of permits. Changes in regulations may require permits from

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establishments that previously did not need one. Increased enforcement efforts also will generate data aberrations. Much too little time has gone into looking at meaning, i.e. to construct a data base that is useful for the purpose for which data are collected.

The above applies similarly to other municipal permits and licenses. For example, municipal construction permits are a good indicator of construction activity a year or two ahead. Syria lacks far behind international efforts in using its tremendous reservoir of administrative data for useful economic purposes. Perhaps even more importantly, the fact that these data are not available publicly will make the collected data less useful than they could be. Governorate Industrial Permit Data: The report has made good use of the industrial permit data collected by the Governorate. It must be remembered however, that Consultant collected these data informally, during a two hour visit to the MoI Department of Industry responsible for industrial permits. Rather than leaving without any data, the effort was on obtaining approximations. This is the correct approach when one operates under severe time constraints. However, it would be appropriate to seek a more systematic approach to the data collection task during the months and years ahead.

In the case of the ADoI, the Department should be revisited and data should be collected in greater detail, by sector and location. As mentioned, statistics are currently kept separately for Sheikh Najjar and the rest of the Governorate. Information is available at the Governorate offices about the location of each establishment, and hence, statistics can be assembled by urban/rural area, municipal/non-municipal area, and by industrial area. Chamber of Commerce Membership Data: Consultant has shown that these data can be used effectively, despite their shortcomings. However, Consultant’s work was limited to members in the Old City. SEBC could repeat this work for the Governorate. It should further identify establishments by location and divide results between rural/urban area, industrial estate/non-industrial area, and by municipal/non-municipal area. Finally, it is possible to suggest the industry of most establishments. ACoC uses a relatively standardized description of each establishment. Hence, there are only 300 or so descriptors, and it is possible to code these.

SEBC’s immediate task is to duplicate the work of the Consultant for the entire database. A medium term task is to work with the Chamber of Commerce to improve its data collection activities to increase the usefulness of this data source. This means consistent coding of products or industries, coding of locational information, and perhaps adding other types of information to the data base of interest for economic development. There may also be a need to critically review the data:

• To what extent does the data base include non-active and bogus members? Does it include multiple listings of the same establishment?

• How well does the data correlate to Census information? How well does it correlate to other data bases that include partially overlapping information, such as permit data from the Department of Municipal Permits or the Department of Industry?

• To what extent is there an overlap between Chamber of Commerce and Chamber of Industry membership?

• Does the data base allow us to compute the opening and closure of firms? Chamber of Industry Membership Data: Again, Consultant has shown that these data can be used effectively, and the comments on ACoC apply similarly to ACoI. As in the case of ACoC data, consultant has available only a subset of the data set, pertaining to the Old City. The fact however, that another consultant was able to extract this data set, means that it should be possible to extract the entire data set, with relevant location information. The recommendations here are the same as for the Chamber of Commerce Membership Data. Chamber of Tourism Membership Data: ACoT has a very small membership. Moreover, membership is not mandatory, making these data less useful. Still, in principle, the same comments as to the ACoC and ACoI data set apply.

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ACoC Export Permit Data: Consultant has analyzed export permit data collected by the Aleppo Chamber of Commerce as part of its role in granting export licenses. This is a reasonable data base which employs clear product and industry codes. It is computerized, and it is available on a timely basis. Output can be generated for the previous month – rather than with a delay of a year or two, as with virtually all other Syrian statistics. Finally, it provides not just the number of export transactions, but their value.

Still, there are some shortcomings and SEBC should as part of its consulting contributions work with ACoC to remedy them. This will come too late for the economic assessment or the strategy. However, it is important for the use of export data as LED indicator. Specifically:

• Up to 40 percent of all export transactions have no product or industry classification, but are classified as miscellaneous in both categories. While there are always some products or activities that are difficult to classify, this level of non-classification in this case makes the entire data base less useful than it could be. The first step would be to analyze why exports cannot be classified. Is it a problem of the classification system, a problem of inadequate training, a matter of just laziness, or are there other reasons? Then these reasons must be removed. Clearly, these data are also used at the national level, and most likely, national statistical offices have some evidence on the make-up of the miscellaneous category. Talking to these data users might help.

• The data base is for the Governorate of Aleppo and it includes exports from rural and urban areas, from industrial and non-industrial areas, and from different regions of the Governorate. Coding by location would increase the use of the data base.

• As with all administrative data, they become more useful if they can be validated based on other data sets. It is not clear what alternative data exist of export values. These could come from port data for example, or they could be checked against data from the International Trade Center (ITC). There are also plausibility checks and checks against survey data, perhaps by the Ministry of Industry. In most countries, establishments are surveyed once a quarter or once a year to provide data on employment, output, value added and exports, and this would provide a great check on the validity of the ACoC data. It may also shed light on the high incidence of miscellaneous exports.

Sheikh Najjar Survey Data: As discussed elsewhere, Sheikh Najjar Industrial City undertakes regular surveys of its establishments that provide timely information on current employment and business plans. SEBC and the LED Team aided by the Municipality should continue its effort to obtain access to these data, and then to analyze them. In the next section we also suggest a long-term effort by the Municipality to develop a similar data base through the management of its industrial estates. ITC Export Data: SEBC has shared with the author ITC export data that proved unreadable in time for this report. SEBC should analyze the data and contribute to the export assessment. These data are of course, on national exports, and hence do not provide direct evidence on economic activity in Aleppo. However, SEBC has a rule of thumb that says that at least 30 percent of all national economic activity is attributable to Aleppo, and when applied to the ITC data would offer an alternative view of economic activity in Aleppo, particularly since the ITC data are based not only on Syrian (i.e. country of origin statistics) but also on country of destination data.26

26 The 30 percent rule seems to be based on the fact that perhaps 30 percent of all registered industrial companies are located in Aleppo. If so, the average percentage could be much higher as there is some evidence that the average Aleppo company is of larger size than the national average, so the share in terms of value added or gross output should be even higher. Moreover, larger companies tend to export a larger share of output, so the export share could be still higher.

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Miscellaneous Data Follow-up: Given its vast and long-term experience in Aleppo, SEBC has numerous ways to contribute to the strategic economic assessment. It knows its expertise best, and it may be able to identify specific ways in which it can contribute to the LED assessment and LED strategy.

b. Stakeholder Data Development

Several stakeholder and umbrella organizations have or should have an interest in developing information for the benefit of their sector. This includes in particular the three chambers – Industry, Commerce, and Tourism – but also others, including in particular the Governorate Decision Support Center. Below we list immediate and long-term actions. We have already mentioned data development tasks in the previous section. These concerned data bases that already exist. The following suggests additional data development tasks.

Essentially, developing data, making them available to the public, and using them for short-term and longer-term strategic purposes is an integral part of a city development strategy. It is essential to the development of an indicator base that can be used by the City of Aleppo and its stakeholders in responding to new developments and to regularly assess its competitiveness. Chamber of Tourism: A workshop by the Chamber of Tourism concluded that the sector suffered from a lack of good information. The most recent data on visitors and tourist nights were close to two years old, dating from 2007. There is no information on the order of magnitude of different forms of tourism, including cultural, religious, business, entertainment, and convention tourism; and there is little information on the competitive advantages by Aleppo, relative to say Damascus or Turkey.

Yet obtaining such information need not be expensive, and tourist chambers the world over make it their task to prepare an assessment or strategy for their sector. Some of the things the Chamber of Tourism should do include:

• Tourist Survey: Hotels may ask their clients to fill out a short survey indicating the reasons for coming to Aleppo, the length of stay in Aleppo, the type of sites visited and activities engaged in, and similar. When combined with information on the hotel, it is possible to identify the different segment of the tourism sector, and the demand of each segment for different types of hotels and other facilities. The survey can be prepared quickly and it could be ready for use at the time a tourism strategy is prepared.

• Facility Survey: This could be a survey of primary facilities such as the museums and tourism sites visited, as well as a survey of secondary facilities such as hotels or restaurants. Of course, the Aleppo Department of Tourism (ADoT) under the Ministry of Tourism has a list of all tourist sites. But it does not have good information on tourist attendance of these facilities. Nor does it have a list – even at the idea level of desirable improvements.

• Tour Operators: Most tourists visit Syria not as individuals but as groups. Groups make relatively standards tours, depending on their origin and purpose of their trip. For example, most trips originate in Damascus, from where they visit Bosra, Palmyra and the Dead Cities each in a one-day trip. The purpose of a survey of tour operators would be to identify typical tours and typical tourist behavior. Cultural tourism of course, is only a small part of total tourism. However, it should be possible to identify the critical operators for other forms of tourism, such as religious tourists.

In general, working with tour operators is crucial to generate greater tourist demand and to identify tourism strategy. It also can generate crucial information on an annual basis. Chamber of Industry and Chamber of Commerce: Neither of the two chambers is an organization run in the interest of its members. Both assume quasi state roles, such as the issue of export permits in

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the case of the Chamber of Commerce. Chambers could become much more active and operate in the interest of their members.

Given the Chamber’s substantial membership and authority, it should be able to sponsor an annual survey of its members. The survey would have two functions: First it would address member demands and hence, helps the Chamber to address these demands in its annual activity planning. Second, it might provide business outlook data that would be shared with EDU and perhaps others. This part of the survey would ask about investment plans, business expectations, employee hiring and lay-off plans and similar. For strategic purposes, it also may ask for an assessment of long-term prospects. Special issue questions could be added annually.

Much of these data could be made available on the internet (subject to confidentiality constraints). There is no reason why the web site should not provide at least the name and address of its members, links to its members, economic indicators, and a statement of economic strategy highlighting Aleppo’s strengths. It should also provide a contact person or team to assist outsiders with questions about investment opportunities. The site could be coordinated with a similar site by the City of Aleppo, with the Chamber taking responsibility for some parts of the reporting and the City for others.

Governorate Decision Support Center: Each Governorate operates a Local Decision Support Center (LDSC), responsible for the collection of a wide range of data. These are usually administrative data collected from governorate departments of the various sector ministries operating in the Governorate. Efforts are no underway to substantially increase the data collection efforts and to collect all data in real time, by entering administrative data in all Governorate offices directly into the data base. The system is developed and tested under MAM sponsorship in Homs Governorate, but will eventually be extended to other Governorates.

Support for these activities goes much beyond the current strategic planning exercise. However, one should be aware of these efforts and the development of indicators should be tied into these activities. A review of the Homs efforts by this Consultant suggests that the amount of data being collected in the future will generate serious information overload. The key problem that has not yet been resolved is to generate, based on the mass of data being collected, meaningful indicators. Experience elsewhere shows that this can take years, as the quality of an indicator is best judged based on its performance over a period of years. This therefore is a long-term project that will be pursued nationally over many years to come. Industrial Estates and Industries: Industrial estates and the City of Sheikh Najjar are in an excellent position to prepare a regular survey of their member establishments. They also may be able to generate monthly administrative data such as data on electricity and water consumption, sewerage effluents and permit activities. These data could provide each estate manager a picture of changes in economic activity in his domain, but these data become even more useful when pooled, perhaps in the hands of the Governorate Decision Support Center.

As mentioned earlier, Sheikh Najjar already collects survey data, though the effort is shrouded in secrecy and the data are not available to the Municipality for analysis.

Industrial estate managers and the manager of Sheikh Najjar are important stakeholders in the LED process – but so far no effort has been made to systematically involve them in the process. It is recommended that a working group be established, perhaps under the joint sponsorship of the Chambers of Commerce and Industry to prepare a joint approach to the collection of administrative data and regular surveys.

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c. Indicator Development

Consultant has been asked to make recommendations for local economic development indicators. He believes that data for the following already exist on an annual basis, either for the City of Aleppo or the Governorate, and could be easily made available through the cooperation of key stakeholders:

• Residence population of Governorate and possibly, by City (estimates prepared by CBS)

• Labor force estimates by Governorate, and possibly, by City (estimates prepared by CBS)

• Unemployment numbers and rates (based on Annual Labor Force Survey of CBS)

• Exports by sector (Chamber of Commerce)

• Municipal business permits granted by type (Municipality)

• Municipal business permits lapsed, by type (Municipality)

• Residential construction permit applications (Municipality)

• Residential construction permits granted (Municipality)

• Industrial Permits (number, planned investment, planned employment) granted by sector (Aleppo Department of Industry)

• Industrial Permits lapsed (number, investment and employment recorded in original permit), by sector (Aleppo Department of Industry)

• Air Freight Tons loaded and unloaded at Aleppo Airport (Aleppo Airport Authority)

• Passengers at Aleppo Airport arriving and departing (Aleppo Airport Authority)

• Rail Freight Tons loaded and unloaded at Aleppo Rail Yard (Rail Authority)

The following data likely could be collected, either based on surveys or administrative data. However, there is a need for more analysis and who might collect these data, the best method of collection, and whether the data are sufficiently useful to warrant the effort.

• Job openings by reporting Chamber of Industry and Chamber of Commerce members. The collection of such data could be through the Chambers, if members reported their job openings. Alternatively, there may be a role here for the former ACU (Agency to Combat Unemployment), which originally was supposed to have a role in job placement services – and which perhaps already collects such data. The problem here is always coverage. If very few members report job openings, then the data is not particularly meaningful and not useful as an indicator.

• Convention Statistics (number of convention visitors, number of conventions). There still is not a Convention Bureau in Aleppo, but there should be. In the meantime this would be something that EDU will have to handle.

• Freight truck tonnage. This is a good indicator of total economic activity, particularly when combined with air and rail freight data. It is not clear however, whether this can be collected easily. The truck sector is private, and some companies may truck their goods with their own truck, so the coverage rate is unclear. We also do not know the reporting requirements for private sector trucking companies.

• Industrial Zones (for each zone # of firms by sector, employment). It would be useful to have information for industrial zones. As members of an industrial zone, members may feel under a greater obligation to answer a survey, than if the survey is sent by one of the Chambers. So the response rate may be much higher. For investors, it would be useful to obtain data on individual industrial zones, and to learn more about the quality of services at each zone.

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List of Annexes and Tables Annex 1: Steering Committee Agenda and Talk Annex 2: Tourism Workshop Annex 3: National and Governorate Data, Statistical Abstract 2008 (CBS Website) Note 1: The base information comes from the latest Statistical Abstract. Often several tables are merged, and additional indicator information has been constructed from the source data, not found in the Abstract.

Note 2: The data are found on a Macro-Enabled Excel Book called 1_CBS Statistical Yearbook 2008 To print the information out, use the Macro called Print_Tables. The source tables (including many not used here) are included in a dozen separate Excel Books.

• Table 1: Population—Registered and Actual Resident Population by Governorate

• Table 2: Population—Distribution and Growth Rates

• Table 3: Population—Rural and Urban Population by Governorate

• Table 4: Employment—by Sector and Gender

• Table 5: Domestic Product—at Factor Cost, by Sector, in Current Prices

• Table 6: Industrial Production—NDP by Industrial Sector, at Factor Cost in Current Prices

• Table 7: Industrial Production—NDP Index Numbers by Industrial Sector, 2004-07

• Table 8: Industrial Production—Manufacturing Output (Physical Units) by Sector

• Table 9: Tourism—Arab and Foreign Arrivals, Syria 2003-07

• Table 10: Tourism—Hotel Guests by Type of Hotel and Governorate

• Table 11: Tourism—Guest Nights by Type of Hotel and Governorate

• Table 12: Tourism—% Distribution of Guests and Guest Nights, and Average Stay

• Table 13: Services—Airports and Air Transport

• Table 14: Services—Water Production and Consumption by Governorate

• Table 15: Services—Use of Phone Services, Total and per Resident, by Governorate

• Table 16: Services—Telephone Lines, and Lines per 100 Population, by Governorate

• Table 17: Financial Sector—Banks and Branches by Governorate

• Table 18: Prices—Exchange Rates at Official and Market Prices, 2005-07

Annex 4: Tables based on 2004 Census Municipality Data (State Planning Commission) Note 1: The data originate with the State Planning Commission, which received the data from the Central Bureau of Statistics. Most of the data are from the Population and Housing Census of 2004. Additional data come from a Business Establishment Survey (though we do not have the precise source).

Note 2: The data are found on a Macro-Enabled Excel Book called 1_Aleppo Indicators. To print the information out, use the Macro called Print_Summary_Tables. The source table allows us to add many other comparison cities. The source table is not included in the Excel Book.

• Table 1: Demographic Profile of Aleppo and Selected Cities

• Table 2: Education Profile of Aleppo and Selected Cities

• Table 3: Labor Force Profile of Aleppo and Comparison Cities

• Table 4: Employment Profile of Aleppo Residents and Comparison Cities

• Table 5: Housing Profile of Aleppo and Comparison Cities

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• Table 6: Business Establishment Profile for Aleppo and Comparison Cities

Annex 5: Tables on Aleppo Manufacturing Permit Data Note 1: The data originate with the Department of Industry of the Ministry of Industry, with the Municipal Administrative Permit Department, and the City of Sheikh Najjar. Limitations of Permit Data are explained in the Report. In addition, one table shows summary data on Export Permits obtained from the Chamber of Commerce.

The purpose of these tables is to obtain rough estimates of the distribution of manufacturing between four sectors: Agro-Food, Textiles, Chemical, and Engineering. Several of the data sources remain incomplete, and the data from on Municipal Administrative Permits remains to be submitted and analyzed.

Note 2: The data are found on a Macro-Enabled Excel Book called 1_Aleppo Industrial Data. To print the information out, use the Macro called Print_Tables. The Excel Book contains the original data with many thousands of export transactions for the Years 2006, 2007, 2008 and the first half of 2009. Additional information can be extracted, but the programming is difficult.

• Table 1: Summary of Aleppo Industry Distribution Estimates, Various Sources

• Table 2: Aleppo Industry Statistics based on Ministry of Industry Permits

• Table 3: Aleppo Firms by Product Group, Textile and Agro-Food Industry, Aleppo Governorate

• Table 4: Number of Firms in Private Sector Industrial Establishments, National and Governorate

• Table 5: Aleppo Members in Handicraft Associations, General Federation of Handicraft Assoc’ns

Annex 6: Tables on Export Permits by the Chamber of Commerce Note 1: The data originate with the Department of Commerce, which issues export licenses. The export data pertain to the agricultural and manufacturing sector, and provide the market price of exported products in US dollars.

Note 2: The data are found on a Macro-Enabled Excel Book called 1_Aleppo Export CoC Data. To print the information out, use the Macro called Print_Summary_Tables. The source table allows us to add many other comparison cities. The source table is not included in the Excel Book.

• Table 1: Aleppo Governorate Exports, by Major Industry Group

• Table 2.1: Aleppo Governorate Exports, by Detailed Product Type, Part 1

• Table 2.2: Aleppo Governorate Exports, by Detailed Product Type, Part 2

• Table 3: Aleppo Governorate Exports, by 2-Digit Product Class

Annex 7: Tourism Statistics Note 1: The data originate mostly with the Department of Tourism and the Statistical Yearbook. In addition, the Tourism Workshop responded to a brief survey, which asked for the distribution of visitors (Arab, Syrian, Foreign) by type of tourism market, see Tables 6 and 7.

Note 2: The data are found on a Macro-Enabled Excel Book called 1_Aleppo Tourism Estimates. To print the information out, use the Macro called Print _Tables. The Book includes several Sheets that are not used in the printing, but that may become relevant in the future. These will not be printed.

• Table 1: Selected Tourism Statistics

• Table 2: Aleppo Governorate Hotel Capacity, by Class of Hotel

• Table 3.1: Aleppo Hotels by Name and Class, Part I

• Table 3.1: Aleppo Hotels by Name and Class, Part II

• Table 4: Aleppo Hotels, mid 2009

• Table 5: Aleppo Governorate Visitor Nights, by Type of Hotel (2006-08)

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• Table 6: Questionnaire for Tourism Estimates by Type of Market

• Table 7: Aleppo Tourism by Type of Market, Survey Results

Annex 8: Old City Information Note 1: The data has two sources – a survey of Old City businesses dating from 2005 (funded by GTZ and prepared by Mahmoud Ramadan) and membership data of the Chamber of Industry and the Chamber of Commerce. The raw membership data were obtained by Eng. Georgi, who prepared a paper for the GTZ on Old City umbrella organizations. In both cases, Consultant received raw data and summarized the data in tabular form.

Note 2: The data are found on a Macro-Enabled Excel Book called 1_Old City Establishment Data. To print the information out, use the Macro called Print _Tables.

• Table 1: # of Old City Establishments by Type, Registered with Chamber of Commerce 2008

• Table 2.1: # of Old City Establishments by Type, Registered with Chamber of Industry, 2008, Pt. I

• Table 2.2: # of Old City Establishments by Type, Registered with Chamber of Industry, 2008, Pt. II

• Table 3: Old City Establishments by 2-Digit Industry, 2005 Survey

• Table 4: Old City Establishments by 3-Digit Industry, 2005 Survey

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Annex 1 Steering Committee Agenda (July 5, 2009)

1. Introduction • Participant Introduction • Time Line

2. CDS/LED Purpose

3. Purpose of Meeting • Selected Findings • Feedback from Participants

4. Overall Assessment of Competitive Position

5. Textile Sector Assessment

6. Spatial Issues

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Annex 1 Steering Committee Talk Aleppo, 5 July 2009, Burkhard v. Rabenau

Part A: Introduction 1. Introduction

• Participant Introduction • Ayman Chihabi and LED Working Group • Prior Work, Time Line

• Initial Report was completed half a year ago • Final Report to be completed in early September • I have been here for 12 days, will return in mid August

2. CDS/LED Purpose

• Why City Strategy? CDS provides an overall framework for investment. Banks will not lend to firms unless there is a coherent business plan or business strategy. In the case of cities, the same is true. There has to be a coherent city strategy.

• What components? CDS aims at an assessment in terms of its economy, infrastructure, spatial development, environment, municipal administration and finance.

• How CDS implemented? In a participatory manner, emphasizing cooperation and ownership among groups of stakeholders.

• Why participation? The city cannot move the economy. It is the trade groups and businessmen that must do that. The city can facilitate, assist, mediate, or change its own policies.

• Tourism Example: There is little cooperation so far, but a lot of potential for cooperation working on a tourism strategy, a peer review system, web site maintenance, international 15 second TV spots, petitioning government on policies and actions

• Tourism should prepare a workplan for the coming year • Why cooperation? Here I refer to cooperation among people that generally compete.

Chambers and other trade groups are designed to be speakers and strong advocates for the private sector. In Syria this is not the case yet, since Chambers are also instruments for the state.

• Why ownership? If it is not your strategy, you will not implement it. Industrial interest groups must be effective speakers for their interests and the enabling environment suitable to them. Economic development What is Role of Municipality?

• How can Participation and Ownership be made to work? The municipality has already agreed to establish:

• A Board of Private and Public Sector Participants that will meet regularly. The current Steering Committee is the model.

• An Economic Development (and Strategic Planning) Unit close to the Mayor that will facilitate relations with domestic and international investors, and that will aim to improve Aleppo’s business climate and to make it more competitive.

3. Purpose of Meeting

• Describe key findings in a few areas • Overall assessment of Aleppo’s potential and competitive position (both relative to

Damascus, in the Arab World and internationally

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• Ideally, compute 100 or more indices of competitiveness as related to business climate, cost and quality of services, administrative efficiency, quality and cost of labor force etc.

• Manufacturing and the textile sector • Tourism • Spatial elements of the industrial strategy

• Get feedback from participants

Methodology I (Participatory Qualitative Process) • Data are very weak, and often do not show what is relevant • Talk to individual participants • Establish Working Groups or Focus Groups (Tourism)

Methodology II (Planning Process) • SWOT Analysis (Distinguish Local and National problems) • Vision • Strategy (for Local and National Actors)

Methodology III (Porter Diamond and Competitive Advantage) • Analysis of Key Drivers in the Economy

• Exogenous Drivers: Export base in manufacturing, engineering, chemicals, agro-business, tourism

• Endogenous Drivers: Agglomeration economies, enabling environment, entrepreneurial culture

• Demand Analysis • Supporting Industries • Factors (Labor, Capital, Land) • Enabling Environment

Part B: Assessment, Current Situation

B.1 Overall Assessment 1. Aleppo’s competitive position is being seriously eroded and is under threat.

• Damascus is the seat of central government. The government is responsible for 30 percent or more of national GDP, generating a tremendous pull of resources.

• Example Berlin vs Paris: Germany has always been highly decentralized. A central government exists for less than 150 years. As a result, the seat of central government to this day is weak in international comparison. Compare to Paris.

• When information is limited, risks are high. This is particularly important in times of change. Change results in uncertainty and risk. There is lack of information about precedent.

• Most decisions continue to be made centrally. Decentralization has not advanced yet very far.

• Airport Example: If there were decentralized decision making, the Government of Aleppo might decide that better airport services are key to its competitiveness, and it could then decide to do something about it.

• Sheikh Najjar: In decentralized systems, Aleppo might recognize that its entrepreneurship is a key to its competitiveness. It would use this to improve its tax base, but it would also provide its entrepreneurs with much better services. But instead, the entire entrepreneurial sector is being corralled into a new and independent city – therefore substantially weakening the political influence of Aleppo.

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• Sheikh Najjar split substantially weakens Aleppo. One cannot split the economic base from a city, and not substantially weaken the city in terms of her economic and political decision making and influence. In principal, this is not much different from splitting Damascus and Rural Damascus. This has the effect of substantially weakening Damascus. But Damascus is different, given that it is the location of the Central Government.

• Damascus is the international entry and access point. Its airport handles 10 to 15 times the passengers of Aleppo; it is virtually impossible to come to Aleppo without passing through Damascus. This is a serious weakness for international business and tourism.

• Manufacturing employment share will be declining, as percent of total. As a country’s income grows, we tend to substitute capital for labor. 31 percent of Aleppo’s employment is in the manufacturing sector, as compared to 18 percent in Damascus. Aleppo has much further to fall than Damascus.

• The service sector employment share is growing worldwide. This effect is even more pronounced in Syria, since it only recently has discovered the service sector as a motor of growth. But all the service industry headquarters (banking, insurance in particular) are locating in Damascus. This is a major shortcoming, and one that can permanently damage Aleppo’s competitive position.

2. For Aleppo there also exist major opportunities and underutilized potential.

• Syria-Turkey Trade Agreement • Competitive advantages low cost (relative to Damas), proximity to Turkey • Is both threat and opportunity (but so far more the former than the latter?)

• Entrepreneurial Culture • Difficult to quantify, but Aleppo has it and Damascus clearly has much less of it. • However, this spirit is mobile. During the Socialist Past, many entrepreneurs left to make

a fortune abroad. Many returned. But in principle, capital is mobile. It looks for the locations that yield the highest return. If this is Tunisia, Egypt or Morocco, I have little doubt that investments will be channeled into this direction.

• Comparative/Locational Advantages • Water: This does not truly translate into an advantage until the government prices water

differentially. • Agricultural Hinterland: Agro-processing potential • Better Trained Labor Force? Actually, the evidence is that the labor force is weaker in

Aleppo than in Damascus – though local stakeholders seem to think otherwise. • Other

3. Strategic Options

• Strongly support and lobby for decentralization. If decentralized decision making is not possible, prepare a CDS and lobby for its principal conclusions.

• Strengthen involvement in the Service Sector: Participate in the finance and insurance sector. Strengthen the service sector. This could include home-grown institutions or partnerships with foreign investors. Which banks want to give industrial loans? At present, this type of lending is still minimal.

• Build on Private Sector Advantage. Most of Syria has 50 percent higher rate of public sector employment than Aleppo. Aleppo has 21 percent. Damascus has more than 30 percent and other cities have 40 percent and more. Slogan: A beautiful city that works for a living.

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• Improve Human Resource Base and Labor Force. It is not competitive with that of Damascus. Illiteracy rate 15+ is 16.4 percent (as compared to 6.9 percent for Damascus). This is appalling for a metropolitan area. School graduation rates (primary, preparatory) are also much lower, and those only literacy aware is 42 percent, as compared to 25 percent in Damascus.

• Increase Female Labor Force Participation. I do not have good data from the Census. But it is limited based on information from employers. Women work in the public and professional sector (university educated) but not as workers in the private sector.

• Informal Sector is more important to Aleppo than in Damascus. We do not have good measures, but self-employment, non-salaried workers, part-time workers are all good indicators. We probably could collect share with social security participation – but I do not have the data. The answer is not to eliminate informality but to build on its strength.

• Strengthen Turkey investment ties. This is a two way street. Turkey can be a tough competitor.

• Airport/Infrastructure: Develop airport and transport infrastructure. Take the initiative through the current CDS process.

• Develop an efficient management structure in the municipality. This includes cost center accounting, municipal/private sector cooperation, Economic Development Board, Economic Development (and Strategic Planning) Unit in Mayor’s Office capable of supporting investors.

• Develop and promote an Aleppo image. Despite the prominence of the textile sector few know about it, even in the sector. Aleppo made very little out of the fact that it was the Islamic City of the Year – this usually takes years of good preparation if it is to make an impact. There is currently an advertizing by Croatia on CNN, showing that she applied for City of the Year for 2016. So others think that it is something important.

B2. Manufacturing/Textile Sector 1. Aleppo’s economy remains highly focused on the private sector and manufacturing.

• The private sector accounts for 70.5 percent of all jobs, as compared to 59.9 percent in Damascus. Damascus is less well positioned in a world in which the public sector share of employment declines, as it must if Syria is to develop.

• Manufacturing comprises 30.5 percent of total employment in Aleppo, as compared to 18 percent in Damascus.

• Manufacturing represents as many as 150-160,000 jobs.

2. Opinions about the health of the textile sector vary widely. • Government Position

• 2005-07 textile sector experienced high growth, 145 percent per year • Chamber of Commerce says export growth persists, including in textiles

• Aleppo Textile Producers: • There is evidence that Aleppo’s textile sector has 8-10,000 establishments and 30-45,000

jobs. • There is a claim that the textile sector nationally accounts for 30% of the non-oil sector

exports • Tell tale of industry collapse that began in 2005-6 and reached extreme levels in 2008 and

2009. This raises the question: Is the textile sector a Dying Industry in Aleppo? Is the recent decline a structural or a short-term recession problem?

• Most producers traditionally operate their factories in two 12-hour shifts, but now have closed down at least one shift and operate the remaining shift at 20 percent of its capacity.

• Some producers have pulled up their stakes and shipped their factory to Egypt, Tunisia or Morocco, while others are thinking about this option.

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• 50 percent of domestic market has been lost to Syrian producers, overcome by cheap imports (despite continued tariffs on these imports).

3. Key Issues and Clarifications

• What is the True Story? How can the stories told by Government and Private Sector be reconciled?

• Problematic Statistics: Not clear. All Syrian statistics are suspect. • Administrative data are biased in unknown ways. • Under-invoicing Exports: Exports in the past had to be declared and profits repatriated.

This led to under-invoicing of exports. Under-invoicing declined as reporting requirement for export repatriation diminished.

• Was there ever an export tax? This would have also led to under-invoicing. • Public Sector Role: Large exports could be from the public sector – mainly yarns and

cloth. The public sector may be able to export at a loss.

• What explains textile industry decline?

• Political situation: Syria’s US and European partners are under pressure not to buy from Syria. This started with the American Syrian Accountability Act of 2004 which bans to import of US technology to Syria.

• GAFTA and loss of domestic share: Re-export from Arab countries of Chinese products.

• Government price increase for energy. In 2008? • Government wage increases in 2009: These apply only to the public sector, but pressure

is on for the private sector to follow. • US Boycott/2004 Syrian Accountability Act: Boycotts all imports except food and

pharma. • Euro 1: This frees Syrian imports of 10 or 12 percent import tariffs (which continue to be

imposed on Chinese imports). This is an advantage, but some textile producers thought that this advantage no longer existed.

• Is the problem structural or temporal, related to the recession?

• Labor Intensity of Garment Sector: A bit of both. Syria can no longer compete in the ready-made garment sector, which is the most labor intensive.

• If true, this requires major restructuring. This sector is likely responsible for 40 percent of total employment.

• Value Chain: One exporter reports the following value chain (which should be validated) moving from agricultural production of raw cotton to ready garments:

7.5% Raw Cotton Production 7.5% Yarn 17.5% Cloth 5.0% Printing and Dyeing 60.0% Ready Made Garment

• China Factor: Syria cannot compete with China, either on labor productivity or wages. • Female Labor: Women do the sewing in China. In Syria, this is mainly men’s work.

Women are a small part of the labor force.

• What are additional threats? • Further reduction in import restrictions. • Industrial Organization Law (mentioned in the Oxford 2009 Syria Report): It would

profoundly affect the informal sector, by requiring them to legalize their status and to register with the Chamber of Industry, or to be shut down.

4. What should be the strategy? What to recommend?

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Immediate Approach • Problem is almost entirely one of national, not local policy. But it impacts Aleppo

profoundly. • Need to have more information. At least get the facts. Do a Survey, even a survey of 1

page will give us essential information. • Obtain access to Sheikh Najjar Survey information. • Develop a strategy that we can take to President of Republic and Parliament. • Establish a Working Group that meets several times. I should also meet with the Arab

Federation of Textile Industries in Aleppo. The President of the Federation is also the President of the Aleppo Chamber of Industry.

• Do Value Chain analysis to determine value added generated at each step of the textile production process and to better understand niches.

• Understand the causes of the problem and their reversibility. Worldwide, there are at any time numerous dying industries. Think of the mining and textile industry in Germany, or the coal and steel industry in the US. Often, it takes decades for them to die out.

• Old industries can survive a long time, if they do not need to invest. Dying industries run down their capital, until it becomes worthless. This would be one scenario.

Towards Long-Term Strategy • Understand and possibly Imitate Competitors: Egypt, Tunisia and Morocco are said to

have a much better business environment, including incentives. All of them are part of GAFTA. There should be nothing in these countries that cannot be done in Syria.

• Reduce Energy Cost? Introduce energy vouchers? Subsidize energy? • Introduce labor vouchers? This would force firms to declare their true number of

workers – but this would also be costly in terms of payments towards social security. • Value added and niche market products? Compete not on price but on proximity and

market access. • Improve political acceptance that there is a problem. This is already on the way. • European – Syrian Agreement: Has long been at signature stage. • Establish an Investment Agency (LED Working Group)

• Promote the current Industrial Zone; • Promote the city's competitive advantages; • Provide assistance with registration & licensing; • Provide legal assistance by introducing investors to local international lawyers; • Promote the formation of Joint-Venture establishments; and • Introduce international investors to potential local partners

Data Notes on Textile Sector Export Statistics

• National statistics (reported by the 2009 Oxford Report) show textile exports double each year between 2005 and 2007. No data are available for 2008 or 2009.

• The Aleppo Chamber of Commerce reports rising exports for the years 2005 through 2009. The data have not yet been received.

Textile Investment and Operations • Sheikh Najjar management shows the textile sector as the dominant investment sector in

Sheikh Najjar. Of 413 firms in operation (start of June 2009), 187 or 45.2 percent are in the textile branch. Of the 1,542 firms that either started construction or operations, 587 or 38.1 percent are in the textile sector. Since all of this is investment since 2004, this seems to indicate a very healthy investment climate. Textiles made up 37 percent of Sheikh Najjar’s

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planned land sales (planned prior to 2003) and actual implementation seems exactly in line with plan.

• Sheikh Najjar has monthly survey figures that show the actual situation, but is not willing to share them. The Municipality or Textile Interest Group may be able to obtain these data. It is the only survey data available. The Sheikh Najjar information on land sales and project start-up However, this could reflect past decisions from 2003-2006, when the outlook for textiles looked better.

Number of Textile Firms • The 2004 Census reports for the Municipality of Aleppo that 24.3 percent of all

establishments (23,798 out of a total 97,765) are in Manufacturing. If we apply to this the establishment share used by Sheikh Najjar, then about 8,800 establishments may be in the textile sector. Obviously, better numbers would be available from the Census, which obtained detailed sector information – though this data is not available to us.

• The Department of Industry under the Ministry of Industry reports that it has given 31,226 permits, of which 10,277 are for textile establishments (5,100 for the textile industry and 5,177 for the textile handicraft sector). This number is for the Governorate (but excludes Sheikh Najjar). The Department estimates that roughly 65 percent of all its permits is for establishments inside the Baladiya. Applied to textiles, this would mean that there are 6,700 textile establishments in the City of Aleppo. The two estimates provide order of magnitude estimates.

Number of Textile Jobs or Workers Employed in the Textile Sector • The 2004 Census reports for the Municipality of Aleppo that 30.5 percent of all employment

is in the manufacturing sector. Aleppo’s total population in 2004 was 2.132 million. Assuming an employment rate of about 25 percent (correct estimates should be available), there would be around 162,600 manufacturing workers. If the textile share of employees had been similar to the share reported in permit applications to the Department of industry (28.9 percent), then the total number of workers employed in 2004 in textile production and residing in the City of Aleppo was around 47,000. This is a large number, and a substantial decline in competitiveness would have a huge impact on Aleppo’s economy.

• The Department of Industry under the Ministry of Industry (responsible for industrial permits) provided figures on textile employment, based on its permits, see Table 2 of Annex 5. These numbers differ from those quoted in the previous paragraph in several ways. They are for the Governorate (though without Sheikh Najjar) rather than the Baladiya; they represent place of work rather than place of residence27

data: and they are permit data. Permits often are many years old, and the actually number of workers working at a plant could be higher or lower. Permit employment is 38,808 in textile industry and handicraft combined. Assuming that only 20 percent of this employment is located outside Aleppo (since rural firms are likely smaller than firms inside the City), this suggests 31,000 textile jobs located in the City of Aleppo.

B3. Spatial Issues Possible Strategic Issues: The CDS Steering Committee has asked for advice on spatial issues within the context of the economic development strategy. The spatial organization of a city can have a

27 Census municipality data are based on the population count in Aleppo City, i.e. they count employment where people reside. Establishment data from Permit Departments count jobs at the location of the firm, i.e. where people work.

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strong impact on its efficiency, ease of job generation, the productivity of its firms, and the quality of life of its resident consumers.

• Industrial Zoning • What is the impact in Aleppo of industrial zoning, including in particular the relocation of

industry into a variety of specialized industrial zones and the new Industrial City Sheikh Najjar?

• Is this helpful to the overall task of job creation? • What type of jobs is likely to be created in this manner? • Will it result in excessive commuting? • How does it impact the generation of agglomeration economies?

• Improving Industrial Zones

• How can the industrial zones be made to work better? • Given that Government has already invested heavily in industrial zones and cities, this is a

course impossible to reverse. • So how can plans be modified to be least disruptive of the economic life of the city?

• Urban Sprawl

• What is the impact of rising sprawl at the urban fringe? • What is the impact of suburbanization of commercial activities and emergence of suburban

shopping centers? • What may be its long-term impact on the Old City and the current City Center?

Advantages/Disadvantages of Industrial City a. Possible Rationale for Industrial City • Reduced rural urban migration: This is given as the reason for locating cities at a distance too

great to commute. Reducing migration solves yesterday’s problem. Rural urban migration already low, as Syria’s urbanization rate is now 60 percent of higher.

• Reduced environmental cost and negative externalities: A valid concern, though there are many ways to do this.

Najjar and other industrial cities include many firms that do not pollute. This should not be used to require relocation.

• Better/more specialized infrastructure services: These have indeed been generated in Najjar. But it would be better to solve the infrastructure problems in general. One of the consequences of good infrastructure in Najjar is a lack of good infrastructure elsewhere.

• Industry Complementarities: A valid goal. This is never achieved. Government is not good at generating industrialization or cluster economies.

• Economies of scale in development: Green field development can generate huge economies of scale, in particular relative to the piecemeal small investments required in built-up areas downtown.

I doubt that these have been generated in Najjar.

b. Possible Problems/Negative Impacts • Limits or reduces the creation of new firms

• Large agglomerations such as Aleppo are business incubators. • Make it very easy to start a new business, because of superior business services.

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• Green fields and small cities have limited business services. Services must be provided internally.

• Start-up cost rises, and hence limits new investment.

• Increases the cost of operation • High commuting cost for workers: Generally, a high percentage of workers does not go to

the nearest job • High cost of linking to traditional suppliers, great distance • Difficult to outsource

• Reduces or inhibits job creation • High capital labor ratio: In Najjar it seems to average $60,000 or so as compared to $2-

3,000 in the informal sector • No forward or backward linkages

• Creates limited range of firms and limited diversity

• In new cities, all is new. This is not the right environment for many firms.

• Reduces quality of life • Most services have dual uses, and consumer also benefits from choice.

• Suburbanizes Investment and possibly, hollows out central city investment

• Traditional US experience is obsolete central cities, little central city investment • Northern European countries have avoided this by reducing sprawl and strictly limiting

land supply at the edge

Strategies for Industrial City and Industrial Zones • Stage infrastructure implementation efficiently

• Idle infrastructure is costly

• Scale up as quickly as possible • Generates economies of scale, agglomeration economies

• Limit relocation requirements • Negative externalities are already internalized, so benefit of relocation is small • Najjar wants forced relocation of 500-600 Aleppo businesses to Najjar • This would mean another large loss of jobs and balance sheet reduction

• Permit nearby informal development • Encourage diversity in plot size

• Strengthen business service development • Allow small establishments to take hold • Do not pre-design all service areas • Develop a large shopping district

• Do not start new industrial zones • Go slow

• Do not concentrate all repair shops in a single zone. • Consider car repairs, and having to commute through the city 2 to 3 times for each repair.

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Annex 2 Tourism Workshop Chamber of Tourism, 5:30, July 1 2009 1. LED Purpose Mahmoud/Burkhard

• Participatory assessment of overall economy, including tourism • Participatory preparation of a strategy and its implementation • Need for cooperative approaches, particularly in Tourism

2. Purpose of Meeting Mahmoud/Burkhard

Four items • Describe key findings so far on Tourism Sector • Use meeting to obtain factual information • Use meeting to identify problems of tourism sector (SWOT analysis) • Identify strategic issues the Tourism Sector should work on

3. Key Findings Burkhard

Lack of good information on the sector • SEBC can only get 2006 data on visitors, occupancy rates • There is no strategy at the local level • Limited presence on the web, world knows little about Aleppo • Competitive advantages low cost (relative to Damas), proximity to Turkey • Easy visa regulations not known and understood

4. Participant Assessments Bana/Burkhard Idea is that we cannot promote a sector that we do not understand and that we know little about. The idea is to get a joint assessment of our Aleppo market segments. Each participant enters a distribution, we collect the data, and maybe, we enter it in a table during a break and the report back on the findings.

• Cultural (mostly group tourism from Europe, US, South America, Japan and Korea) • Religious Christian (mostly from US and South America, less from Europe) • Religious Shiite (mostly from Iran) • Business (mostly from Middle East, proportionate to business volume) • Convention, Events (domestic, little international) • Expatriate (this is large, coming from Europe and US) The problems is that we do not

know whether they are traveling on a Syrian or expat passport • Urban Entertainment (Arab, little in Aleppo) • Beach and Coastal Hill Tourism (mostly domestic and Arab) • Weekend Tourism (mostly focused on Syrian Coast, not Aleppo)

I would like to get from the audience an estimate of the distribution of the different types of tourism, in terms of number of visitors. 5. SWOT Analysis 5.1 Weaknesses/Problems Consider both problems national and local problems.

• National problems are those common to the national industry (related often to national laws and regulations)

• Local problems are those mostly confined to Aleppo, and under local control) Consider problems by types

Industry Structure • Hotels: Limited luxury and 5 star presence • Restaurants: Limited choice of cuisine • Tour operators: mainly from Damascus

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• Amusement and Night Life: Outlets very limited • Handicraft products: Exist but innovation limited • Museums & Sites: Under Ministry of Culture badly managed for tourism • Cooperation: Little cooperative industry action • Promotion and Marketing: Lack of institutional capacity • Peer Review System: Non-existent Support Industries: • Airport: Bad appearance, small size, low frequency of flights, limited destinations • Transport Ownership: Bus companies owned by Damascus operators • Finance: Weak access, main banks mostly in Damascus • Tourism infrastructure limited (no information booths, public toilets) Demand • Domestic leisure demand for Aleppo weak • Foreign culture demand below potential • Aleppo largely unknown (particularly relative to Damascus) • No presence on international TV channels Factor Supplies: • Location has weaknesses: Damascus is first point of entry, gives it competitive • Aleppo is isolated • Human capital weak (ltd language skills, lack of training) • Hotels need updating • Hotel management capacity missing Enabling Environment • Middle East instability, political environment reduces potential • Slow permits and licensing for hotels • Government visa regulations not well known • Institutions weak for promotion and marketing • Institutions weak for convention and events business

5.2 Strengths

• Great sites spanning pre-historical, Greek, Roman, Early Christian & Islamic sites • Old City of Aleppo, Citadel • Living traditional bazaar and traditional crafts • Important museums • Great and diverse culture • Important religious sites • Great climate, year-round potential • Warm and welcoming population • Close proximity to Europe and Turkey • Rich cuisine • Traditional Handicraft

5.3 Threats

• Regional instability • Greater competitiveness of nearby countries • Continued concentration on Damascus • Failure of decentralization policies • Insufficient rehabilitation

5.4 Opportunities

• Hub-potential with day-excursion to dead cities, Eastern Region • Turkey-Syrian joint tourism development • Convention tourism related to Aleppo industry • Expansion of GAFTA trade and resulting business tourism

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• Expansion of Turkey Syria trade and resulting business tourism 6. Review of Problems, Prioritization

• Identify problems by priority, which are critical • Identify which require national action • Identify problems for local stakeholder action

7. Possible Immediate Actions for Chamber, Municipality, and National Organizations (Ministry of Tourism/Culture)

Local Level • Cooperate in developing or strengthening web-site development • Cooperate in market survey at hotels • Prepare a promotion and marketing strategy for specific market segment, based on

survey • Cooperate in developing convention tourism • Actively engage in attracting events and conventions • Improve ties with public and private institutions for language skills • Develop an employee training program • Establish a Peer Review System for hotel operations and improvement • Develop Plan for site development • Develop suggestion for Ministry of Culture for improved site operations • Ease restrictions on use conversion for Niche Market hotels in Old City Central Level • Lobby for airport improvements • Lobby for improved Airport operations • Lobby for Airport business plan to support greater connectivity • Lobby for decentralization of some tourism tax revenues • Lobby Ministry of Culture for specific improvements in • Decentralize spending of tourism taxes to local level

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Annex 3

National and Governorate Data, Statistical Abstract 2008 Table 1: Population—Registered and Actual Resident Population by Governorate

Table 2: Population—Distribution and Growth Rates

Table 3: Population—Rural and Urban Population by Governorate

Table 4: Employment—by Sector and Gender

Table 5: Domestic Product—at Factor Cost, by Sector, in Current Prices

Table 6: Industrial Production—NDP by Industrial Sector, at Factor Cost in Current Prices

Table 7: Industrial Production—NDP Index Numbers by Industrial Sector, 2004-07

Table 8: Industrial Production—Manufacturing Output (Physical Units) by Sector

Table 9: Tourism—Arab and Foreign Arrivals, Syria 2003-07

Table 10: Tourism—Hotel Guests by Type of Hotel and Governorate

Table 11: Tourism—Guest Nights by Type of Hotel and Governorate

Table 12: Tourism—% Distribution of Guests and Guest Nights, and Average Stay

Table 13: Services—Airports and Air Transport

Table 14: Services—Water Production and Consumption by Governorate

Table 15: Services—Use of Phone Services, Total and per Resident, by Governorate

Table 16: Services—Telephone Lines, and Lines per 100 Population, by Governorate

Table 17: Financial Sector—Banks and Branches by Governorate

Table 18: Prices—Exchange Rates at Official and Market Prices, 2005-07

Table 1: Registered vs. Actual Population in 2008, by Governorate, as per CBS 2008 Statistical Yearbook and Additions

Table 1/2 and 2/2 Table1

Governorate Total Females Males Total Females Males Total Females MalesDamascus 100.2 7.5 1,684 841 843 1,669 818 851 1.01 1.03 0.99 0.88 0.88 0.88 Rural Damascus 103.2 7.7 1,711 842 869 2,487 1,207 1,280 0.69 0.70 0.68 0.60 0.60 0.60 Aleppo 101.0 23.8 5,315 2,644 2,671 4,393 2,130 2,263 1.21 1.24 1.18 1.05 1.06 1.04 Homs 102.1 8.9 1,977 978 999 1,647 806 841 1.20 1.21 1.19 1.04 1.04 1.05 Hama 102.5 8.7 1,938 957 981 1,491 732 759 1.30 1.31 1.29 1.13 1.12 1.14 Lattakia 100.2 5.2 1,161 580 581 943 467 476 1.23 1.24 1.22 1.07 1.06 1.08 Deir-ez-Zor 98.0 6.8 1,511 763 748 1,094 540 554 1.38 1.41 1.35 1.20 1.21 1.19 Idleb 102.5 8.4 1,865 921 944 1,359 664 695 1.37 1.39 1.36 1.19 1.18 1.20 Al-Hasakeh 98.8 6.5 1,445 727 718 1,377 684 693 1.05 1.06 1.04 0.91 0.91 0.92 Al-Rakka 96.7 4.0 903 459 444 854 404 450 1.06 1.14 0.99 0.92 0.97 0.87 Al-Sweida 100.0 2.1 460 230 230 346 177 169 1.33 1.30 1.36 1.16 1.11 1.20 Dar ' a 102.6 4.5 1,011 499 512 916 451 465 1.10 1.11 1.10 0.96 0.94 0.97 Tartous 101.3 4.0 904 449 455 750 370 380 1.21 1.21 1.20 1.05 1.04 1.06 Quneitra 101.8 2.0 446 221 225 79 38 41 5.65 5.82 5.49 4.91 4.97 4.85

TOTAL 101.0 100.0 22,331 11,111 11,220 19,405 9,488 9,917 1.15 1.17 1.13 1.00 1.00 1.00 Source: CBS 2008 Statistical Yearbook\1 Ratio of Registered Population to Resident Population (Population actually living in Governor\2 Ratio of Registered to Resident Population, normalized by the average ratio for Syria of registered to resident population

Population according to Civil Registration Records 1/1/2008Estimated Population actually Living

in Syria 1/1/2008, in '000Ratio of Registered to Actual

Population \1Normalized Ratio of Registered to

Actual Population \2

Sex Ratio% of Total Population

Total (in '000)

Females (in '000)

Males (in '000)

Table 2: Population Distribution by Governorate, and Rate of Growth for Selected Periods 1981-2005, based on 1981, 1994 and 2004 Census Results and Interpolation

TABLE 6/2 Table2

2004 1994 1981 2000 - 2005 1995 - 2000 1981 - 1994 1981-2005 2000 - 2005 1995 - 2000 1981 - 1994 1981-2005Damascus 8.7 10.1 12.3 13.3 14.7 18.0 53.3 2.53% 2.78% 1.11% 1.72%Damascus rural area 12.7 11.9 10.1 34.1 37.6 45.9 169.2 6.04% 6.59% 2.55% 4.04%Aleppo 22.6 21.6 20.8 26.8 29.5 36.1 123.5 4.86% 5.31% 2.08% 3.27%Homs 8.5 8.8 9.0 23.5 25.9 31.6 104.6 4.31% 4.71% 1.85% 2.91%Hama 7.7 8.0 8.2 23.0 25.4 31.1 102.2 4.23% 4.63% 1.82% 2.86%Lattakia 4.9 5.4 6.1 17.5 19.3 23.6 73.3 3.28% 3.59% 1.42% 2.22%Deir-ez-zor 5.6 5.2 4.5 32.4 35.7 43.6 158.0 5.77% 6.30% 2.44% 3.86%Idleb 7.0 6.6 6.4 25.9 28.5 34.8 118.1 4.71% 5.14% 2.01% 3.17%Al-Hasakeh 7.1 7.4 7.4 24.6 27.1 33.1 110.8 4.50% 4.91% 1.92% 3.03%Al-Rakka 4.4 4.0 3.9 26.7 29.4 35.9 122.8 4.85% 5.29% 2.07% 3.26%Al-Sweida 1.8 1.9 2.2 17.1 18.8 23.0 71.1 3.21% 3.51% 1.39% 2.17%Dar'a 4.7 4.4 4.0 29.9 33.0 40.3 142.4 5.37% 5.87% 2.28% 3.61%T artous 3.9 4.3 4.9 16.2 17.9 21.9 67.0 3.05% 3.35% 1.33% 2.07%Qunetira 0.4 0.3 0.3 36.2 39.9 48.8 183.5 6.37% 6.95% 2.68% 4.26%

TOTAL 100.0 100.0 100.0 24.5 27.0 33.0 110.3 4.48% 4.90% 1.92% 3.02%Source: 2008 CBS Statistical Abstract and own adaptations

Mohafazat

معدل النمو السنوي باأللف نسبة سكان المحافظة من مجموع السكان % % of Total Population Growth Rate over Period Annnual Growth Rate over Period

Table 3: Estimates of the Resident Population in mid 2008, by Governorate, Gender and Rural/Urban Area

TABLE 12/2 Table3

Total Female Male Total Female Male Total Female Male

Place of Residence Population by Governorate, in '000Damascus 1,680 823 857 - - - 1,680 823 857 Damascus Rural 2,529 1,227 1,302 887 431 456 1,642 796 846 Aleppo 4,450 2,158 2,292 1,673 817 856 2,777 1,341 1,436 Homs 1,667 815 852 763 374 389 904 441 463 Hama 1,508 740 768 952 470 482 556 270 286 Lattakia 951 471 480 462 230 232 489 241 248 Deir-ezzor 1,111 548 563 616 306 310 495 242 253 Idleb 1,376 672 704 983 481 502 393 191 202 Al-hasakeh 1,392 691 701 892 445 447 500 246 254 Al-rakka 865 409 456 531 253 278 334 156 178 Al-Sweida 349 178 171 240 121 119 109 57 52 Draà 930 458 472 513 252 261 417 206 211 Tartous 756 373 383 541 266 275 215 107 108 Quneitra 80 39 41 80 39 41 - - -

TOTAL 19,644 9,602 10,042 9,133 4,485 4,648 10,511 5,117 5,394

% Distribution of Population, by GovernorateDamascus 8.6% 8.6% 8.5% 0.0% 0.0% 0.0% 16.0% 16.1% 15.9%Damascus Rural 12.9% 12.8% 13.0% 9.7% 9.6% 9.8% 15.6% 15.6% 15.7%Aleppo 22.7% 22.5% 22.8% 18.3% 18.2% 18.4% 26.4% 26.2% 26.6%Homs 8.5% 8.5% 8.5% 8.4% 8.3% 8.4% 8.6% 8.6% 8.6%Hama 7.7% 7.7% 7.6% 10.4% 10.5% 10.4% 5.3% 5.3% 5.3%Lattakia 4.8% 4.9% 4.8% 5.1% 5.1% 5.0% 4.7% 4.7% 4.6%Deir-ezzor 5.7% 5.7% 5.6% 6.7% 6.8% 6.7% 4.7% 4.7% 4.7%Idleb 7.0% 7.0% 7.0% 10.8% 10.7% 10.8% 3.7% 3.7% 3.7%Al-hasakeh 7.1% 7.2% 7.0% 9.8% 9.9% 9.6% 4.8% 4.8% 4.7%Al-rakka 4.4% 4.3% 4.5% 5.8% 5.6% 6.0% 3.2% 3.0% 3.3%Al-Sweida 1.8% 1.9% 1.7% 2.6% 2.7% 2.6% 1.0% 1.1% 1.0%Draà 4.7% 4.8% 4.7% 5.6% 5.6% 5.6% 4.0% 4.0% 3.9%Tartous 3.8% 3.9% 3.8% 5.9% 5.9% 5.9% 2.0% 2.1% 2.0%Quneitra 0.4% 0.4% 0.4% 0.9% 0.9% 0.9% 0.0% 0.0% 0.0%

TOTAL 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%

% Distribution of Population by Rural and Urban AreaDamascus 100.0% 100.0% 100.0% 0.0% 0.0% 0.0% 100.0% 100.0% 100.0%Damascus Rural 100.0% 100.0% 100.0% 35.1% 35.1% 35.0% 64.9% 64.9% 65.0%Aleppo 100.0% 100.0% 100.0% 37.6% 37.9% 37.3% 62.4% 62.1% 62.7%Homs 100.0% 100.0% 100.0% 45.8% 45.9% 45.7% 54.2% 54.1% 54.3%Hama 100.0% 100.0% 100.0% 63.1% 63.5% 62.8% 36.9% 36.5% 37.2%Lattakia 100.0% 100.0% 100.0% 48.6% 48.8% 48.3% 51.4% 51.2% 51.7%Deir-ezzor 100.0% 100.0% 100.0% 55.4% 55.8% 55.1% 44.6% 44.2% 44.9%Idleb 100.0% 100.0% 100.0% 71.4% 71.6% 71.3% 28.6% 28.4% 28.7%Al-hasakeh 100.0% 100.0% 100.0% 64.1% 64.4% 63.8% 35.9% 35.6% 36.2%Al-rakka 100.0% 100.0% 100.0% 61.4% 61.9% 61.0% 38.6% 38.1% 39.0%Al-Sweida 100.0% 100.0% 100.0% 68.8% 68.0% 69.6% 31.2% 32.0% 30.4%Draà 100.0% 100.0% 100.0% 55.2% 55.0% 55.3% 44.8% 45.0% 44.7%Tartous 100.0% 100.0% 100.0% 71.6% 71.3% 71.8% 28.4% 28.7% 28.2%Quneitra 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 0.0% 0.0% 0.0%

TOTAL 100.0% 100.0% 100.0% 46.5% 46.7% 46.3% 53.5% 53.3% 53.7%Source: CBS 2008 Statistical Yearbook

URBANTOTAL RURAL

Table 4: Distribution of Workers (15 years and older) in Syria, by Sector and Sex, 200

TABLE 6/3 Table 3.1SECTOR القطـــاع

T F M T F M T F M T F M

Number of Workers

Agriculture زراعة 17,850 4,024 21,874 565,131 95,762 660,893 197,973 65,861 263,834 780,954 165,647 946,601 Industry صناعة 112,833 14,490 127,323 531,064 25,889 556,953 14,714 2,303 17,017 658,611 42,682 701,293 Building and Construction بناء و تشييد 33,104 1,137 34,241 675,669 4,912 680,581 20,934 175 21,109 729,707 6,224 735,931 Retail, Hotels and Restaurants تجارة و فنادق 16,401 2,364 18,765 707,822 24,758 732,580 29,702 2,193 31,895 753,925 29,315 783,240 Storage, Transport and Communication نقل و مواصالت 53,349 6,271 59,620 275,320 3,050 278,370 14,218 77 14,295 342,887 9,398 352,285 Finace, Insurance and Real Estate مال و تأمين 13,466 4,598 18,064 102,096 10,415 112,511 1,644 168 1,812 117,206 15,181 132,387 Services خدمات 782,786 317,304 1,100,090 144,226 41,863 186,089 6,065 1,996 8,061 933,077 361,163 1,294,240 Total المجموع 1,029,789 350,188 1,379,977 3,001,328 206,649 3,207,977 285,250 72,773 358,023 4,316,367 629,610 4,945,977

Distribution of Workers by Sector

Agriculture 19.1% 26.3% 18.1% 73.7% 90.5% 69.4% 20.6% 46.3% 18.8% 1.6% 1.1% 1.7% زراعةIndustry 14.2% 6.8% 15.3% 4.8% 3.2% 5.2% 17.4% 12.5% 17.7% 9.2% 4.1% 11.0% صناعةBuilding and Construction 14.9% 1.0% 16.9% 5.9% 0.2% 7.3% 21.2% 2.4% 22.5% 2.5% 0.3% 3.2% بناء و تشييدRetail, Hotels and Restaurants 15.8% 4.7% 17.5% 8.9% 3.0% 10.4% 22.8% 12.0% 23.6% 1.4% 0.7% 1.6% تجارة و فنادقStorage, Transport and Communication 7.1% 1.5% 7.9% 4.0% 0.1% 5.0% 8.7% 1.5% 9.2% 4.3% 1.8% 5.2% نقل و مواصالتFinace, Insurance and Real Estate 2.7% 2.4% 2.7% 0.5% 0.2% 0.6% 3.5% 5.0% 3.4% 1.3% 1.3% 1.3% مال و تأمينServices 26.2% 57.4% 21.6% 2.3% 2.7% 2.1% 5.8% 20.3% 4.8% 79.7% 90.6% 76.0% خدماتTotal 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% المجموعSource : Central Bureau of Statistics, Statistical Abstract 2008, based on the Labour Force Survey of 2007 Translation of sectors adjusted by Consultan

Private PublicECONOMIC ACTIVITY Totalالنشاط االقتصادي Others

Table 5: Structure of Net Domestic Product at Factor Cost by Sector, 2007 (at Current Prices)Table 7.1

Sector/Industry 2004 2005 2006 2007

Net Domestic Product at Factor Cost, in Current Prices, in million SP

Agriculture 275,804 305,449 350,423 409,511 Mining & manufacturing 386,225 490,058 551,502 621,738

Extraction 256,140 350,823 412,693 460,344 Water and Electricity 15,774 17,207 20,092 23,711 Manufacturing 114,310 122,028 98,445 137,681

Food beverage and tobacco 28,017 29,316 23,201 28,975 Textiles clothing & leather Industry 39,002 33,928 34,892 35,953 Wood and furniture 6,700 7,398 8,169 8,566 Paper printing and publishing 3,972 3,945 3,959 3,975 Chemical & Production and Petroleum Refinement 6,291 11,188 (12,296) 3,348 Non-metalic Products 19,009 14,595 16,204 14,816 Basic metal Products 1,481 2,222 2,247 2,492 Metal products 9,331 18,569 21,207 20,003 Miscellaneous 507 867 862 19,553

Building & construction 33,814 37,476 58,709 68,674 Wholesale & retail trade 204,103 326,424 440,501 593,374 Transport & communication 123,074 139,353 154,345 176,429 Finance & insurance 47,122 66,587 76,497 104,696 Social & personal services 29,857 35,542 40,529 46,231 Government services 151,153 156,316 147,186 196,874 Private non-profit services 706 795 908 954 Customs duties - - - -

Value of imputed monetary services (FISIM) 11,223 28,539 34,491 46,776

TOTAL 1,240,635 1,529,461 1,786,109 2,171,706

Distribution of Net Domestic Product at Factor Cost, by Sector

Agriculture 22.2% 20.0% 19.6% 18.9%Mining & manufacturing 31.1% 32.0% 30.9% 28.6%

Extraction 20.6% 22.9% 23.1% 21.2%Water and Electricity 1.3% 1.1% 1.1% 1.1%Manufacturing 9.2% 8.0% 5.5% 6.3%

Food beverage and tobacco 2.3% 1.9% 1.3% 1.3%Textiles clothing & leather Industry 3.1% 2.2% 2.0% 1.7%Wood and furniture 0.5% 0.5% 0.5% 0.4%Paper printing and publishing 0.3% 0.3% 0.2% 0.2%Chemical & Production and Petroleum Refinement 0.5% 0.7% -0.7% 0.2%Non-metalic Products 1.5% 1.0% 0.9% 0.7%Basic metal Products 0.1% 0.1% 0.1% 0.1%Metal products 0.8% 1.2% 1.2% 0.9%Miscellaneous 0.0% 0.1% 0.0% 0.9%

Building & construction 2.7% 2.5% 3.3% 3.2%Wholesale & retail trade 16.5% 21.3% 24.7% 27.3%Transport & communication 9.9% 9.1% 8.6% 8.1%Finance & insurance 3.8% 4.4% 4.3% 4.8%Social & personal services 2.4% 2.3% 2.3% 2.1%Government services 12.2% 10.2% 8.2% 9.1%Private non-profit services 0.1% 0.1% 0.1% 0.0%Customs duties 0.0% 0.0% 0.0% 0.0%Value of imputed monetary services (FISIM) 0.9% 1.9% 1.9% 2.2%

TOTAL 100.0% 100.0% 100.0% 100.0%

Distribution of Net Domestic Product at Factor Cost, by Industry for Manufacturing

Manufacturing 100.0% 100.0% 100.0% 100.0%Food beverage and tobacco 24.5% 24.0% 23.6% 21.0%Textiles clothing & leather Industry 34.1% 27.8% 35.4% 26.1%Wood and furniture 5.9% 6.1% 8.3% 6.2%Paper printing and publishing 3.5% 3.2% 4.0% 2.9%Chemical & Production and Petroleum Refinement 5.5% 9.2% -12.5% 2.4%Non-metalic Products 16.6% 12.0% 16.5% 10.8%Basic metal Products 1.3% 1.8% 2.3% 1.8%Metal products 8.2% 15.2% 21.5% 14.5%Miscellaneous 0.4% 0.7% 0.9% 14.2%

Distribution of Net Domestic Product at Factor Cost, by Industry for Manufacturing

Manufacturing 100.0% 100.0% 100.0% 100.0%Agro-Food 24.6% 24.2% 23.8% 24.5%Textiles 34.3% 28.0% 35.8% 30.4%Chemical 5.5% 9.2% -12.6% 2.8%Engineering 35.6% 38.6% 53.1% 42.2%

* ProvisionalSource: Central Bureau of Statistics, Statistical Yearbook 2008 and Consultant interpretations

Table 6: Gross Output and Net Domestic Product in the Public and Private Industrial Sectors and Factor Cost (2004-07) in Current Prices (Million SP

TABLE 12/5 to 14/5 Table9INDUSTRIAL ACTIVITY 2004 2005 2006 2007 النشــاط

صافي النـاتج لالمحلي

االنتـاج صافي النـاتج المحلي



االنتـاج

N.D.P. Gross Output N.D.P. Gross Output N.D.P. Gross Output N.D.P. Gross Output 2004 2005 2006 2007

Public Industrial SectorFood beverage and tobacco 14,104 56,031 13,504 54,327 7,492 53,351 11,836 52,180 25.2% 24.9% 14.0% 22.7% المواد Textiles clothing & leather Industry 4,927 20,862 6,980 22,410 6,073 21,711 6,147 20,527 23.6% 31.1% 28.0% 29.9% الغزل Wood and furniture 58 221 70 244 110 340 86 362 26.2% 28.7% 32.4% 23.8% الخشب Paper printing and publishing 581 829 450 841 268 1,131 33 1,075 70.1% 53.5% 23.7% 3.1% الورق Chemical & Production and Petroleum Refinement 3,075 109,072 3,049 179,347 (20,500) 290,358 (5,287) 338,860 2.8% 1.7% -7.1% -1.6% الكيماويـة Non-metalic Products 5,198 12,760 5,810 15,997 6,462 16,631 5,065 16,305 40.7% 36.3% 38.9% 31.1% المنتجات غير Basic metal Products 808 2,690 626 3,348 465 3,307 677 3,269 30.0% 18.7% 14.1% 20.7% المعدنية Metal products 2,477 7,823 2,986 9,089 4,201 12,234 2,610 11,607 31.7% 32.9% 34.3% 22.5% المنتجات Miscellaneous - - - - - - - - متنوعة اخرىTotal of manufactured industries 31,228 210,288 33,475 285,603 4,571 399,063 21,167 444,185 14.9% 11.7% 1.1% 4.8% مجمـوع Extractive Industry 254,909 288,096 349,385 391,316 411,209 456,209 458,809 506,910 88.5% 89.3% 90.1% 90.5% الصناعات Electricity and water 15,774 61,172 17,207 86,976 20,092 94,482 23,711 118,032 25.8% 19.8% 21.3% 20.1% الماء TOTAL 301,911 559,556 400,067 763,895 435,872 949,754 503,687 1,069,127 54.0% 52.4% 45.9% 47.1% المجمــوع

Private Industrial SectorFood beverage and tobacco 13,912 52,228 15,812 61,340 15,708 63,910 17,138 72,092 26.6% 25.8% 24.6% 23.8% المواد Textiles clothing & leather Industry 34,075 69,934 26,949 80,148 28,819 83,506 29,807 89,226 48.7% 33.6% 34.5% 33.4% الغزل Wood and furniture 6,643 22,005 7,327 24,320 8,059 25,339 8,481 27,786 30.2% 30.1% 31.8% 30.5% الخشب Paper printing and publishing 3,391 8,456 3,495 9,511 3,691 10,709 3,942 11,866 40.1% 36.7% 34.5% 33.2% الورق Chemical & Production and Petroleum Refinement 3,216 20,493 8,139 27,911 8,204 29,080 8,635 32,036 15.7% 29.2% 28.2% 27.0% الكيماويـة Non-metalic Products 13,810 27,385 8,785 30,750 9,742 32,038 9,751 33,554 50.4% 28.6% 30.4% 29.1% المنتجات غير Basic metal Products 673 5,164 1,596 5,570 1,783 5,803 1,815 6,175 13.0% 28.7% 30.7% 29.4% المعدنية Metal products 6,854 42,845 15,584 47,836 17,006 49,840 17,393 52,916 16.0% 32.6% 34.1% 32.9% المنتجات Miscellaneous 507 1,167 867 2,595 862 2,421 19,553 49,451 43.4% 33.4% 35.6% 39.5% متنوعة اخرىTotal of manufactured industries 83,081 249,677 88,554 289,981 93,874 302,646 116,515 375,102 33.3% 30.5% 31.0% 31.1% مجمـوع Extractive Industry 1,231 2,112 1,438 2,442 1,484 2,559 1,535 2,682 58.3% 58.9% 58.0% 57.2% الصناعات Electricity and water - - - - - - - - الماء TOTAL 84,312 251,789 89,992 292,423 95,358 305,205 118,050 377,784 33.5% 30.8% 31.2% 31.2% المجمــوع

Total (Private and Public) Industrial SectorFood beverage and tobacco 28,017 108,259 29,316 115,667 23,201 117,261 28,975 124,272 25.9% 25.3% 19.8% 23.3% الموادTextiles clothing & leather Industry 39,002 90,796 33,928 102,558 34,892 105,217 35,953 109,753 43.0% 33.1% 33.2% 32.8% الغزلWood and furniture 6,700 22,226 7,398 24,564 8,169 25,679 8,566 28,148 30.1% 30.1% 31.8% 30.4% الخشبPaper printing and publishing 3,972 9,285 3,945 10,352 3,959 11,840 3,975 12,941 42.8% 38.1% 33.4% 30.7% الورقChemical & Production and Petroleum Refinement 6,291 129,564 11,188 207,258 (12,296) 319,438 3,348 370,896 4.9% 5.4% -3.8% 0.9% الكيماويـةNon-metalic Products 19,009 40,145 14,595 46,747 16,204 48,669 14,816 49,859 47.4% 31.2% 33.3% 29.7% المنتجاتBasic metal Products 1,481 7,853 2,222 8,918 2,247 9,110 2,492 9,444 18.9% 24.9% 24.7% 26.4% المعدنيةMetal products 9,331 50,668 18,569 56,925 21,207 62,074 20,003 64,523 18.4% 32.6% 34.2% 31.0% المنتجاتMiscellaneous 507 1,167 867 2,595 862 2,421 19,553 49,451 43.4% 33.4% 35.6% 39.5% متنوعة اخرىTotal of manufactured industries 114,310 459,963 122,028 575,584 98,445 701,709 137,681 819,287 24.9% 21.2% 14.0% 16.8% مجمـوعExtractive Industry 256,140 290,208 350,823 393,758 412,693 458,768 460,344 509,592 88.3% 89.1% 90.0% 90.3% الصناعاتElectricity and water 15,774 61,172 17,207 86,976 20,092 94,482 23,711 118,032 25.8% 19.8% 21.3% 20.1% الماءTOTAL 386,224 811,343 490,058 1,056,318 531,230 1,254,959 621,736 1,446,911 47.6% 46.4% 42.3% 43.0% المجمــوع

Total (Private and Public) Industrial Sector, Percent of ManufacturingFood beverage and tobacco 24.5% 23.5% 24.0% 20.1% 23.6% 16.7% 21.0% 15.2% 104.1% 119.5% 141.0% 138.7%Textiles clothing & leather Industry 34.1% 19.7% 27.8% 17.8% 35.4% 15.0% 26.1% 13.4% 172.8% 156.0% 236.4% 194.9%Wood and furniture 5.9% 4.8% 6.1% 4.3% 8.3% 3.7% 6.2% 3.4% 121.3% 142.1% 226.8% 181.1%Paper printing and publishing 3.5% 2.0% 3.2% 1.8% 4.0% 1.7% 2.9% 1.6% 172.1% 179.8% 238.3% 182.8%Chemical & Production and Petroleum Refinement 5.5% 28.2% 9.2% 36.0% -12.5% 45.5% 2.4% 45.3% 19.5% 25.5% -27.4% 5.4%Non-metalic Products 16.6% 8.7% 12.0% 8.1% 16.5% 6.9% 10.8% 6.1% 190.5% 147.3% 237.3% 176.8%Basic metal Products 1.3% 1.7% 1.8% 1.5% 2.3% 1.3% 1.8% 1.2% 75.9% 117.5% 175.8% 157.0%Metal products 8.2% 11.0% 15.2% 9.9% 21.5% 8.8% 14.5% 7.9% 74.1% 153.9% 243.5% 184.5%Miscellaneous 0.4% 0.3% 0.7% 0.5% 0.9% 0.3% 14.2% 6.0% 174.8% 157.6% 253.8% 235.3%Total of manufactured industries 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%

* production of all types of activities within the industrial cities is included

N.D.P/Gross Output

Table 7: Index Numbers of Industrial Production in the Public Sector, 2004-07, Year 2000 = 100

Table 1/5 Table6

INDUSTRIES 2004 2005 2006 2007 الصنـــــاعــــات

First: General index number 95 91 91 88 أوال : الرقم القياسي العامSecond: Extractive industry 85 78 75 69 ثانيا : الصناعات االستخراجيةThird: Manufacturing Industries 109 107 111 111 ثالثا : الصنـاعـات التحويليـة … 1- Food staff and beverages .... 118 112 119 120 1- المواد الغذائية والمشروبات ...... 2- Tobacco...... 119 108 121 125 2- التبغ .... 3- Textile and yarn 138 138 141 128 3- المنسوجات 4- Clothes, fur preparation and dyeing 67 66 58 66 4- المالبس … 5- Tanning and preparation of hides … 78 82 64 59 5- دبغ وتھيئة وصناعة الجلود … 6- Wood and wooden products 91 80 103 91 6- الخشب والمنتجات الخشبية 7- paper and paper products 51 54 43 35 7- الورق ومنتجاته 8- Coke and oil products ..... 104 103 107 108 8- فحم الكوك والمنتجات النفطية… 9- Chemical materials and products.... 113 108 131 123 9- المواد والمنتجات الكيميائية 10- Rubber and plastic ..... 138 104 77 71 10- منتجات المطاط واللدائن … 11- Non metallic products .... 104 111 102 103 11- منتجات المعادن الالفلزية 12- Basic metallic industries 84 94 90 79 12- الفلزات القاعدية األساسية 13- Mineral products other than machineries & equipments 185 164 177 132 13- منتجات المعادن المشكلة عدا 14- Other equipments and machines .... 70 93 90 90 14- اآلالت والمعدات األخرى … 15- Electric equip't and machines not elsewhere classified 153 149 125 122 15 - أجھزة كھربائية غير مصنفة 16- Communication radio and T.V .... 34 24 35 21 16- معدات وأجھزة التلفزيون 17- Furniture and products not classified elsewhere 73 88 130 127 17- األثاث ومنتجات غير مصنفةFourth : Industry of electric and water .... 127 143 148 152 : صناعة المـاء والكھربـاء … ً رابعا Production of electric power 129 145 152 156 إنتاج الطاقة الكھربائية Water networks &its distribution 124 148 135 137 شبكات المياه وتوزيعھاSource: CBS Statistical Yearbook 2008

Table 8: Production of the main Manufacturing Industries 2003-06, Consultant's Adaptation of CBS Statistical Yearbook sources.

Table 2-4/5 Table7

Type of Industry unit 2003 2004 2005 2006 2007 *2003 2004 2005 2006 2003 2004 2005 2006 2003 2004 2005 2006 الوحدة نوع الصناعة

Flour '000 tons 1,716 1,753 1,807 1,832 1,897 1,716 1,753 1,807 1,832 0.0% 0.0% 0.0% 0.0% الف طن الدقيقBread '000 tons 808 821 848 857 920 1,789 2,411 2,525 2,610 2,597 3,232 3,373 3,467 68.9% 74.6% 74.9% 75.3% الف طن الخبز Vegetable oil Ton 43,756 33,320 47,723 46,749 33,337 68,161 69,031 71,302 78,508 111,917 102,351 119,025 125,257 60.9% 67.4% 59.9% 62.7% طن زيت نباتي Margarine and butter Ton 1,054 926 744 1,138 747 1,054 926 744 1,138 0.0% 0.0% 0.0% 0.0% طن سمن وزبده Olive oil Ton 103,947 201,964 123,143 252,352 103,947 201,964 123,143 252,352 100.0% 100.0% 100.0% 100.0% طن زيت زيتونSoap Ton 1,222 1,289 2,207 1,648 1,647 15,270 18,324 25,540 33,599 16,492 19,613 27,747 35,247 92.6% 93.4% 92.0% 95.3% طن صابونCotton Cake '000 tons 144 147 156 149 110 985 2,463 2,860 3,342 1,129 2,610 3,016 3,491 87.2% 94.4% 94.8% 95.7% الف طن كسبة Variant Canned Foods Ton 8,017 8,441 6,692 4,186 3,498 12,570 15,898 21,124 23,108 20,587 24,339 27,816 27,294 61.1% 65.3% 75.9% 84.7% طن كونسروة متنوعةPasteurized Milk Ton 14,759 13,402 9,123 11,032 6,878 1,470 1,502 1,490 3,884 16,229 14,904 10,613 14,916 9.1% 10.1% 14.0% 26.0% طن حليب مبستر Biscuits Ton 1,644 1,678 1,455 1,264 903 16,037 17,801 18,371 22,672 17,681 19,479 19,826 23,936 90.7% 91.4% 92.7% 94.7% طن بسكويت متنوعChocolate Ton 1 0 - - - 7,985 8,023 8,631 12,704 7,986 8,023 8,631 12,704 100.0% 100.0% 100.0% 100.0% طن شوكوالتةMacaroni & noodles Ton 1,219 1,203 1,178 1,203 1,261 7,205 11,000 12,858 19,122 8,424 12,203 14,036 20,325 85.5% 90.1% 91.6% 94.1% طن معكرونة وشعيريةDry Onion Ton 1,032 1,460 1,790 788 812 1,032 1,460 1,790 788 0.0% 0.0% 0.0% 0.0% طن بصل مجففMineral Water 000 liters 65,887 60,620 51,700 64,773 92,206 65,887 60,620 51,700 64,773 0.0% 0.0% 0.0% 0.0% الف ليتر مياه معدنيةGaseous Beverages 000 liters 2,642 2,412 1,788 779 254 138,519 155,348 168,838 197,204 141,161 157,760 170,626 197,983 98.1% 98.5% 99.0% 99.6% الف ليتر مشروبات غازية Beer 000 liters 10,013 10,855 11,073 10,650 9,891 10,013 10,855 11,073 10,650 0.0% 0.0% 0.0% 0.0% الف ليتر بيرةArak 000 liters 2,496 3,334 3,113 3,251 3,208 845 837 912 938 3,341 4,171 4,025 4,189 25.3% 20.1% 22.7% 22.4% الف ليتر عرقWine 000 liters 315 257 225 213 210 315 257 225 213 0.0% 0.0% 0.0% 0.0% الف ليتر نبيذOther Alcoholic Beverages 000 liters 49 25 63 73 40 1,486 2,268 3,397 3,415 1,535 2,293 3,460 3,488 96.8% 98.9% 98.2% 97.9% الف ليتر مشروبات روحية أخرىFruit Juice 000 liters 8,327 8,689 12,453 19,678 8,327 8,689 12,453 19,678 100.0% 100.0% 100.0% 100.0% الف ليتر عصير فواكهManufactured Tobacco Ton 13,412 13,144 11,832 13,056 13,245 13,412 13,144 11,832 13,056 0.0% 0.0% 0.0% 0.0% طن تبغ مصنعSugar '000 tons 123 231 148 198 197 123 231 148 198 0.0% 0.0% 0.0% 0.0% الف طن سكرMolasses Ton 57,295 57,180 53,023 68,183 64,030 57,295 57,180 53,023 68,183 0.0% 0.0% 0.0% 0.0% طن ميالسBeet Sediment '000 tons 278 263 211 315 263 278 263 211 315 0.0% 0.0% 0.0% 0.0% الف طن تفل شوندرAlcohol Ton 3,577 2,014 2,281 2,376 2,733 372 384 395 350 3,949 2,398 2,676 2,726 9.4% 16.0% 14.8% 12.8% طن كحولYeast Ton 27,556 29,725 30,050 30,994 31,950 27,556 29,725 30,050 30,994 0.0% 0.0% 0.0% 0.0% طن خميرةCotton Yarns Ton 98,374 107,610 114,951 110,159 102,048 - 28,115 31,454 35,426 98,374 135,725 146,405 145,585 0.0% 20.7% 21.5% 24.3% طن غزول قطنيةMixed Woolen Yarns Ton 2,353 3,261 3,478 3,521 3,354 2,353 3,261 3,478 3,521 0.0% 0.0% 0.0% 0.0% طن غزول صوفية وممزوجةSynthetic Yarns Ton 311 - 31 41 15 - 11,107 12,502 13,830 311 11,107 12,533 13,871 0.0% 100.0% 99.8% 99.7% طن غزول تركيبيةCotton Textiles Ton 15,806 21,401 18,118 19,460 17,050 13,283 18,175 19,178 23,517 29,089 39,576 37,296 42,977 45.7% 45.9% 51.4% 54.7% طن أقمشة قطنيةMixed Woolen Textiles Ton 351 763 484 739 567 8,184 9,298 10,400 14,208 8,535 10,061 10,884 14,947 95.9% 92.4% 95.6% 95.1% طن أقمشة صوفية وممزوجةSynthetic Textiles Ton 1,298 - - - - 23,452 31,186 35,744 38,155 24,750 31,186 35,744 38,155 94.8% 100.0% 100.0% 100.0% طن أقمشة تركيبيةSilk Textiles Ton 30 40 55 32 30 40 55 32 100.0% 100.0% 100.0% 100.0% طن أقمشة حريريةUnder Wear Clothes dozen ' 000 510 475 560 402 453 7,680 9,963 11,452 15,408 8,190 10,438 12,012 15,810 93.8% 95.4% 95.3% 97.5% الف دزينة ألبسة داخليةReady ـ Made Clothes pieces '000 1,045 743 629 657 743 53,693 87,920 91,296 112,886 54,738 88,663 91,925 113,543 98.1% 99.2% 99.3% 99.4% الف قطعة ألبسة جاھزة Tricot pieces '000 16,072 21,884 27,567 32,873 16,072 21,884 27,567 32,873 100.0% 100.0% 100.0% 100.0% الف قطعة تريكو متنوعCarpets sq.m. '000 400 357 397 355 331 2,058 4,843 5,563 7,410 2,458 5,200 5,960 7,765 83.7% 93.1% 93.3% 95.4% الف م2 سجادSocks dozen ' 000 167 163 178 133 119 7,836 8,882 9,056 12,571 8,003 9,045 9,234 12,704 97.9% 98.2% 98.1% 99.0% الف دزينة جواربBlankets pieces '000 73 53 35 80 80 387 473 642 905 460 526 677 985 84.1% 89.9% 94.8% 91.9% الف قطعة حراماتBed Sheets pieces '000 1,817 1,905 2,258 3,476 1,817 1,905 2,258 3,476 100.0% 100.0% 100.0% 100.0% الف قطعة شراشفTowels & kaflas pieces '000 8,133 10,104 12,721 16,818 8,133 10,104 12,721 16,818 100.0% 100.0% 100.0% 100.0% الف قطعة مناشف وبشاكيرLeather Shoes pieces '000 518 674 662 489 379 22,894 34,623 36,835 43,587 23,412 35,297 37,497 44,076 97.8% 98.1% 98.2% 98.9% الف زوج أحذية جلدية Sport & Rubber Shoes P.000 2,675 2,854 2,671 3,438 2,675 2,854 2,671 3,438 100.0% 100.0% 100.0% 100.0% ألف زوج أحذية رياضية ومطاطيةPlastic Shoes P.000 4 3 2 4 1 1,536 1,220 1,305 1,342 1,540 1,223 1,307 1,346 99.7% 99.8% 99.8% 99.7% ألف زوج أحذية بالستيكيةSport &Rubber Shoes P.000 138 177 147 135 141 138 177 147 135 0.0% 0.0% 0.0% 0.0% ألف زوج أحذية رياضية ومطاطيةTanned hides Box F2.000 91 - 499 27 37 91 - 499 27 0.0% 0.0% 0.0% ألف قدم2 جلود بوكسTanned Hides F2 000 417 599 727 849 951 417 599 727 849 0.0% 0.0% 0.0% 0.0% ألف قدم2 جلود مدبوغةMedical drugs:Capsules C.000 148,195 169,978 154,449 145,171 131,280 210,939 521,058 587,781 630,506 359,134 691,036 742,230 775,677 58.7% 75.4% 79.2% 81.3% ألف كبسولة ادوية كبسولMedical drugs:Tablets T.000 205,255 204,147 175,424 162,442 190,926 494,699 709,349 821,931 957,832 699,954 913,496 997,355 1,120,274 70.7% 77.7% 82.4% 85.5% ألف قرص ادوية أقراص

Medical drugs: Suppositories S.000 166,458 228,122 286,041 389,301 166,458 228,122 286,041 389,301 100.0% 100.0% 100.0% 100.0%Medical drugs: Ampoules A.000 2,489 3,592 1,961 2,656 2,467 137,862 208,141 213,320 220,991 140,351 211,733 215,281 223,647 98.2% 98.3% 99.1% 98.8% ألف أمبولة ادوية امبول

Powdered Cleaner Ton 15,445 17,501 24,248 40,557 15,445 17,501 24,248 40,557 100.0% 100.0% 100.0% 100.0% طن منظف مسحوق Liquid Cleaner Ton 23,199 24,376 31,866 33,924 23,199 24,376 31,866 33,924 100.0% 100.0% 100.0% 100.0% طن منظف سائل Paints Ton 25,670 28,864 29,651 38,944 25,670 28,864 29,651 38,944 100.0% 100.0% 100.0% 100.0% طن دھانات Electrical Transformers P 7,643 7,522 6,500 7,605 7,643 7,522 6,500 7,605 100.0% 100.0% 100.0% 100.0% قطعة محوالت كھربائية Metal Pipes Ton 37,219 35,750 32,996 46,294 37,219 35,750 32,996 46,294 100.0% 100.0% 100.0% 100.0% طن أنابيب معدنية Dry Batteries P.000 122 145 612 521 122 145 612 521 100.0% 100.0% 100.0% 100.0% ألف قطعة بطاريات جافة Liquid Batteries P.000 720 986 913 965 720 986 913 965 100.0% 100.0% 100.0% 100.0% ألف قطعة بطاريات سائلة

Total Public plus Private Sector Private as % of Total Public Sector Private Sector

Table 9: Arab and Foreign Arrivals by Nationality, 2003 - 07

TABLE 1/8 - 2/8 Table 4.3Nationality 2003 2004 2005 2006 2007 الجـنسـيـة

Arab ArrivalsJordanian اردنيــة 914,822 882,501 940,413 851,095 752,935Emirates اماراتيـة 33,641 26,192 28,188 30,538 24,274Bahrani بحرانيــة 64,476 44,555 55,854 67,163 60,648Tunisian تونسـية 16,877 22,036 30,500 28,021 21,048Algerian جزائرية 31,615 31,618 32,983 33,073 25,382Saudi-Arabian سـعودية 353,103 408,186 469,118 461,035 361,758Sudanese سـودانية 18,781 18,246 17,885 17,859 17,303Iraqi عراقيــة 1,530,458 1,289,250 913,266 804,131 253,120Palestinian فلسطينية 86,359 82,702 65,839 56,884 52,087Qatarian قطريــة 17,249 16,075 17,126 14,411 9,883Kuwaiti كويتيــة 110,388 98,892 103,474 105,715 72,693Lebanese لبنانيــة 1,448,809 1,786,943 1,681,158 2,262,733 1,654,001Libyan ليبيــة 22,434 22,156 22,957 20,102 18,230Moroccan مغربيــة 10,253 9,236 11,217 10,711 9,754Egyptian مصريــة 37,675 46,026 36,398 44,533 31,423Yemeni يمنيــة 18,345 17,934 19,123 28,760 22,046Omania ــ عمانية 10,231 7,681 1,799 9,567Others اخــرون 6,395 5,191 5,956 4,106 12,393

TOTAL الـمجمـوع 4,731,911 4,815,420 4,453,254 4,850,437 3,398,978

Foreign ArrivalsCanadian كندية 15,347 15,259 13,474 13,571 9,864American أمريكية 35,539 35,381 38,343 38,939 29,023Argentinian أرجنتينية 787 853 904 985 778Brazilian برازيلية 2,132 3,953 2,012 1,989 1,753Cypriot قبرصية 5,808 6,578 11,990 11,163 6,627Indian ھندية 11,490 9,830 11,875 11,936 9,560Iranian ايرانية 330,369 270,915 247,662 196,699 213,931Japanese يابانية 6,958 5,841 6,715 5,751 4,787Pakistani باكستانية 12,661 8,183 8,789 8,634 4,217Turkish تركية 485,953 480,553 688,978 689,581 470,900Austrian نمساوية 4,523 4,075 5,231 4,631 3,730Belgian بلجيكية 4,669 5,057 5,074 4,709 3,376Bulgarian بلغارية 4,242 3,981 3,426 5,015 4,232Czech 1,951 2,473 3,307 2,468 3,135 تشيكيةDanish 5,616 9,188 8,770 8,564 7,559 دانماركيةFrench افرنسية 28,828 27,151 31,191 33,599 26,910German ألمانية 35,123 36,372 38,408 34,878 25,036Greek 3,207 4,264 4,801 4,656 6,065 يونانيةHungarian ھنغارية 3,718 3,345 4,479 3,244 2,526Italian ايطالية 13,812 10,431 13,898 11,729 8,859Dutch ھولندية 9,397 8,952 11,790 12,880 7,862Norwegian نروجية 2,886 2,978 3,870 4,346 2,328Polish بولونية 3,347 2,087 3,022 2,671 1,399Spanish اسبانية 15,332 9,732 15,744 11,329 6,890Swiss سويسرية 4,231 4,086 4,897 4,930 3,100Swedish سويدية 14,280 15,570 16,548 19,069 12,950British 16,908 19,902 20,508 20,955 22,739 بريطانيةYugoslavian 5,344 4,601 5,038 4,695 4,408 يوغسالفيةAustralian 7,597 12,542 11,254 13,886 10,597 استراليةRussian روسية 43,919 38,936 38,212 35,188 28,696Romanian 3,353 3,849 3,883 3,783 3,829 رومانيةIndonisian 13,513 18,559 17,119 15,428 17,443 أندونيسيةUkrainian ــ ــ أوكرانية 3,941 4,692 3,788Malayzian ــ ــ ماليزية 2,751 1,905 1,680Chinese ــ صينية 4,678 4,150 3,397 2,890Newslandian نيوزيالندية 1,060 1,033 1,173 1,336 606Venezuelian 2,483 2,548 3,062 3,962 5,779 فنزويليةAfghanistani 649 678 626 730 1,010 أفغانيةOthers 38,580 52,920 60,788 93,059 81,805 جنسيات أخرى

TOTAL المجموع 1,272,150 1,194,065 1,375,726 1,303,216 989,141

Total Arrivals

By RegionArab 3,398,978 4,850,437 4,453,254 4,815,420 4,731,911 Foreign 989,141 1,303,216 1,375,726 1,194,065 1,272,150 SyrianGRAND TOTAL 4,388,119 6,153,653 5,828,980 6,009,485 6,004,061 By Type of TransportLand مجموع القادمين براً 5,196,499Sea مجموع القادمين بحراً 5,465Air مجموع القادمين جواً 802,097GRAND TOTAL المجموع العام 6,004,061Source: Central Bureau of Statistics, Statistical Yearbook 2008

Table 10: Number of Hotel Guests by Origin, Type of Hotel and Province, 2007 TABLE 22-24/ 8 Table4

5-Star 4-Star 3-Star 2-Star 1-Star Hostel TotalGovernorate International Deluxe 1st Class 2nd Class 3rd Class Hostel

Number of Syrian Guests by Governorate, 2007Damascus 35,203 44,807 23,970 58,974 91,844 13,964 268,762 Damascus Rural 5,582 100 116 68 - - 5,866 Aleppo 26,241 22,889 14,151 17,014 52,602 5,423 138,320 Homs 18,308 13,568 3,214 7,535 4,892 244 47,761 Hama 5,778 - - 9,370 4,750 2,700 22,598 Lattakia 99,205 2,536 1,948 2,614 378 - 106,681 Deir-ezzor 4,027 3,263 3,442 3,385 4,018 - 18,135 Idleb - 2,735 - 865 - - 3,600 Al-hasakeh - - - 5,211 - - 5,211 Al-rakka - - 5,957 - 2,383 76 8,416 Al-Sweida - - - - - - - Darà - 593 - 212 - - 805 Tartous - 18,439 16,412 3,751 7,034 7,156 52,792 Quneitra - - - - - - -

Total 194,344 108,930 69,210 108,999 167,901 29,563 678,947

Number of Arab Guests by Governorate, 2007Damascus 91,174 71,708 53,552 68,614 147,148 12,116 444,312 Damascus Rural 26,531 32,833 14,905 70,001 16,896 1,337 162,503 Aleppo 8,863 17,272 15,262 31,812 118,597 7,507 199,313 Homs 22,427 22,189 12,026 19,330 13,094 1,711 90,777 Hama 6,080 - 3,039 11,245 6,596 1,990 28,950 Lattakia 63,177 12,589 17,147 27,497 31,983 4,649 157,042 Deir-ezzor 2,770 10,361 5,111 5,900 3,605 1,013 28,760 Idleb - 5,503 - 2,303 - - 7,806 Al-hasakeh - - - 8,330 15,457 - 23,787 Al-rakka - - 2,795 1,013 883 983 5,674 Al-Sweida - - - - - - - Darà - 3,772 3,545 7,552 1,015 - 15,884 Tartous - 20,365 17,441 24,910 17,375 13,627 93,718 Quneitra - - - - - - -

Total 221,022 196,592 144,823 278,507 372,649 44,933 1,258,526

Number of Foreign Guests by Governorate, 2007

Damascus 31,614 25,814 47,001 38,263 28,154 1,506 172,352 Damascus Rural 10,830 14,748 2,096 42,109 1,419 229 71,431 Aleppo 8,104 21,257 9,464 7,132 30,677 2,231 78,865 Homs 7,094 5,430 15,227 14,078 5,137 1,049 48,015 Hama 8,258 - 1,964 4,718 5,295 982 21,217 Lattakia 9,939 9,380 7,191 34,218 12,885 8,900 82,513 Deir-ezzor 2,435 4,195 14,574 3,974 1,536 3,492 30,206 Idleb - 1,405 - 1,879 - - 3,284 Al-hasakeh - - - 3,544 1,037 - 4,581 Al-rakka - - 836 1,440 490 500 3,266 Al-Sweida - - - - - - - Darà - 1,767 873 4,256 546 7,442 Tartous - 9,372 1,762 12,303 5,996 6,072 35,505 Quneitra - - - - - - -

Total 78,274 93,368 100,988 167,914 93,172 24,961 558,677

Total Hotel and Hostel Guests by Governorate, 2007Damascus 157,991 142,329 124,523 165,851 267,146 27,586 885,426 Damascus Rural 42,943 47,681 17,117 112,178 18,315 1,566 239,800 Aleppo 43,208 61,418 38,877 55,958 201,876 15,161 416,498 Homs 47,829 41,187 30,467 40,943 23,123 3,004 186,553 Hama 20,116 - 5,003 25,333 16,641 5,672 72,765 Lattakia 172,321 24,505 26,286 64,329 45,246 13,549 346,236 Deir-ezzor 9,232 17,819 23,127 13,259 9,159 4,505 77,101 Idleb - 9,643 - 5,047 - - 14,690 Al-hasakeh - - - 17,085 16,494 - 33,579 Al-rakka - - 9,588 2,453 3,756 1,559 17,356 Al-Sweida - - - - - - - Darà - 6,132 4,418 12,020 1,561 - 24,131 Tartous - 48,176 35,615 40,964 30,405 26,855 182,015 Quneitra - - - - - - -

Total 493,640 398,890 315,021 555,420 633,722 99,457 2,496,150 Source: CBS Statistical Yearbook 2008

Table 11: Number of Hotel Guest Nights by Origin of Guest, Type of Hotel and Governorate, 2007

TABLE 26-28/ 8 Table5

5-Star 4-Star 3-Star 2-Star 1-Star Hostel TotalGovernorate International Deluxe 1st Class 2nd Class 3rd Class Hostel

Number of Syrian Hotel Nights by Governorate, 2007

Damascus 62,798 95,574 53,959 81,849 155,723 28,008 477,911

Damascus Rural 8,092 110 157 108 - - 8,467

Aleppo 37,712 43,390 20,615 27,531 77,589 7,808 214,645

Homs 25,226 17,444 3,609 10,632 6,117 255 63,283

Hama 6,838 - - 12,874 12,081 7,286 39,079

Lattakia 131,534 3,485 2,052 4,701 1,031 - 142,803

Deir-ezzor 6,523 5,953 4,079 3,940 5,103 - 25,598

Idleb - 3,621 - 1,332 - - 4,953

Al-hasakeh - - - 7,981 16,718 - 24,699

Al-rakka - - 17,367 - 3,159 1,306 21,832

Al-Sweida - - - - - - -

Darà - 1,025 - 602 - - 1,627

Tartous - 36,630 27,211 4,526 9,557 13,084 91,008

Quneitra - - - - - - -

Total 278,723 207,232 129,049 156,076 287,078 57,747 1,115,905

Number of Arab Hotel Nights by Governorate, 2007

Damascus 452,337 332,383 436,362 462,728 729,361 26,634 2,439,805

Damascus Rural 116,662 258,520 46,821 558,105 53,484 5,400 1,038,992

Aleppo 36,258 92,153 64,711 131,904 489,661 33,249 847,936

Homs 88,314 85,335 121,102 150,566 75,875 7,168 528,360

Hama 33,080 - 7,083 87,640 16,238 9,337 153,378

Lattakia 409,343 62,386 87,133 240,219 120,475 41,816 961,372

Deir-ezzor 30,458 31,248 88,817 25,084 38,227 9,077 222,911

Idleb - 30,324 - 11,631 - - 41,955

Al-hasakeh - - - 71,611 67,616 - 139,227

Al-rakka - - 13,480 5,504 9,042 5,881 33,907

Al-Sweida - - - - - - -

Darà - 19,605 14,872 52,977 2,685 - 90,139

Tartous - 103,668 72,929 152,037 60,132 59,742 448,508

Quneitra - - - - - - -

Total 1,166,452 1,015,622 953,310 1,950,006 1,662,796 198,304 6,946,490

Number of Foreign Hotel Nights by Governorate, 2007

Damascus 181,949 212,668 328,640 375,058 270,116 7,380 1,375,811

Damascus Rural 98,924 102,015 12,642 339,098 13,756 2,311 568,746

Aleppo 21,679 49,372 45,620 32,736 117,363 15,116 281,886

Homs 27,471 40,488 68,996 86,804 36,900 3,844 264,503

Hama 32,094 - 4,974 23,003 9,720 3,304 73,095

Lattakia 175,897 34,406 39,729 92,260 26,892 23,174 392,358

Deir-ezzor 16,190 16,020 55,485 17,726 13,437 5,568 124,426

Idleb - 15,878 - 5,754 - - 21,632

Al-hasakeh - - - 21,270 2,489 - 23,759

Al-rakka - - 9,526 3,962 7,819 1,297 22,604

Al-Sweida - - - - - - -

Darà - 14,551 7,358 22,581 1,181 - 45,671

Tartous - 59,710 31,913 77,068 22,016 25,553 216,260

Quneitra - - - - - - -

Total 554,204 545,108 604,883 1,097,320 521,689 87,547 3,410,751

Total Hotel Nights by Governorate, 2007

Damascus 697,084 640,625 818,961 919,635 1,155,200 62,022 4,293,527

Damascus Rural 223,678 360,645 59,620 897,311 67,240 7,711 1,616,205

Aleppo 95,649 184,915 130,946 192,171 684,613 56,173 1,344,467

Homs 141,011 143,267 193,707 248,002 118,892 11,267 856,146

Hama 72,012 - 12,057 123,517 38,039 19,927 265,552

Lattakia 716,774 100,277 128,914 337,180 148,398 64,990 1,496,533

Deir-ezzor 53,171 53,221 148,381 46,750 56,767 14,645 372,935

Idleb - 49,823 - 18,717 - - 68,540

Al-hasakeh - - - 100,862 86,823 - 187,685

Al-rakka - - 40,373 9,466 20,020 8,484 78,343

Al-Sweida - - - - - - -

Darà - 35,181 22,230 76,160 3,866 - 137,437

Tartous - 200,008 132,053 233,631 91,705 98,379 755,776

Quneitra - - - - - - -

Total 1,999,379 1,767,962 1,687,242 3,203,402 2,471,563 343,598 11,473,146

Source: Central Bureau of Statistics, Statistical Yearbook 2008

Table 12: Distribution of Guest Nights by Type of Hotel, and Nights per Guest by Governorate

Table 4.4

Distribution of Guest Nights by Type of Hotel

5-Star 4-Star 3-Star 2-Star 1-Star Hostel Total % Distrb'n % Distrb'n Nights per

Governorate International Deluxe 1st Class 2nd Class 3rd Class Hostel Guest Nights Guests Guest

Syrian GuestsDamascus 13.1% 20.0% 11.3% 17.1% 32.6% 5.9% 100.0% 16.1 42.8% 39.6% 1.78

Damascus Rural 95.6% 1.3% 1.9% 1.3% 0.0% 0.0% 100.0% 0.2 0.8% 0.9% 1.44

Aleppo 17.6% 20.2% 9.6% 12.8% 36.1% 3.6% 100.0% 3.1 19.2% 20.4% 1.55

Homs 39.9% 27.6% 5.7% 16.8% 9.7% 0.4% 100.0% 2.9 5.7% 7.0% 1.32

Hama 17.5% 0.0% 0.0% 32.9% 30.9% 18.6% 100.0% 1.5 3.5% 3.3% 1.73

Lattakia 92.1% 2.4% 1.4% 3.3% 0.7% 0.0% 100.0% 11.3 12.8% 15.7% 1.34

Deir-ezzor 25.5% 23.3% 15.9% 15.4% 19.9% 0.0% 100.0% 1.7 2.3% 2.7% 1.41

Idleb 0.0% 73.1% 0.0% 26.9% 0.0% 0.0% 100.0% 0.3 0.4% 0.5% 1.38

Al-hasakeh 0.0% 0.0% 0.0% 32.3% 67.7% 0.0% 100.0% 0.4 2.2% 0.8% 4.74

Al-rakka 0.0% 0.0% 79.5% 0.0% 14.5% 6.0% 100.0% 1.0 2.0% 1.2% 2.59

Al-Sweida ‐

Darà 0.0% 63.0% 0.0% 37.0% 0.0% 0.0% 100.0% 0.1 0.1% 0.1% 2.02

Tartous 0.0% 40.2% 29.9% 5.0% 10.5% 14.4% 100.0% 7.0 8.2% 7.8% 1.72

Quneitra

Total 25.0% 18.6% 11.6% 14.0% 25.7% 5.2% 100.0% 3.5 100.0% 100.0% 1.64

Arab GuestsDamascus 18.5% 13.6% 17.9% 19.0% 29.9% 1.1% 100.0% 26.6 35.1% 35.3% 5.49

Damascus Rural 11.2% 24.9% 4.5% 53.7% 5.1% 0.5% 100.0% 6.5 15.0% 12.9% 6.39

Aleppo 4.3% 10.9% 7.6% 15.6% 57.7% 3.9% 100.0% 4.5 12.2% 15.8% 4.25

Homs 16.7% 16.2% 22.9% 28.5% 14.4% 1.4% 100.0% 5.5 7.6% 7.2% 5.82

Hama 21.6% 0.0% 4.6% 57.1% 10.6% 6.1% 100.0% 1.9 2.2% 2.3% 5.30

Lattakia 42.6% 6.5% 9.1% 25.0% 12.5% 4.3% 100.0% 16.7 13.8% 12.5% 6.12

Deir-ezzor 13.7% 14.0% 39.8% 11.3% 17.1% 4.1% 100.0% 2.6 3.2% 2.3% 7.75

Idleb 0.0% 72.3% 0.0% 27.7% 0.0% 0.0% 100.0% 0.6 0.6% 0.6% 5.37

Al-hasakeh 0.0% 0.0% 0.0% 51.4% 48.6% 0.0% 100.0% 1.7 2.0% 1.9% 5.85

Al-rakka 0.0% 0.0% 39.8% 16.2% 26.7% 17.3% 100.0% 0.7 0.5% 0.5% 5.98

Al-Sweida ‐

Draà 0.0% 21.7% 16.5% 58.8% 3.0% 0.0% 100.0% 1.7 1.3% 1.3% 5.67

Tartous 0.0% 23.1% 16.3% 33.9% 13.4% 13.3% 100.0% 12.5 6.5% 7.4% 4.79

Quneitra

Total 16.8% 14.6% 13.7% 28.1% 23.9% 2.9% 100.0% 6.5 100.0% 100.0% 5.52

Foreign (Non-Arab) GuestsDamascus 13.2% 15.5% 23.9% 27.3% 19.6% 0.5% 100.0% 10.3 40.3% 30.9% 7.98

Damascus Rural 17.4% 17.9% 2.2% 59.6% 2.4% 0.4% 100.0% 2.9 16.7% 12.8% 7.96

Aleppo 7.7% 17.5% 16.2% 11.6% 41.6% 5.4% 100.0% 1.8 8.3% 14.1% 3.57

Homs 10.4% 15.3% 26.1% 32.8% 14.0% 1.5% 100.0% 2.9 7.8% 8.6% 5.51

Hama 43.9% 0.0% 6.8% 31.5% 13.3% 4.5% 100.0% 1.4 2.1% 3.8% 3.45

Lattakia 44.8% 8.8% 10.1% 23.5% 6.9% 5.9% 100.0% 8.8 11.5% 14.8% 4.76

Deir-ezzor 13.0% 12.9% 44.6% 14.2% 10.8% 4.5% 100.0% 2.8 3.6% 5.4% 4.12

Idleb 0.0% 73.4% 0.0% 26.6% 0.0% 0.0% 100.0% 0.2 0.6% 0.6% 6.59

Al-hasakeh 0.0% 0.0% 0.0% 89.5% 10.5% 0.0% 100.0% 0.3 0.7% 0.8% 5.19

Al-rakka 0.0% 0.0% 42.1% 17.5% 34.6% 5.7% 100.0% 0.4 0.7% 0.6% 6.92

Al-Sweida ‐

Darà 0.0% 31.9% 16.1% 49.4% 2.6% 0.0% 100.0% 0.8 1.3% 1.3% 6.14

Tartous 0.0% 27.6% 14.8% 35.6% 10.2% 11.8% 100.0% 4.7 6.3% 6.4% 6.09

Quneitra

Total 16.2% 16.0% 17.7% 32.2% 15.3% 2.6% 100.0% 2.9 100.0% 100.0% 6.11

Total GuestsDamascus 16.2% 14.9% 19.1% 21.4% 26.9% 1.4% 100.0% 53.1 37.4% 35.5% 4.85

Damascus Rural 13.8% 22.3% 3.7% 55.5% 4.2% 0.5% 100.0% 9.6 14.1% 9.6% 6.74

Aleppo 7.1% 13.8% 9.7% 14.3% 50.9% 4.2% 100.0% 9.5 11.7% 16.7% 3.23

Homs 16.5% 16.7% 22.6% 29.0% 13.9% 1.3% 100.0% 11.3 7.5% 7.5% 4.59

Hama 27.1% 0.0% 4.5% 46.5% 14.3% 7.5% 100.0% 4.9 2.3% 2.9% 3.65

Lattakia 47.9% 6.7% 8.6% 22.5% 9.9% 4.3% 100.0% 36.7 13.0% 13.9% 4.32

Deir-ezzor 14.3% 14.3% 39.8% 12.5% 15.2% 3.9% 100.0% 7.0 3.3% 3.1% 4.84

Idleb 0.0% 72.7% 0.0% 27.3% 0.0% 0.0% 100.0% 1.1 0.6% 0.6% 4.67

Al-hasakeh 0.0% 0.0% 0.0% 53.7% 46.3% 0.0% 100.0% 2.4 1.6% 1.3% 5.59

Al-rakka 0.0% 0.0% 51.5% 12.1% 25.6% 10.8% 100.0% 2.0 0.7% 0.7% 4.51

Al-Sweida ‐

Darà 0.0% 25.6% 16.2% 55.4% 2.8% 0.0% 100.0% 2.6 1.2% 1.0% 5.70

Tartous 0.0% 26.5% 17.5% 30.9% 12.1% 13.0% 100.0% 24.3 6.6% 7.3% 4.15

Quneitra

Total 17.4% 15.4% 14.7% 27.9% 21.5% 3.0% 100.0% 12.9 100.0% 100.0% 4.60

Source: Central Bureau of Statistics, Statistical Yearbook 2008

Guests per 100

Population

Table 13: Air Transport at Airports of the Syrian Arab Republic, 2006 TABLE 14/ 7 Table 10

وارد صــادر المجمـــوع مــــرور قــــدوم ذھــــابTotal Unloaded Loaded Total Transit Arrival Departure

Year 2006

Damascus 32,581 16,051 16,530 2,990,820 1,289 1,431,114 1,558,417 16,388 16,554 89.3 8,194 183 45 Aleppo 552 - 552 407,420 27,155 193,107 187,158 3,845 3,807 1.5 1,116 106 11 Bassel Al Assad 1,008 1,008 - 34,852 7,275 10,917 16,660 850 848 2.8 95 41 2 Deir-Ez-Zor - - - 12,602 _ 6,044 6,558 207 207 - 35 61 1 Al Kamishli - - - 39,921 _ 20,063 19,858 306 306 - 109 130 1 TOTAL 34,140 17,058 17,082 3,485,615 35,719 1,661,245 1,788,651 21,596 21,722 93.5 9,550 161 59

Year 2007

Damascus 31,083 15,984 15,099 3,365,730 _ 1,662,731 1,702,999 15,242 15,168 85.2 9,221 221 42 Aleppo 850 - 850 414,795 _ 212,473 202,322 3,831 3,879 2.3 1,136 108 10 Bassel Al Assad - - - 47,318 _ 24,120 23,198 936 936 - 130 51 3 Deir-Ez-Zor - - - _ _ _ _ _ _ - Al Kamishli - - - 46,816 _ 23,500 23,316 367 367 - 128 128 1 TOTAL 31,933 15,984 15,949 3,874,659 _ 1,922,824 1,951,835 20,376 20,350 87.5 10,616 190 56 Source: CBS Statistical Yearbook 2008

Tons per day Passenger

Throughputper Day

Landingsper Day

Use Indicators

Passengersper Landfing

AIRPORTS

الحمولة (طن) عـــدد الــــركـــاب الطائرات الھابطة# Planes

#Landing

الطائرات المقلعة

Taking off

Freieght ( T . ) Number of Passengers

Table 14: Production and Consumption of Potable Water, by Governorate, plus Indicators, 2007

TABLE 8/5 Table8الضياع في الشبكـة المستھلك بالمجـان المستھلك بالقيمة اإلنتاج الفعلــي

ألـــف م3 ألـــف م3 ألـــف م3 ألـــف م3Lost in Free priced Actual

the netWork Consumption Consumption productionM3 000 M3 000 M3 000 M3 000

Damascus 399,382 35,718 44,100 94,414 174,232 1,669 286 227 31.8% 21% 4.2 Damascus rural 383,000 54,006 813 70,181 125,000 2,487 138 78 1.1% 43% 6.5 Aleppo 716,000 118,994 2,214 172,562 293,770 4,393 183 109 1.3% 41% 6.1 Homs 292,000 33,065 1,400 63,623 98,088 1,647 163 108 2.2% 34% 5.6 Hama 255,000 29,205 750 67,655 97,610 1,491 179 126 1.1% 30% 5.8 Lattakia 201,047 22,698 1,970 44,446 69,114 943 201 135 4.2% 33% 4.7 Deir-ez-zor 102,540 20,875 2,600 44,200 67,675 1,094 169 117 5.6% 31% 10.7 Idleb 188,000 15,686 2,994 31,216 49,896 1,359 101 69 8.8% 31% 7.2 Al-Hasakeh 116,617 8,967 8,504 25,029 42,500 1,377 85 67 25.4% 21% 11.8 Al-Rakka 115,236 12,930 1,500 43,480 57,910 854 186 144 3.3% 22% 7.4 Al-Sweida 64,559 3,750 250 12,350 16,350 346 129 100 2.0% 23% 5.4 Dar'a 112,500 20,620 380 34,000 55,000 916 165 103 1.1% 37% 8.1 Tartous 173,000 12,203 555 26,085 38,843 750 142 97 2.1% 31% 4.3 Quneitra 28,990 3,547 450 7,090 11,087 79 384 261 6.0% 32% 2.7

Total 3,147,871 392,264 68,480 736,331 1,197,075 19,405 169 114 8.5% 33% 6.2

Source: CBS Statistical Yearbook 2008

Water Loss as % of Actual Production

# of Persons per Subscription

Priced as % of Total

Consumption

عـدد المشتركين

No of Subscribers

Resident Population

(1/1/2008) in '000

Production per Capita per

Day (l/c/d)

Total (Free+Priced) Consumption per Capita per

Day (l/c/d)

Table 15: Use of Phone Services, Total and per Resident, 2007

TABLE 24 / 7 Table11

دقيـقــة مكالمـــة دقيـقــة مكالمـــةMinute ('000) Call ('000) Minute ('000) Call ('000)

Damascus 293,906 37,486 140,615 17,687 176.10 22.46 84.25 10.60 1,669 Damascus Rural 181,739 23,677 46,709 6,105 73.08 9.52 18.78 2.45 2,487 Aleppo 173,590 29,524 71,111 8,999 39.52 6.72 16.19 2.05 4,393 Homs 179,105 59,686 26,256 3,172 108.75 36.24 15.94 1.93 1,647 Hama 141,609 43,982 16,536 2,005 94.98 29.50 11.09 1.34 1,491 Lattakia 134,377 44,246 15,457 1,995 142.50 46.92 16.39 2.12 943 Deir-ez-Zor 49,925 15,742 7,553 950 45.64 14.39 6.90 0.87 1,094 Idleb 99,572 31,546 12,321 1,645 73.27 23.21 9.07 1.21 1,359 Al-Hasakeh 81,367 24,619 10,755 1,233 59.09 17.88 7.81 0.90 1,377 Al-Rakka 48,587 14,980 5,256 698 56.89 17.54 6.15 0.82 854 Al-Sweida 41,214 14,142 11,552 1,398 119.12 40.87 33.39 4.04 346 Dar'a 78,887 26,276 21,125 2,706 86.12 28.69 23.06 2.95 916 Tartous 124,968 38,302 18,007 2,321 166.62 51.07 24.01 3.09 750 Quneitra 15,137 4,589 766 109 191.61 58.09 9.70 1.38 79

Total 1,643,983 408,797 404,019 51,023 84.72 21.07 20.82 2.63 19,405 Source: CBS Statistical Yearbook 2008

MuhafazatMinutes per

ResidentCalls per Resident

Minutes per Resident

Calls per Resident

مكالمات خارجية ضمن القطر مكالمات دوليةResident

Population 1/1/2008in '000

Trunk- calls within Country International callsمكالمات خارجية ضمن القطر مكالمات دولية

Trunk- calls within Country International calls

Table 16: Number of Telephone Lines and Lines per 100 Population, by Governorate (2007)

TABLE 25 / 7 Table12

MohafazatYear المجموع يــدوي آلــي يــدوي يــدوي آلــي آلــي يــدوي آلــي

Total Manual Aut . Manual Aut. Manual Aut. Manual Aut.2003 2,415,109 2,418 2,412,691 _ 1,147 _ 417 2,418 2,411,127 2004 2,661,576 2,127 2,659,449 _ 1,277 _ 396 2,127 2,657,776 ــ 2,904,552 2,011 2,906,563 2005 ــ 982 431 2,011 2,903,139 2006 3,246,118 1,581 3,244,537 _ 869 _ 436 1,581 3,243,232 2007 3,455,523 1,547 3,453,976 _ 878 _ 438 1,547 3,452,660

Damascus 598,146 _ 598,146 _ _ _ _ _ 598,146 35.8 1,669 Damascus Rural 489,222 _ 489,222 _ _ _ _ _ 489,222 19.7 2,487 Aleppo 623,810 _ 623,810 _ _ _ _ _ 623,810 14.2 4,393 Homs 333,489 85 333,404 _ _ _ _ 85 333,404 20.2 1,647 Hama 252,022 246 251,776 _ 97 _ 57 246 251,622 16.9 1,491 Lattakia 232,111 128 231,983 _ _ _ _ 128 231,983 24.6 943 Deir-ez-Zor 126,370 _ 126,370 _ _ _ _ _ 126,370 11.6 1,094 Idleb 170,561 _ 170,561 _ _ _ _ _ 170,561 12.6 1,359 Al-Hasakeh 137,596 1,026 136,570 _ 524 _ 361 1,026 135,685 10.0 1,377 Al-Rakka 80,538 62 80,476 _ _ _ _ 62 80,476 9.4 854 Al-Sweida 80,139 _ 80,139 _ 257 _ 20 _ 79,862 23.2 346 Dar'a 137,376 _ 137,376 _ _ _ _ _ 137,376 15.0 916 Tartous 180,023 _ 180,023 _ _ _ _ _ 180,023 24.0 750 Quneitra 14,120 _ 14,120 _ _ _ _ _ 14,120 17.9 79

Total 3,455,523 1,547 3,453,976 - 878 - 438 1,547 3,452,660 17.8 19,405 Source: CBS Statistical Yearbook 2008

Resident Population 1/1/2008

in '000

مجمـــــوع الخــــطوط خـط فرعي خارجي خــط فرعي داخلي خــط رئيـــسيTotal of Lines Secondary external Line Secondary internal Line Main Line Total Lines per

Population 100

Table 17: Banks and Number of Branches, by Governorate, 2005-07

TAB 7/14 Table 13

Bank/Governorate 2005 2006 2007

Central Bank 11 11 11 المصرف المركزي

Public Sector Banks 269 271 275

Commercial Bank 53 53 56 المصرف التجاري السوري Damascus & its District 20 20 21 دمشق وريفھا Aleppo 8 8 8 حلب Homs 4 4 4 حمص Hama 3 3 3 حماة Lattakia 3 3 3 الالذقية Other Governorates 10 10 12 المحافظات األخرى Free Zone 5 5 5 المنطقة الحرة

Industrial Bank 17 17 17 المصرف الصناعي Damascus & its District 4 4 4 دمشق وريفھا Aleppo 1 1 1 حلب Homs 1 1 1 حمص Other Governorates 11 11 11 المحافظات األخرى

Agricultural Cooperative Bank 106 106 106 المصرف الزراعي التعاوني Damascus & its District 10 10 10 دمشق وريفھا Aleppo 16 16 16 حلب Idleb 10 10 10 ادلب Hama 10 10 10 حماة Homs 7 7 7 حمص Al-Rakka 7 7 7 الرقة Al-Haskeh 17 17 17 الحسكة Other Governorates 29 29 29 المحافظات األخرى

Real Estate Bank 17 19 20 المصرف العقاري Damascus & its District 4 6 6 دمشق وريفھا Other Governorates 13 13 14 المحافظات األخرى

Popular Credit Bank 63 63 63 مصرف التسليف الشعبي Damascus & its District 17 17 17 دمشق وريفھا Aleppo 8 8 8 حلب Homs 4 4 4 حمص Hama 5 5 5 حماة Lattakia 4 4 4 الالذقية Tartous 6 6 6 طرطوس Idleb 5 5 5 ادلب Other Governorates 14 14 14 المحافظات األخرى

Savings Bank 13 13 13 مصرف التوفير

Private Domestic Banks 25 43 66 المصارف الخاصةBank Bemo Saudi Fransi 9 12 15 مصرف بيمو السعودي الفرنسيThe International Bank for Trade & Finance 6 9 10 مصرف سورية والمھجرBank of Syria & Overseas 6 10 14 المصرف الدولي للتجارة ةالتمويلArab Bank 1 3 6 البنك العربيAudi Bank 2 5 9 بنك عودةByblos Bank 1 4 6 بنك بيبلوسSyria Gulf Bank S.A ــ ــ 1 بنك سورية والخليجCham Bank ــ ــ 1 بنك الشامSyria International Islamic Bank ــ ــ 4 بنك سورية الدولي االسالمي

Foreign Banks 6 7 7 المصارف االجنبيةFree Zone 6 7 7 المنطقة الحرة

G.TOTAL* 300 321 348 *المجموع العام

Source : The Central Bank of Syria المصدر : مصرف سورية المركزي*Excludes Central Bank Branches *المجموع اليتضمن المصرف المركزي

Table 18: Exchange Rates of Foreign Currencies at Official Market Prices (2005-07), in Syrian Pounds

TAB 6/14 Table 142007 2006 2005

كانون األول كانون األول كانون األولCurrency December December DecemberUS Dollar, Period Average

Exchange Rates (SYP per US$)) أسعار الصرف (الليرة السورية مقابل الدوالر)Official Exchange Rate 11.2 11.2 11.2 سعر الصرف الرسميNeighboring Countries Exchange Rate سعر صرف البلدان المجاورةState and Public Sector Exchange Rate 49.9 49.9 سعر صرف الدولة والقطاع العامNon-Commercial Transactions Exchange Rate سعر صرف البلدان المجاورة للعمليات غير التجاريةFree Market Exchange Rate (Central Bank Of Syria)* 52 53.4 سعر الصرف الحر( المصرف المركزي )Foreign Currency Exchange Rate (Central Bank Of Syria) 50 سعر الصرف للعمالت األجنبي( المصرف المركزي )Foreign Currency Exchange Rate* سعر الصرف للعمالت األجنبي( المصرف المركزي ) *Other Exchange Rates, Period Average

Euro 68.5 65.3 66.8 اليوروSterling Pound 100.1 95.8 97.3 الجنيه االسترلينيJapanese Yen 42.5 44.7 48.7 الين اليابانيSaudi Riyal 13.4 13.9 14.3 الريال السعوديJordanian Dinar 70.8 73.7 75.9 الدينار األردنيLebanese Pound 0.033 0.035 0.36 الليرة اللبنانيةEgyptian Pound 8.9 8.9 8.2 الجنيه المصريTurkish Pound 38.3 36.3 39.76 الليرة التركيةUS Dollar (SYP per $), End of Period أسعار الصرف (الليرة السورية مقابل الدوالر)Neighboring Countries Exchange Rate سعر صرف البلدان المجاورةState and Public Sector Exchange Rate 49.9 49.9 سعر صرف الدولة والقطاع العامNon-Commercial Transactions Exchange Rate سعر صرف البلدان المجاورة للعمليات غير التجاريةFree Market Exchange Rate (Central Bank Of Syria)*. 51.1 54.9 سعر الصرف الحر( المصرف المركزي )Foreign Currency Exchange Rate (Central Bank Of Syria) 51.1 سعر الصرف للعمالت األجنبي( المصرف المركزي )Other Foreign Currency Exchange Rate*, End of Period سعر الصرف للعمالت األجنبي( المصرف المركزي ) *Euro 66.2 67.1 65 اليوروSterling Pound 100.3 100.1 94.4 الجنيه االسترلينيJapanese Yen 41.8 43 46.5 الين اليابانيSaudi Riyal 13.7 13.7 14.7 الريال السعوديJordanian Dinar 71.8 72.4 77.6 الدينار األردنيLebanese Pound 0.034 0.034 0.037 الليرة اللبنانيةEgyptian Pound 8.9 9 8.2 الجنيه المصريTurkish Pound 36.2 36.1 40.66 الليرة التركيةSource : The Central Bank of Syria*The State and Public Sector Exchane Rate is Unified with The Free Exchange Rate Issued by Central Bank of Syria since 1/1/2007

121

Annex 4

2004 Census Municipality Data, State Planning Commission Table 1: Demographic Profile of Aleppo and Selected Cities

Table 2: Education Profile of Aleppo and Selected Cities

Table 3: Labor Force Profile of Aleppo and Comparison Cities

Table 4: Employment Profile of Aleppo Residents and Comparison Cities

Table 5: Housing Profile of Aleppo and Comparison Cities

Table 6: Business Establishment Profile for Aleppo and Comparison Cities

Table 1 Demographic Profile of Aleppo and Selected Cities

Items Damascus Aleppo Homs Idleb

5 Population Counts6 Total Population Number (2004 Census) 98,791 652,609 2,132,100 1,414,913 عدد السكان

7 Males 50,921 336,224 1,106,907 725,818 عدد الذكور

8 Females 47,870 316,385 1,025,193 689,095 عدد االناث

9 Registered Population (2007) 1,627,098 1,715,038 686,080 127,554

10 Registered as % of Census Population 115% 80% 105% 129%

11

12 Distribution Distribution by Age and Gender13 Young Age Population

14 % of Males less than 15 %30.9 نسبة الذكور 39.7% 35.3% 39.7%

15 % of Females less than 15 %30.9 نسبة االناث 39.7% 35.3% 39.7%

16 % of Population less than 15 %30.9 نسبة السكان 39.7% 35.3% 39.7%

17 Working Age Population

18 % of Males 15-64 Years of Age %61.3 نسبة الذكور 57.4% 61.0% 56.8%

19 % of Females 15-64 Years of Age نسبة االناث 61.3% 57.8% 61.3% 57.5%

20 % of Population 15-64 Years of Age %61.3 نسبة السكان 57.6% 61.1% 57.2%

21 Old Age Population

22 % of Males 65 Years and Older %7.7 نسبة الذكور 2.9% 3.7% 3.5%

23 % of Females 65 Years and Older %7.7 نسبة االناث 2.5% 3.4% 2.7%

24 % of Population 65 Years and Older نسبة السكان 7.7% 2.7% 3.6% 3.1%

25

26 Household Attributues

27 Number of households عدد األسر 310,883 408,651 123,878 18,434

28 Average Household Size Line 4.55 5.22 5.27 5.36

29 % of Households with Female Head %11.5 نسبة األسر 7.6% 9.1% 8.5%

30

31 Family size (as reported by Census) حجم األسرة 4.53 5.21 5.26 5.36

32 Fertility Rate

33 Marriage Fertility Rate معدل 4.66 4.91 5.29 6.22

Municipalities

SyriaAleppo

Governorate

Table 2 Educational Profile of Aleppo and Comparison Cities


41 Illiteracy and Literacy Awareness

42 Illiteracy Rate, 15 Years and Older

43 Males %4.3 نسبة األمية 12.6% 6.1% 9.8%

44 Females 9.6 نسبة األمية% 20.4% 12.9% 16.2%

45 Total %6.9 نسبة األمية 16.4% 9.4% 12.9%

46 Literacy Awareness Rate 15 Years and Older

47 Males %25.4 نسبة الملم 43.1% 32.5% 33.0%

48 Females 26.4 نسبة الملم% 41.6% 30.8% 30.0%

49 Total %25.9 نسبة الملم 42.4% 31.7% 31.6%

50

51 Educational Attainment

52 Primay Education, Persons 15 years and Older

53 Males %19.6 نسبة االبتدائية 16.4% 15.8% 19.2%

54 Females 16.0 نسبة االبتدائية% 14.3% 13.1% 16.4%

55 Total %17.8 نسبة االبتدائية 15.4% 14.5% 17.9%

56 Preparatory Education, Persons 15 Years and Older

57 Males %18.1 نسبة 12.3% 18.9% 14.6%

58 Females 17.5 نسبة% 11.1% 17.8% 14.6%

59 Total %17.8 نسبة 11.7% 18.4% 14.6%

60 High School, Persons 15 Years and Older

61 Males نسبة ثانوية 76.7% 79.2% 80.2% 77.3%

62 Females نسبة ثانوية 73.9% 73.4% 74.6% 70.2%

63 Total %75.3 نسبة ثانوية 76.4% 77.5% 73.8%

64 % of Population with College or University

65 Males %13.6 نسبة معهد 7.7% 13.2% 12.2%

66 Females 11.2 نسبة معهد% 5.8% 12.1% 12.9%

67 Total %12.4 نسبة معهد 6.8% 12.7% 12.5%

68

69 Attendance and Drop-Out Rates

70 Percent of Population in School Attendance

71 5-24 Years of Age %64.1 معدل 57.2% 64.1% 62.1%

72 6-11 Years of Age %97.4 معدل 97.5% 99.1% 98.7%

73 School Attendance Rate, 6-11 Years of Age

74 Total %97.8 معدل 98.2% 99.4% 99.2%

75 Male %97.8 معدل 98.3% 99.4% 99.1%

76 Female %97.9 معدل 98.1% 99.4% 99.3%

77 School Drop-out Rate, 6-11 Years of Age

78 Total %0.4 معدل التسرب 0.8% 0.3% 0.5%

79 Male %0.4 معدل التسرب 0.9% 0.3% 0.6%

80 Female %0.4 معدل التسرب 0.7% 0.3% 0.4%


82 Total %98.7 معدل 96.8% 99.3% 98.5%

83 Male %98.6 معدل 96.9% 99.3% 98.6%

84 Female %98.8 معدل 96.8% 99.2% 98.4%



87 Male %7.2 معدل التسرب 16.7% 9.4% 13.2%



90 Total %97.2 معدل 93.6% 98.2% 97.6%

91 Male %97.2 معدل 94.1% 98.2% 97.5%

92 Female %97.1 معدل 93.0% 98.2% 97.6%



95 Male %38.2 معدل التسرب 55.8% 39.5% 47.6%


Municipalities Aleppo Governorate Syria

Table 3: Labor Force Profile of Aleppo and Comparison Cities


106 Indicators of Economic Activity107 Economically Active, as % of Total Population\1

108 Male معدل النشاط االق 46.8% 49.0% 48.9% 46.2%

109 Female معدل النشاط االق 10.8% 5.1% 10.4% 9.3%

110 Total معدل النشاط االق 29.3% 27.9% 30.2% 28.3%

111 Labor Force (Estimate based on Census Data)\1

112 Male 339,873 542,006 164,474 23,518

113 Female 74,189 52,478 32,825 4,438

114 Total 414,062 594,484 197,299 27,956

115 Economically Active as % of Population 15-64 Years\2

116 Male معدل النشاط االق 76.3% 85.3% 80.2% 81.2%

117 Female معدل النشاط االق 17.6% 8.9% 16.9% 16.1%

118 Total معدل النشاط االق 47.7% 48.4% 49.5% 49.5%

119 Population 15-64 Years of Age (Estimate)\2

120 Male 445,167 635,735 205,001 28,948

121 Female 422,525 592,119 193,789 27,543

122 Total 867,692 1,227,854 398,790 56,491 123 Labor Force 15-64 Years of Age (Estimate)124 Male 339,873 542,006 164,474 23,518 125 Female 74,189 52,478 32,825 4,438 126 Total 414,062 594,484 197,299 27,956 127 Control 414,062 594,484 197,299 27,956 128 Labor Force (Estimate based on Census Data)129 Employed 387,877 552,478 173,422 25,867 130 Unemployed 26,185 42,006 23,877 2,089 131 Total 414,062 594,484 197,299 27,956 132

133 Unemployment Characteristcis134 Unemployment Rate 15 Years and Older (Percent)

135 Male %4.5 معدل البطالة 6.4% 10.6% 7.2%

136 Female معدل البطالة 14.6% 14.0% 19.8% 9.0%

137 Total معدل 6.3% 7.1% 12.1% 7.5%

138 Unemployment Rate 15 Years and Older (Percent)

139 Illiterate but Aware %8.9 معدل البطالة 7.2% 12.7% 7.1%

140 Educated %5.4 معدل البطالة 6.9% 11.7% 7.4%

141 Total معدل البطالة 6.3% 7.1% 12.1% 7.5%

142 Unemployment Rate by Age Group

143 Age 15-24 معدل البطالة 17.0% 17.1% 29.8% 18.6%

144 Age 25-34 %5.0 معدل البطالة 4.6% 11.6% 6.4%

145 Age 35-44 %2.3 معدل البطالة 1.4% 3.1% 1.7%

146 Age 45 and older %2.3 معدل البطالة 0.9% 1.3% 1.2%

147

148 Underemployment Indicators

149 % of Workers with Permanent Job نسبة 73.0% 67.0% 66.8% 60.2%

150 % of Workers with Temporal Job نسبة 8.5% 7.1% 8.5% 7.9%

151 % of Workers with Seasonal Job نسبة 3.4% 3.9% 2.6% 4.0%

152 % of Workers with Part-Time Job نسبة 14.3% 21.8% 22.1% 27.8%

153

154 Child Labor Prevalence155 Population 14 years and Younger 437,698 846,660 230,586 39,226

156 Number of Children Working?

157 Less than 6 Years of Age نسبة األطفال 38,739 69,351 18,135 3,110

158 6-14 Years of Age 4,209 25,719 93,003 57,886 نسبة األطفال

159 Total 14 and Younger 96,625 162,354 43,854 7,319

160 % of Population 14 and Younger Working 22.1% 19.2% 19.0% 18.7%

\1 Called the gross economic activity rate in the translation

\2 Called the net economic activity rate in the translation


Table 4: Employment Profile of Aleppo Residents and Comparison Cities


171 Jobs by Sector and Type172 Distribution of Workers by Type of Employment

173 % Business Owners %9.3 نسبة صاحب 8.9% 6.6% 8.4%

174 % Self-employed %19.6 نسبة يعمل 22.6% 20.7% 29.5%

175 % Salaried %66.8 نسبة يعمل بأجر 64.7% 68.8% 57.3%

176 % without Salary %2.1 نسبة يعمل 2.3% 1.9% 3.1%

177

178 % Distribution of Workers by Sector Ownership Form

179 Public Sector نسبة المشتغلين 34.2% 21.4% 41.2% 35.0%

180 Private Sector نسبة المشتغلين 59.9% 70.5% 53.7% 54.9%

181 Cooperative Sector نسبة المشتغلين 1.1% 0.6% 0.6% 0.8%

182 Joint Public Private Sector نسبة المشتغلين 1.3% 1.2% 1.1% 1.8%

183 Family Sector نسبة المشتغلين 1.8% 2.6% 1.5% 2.6%

184 Community/Civil Sector نسبة المشتغلين 0.9% 3.6% 1.9% 4.7%

185 Total 99.1% 99.8% 100.0% 99.9%

186

187 Number of Workers by Sector

188 Agricultural Activities 20.53 35.94 112.95 68.43 نسبة العاملين

189 Owner of Agricultural Business 68.29 146.63 483.81 268.44 نسبة من يعمل

190 Salaried in Agriculture 59.15 272.53 563.00 285.88 نسبة العاملين

191 Non-Salaried in Agriculture 18.29 52.68 164.34 83.00 نسبة العاملين

192 Activities Other than Agriculture 389.79 2,155.74 9,402.29 7,898.47 نسبة العاملين

193 Owner of Non-Agricultural Business 1,374.99 6,736.16 23,840.16 16,600.27 نسبة من يعمل

194 Salaried in Non-Agriculture 2,745.70 22,620.20 69,646.44 57,239.65 نسبة العاملين

195 Non-Salaried in Non-Agriculture 136.59 589.19 2,331.59 1,715.06 نسبة العاملين

196 Total 84,159.21 106,544.58 32,609.08 4,813.32

197 Distribution of Workers by Sector (My Estimate)

198 Agricultural Activities 0.1% 0.1% 0.1% 0.4%

199 Owner of Agricultural Business 0.3% 0.5% 0.4% 1.4%

200 Salaried in Agriculture 0.3% 0.5% 0.8% 1.2%

201 Non-Salaried in Agriculture 0.1% 0.2% 0.2% 0.4%

202 Activities Other than Agriculture 9.4% 8.8% 6.6% 8.1%

203 Owner of Non-Agricultural Business 19.7% 22.4% 20.7% 28.6%

204 Salaried in Non-Agriculture 68.0% 65.4% 69.4% 57.0%

205 Non-Salaried in Non-Agriculture 2.0% 2.2% 1.8% 2.8%

206 Total 100.0% 100.0% 100.0% 100.0%

207

208 % Distribution of Workers by Industry (Census)

209 Agriculture and Forestry نسبة المشتغلين 0.8% 1.3% 1.6% 3.5%

210 Manufacturing نسبة المشتغلين 18.0% 30.5% 13.9% 15.7%

211 Building and Construction نسبة المشتغلين 10.9% 17.6% 19.5% 19.8%

212 Hotels and Restaurants نسبة المشتغلين 22.1% 18.8% 15.8% 17.5%

213 Transport and Communication نسبة المشتغلين 7.3% 6.3% 5.5% 6.2%

214 Finance, Insurance, and Real Estate نسبة المشتغلين 4.5% 2.1% 1.9% 2.3%

215 Services نسبة المشتغلين 34.6% 22.7% 41.4% 34.4%

216 Other نسبة المشتغلين 1.8% 0.8% 0.4% 0.4%

217 Total 100.0% 100.0% 100.0% 100.0%

218 Employment by Sector (My Estimate)

219 Agriculture and Forestry 3,239 6,961 2,728 917

220 Manufacturing 69,719 168,273 24,070 4,074

221 Building and Construction 42,291 97,375 33,881 5,133

222 Hotels and Restaurants 85,573 103,662 27,441 4,536

223 Transport and Communication 28,412 34,783 9,544 1,613

224 Finance, Insurance, and Real Estate 17,632 11,464 3,297 607

225 Services 134,049 125,396 71,817 8,887

226 Other 6,962 4,564 644 100

227 Total 387,877 552,478 173,422 25,867

228

229 % Distribution of Workers by Type of Occupation

230 Administration and White Collar نسبة المشتغلين 17.2% 6.0% 16.1% 10.2%

231 Crafts and Technicians نسبة المشتغلين 13.9% 9.1% 15.5% 18.0%

232 Service and Retail Worker نسبة المشتغلين 28.4% 22.8% 23.8% 22.3%

233 Agricultural Worker نسبة المشتغلين 0.8% 1.2% 1.6% 3.5%

234 Production Worker نسبة المشتغلين 38.1% 60.2% 42.7% 45.7%

235 Total 98.4% 99.4% 99.7% 99.8%


Table 5: Housing Profile of Aleppo and Comparison Cities


244 Housing Conditions

245 Average Size of Home (m2) متوسط مساحة 100.8 92.0 118.9 106.4

246 Average Age of Residence متوسط عمر 28.9 20.9 21.7 27.1

247 Housing Units (Number)

248 Occupied Housing Units عدد المساكن 279,771 391,372 119,416 18,166

249 Vacant Housing Units عدد المساكن 33,322 38,942 17,452 2,637

250 Under Construction عدد المساكن 30,900 24,449 7,072 1,446

251 Total Completed and Under Construction 343,993 454,763 143,940 22,249

252 Distribution of Housing Units by Status of Occupation

253 Occupied Housing Units نسبة المساكن 89.4% 91.0% 87.2% 87.3%

254 Vacant Housing Units نسبة المساكن 10.6% 9.0% 12.8% 12.7%

255 Total 100.0% 100.0% 100.0% 100.0%

256 Housing under Construction, as % to Completed Units نسبة المساكن 9.9% 5.7% 5.2% 7.0%

257

258 Percent of Housing Units by Infrastructure Access

259 Safe Water Supply %94.9 نسبة المساكن 97.3% 98.2% 96.5%

260 Waste Water Service %91.6 نسبة المساكن 96.8% 97.6% 95.5%

261 Access to Public Electricity Network نسبة المساكن 95.0% 98.7% 98.9% 96.5%

262 Percentage Distribution of Housing Units by Type

263 Villa %2.8 نسبة المساكن 2.3% 2.2% 3.9%

264 Multi-Family Building %52.8 نسبة المساكن 63.6% 71.2% 77.8%

265 Arabic Style %21.8 نسبة المساكن 10.4% 16.1% 9.6%

266 Other Style %22.6 نسبة المساكن 23.7% 10.5% 8.7%

267 Housing Units by Type of Ownership (% of Total)

268 Owned %79.5 حيازة المسكن 85.7% 84.9% 84.1%

269 Rented %14.0 حيازة المسكن 10.7% 12.8% 11.2%

270 Housing Units by Tyep of Registration

271 Real Estate Register %53.9 الحالة 61.7% 58.2% 78.9%

272 Agricultural Register %14.5 الحالة 6.7% 23.3% 0.9%

273 Legal Registration at Court %15.6 الحالة 18.3% 14.4% 7.8%

274 Housing Units by Type of Dominant Material

275 Cement مادة البناء 90.5% 55.0% 97.7% 25.7%

276 Mud %3.3 مادة البناء 0.1% 0.3% 0.3%

277 Stone %1.0 مادة البناء 44.0% 1.5% 70.7%

278 Other %0.3 مادة البناء 0.1% 0.3% 0.1%

279 Persons per Room 1.3 معدل التزاحم 1.5 1.4 1.4


Table 6: Business Establishment Profile for Aleppo and Comparison Cities


288 Number of Establishments, by Number of Workers

289 1-2 Workers 3,461 26,202 65,795 55,686 عدد المنشآت

290 3-5 Workers 652 3,268 19,381 10,513 عدد المنشآت

291 6-9 Workers 77 310 3,842 1,460 عدد المنشآت

292 10-50 Workers 19 97 1,224 589 عدد المنشآت

293 51 and more Workers 2 15 68 57 عدد المنشآت

294 Total 68,305 90,310 29,892 4,211

295 Number of Establishments, by Number of Workers

296 1-2 Workers 81.5% 72.9% 87.7% 82.2%

297 3-5 Workers 15.4% 21.5% 10.9% 15.5%

298 6-9 Workers 2.1% 4.3% 1.0% 1.8%

299 10-50 Workers 0.9% 1.4% 0.3% 0.5%

300 51 and more Workers 0.1% 0.1% 0.1% 0.0%

301 Total 100.0% 100.0% 100.0% 100.0%

302

303 # of Establishments in Operation 4,545 31,574 97,767 74,570 عدد المنشآت

304 Population per Establishment 19.0 21.8 20.7 21.7

305 % Distribution of Establishments by # of Workers

306 1-2 workers %74.7 نسبة المنشآت 67.3% 83.0% 76.1%




310 51 or more workers %0.1 نسبة المنشآت 0.1% 0.0% 0.0%

311

312 Number of Establishments, by Ownership

313 Public Sector 179 699 1,618 1,991 عدد المنشآت

314 Private Individual Ownership 4,164 29,044 84,526 63,414 عدد المنشآت

315 Private Company 56 823 5,858 4,828 عدد المنشآت

316 Cooperative Joint Public Private 2 44 185 242 عدد المنشآت

317 Non-Profit 1 14 16 55 عدد المنشآت

318 Total 70,530 92,203 30,624 4,402

319 Distribution of Establishments, by Ownership

320 Public Sector 2.8% 1.8% 2.3% 4.1%

321 Private Individual Ownership 89.9% 91.7% 94.8% 94.6%

322 Private Company 6.8% 6.4% 2.7% 1.3%

323 Cooperative Joint Public Private 0.3% 0.2% 0.1% 0.0%

324 Non-Profit 0.1% 0.0% 0.0% 0.0%

325 Total 100.0% 100.0% 100.0% 100.0%

326 Number of Establishments by Industry

327 Agriculture and Forestry 7 20 62 81 عدد المنشآت

328 Manufacturing 845 4,988 23,798 11,262 عدد المنشآت

329 Building and Construction - 1 - 2 عدد المنشآت

330 Hotels and Restaurants 2,606 19,357 54,717 45,021 عدد المنشآت

331 Transport and Communication 210 1,267 5,504 4,072 عدد المنشآت

332 Finance, Insurance, and Real Estate 280 2,143 4,496 3,518 عدد المنشآت

333 Services 596 3,797 9,188 10,610 عدد المنشآت

334 Unknown - - - - عدد المنشآت

335 Total 74,566 97,765 31,573 4,544

336 Number of Establishments by Industry

337 Agriculture and Forestry 0.1% 0.1% 0.1% 0.2%

338 Manufacturing 15.1% 24.3% 15.8% 18.6%

339 Building and Construction 0.0% 0.0% 0.0% 0.0%

340 Hotels and Restaurants 60.4% 56.0% 61.3% 57.4%

341 Transport and Communication 5.5% 5.6% 4.0% 4.6%

342 Finance, Insurance, and Real Estate 4.7% 4.6% 6.8% 6.2%

343 Services 14.2% 9.4% 12.0% 13.1%

344 Unknown 0.0% 0.0% 0.0% 0.0%

345 Total 100.0% 100.0% 100.0% 100.0%

Municipalities

SyriaAleppo

Governorate

129

Annex 5

Aleppo Manufacturing Permit Data Table 1: Summary of Aleppo Industry Distribution Estimates, Various Sources

Table 2: Aleppo Industry Statistics based on Ministry of Industry Permits

Table 3: Aleppo Firms by Product Group, Textile and Agro-Food Industry, Aleppo Governorate

Table 4: Number of Firms in Private Sector Industrial Establishments, National and Governorate

Table 5: Aleppo Members in Handicraft Associations, General Federation of Handicraft Assoc’ns

Table 1: Industry Distribution Estimates, based on various SourcesTable1

Source of Data Area Year Availability Textiles Chemical Engineering Agri-Food Misc, nec Total Total

Distribution of Firms (Number of Firms)5 Dept of Industry Permits Govrn'te w/o Sheikh Najjar Private mid 09 Available 32.9% 14.7% 40.9% 11.5% 0.0% 100.0% 31,226 6 Large Firms (Industry) Govrn'te w/o Sheikh Najjar Private mid 09 Available 47.2% 17.7% 24.1% 11.1% 0.0% 100.0% 10,806 7 Small Firms (Handicraft) Govrn'te w/o Sheikh Najjar Private mid 09 Available 25.4% 13.1% 49.8% 11.8% 0.0% 100.0% 20,420 8 Municipal Permits Municipal To be supplied9 Chamber of Commerce Membership Governorate Potentially

10 Chamber of Industry Membership Governorate Potentially11 Sheikh Najjar Permanent Permits Sheikh Najjar mid Jun 09 Available 45.9% 16.7% 15.5% 21.9% 0.0% 100.0% 233

Distribution of Employees (Number of Employees)13 Dept of Industry Permits Governorate w/o Sheikh Najjar To be supplied 28.9% 21.2% 37.9% 11.9% 0.0% 100.0% 134,406 14 Large Firms (Industry) Govrn'te w/o Sheikh Najjar mid 09 Potentially 34.7% 23.7% 28.6% 13.0% 0.0% 100.0% 71,694 15 Small Firms (Handicraft) Govrn'te w/o Sheikh Najjar mid 09 Potentially 22.2% 18.4% 48.7% 10.7% 0.0% 100.0% 62,712 16 Municipal Permits Municipal Unknown17 Chamber of Commerce Membership Governorate18 Chamber of Industry Membership Governorate19 Sheikh Najjar Permanent Permits Sheikh Najjar mid Jun 09 Available 42.8% 16.3% 21.8% 19.1% 0.0% 100.0% 2,909 20 Sheikh Najjar Survey Data Sheikh Najjar Potentially

Distribution of Capital (SL Million)22 Dept of Industry Permits Governorate w/o Sheikh Najjar Yes23 Municipal Permits Municipal Probably Not24 Chamber of Commerce Membership Governorate Probably Not25 Chamber of Industry Membership Governorate Probably Not26 Sheikh Najjar Permanent Permits Sheikh Najjar mid Jun 09 Yes 54.1% 10.8% 28.9% 6.2% 0.0% 100.0% 8,037.00

Distribution of Exports excl Agriculture (US$ in Current Prices)28 CoC Export Licences (US$) Governorate 2006 6.4% 8.6% 12.4% 11.6% 61.0% 100.0% 248,520,370 29 CoC Export Licences (US$) Governorate 2007 16.1% 10.1% 10.5% 10.1% 53.3% 100.0% 317,607,921 30 CoC Export Licences (US$) Governorate 2008 18.4% 13.1% 11.8% 3.1% 53.6% 100.0% 318,857,799 31 CoC Export Licences (US$) Governorate Est 2009 9.4% 26.1% 10.2% 4.1% 50.2% 100.0% 286,151,724

Distribution of Exports excl Agriculture, after Distribution of Miscellaneous Exports over Four Manufacturing Sub-Sectors (US$ in Current Prices)33 CoC Export Licences (US$) Governorate 2006 16.3% 22.0% 31.8% 29.8% 100.0% 248,520,370 34 CoC Export Licences (US$) Governorate 2007 34.4% 21.6% 22.5% 21.5% 100.0% 317,607,921 35 CoC Export Licences (US$) Governorate 2008 39.6% 28.3% 25.4% 6.8% 100.0% 318,857,799 36 CoC Export Licences (US$) Governorate Est 2009 18.9% 52.3% 20.5% 8.3% 100.0% 286,151,724

Table 2: Industry Statistics based on the Ministry of Industry Permit System Table2

Item Textiles Chemical Engineering Agri-Food Misc, nec Total Remarks

Sheikh Najjar Statistics, Mid-2009 I believe data were for mid-June5 General Statistics6 Permits Requested7 Permits Issued8 Temporary9 Permanent

10 # Firms Construction Started, but Operation Pending11 # Firms Operating 350 Get Distribution12 by Type of License13 with Temporary License 117 14 with Permanent License 107 39 36 51 - 233 15 by Type of Investment16 Relocated within Aleppo 56 This is out of 35017 New Investment 294 1819 Indicators for Firms with Permanent License20 Number of Firms 107 39 36 51 - 233 21 Of these, Operating under Law 10 23 1 5 1 - 30 22 Of these, Foreign Direct Investment 15 23 # Employment (acc to Permit of 233 Firms) 1,244 475 635 555 - 2,909 24 Paid-up Capital (acc to Permit of 233 Firms), SL m 4,350.0 869.0 2,320.0 498.0 - 8,037.0 25 Paid-up Capital per Worker26 In Syrian Pound 3,496,785 1,829,474 3,653,543 897,297 - 2,762,805 27 In US $ 74,400 38,925 77,735 19,091 - 58,783

Governorate of Aleppo Statistics according to Permits (without Sheikh Najjar), End of 200830 # of Firms with Permit (temporary and permanent)31 Industry 5,100 1,908 2,599 1,199 - 10,806 32 Handicraft 5,177 2,669 10,167 2,407 - 20,420 33 Total 10,277 4,577 12,766 3,606 - 31,226 34 # of Employees in Permit35 Industry 24,898 16,991 20,480 9,325 - 71,694 36 Handicraft 13,910 11,565 30,514 6,723 - 62,712 37 Total 38,808 28,556 50,994 16,048 - 134,406 38 Employees per Permit39 Industry 4.9 8.9 7.9 7.8 6.6 40 Handicraft 2.7 4.3 3.0 2.8 3.1 41 Total 3.8 6.2 4.0 4.5 4.3 4243 % Distribution of Firms with Permit (temporary and permanent)44 Industry (Large Manufacturing) 47.2% 17.7% 24.1% 11.1% 0.0% 100%45 Handicraft (Small Manufacturing) 25.4% 13.1% 49.8% 11.8% 0.0% 100%46 Total 32.9% 14.7% 40.9% 11.5% 0.0% 100%47 % Distribution of Employees in Permits48 Industry 34.7% 23.7% 28.6% 13.0% 0.0% 100%49 Handicraft 22.2% 18.4% 48.7% 10.7% 0.0% 100%50 Total 28.9% 21.2% 37.9% 11.9% 0.0% 100%5152 % Establishments inside Baladiya (Rough Estimate) 65% Add detail by sector53 % Esablishments inside Industrial Zones Find out54 % Establishments with Permanent Permit Find out5556

Source: Department of Industry, Ministry of Industry58 Exchange Rate: SL per US$ 47

Table 3:Governorate Industrial Permits, End of 2008 StatusInformation by Subsector To be Completed

Item # of Firms # of Workers

Number of Firms in the Textile Sector, by Type of Product6 Private Sector7 Dyeing 212 8 Spinning, Yarn Production 108 9 Fabric, Weaving and Cloth Production 2,400

10 Trikot and Knitting 1,600 11 Sewing in Big Factories 800 12 Sewing in Small Factories 4,500 13 Embroidery 500 14 Stoning of Cotton (for use in Jeans) 23 15 Total Private Sector (Approximate) 10,143 1617 Public Sector18 Carpet Production 1 19 Underwear Production 1 20 Fabric and Yarn Production 4 21 Total Public Sector 6

Number of Firms in the Agri-Food Sector, by Type of Product24 Private Sector (Industry Level only, does not include Handicraft)25 Olive Oil Mill 366 26 Canned or Packaged Food 10 27 Cotton Seed Oil 5 28 Sunflower Oil 7 29 Cooling and Refrigeration Warehouses 74 30 Sweets and Candies 125 31 Sesame Sweets 60 32 Animal Feed 29 33 Carbonated Soft Drinks 18 34 Non-carbonated Soft Drinks 17 35 Yoghurt 16 36 Icecream 183 37 Biscuit 29 38 Potato Chips 89 39 Layered Wafer Sweets 56 40 Coated Biscuits 71 41 Bakery Goods 14 42 Chocolade 67 43 Total Private Sector (Approximate) 1,236 4445 Public Sector na4647

Number of Firms in the Chemical Sector, by Type of Product49 na50 na51

Number of Firms in the Engineering Sector, by Type of Product53 na54 na55

Table 4: Private Sector Industrial Establishments in Syria

Item 2005 2006 2007

Establishments in the Private Industrial Sector

# of Establishments 98,928 99,054 99,404 Rate of growth on previous year 0.1% 0.4%

Distribution of enterprises by number of workers1-5 Workers 90.7% 89.3%6-9 Workers 6.3% 6.1%10 or more workers 3.1% 4.6%

Total 100.0% 100.0%

Distribution of industrial enterprises in the private sector, by governorateDamascus (Urban) 12.0% 12.1%Damascus (Rural) 17.9% 18.2%Aleppo 29.8% 30.0%Homs 8.1% 8.0%Hama 7.3% 7.2%Lattakia 4.4% 4.3%Idleb 5.2% 5.2%Hassaka 3.1% 3.1%Deir Al Zoor 2.3% 2.2%Tartous 3.8% 3.5%Raqqa 1.8% 1.9%Darra 2.7% 2.7%Sweida 1.6% 1.5%Qunitera 0.2% 0.2%

Total 100.0% 100.0%

Manufacturing and Industrial IndicatorsPublic industrial production, as % of total industrial production 72.3% 75.7% 73.9%Private industrial production, as % of total industrial production 27.7% 24.3% 26.1%Public manufacturing production, as % of total non-oil manufacturing production 28.3% 27.9% 23.3%Private manufacturing production, as % of total non-oil manufacturing production 71.7% 72.1% 76.8%Industrial workers, as % of total workers in Syria 10.9% 11.6% 11.8%

Source: Syrian Statistcs web site http:/www.cbssyr.org/economy statistics/economic 1/eco-h.htmAsk SEBC whether there is a difference in Arabic between establishments and enterprises. In the US there is.

Table 5:

Name of Association No of Members

(Aleppo)

Percentage Distribution of

Members1 Handicraft Association of Manufacturing of Ceramics, Marble and Cement Products 876 5.1%2 Handicraft Association of Restaurants and Cafes 66 0.4%3 Handicraft Association of Vocational Training Centers 49 0.3%4 Handicraft Association for Iron Works 826 4.8%5 Handicraft Association for Carpentry and Wooden Furniture 1,572 9.2%6 Handicraft Association for Metal Furniture 603 3.5%7 Handicraft Association of Jewelers and Jewelry making 1,248 7.3%8 Handicraft Association of Bread Makers 669 3.9%9 Handicraft Association for Electric Tools 1,121 6.6%

10 Handicraft Association for Trico and Undergarment Making 316 1.9%11 Handicraft Association of Customs Clearers 206 1.2%12 Handicraft Association for Sewing, Tailoring and Ironing 1,208 7.1%13 Handicraft Association for Metal Decorating and Oriental Artifacts 57 0.3%14 Handicraft Association for Hospitality (hotels and motels) 62 0.4%15 Handicraft Association for Sweets, Chocolate and Ice-cream 307 1.8%16 Handicraft Association for Textiles, Embroidery and Dying 361 2.1%17 Handicraft Association for Filmmaking and Photography 420 2.5%18 Handicraft Association for Arabic Upholstery 116 0.7%19 Handicraft Association for Printing and Binding 140 0.8%20 Handicraft Association for Manufacturing of Soaps, Detergents and Cleaners 133 0.8%21 Handicraft Association for Leathers and Tannery 103 0.6%22 Handicraft Association for Advertising through Posters and Calligraphy 49 0.3%23 Handicraft Association for Hand-made Glass 318 1.9%24 Handicraft Association of Shoemakers 671 3.9%25 Handicraft Association of Attorneys 1,062 6.2%26 Handicraft Association of Real-estate agents 2,002 11.7%27 Handicraft Association for Aluminum Works 401 2.4%28 Handicraft Association for Plumbing and Sewerage System Works 518 3.0%29 Handicraft Association of Food Industries 126 0.7%30 Handicraft Association for Truck Transporting 68 0.4%31 Handicraft Association for Car Maintenance 905 5.3%32 Handicraft Association for Clock Making 59 0.3%33 Handicraft Association for Perfumes and Cosmetics 59 0.3%34 Handicraft Association for Olive Oil Pressing 52 0.3%35 Handicraft Association for Gypsum 117 0.7%36 Handicraft Association for Rock Cutting 191 1.1%

Total Number of Associations 17,057 100.0%

Source: General Federation of Handicrafts, Aleppo Branch 2009

Handicrafts Associations affiliated to the General Federation of Handicrafts Associations and the Number of Members in Each Association, Aleppo Governorate

137

Annex 6

Data on Chamber of Commerce Export Permits Table 1: Aleppo Governorate Exports, by Major Industry Group

Table 2.1: Aleppo Governorate Exports, by Detailed Product Type, Part 1

Table 2.2: Aleppo Governorate Exports, by Detailed Product Type, Part 2

Table 3: Aleppo Governorate Exports, by 2-Digit Product Class

Table 1: Aleppo Governorate Exports Reported by the Chamber of Commerce, by Major Industry Group, 2006-09 (US Dollars, Current Pric

Major Industry Code 2006 2007 2008 2009 1st Half 2009 2006 2007 2008 2009 2006-08 2006-09 2008-09

Agriculture Agricultural 97,367,096 86,344,737 124,817,771 87,401,652 43,700,826 28.1% 21.4% 28.1% 23.4% 13.2% -3.5% -30.0%Cosmetics C 49,114 16,600 50,060 397,594 198,797 0.0% 0.0% 0.0% 0.1% 1.0% 100.8% 694.2%Chemicals Chemical 5,995,854 8,577,963 8,943,608 7,788,664 3,894,332 1.7% 2.1% 2.0% 2.1% 22.1% 9.1% -12.9%Food Food 28,916,855 31,933,769 10,013,993 11,785,908 5,892,954 8.4% 7.9% 2.3% 3.2% -41.2% -25.9% 17.7%Manufacture Manufactured 30,826,092 33,427,825 37,552,326 29,216,806 14,608,403 8.9% 8.3% 8.5% 7.8% 10.4% -1.8% -22.2%Pharmaceutics Pharmaceutical 15,261,972 23,452,090 32,861,412 66,374,352 33,187,176 4.4% 5.8% 7.4% 17.8% 46.7% 63.2% 102.0%Textile Textile 15,839,615 51,007,089 58,657,782 26,880,660 13,440,330 4.6% 12.6% 13.2% 7.2% 92.4% 19.3% -54.2%Miscellaneous Miscellaneous 151,592,868 169,192,585 164,469,029 139,418,416 69,709,208 43.8% 41.9% 37.1% 37.3% 4.2% -2.8% -15.2%N/A N/A 38,000 - - - - 0.0% 0.0% 0.0% 0.0% -100.0% -100.0%Blank - - 6,309,589 4,289,324 2,144,662 0.0% 0.0% 1.4% 1.1% -32.0%

Total 345,887,466 403,952,658 443,675,570 373,553,376 186,776,688 100.0% 100.0% 100.0% 100.0% 13.3% 2.6% -15.8%Control Total 345,887,466 403,952,658 443,675,570 373,565,376 186,782,688

Value of Exports (US$) Share of Total Exports Annual Growth Rate

Table 2.1: Aleppo Governorate Exports Reported by the Chamber of Commerce, by Detailed Product Type, 2006-09 (US Dollars, Current Prices), Part I

Code 2-Digit Product Group 2006 2007 2008 2009 1st Half 2009 2006 2007 2008 2009 2006-08 2006-09 2008-09Animal and Animal Products (1-5)

1 Livestock Sheep Agriculture 52,104,232 49,470,292 85,601,869 58,443,540 29,221,770 15.1% 12.2% 19.3% 15.6% 28.2% 3.9% -31.7%2 - - - - - 3 Aquarium Fish Miscellaneous 51,250 - - 87,500 43,750 0.0% 0.0% -100.0% 19.5%4 Butter, Cheese, Eggs Agriculture - 347,995 - - - 0.1%5 Wool Agriculture 38,156 - - 22,600 11,300 0.0% 0.0% -100.0% -16.0%

Agricultural Products (6-24)6 Agricultural Seets, Laurel Leaves Agriculture 306,969 407,673 1,147,131 408,000 204,000 0.1% 0.1% 0.3% 0.1% 93.3% 9.9% -64.4%7 Fruit Vegetables Food, Agriculture 3,078,010 3,258,821 2,688,268 549,910 274,955 0.9% 0.8% 0.6% 0.1% -6.5% -43.7% -79.5%8 - - - - - 9 Tea Food 1,017,751 2,371,744 282,696 32,524 16,262 0.3% 0.6% 0.1% 0.0% -47.3% -68.3% -88.5%

10 Rice Food - 36,750 - - - 0.0%11 Cereals, Glucose Food 5,925,216 11,140,454 2,365,811 860,000 430,000 1.7% 2.8% 0.5% 0.2% -36.8% -47.4% -63.6%12 Cereals, Lentil, Cumin, Beans Food 3,274,475 7,163,810 1,478,912 7,063,392 3,531,696 0.9% 1.8% 0.3% 1.9% -32.8% 29.2% 377.6%13 - - - - - 14 Table Olives Food 12,653,713 1,413,570 - 299,578 149,789 3.7% 0.3% 0.1% -100.0% -71.3%15 Oive Oil Food 1,816,104 4,444,397 1,778,537 729,338 364,669 0.5% 1.1% 0.4% 0.2% -1.0% -26.2% -59.0%16 - - - - - 17 Confectionary Manuf 541,477 61,329 198,206 112,500 56,250 0.2% 0.0% 0.0% 0.0% -39.5% -40.8% -43.2%18 Chocolate and Candies Food 97,433 310,470 576,439 533,304 266,652 0.0% 0.1% 0.1% 0.1% 143.2% 76.2% -7.5%19 Confectionay Biscuits Food - 5,355 44,900 95,862 47,931 0.0% 0.0% 0.0% 113.5%20 Food Stuff Food 701,747 1,497,640 959,114 1,582,084 791,042 0.2% 0.4% 0.2% 0.4% 16.9% 31.1% 65.0%21 Canned Food, Potato Chips Food - 101,335 46,494 7,156 3,578 0.0% 0.0% 0.0% -84.6%22 Fruit Juice Food 267,066 12,096 86,701 1,403,012 701,506 0.1% 0.0% 0.0% 0.4% -43.0% 73.8% 1518.2%23 Animal Feed, Olive Pomace Agriculture 462,192 51,230 117,683 7,159,000 3,579,500 0.1% 0.0% 0.0% 1.9% -49.5% 149.3% 5983.3%24 - - - - -

Mineral and Oil Products (25-27)25 Foundry Raw Material Misc 70,775 140,104 258,509 130,870 65,435 0.0% 0.0% 0.1% 0.0% 91.1% 22.7% -49.4%26 - - - - - 27 Mineral Oils and Grease Manuf 1,767,952 712,624 1,838,127 5,087,326 2,543,663 0.5% 0.2% 0.4% 1.4% 2.0% 42.2% 176.8%

Chemicals (28-38)28 Chemicals Chemicals 1,790,464 295,575 73,969 96,544 48,272 0.5% 0.1% 0.0% 0.0% -79.7% -62.2% 30.5%29 Agricultural Pesticides Chemicals 247,567 97,726 91,395 286,012 143,006 0.1% 0.0% 0.0% 0.1% -39.2% 4.9% 212.9%30 Human Medicines Pharmaceuticals 15,261,972 23,452,090 32,791,200 66,374,352 33,187,176 4.4% 5.8% 7.4% 17.8% 46.6% 63.2% 102.4%31 Fertilizer Chemicals 42,189 120,877 54,550 47,580 23,790 0.0% 0.0% 0.0% 0.0% 13.7% 4.1% -12.8%32 Printing Inks, Dyes Chemicals, Manuf 187,146 127,083 - - - 0.1% 0.0% -100.0% -100.0%33 Cosmetics Chemicals 74,564 91,421 108,220 320,834 160,417 0.0% 0.0% 0.0% 0.1% 20.5% 62.6% 196.5%34 Detergents, Soaps Chemicals 1,161,078 1,520,432 1,315,502 1,796,214 898,107 0.3% 0.4% 0.3% 0.5% 6.4% 15.7% 36.5%35 Adhesives Chemicals 89,212 - - - - 0.0% -100.0% -100.0%36 - - - - - 37 - - - - - 38 Formica Chemicals 2,632,770 6,460,635 8,596,999 7,311,168 3,655,584 0.8% 1.6% 1.9% 2.0% 80.7% 40.6% -15.0%

Plastics (39-40)39 Plastic Manufactured Manufactured 6,172,415 6,065,732 7,622,218 9,227,150 4,613,575 1.8% 1.5% 1.7% 2.5% 11.1% 14.3% 21.1%40 Rubber Misc - 12,592 16,760 - - 0.0% 0.0% -100.0%

Skin and Leather Products (41-43)41 Animal Skins Agriculture 16,751,928 24,332,510 30,014,833 15,095,162 7,547,581 4.8% 6.0% 6.8% 4.0% 33.9% -3.4% -49.7%42 Sheep Guts, Leather Goods Agriculture, Manufactu 4,210,455 4,950,994 5,101,783 4,724,410 2,362,205 1.2% 1.2% 1.1% 1.3% 10.1% 3.9% -7.4%43 - - - - -

Wood Products (44)44 Wood Manufactured 2,064,532 2,504,542 2,325,354 1,279,694 639,847 0.6% 0.6% 0.5% 0.3% 6.1% -14.7% -45.0%45 - - - - - 46 - - - - -

Paper and Printed Materials (47-49)47 - - - - - 48 Paper, Carton, Napkins, Tissue Manufactured 584,629 1,266,298 1,207,005 946,622 473,311 0.2% 0.3% 0.3% 0.3% 43.7% 17.4% -21.6%49 Learning Material Miscellaneous - - 720 - - 0.0% -100.0%

Industry Group


Table 2.2: Aleppo Governorate Exports Reported by the Chamber of Commerce, by Detailed Product Type, 2006-09 (US Dollars, Current Prices), Part I

Code 2-Digit Product Group 2006 2007 2008 2009 1st Half 2009 2006 2007 2008 2009 2006-08 2006-09 2008-09Textile Products (50-63)

50 - - - - - 51 Wool Agriculture 2,909,030 2,754,949 2,427,384 1,724,242 862,121 0.8% 0.7% 0.5% 0.5% -8.7% -16.0% -29.0%52 Cotton, Cotton Lint Agriculture 20,734,888 4,725,975 1,127,792 53,856 26,928 6.0% 1.2% 0.3% 0.0% -76.7% -86.3% -95.2%53 - - - - - 54 - - - - - 55 - - - - - 56 Textile Mattress Textile 42,523 - - - - 0.0% -100.0% -100.0%57 Textile Carpet Textile 619,006 1,464,445 227,934 656,562 328,281 0.2% 0.4% 0.1% 0.2% -39.3% 2.0% 188.0%58 Textile Poly Propylene Bags Textile 2,207,928 3,888,341 6,541,439 1,198,544 599,272 0.6% 1.0% 1.5% 0.3% 72.1% -18.4% -81.7%59 - - - - - 60 Textile Bath Textiles Textile 15,926 12,000 25,960 - - 0.0% 0.0% 0.0% 27.7% -100.0% -100.0%61 Textile Ready Garments Textile 7,578,699 13,094,620 16,253,289 4,358,456 2,179,228 2.2% 3.2% 3.7% 1.2% 46.4% -16.8% -73.2%62 Textile Fabrics, Yarns, Upholstery Textile 4,511,249 31,076,037 32,394,507 19,729,466 9,864,733 1.3% 7.7% 7.3% 5.3% 168.0% 63.5% -39.1%63 Residue, Waste Products Textile 864,284 1,471,646 3,284,865 937,632 468,816 0.2% 0.4% 0.7% 0.3% 95.0% 2.8% -71.5%

Footwear (64-67)64 Shoes Manufactured 1,078,802 1,101,225 1,688,225 1,336,338 668,169 0.3% 0.3% 0.4% 0.4% 25.1% 7.4% -20.8%65 - - - - - 66 - - - - - 67 - - - - -

Stone and Ceramics (68-69)68 Cement, Stones, Building MaterialMisc 1,848,856 2,962,659 2,516,676 1,318,322 659,161 0.5% 0.7% 0.6% 0.4% 16.7% -10.7% -47.6%69 Ceramics Manufactured 88,593 32,430 5,545 83,138 41,569 0.0% 0.0% 0.0% 0.0% -75.0% -2.1% 1399.3%

Glass (70)70 Glass Manufactured Manufactured 496,629 245,212 549,594 194,384 97,192 0.1% 0.1% 0.1% 0.1% 5.2% -26.9% -64.6%71 - - - - -

Metals and Machinery (72-90)72 Steel Manufactured 26,223 - 873,922 - - 0.0% 0.2% 477.3% -100.0% -100.0%73 Manufactured Steel Manufactured 9,180,928 6,306,465 12,128,523 2,677,306 1,338,653 2.7% 1.6% 2.7% 0.7% 14.9% -33.7% -77.9%74 Manufactured Copper Manufactured 1,312,500 23,665 601,020 - - 0.4% 0.0% 0.1% -32.3% -100.0% -100.0%75 - - - - - 76 Aluminum, Scrap Miscellaneous 883,940 - - - - 0.3% -100.0% -100.0%77 - - - - - 78 Lead Manufactured 5,818,549 3,703,405 1,447,235 - - 1.7% 0.9% 0.3% -50.1% -100.0% -100.0%79 - - - - - 80 Tins Manufactured - - - 7,256 3,628 0.0%81 - - - - - 82 Spare Parts Manufactured 2,522,392 5,750,083 2,677,966 2,917,790 1,458,895 0.7% 1.4% 0.6% 0.8% 3.0% 5.0% 9.0%83 Scrap Metal Miscellaneous 15,345,152 - 157,843 38,090 19,045 4.4% 0.0% 0.0% -89.9% -86.5% -75.9%84 Machinery Manufactured 4,489,447 7,266,097 6,045,537 4,012,210 2,006,105 1.3% 1.8% 1.4% 1.1% 16.0% -3.7% -33.6%85 Home Appliances Manufactured 137,535 149,714 141,071 497,380 248,690 0.0% 0.0% 0.0% 0.1% 1.3% 53.5% 252.6%86 - - - - - 87 Cars Misc 18,744 36,000 420,600 22,800 11,400 0.0% 0.0% 0.1% 0.0% 373.7% 6.7% -94.6%88 - - - - - 89 - - - - - 90 Medical Equipment Manufactured 92,090 127,188 56,391 65,858 32,929 0.0% 0.0% 0.0% 0.0% -21.7% -10.6% 16.8%

Furniture, Lighting, Prefab Housing (91-98)91 Watches Misc - 18,141 53,011 20,000 10,000 0.0% 0.0% 0.0% -62.3%92 Music Instruments Miscellaneous 5,025 - - - - 0.0% -100.0% -100.0%93 - - - - - 94 Furniture, Cabins, Frames Manufactured 796,261 821,641 622,665 522,930 261,465 0.2% 0.2% 0.1% 0.1% -11.6% -13.1% -16.0%95 - - - - - 96 Bird Cages, CDs, Chalk Manufactured, Misc 139,476 198,781 504,355 119,724 59,862 0.0% 0.0% 0.1% 0.0% 90.2% -5.0% -76.3%97 Hubble Bubbles Misc - 63,788 108,710 59,628 29,814 0.0% 0.0% 0.0% -45.1%98 - - - - -

Not Elsewhere Classified (99)99 Miscellaneous Misc 126,677,352 162,411,955 162,003,606 138,900,226 69,450,113 36.6% 40.2% 36.5% 37.2% 13.1% 3.1% -14.3%

Total 345,887,466 403,952,658 443,675,570 373,565,376 186,782,688 100.0% 100.0% 100.0% 100.0% 13.3% 2.6% -15.8%

Value of Exports (US$) Share of Total Exports Annual Growth RateIndustry Group

Table 3: Aleppo Governorate Exports Reported by the Chamber of Commerce, by 2-Digit Product Class, 2006-09 (US Dollars, Current Prices

Code 2-Digit Product Group 2006 2007 2008 2009 1st Half 2009 2006 2007 2008 2009 2006-08 2006-09 2008-09

01-05 Animal and Animal Products 52,193,638 49,818,287 85,601,869 58,553,640 29,276,820 15.1% 12.3% 19.3% 15.7% 28.1% 3.9% -31.6%06-24 Agricutural products 30,142,153 32,276,674 11,770,892 20,835,660 10,417,830 8.7% 8.0% 2.7% 5.6% -37.5% -11.6% 77.0%25-27 Mineral and Oil products 1,838,727 852,728 2,096,636 5,218,196 2,609,098 0.5% 0.2% 0.5% 1.4% 6.8% 41.6% 148.9%28-38 Chemicals 21,486,962 32,165,839 43,031,835 76,232,704 38,116,352 6.2% 8.0% 9.7% 20.4% 41.5% 52.5% 77.2%39-40 Plastics 6,172,415 6,078,324 7,638,978 9,227,150 4,613,575 1.8% 1.5% 1.7% 2.5% 11.2% 14.3% 20.8%41-43 Skins and Leather Products 20,962,383 29,283,504 35,116,616 19,819,572 9,909,786 6.1% 7.2% 7.9% 5.3% 29.4% -1.9% -43.6%44 Wood Products 2,064,532 2,504,542 2,325,354 1,279,694 639,847 0.6% 0.6% 0.5% 0.3% 6.1% -14.7% -45.0%47-49 Paper and Printed Materials 584,629 1,266,298 1,207,725 946,622 473,311 0.2% 0.3% 0.3% 0.3% 43.7% 17.4% -21.6%50-63 Textile Products 39,483,533 58,488,013 62,283,170 28,658,758 14,329,379 11.4% 14.5% 14.0% 7.7% 25.6% -10.1% -54.0%64-67 Footwear 1,078,802 1,101,225 1,688,225 1,336,338 668,169 0.3% 0.3% 0.4% 0.4% 25.1% 7.4% -20.8%68-69 Stone and Ceramics 1,937,449 2,995,089 2,522,221 1,401,460 700,730 0.6% 0.7% 0.6% 0.4% 14.1% -10.2% -44.4%70 Glassware 496,629 245,212 549,594 194,384 97,192 0.1% 0.1% 0.1% 0.1% 5.2% -26.9% -64.6%72-90 Metals and Machinery 39,827,500 23,362,617 24,550,108 10,238,690 5,119,345 11.5% 5.8% 5.5% 2.7% -21.5% -36.4% -58.3%91-97 Furniture, lighting, prefibricated buildin 940,762 1,102,351 1,288,741 722,282 361,141 0.3% 0.3% 0.3% 0.2% 17.0% -8.4% -44.0%99 Commodities not elsewhere specified 126,677,352 162,411,955 162,003,606 138,900,226 69,450,113 36.6% 40.2% 36.5% 37.2% 13.1% 3.1% -14.3%

Total 345,887,466 403,952,658 443,675,570 373,565,376 186,782,688 100.0% 100.0% 100.0% 100.0% 13.3% 2.6% -15.8%

Textile Product Details51-52 Wool, Cotton, Lint Agriculture 23,643,918 7,480,924 3,555,176 1,778,098 889,049 59.9% 12.8% 5.7% 6.2% -61.2% -57.8% -50.0%56-60 Carpets, Mattresses, Bath Textiles Textiles 2,885,383 5,364,786 6,795,333 1,855,106 927,553 7.3% 9.2% 10.9% 6.5% 53.5% -13.7% -72.7%61 Ready Garments Textiles 7,578,699 13,094,620 16,253,289 4,358,456 2,179,228 19.2% 22.4% 26.1% 15.2% 46.4% -16.8% -73.2%62 Fabrics, Yarns Textiles 4,511,249 31,076,037 32,394,507 19,729,466 9,864,733 11.4% 53.1% 52.0% 68.8% 168.0% 63.5% -39.1%63 Waste Products Textiles 864,284 1,471,646 3,284,865 937,632 468,816 2.2% 2.5% 5.3% 3.3% 95.0% 2.8% -71.5%

Total Textile 39,483,533 58,488,013 62,283,170 28,658,758 14,329,379 100.0% 100.0% 100.0% 100.0% 25.6% -10.1% -54.0%56-63 Of This: Non-Agricultural 15,839,615 51,007,089 58,727,994 26,880,660 13,440,330 40.1% 87.2% 94.3% 93.8% 92.6% 19.3% -54.2%

Industry Group


143

Annex 7

Tourism Statistics

Table 1: Selected Tourism Statistics

Table 2: Aleppo Governorate Hotel Capacity, by Class of Hotel

Table 3.1: Aleppo Hotels by Name and Class, Part I

Table 3.1: Aleppo Hotels by Name and Class, Part II

Table 4: Aleppo Hotels, mid 2009

Table 5: Aleppo Governorate Visitor Nights, by Type of Hotel (2006-08)

Table 6: Questionnaire for Tourism Estimates by Type of Market

Table 7: Aleppo Tourism by Type of Market, Survey Results

Table 1: Selected Tourism StatisticsTable2

2004 2005 2006 2007 20082009

1st Half

Visitors to Museums and Monuments, Aleppo and Selected Sites in Syria5 Aleppo Mucums and Monuments6 Aleppo National Museum 25,150 31,260 29,650 24,090 NA NA7 Aleppo Citadel Museum 39,208 31,407 36,898 31,847 8 Aleppo Citadel 371,909 398,380 359,940 411,880 9 Aleppo Popular Arts Museum 1,760 2,138 3,847 3,290

1011 Damascus Museums and Monuments12 Damascus National Museum 73,547 93,649 73,136 85,272 13 Damascus Popular Arts 169,075 194,212 169,502 187,906 14 Historical Museum of Damascus 879 1,643 2,075 1,945 1516 Selected Other Monuments17 Krak de Chevalier 139,318 163,511 145,247 171,913 18 Bosra 146,227 197,389 192,823 234,226

Airtransport StatisticsAleppo

22 Passengers Arriving 202,472 193,107 212,473 NA NA23 Passengers Departing 192,450 187,158 202,322 24 # Plane Landings 4,271 3,845 3,831 25 # Plane Departures 4,277 3,807 3,879 26 Freight Unloaded - - - 27 Freight Loaded 2,827 552 850 2829 Number of Destination Countries30 Number of Airlines Serving3132 Damascus33 Passengers Arriving 1,284,551 1,431,114 1,662,731 NA NA34 Passengers Departing 1,311,633 1,558,417 1,702,999 35 # Plane Landings 14,879 16,388 15,242 36 # Plane Departures 15,088 16,554 15,168 37 Freight Unloaded 15,856 16,050 15,099 38 Freight Loaded 16,908 16,530 15,983 3940 Number of Destination Countries41 Number of Airlines Serving

Source: SEBC, Miscellaneous Sources

Table 2: Aleppo Governorate Hotel Capacity, by Type of Hotel (2006 - 09)Table3

5-Star 4-Star 3-Star 2-Star 1-Star Hostel Total5-Stars Deluxe 1st Class 2nd Class 3rd Class Hostel

Hotel Capacity by Hotel Qualtiy and Year2006

Hotels 1 5 6 11 61 10 94 Rooms 252 316 270 289 1,054 68 2,249 Beds 416 608 487 622 2,335 198 4,666

2007Hotels 2 6 6 13 61 10 98 Rooms 262 335 270 334 1,054 68 2,323 Beds 426 656 487 713 2,335 198 4,815

2008Hotels 3 11 8 12 58 8 100

Rooms 440 622 312 292 1,012 67 2,745

Beds 714 997 556 628 2,286 162 5,343

2009Hotels 3 12 8 12 57 8 100

Rooms 440 622 312 292 1,012 67 2,745

Beds 714 997 556 628 2,286 162 5,343

Distribution of Hotel Capacity by Hotel Quality and Year2006

Hotels 1.1% 5.3% 6.4% 11.7% 64.9% 10.6% 100.0%Rooms 11.2% 14.1% 12.0% 12.9% 46.9% 3.0% 100.0%Beds 8.9% 13.0% 10.4% 13.3% 50.0% 4.2% 100.0%

2007Hotels 2.0% 6.1% 6.1% 13.3% 62.2% 10.2% 100.0%Rooms 11.3% 14.4% 11.6% 14.4% 45.4% 2.9% 100.0%Beds 8.8% 13.6% 10.1% 14.8% 48.5% 4.1% 100.0%



Miscellaneous IndicatorsBeds per Hotel

2006 416 122 81 57 38 20 50

2007 213 109 81 55 38 20 49

2008 238 91 70 52 39 20 53

2009 238 83 70 52 40 20 53

3-Year Growth Rate 2006-09Hotels 200.0% 140.0% 33.3% 9.1% -6.6% -20.0% 6.4%

Rooms 74.6% 96.8% 15.6% 1.0% -4.0% -1.5% 22.1%

Beds 71.6% 64.0% 14.2% 1.0% -2.1% -18.2% 14.5%

Table 3.1: Aleppo Hotels by Class, mid-2009Table11

No. Hotel Name ClassNumber of

Rooms Number of

BedsNumber of Employees

Beds per Room

Employees per Bed

5 Star1 Dedeman 5 242 416 258 1.72 0.62 2 Sheraton 5 180 280 288 1.56 1.03 3 Al Mansourieh 5 18 18 10 1.00 0.56

4 Star4 Julia Domna 4 68 103 35 1.51 0.34 5 Riga 4 136 250 138 1.84 0.55 6 Kasr Al Wali 4 12 22 1.83 na7 Yasmine Halab 4 8 16 2.00 na8 Sarab 4 131 200 190 1.53 0.95 9 Pullman El Shahba 4 101 146 150 1.45 1.03

10 Beit Wakil 4 16 35 21 2.19 0.60 11 Al Kawkab 4 100 129 12 1.29 0.09 12 Beit Sharki 4 18 36 6 2.00 0.17 13 Dar Zamaria 4 22 40 25 1.82 0.63 14 Beit Marrash 4 10 20 10 2.00 0.50

3 Star15 Al Mahatah 3 46 96 40 2.09 0.42 16 Al Jdaydeh 3 10 20 13 2.00 0.65 17 Ezyss 3 16 32 2.00 na18 Al Siyahi 3 100 175 50 1.75 0.29 19 Baron 3 45 74 11 1.64 0.15 20 Beit Salahieh 3 35 66 10 1.89 0.15 21 Ramsis 3 36 54 63 1.50 1.17 22 Mandaloun 3 24 39 12 1.63 0.31

2 Star23 Al Tourath 2 15 26 7 1.73 0.27 24 Umayah 2 34 71 10 2.09 0.14 25 Beit Dalal 2 11 18 7 1.64 0.39 26 Al Bustan 2 47 115 7 2.45 0.06 27 Bashar 2 20 40 3 2.00 0.08 28 Al Hamdanieh 2 16 32 3 2.00 0.09 29 Al Soufaraa 2 18 44 7 2.44 0.16 30 Samiramis 2 36 63 7 1.75 0.11 31 Somar 2 18 40 3 2.22 0.08 32 Al Faysal 2 34 86 8 2.53 0.09 33 Ghournata 2 32 63 6 1.97 0.10 34 Kilikia 2 11 30 3 2.73 0.10

Source: Chamber of Tourism

Table 3.2: Aleppo Hotels by Class, mid-2009, ContinuedTable12

No. Hotel Name ClassNumber of

Rooms Number of


Beds per Room

Employees per Bed

1 Star35 Emar 1 20 44 6 2.20 0.14 36 Arouz Lebanon 1 34 85 5 2.50 0.06 37 Al Basha 1 19 38 3 2.00 0.08 38 Asia 1 28 63 3 2.25 0.05 39 Eshbilia 1 27 38 2 1.41 0.05 40 Shtoura 1 11 1 2 0.09 2.00 41 Atlas 1 22 49 1 2.23 0.02 42 Afamia 1 13 25 3 1.92 0.12 43 Al Boundoukieh 1 19 46 3 2.42 0.07 44 Por Said 1 16 43 2 2.69 0.05 45 Al Jandoul 1 14 45 3 3.21 0.07 46 Halab 1 11 24 1 2.18 0.04 47 Al Khiyam 1 15 43 3 2.87 0.07 48 Al Rabee 1 8 16 4 2.00 0.25 49 Al Radwan 1 28 64 2 2.29 0.03 50 Al Raghdan 1 25 46 8 1.84 0.17 51 Al Rawda 4 11 25 2 2.27 0.08 52 Al zahraa 1 25 47 3 1.88 0.06 53 Souria 1 40 76 4 1.90 0.05 54 Al Salam 1 13 29 3 2.23 0.10 55 Al Siyahah 1 16 27 3 1.69 0.11 56 Al Shark 1 14 35 3 2.50 0.09 57 Al Shark El Awsat 1 37 87 6 2.35 0.07 58 Al Alam El Arabi 1 10 22 4 2.20 0.18 59 Ghassan 1 11 27 3 2.45 0.11 60 Al Kasr 1 20 42 6 2.10 0.14 61 Al Kemeh 1 17 39 5 2.29 0.13 62 Kasr Al Hamraa 1 19 51 2 2.68 0.04 63 Al Madinah 1 27 52 4 1.93 0.08 64 Qanat El sweiss 1 11 29 1 2.64 0.03 65 Kawkab El Salam 1 10 21 2 2.10 0.10 66 Maysaloun 1 11 20 3 1.82 0.15 67 Al Nejem EL Akhdar 1 20 50 2 2.50 0.04 68 Milad 1 8 21 3 2.63 0.14 69 Hanadi 1 12 32 1 2.67 0.03 70 Al Yarmouk 1 32 63 8 1.97 0.13 71 Abi El Fedaa 1 16 42 3 2.63 0.07 72 Al Etihad El Arabi 1 13 22 1 1.69 0.05 73 Amal 1 11 25 3 2.27 0.12 74 Al Umawi Al Kabeer 1 12 32 3 2.67 0.09 75 Barada 1 14 30 3 2.14 0.10 76 Al Jameaa El Arabia 1 15 47 3 3.13 0.06 77 Al Jawaher 1 18 25 3 1.39 0.12 78 Dar El Sourour 1 11 29 1 2.64 0.03 79 Dar Halabia 1 19 33 2 1.74 0.06 80 Al Huryeh Al Kabeer 1 11 37 2 3.36 0.05 81 Demashq 1 25 61 3 2.44 0.05 82 Al Safeer 1 12 29 3 2.42 0.10 83 Sameer 1 14 35 2 2.50 0.06 84 Sourya wa Lebnan 1 15 39 1 2.60 0.03 85 Tareq Bn Ziad 1 11 28 1 2.55 0.04 86 Al Badiya 1 10 25 1 2.50 0.04 87 Al Fayhaa 1 28 69 4 2.46 0.06 88 Farouk 1 15 34 2 2.27 0.06 89 Kasr El Andalous 1 24 47 2 1.96 0.04 90 Kasr El Zaafaran 1 19 51 2 2.68 0.04 91 Wadi El Neel 1 15 56 1 3.73 0.02 92 Al Kendi 1 10 25 4 2.50 0.16

Hostel93 Umayah Al Hashemi Hostel 9 20 1 2.22 0.05 94 Al Jamal Hostel 7 15 2 2.14 0.13 95 Al Juneidi Hostel 7 26 4 3.71 0.15 96 Zahret Al Rabee Hostel 14 31 2 2.21 0.06 97 Zami Hostel 6 18 2 3.00 0.11 98 Kasr El Baba Hostel 9 19 2 2.11 0.11 99 Kasr El Moulouk Hostel 9 24 2 2.67 0.08 100 Nejmet El Shark Hostel 6 9 1 1.50 0.11

Total 2,745 5,343 1,598 1.95 0.30 Source: Chamber of Tourism

Table 4: Aleppo Hotels mid 2009Table13

Hotel TypeNumber of

HotelsNumber of

Rooms Number of


Beds per Room

Employees per Bed

Employees per Bed,

Adjusted/1

5-Star Hotels 3 440 714 556 1.62 0.78 0.78 4-Star Hotels 12 622 997 587 1.60 0.59 0.60 3-Star Hotels 8 312 556 199 1.78 0.36 0.38 2-Star Hotels 12 292 628 71 2.15 0.11 0.11 1-Star Hotel 57 1,012 2,286 169 2.26 0.07 0.07 Hostel 8 67 162 16 2.42 0.10 0.10 Total 100 2,745 5,343 1,598 1.95 0.30 0.30

\1 Adjusted for missing employee observations; takes into account only hotels for which employees reported

Table 5: Aleppo Governorate Visitor Nights, by Type of Hotel (2006 - 08)

Table4

5-Star 4-Star 3-Star 2-Star 1-Star Hostel Total5-Stars Deluxe 1st Class 2nd Class 3rd Class Hostel

Visitor Nights by Type of Hotel2006

Syrian 32,813 44,974 22,499 27,042 86,160 7,565 221,053 Arab 34,913 88,735 62,311 127,010 471,497 32,015 816,481

Foreign 19,700 44,865 41,456 29,749 106,651 13,736 256,157 Total 87,426 178,574 126,266 183,801 664,308 53,316 1,293,691

2007Syrian 37,712 43,390 20,615 27,531 77,589 7,808 214,645 Arab 36,258 92,153 64,711 131,904 489,661 33,249 847,936

Foreign 21,679 49,372 45,620 32,736 117,363 15,116 281,886 Total 95,649 184,915 130,946 192,171 684,613 56,173 1,344,467

2008SyrianArab

ForeignTotal

Distribution of Visitor Nights by Type of Hotel2006

Syrian 14.8% 20.3% 10.2% 12.2% 39.0% 3.4% 100.0%Arab 4.3% 10.9% 7.6% 15.6% 57.7% 3.9% 100.0%

Foreign 7.7% 17.5% 16.2% 11.6% 41.6% 5.4% 100.0%Total 6.8% 13.8% 9.8% 14.2% 51.3% 4.1% 100.0%

2007Syrian 17.6% 20.2% 9.6% 12.8% 36.1% 3.6% 100.0%Arab 4.3% 10.9% 7.6% 15.6% 57.7% 3.9% 100.0%

Foreign 7.7% 17.5% 16.2% 11.6% 41.6% 5.4% 100.0%Total 7.1% 13.8% 9.7% 14.3% 50.9% 4.2% 100.0%

2008SyrianArab

ForeignTotal

Bed Occupancy Rate by Year2006 57.6% 80.5% 71.0% 81.0% 77.9% 73.8% 76.0%2007 61.5% 77.2% 73.7% 73.8% 80.3% 77.7% 76.5%2008

Source: SEBC data from Department of Tourism, Consultant Indicators

Table 6: Survey Form to Estimate Aleppo Governorate Tourism by Type of MarketTable1

Item Syrian Arab Foreign Total

Tourism Statistics for 2006Number of Visitors 139,190 196,769 72,270 408,229 Number of Visitor Nights 221,053 816,481 256,157 1,293,691

Nights per Visitor 1.59 4.15 3.54 3.17

Estimated Market Share (Percent)Cultural

Religious Christian

Religious Shiite

Business

Convention

Expatriate

Urban Entertainment

Beach and Mountain

WeekendPersonal

Total

Check all that apply to you ___ Hotel Owner/Operator___ Restaurant Owner/Operator___ Tourism Agency Owner/Operator___ Government Institution___ Chamber of Tourism Member

Table 7: Aleppo Tourism by Type of MarketTable5

Item Syrian Arab Foreign Total

Tourism StatisticsNumber of Visitors 139,190 196,769 72,270 408,229

Number of Visitor Nights 221,053 816,481 256,157 1,293,691

Nights per Visitor 1.59 4.15 3.54 3.17

Estimated Market Share10 Cultural 2% 3% 50% 11%11 Religious Christian 2% 4% 14% 5%12 Religious Shiite 3% 8% 6% 6%13 Business 29% 27% 12% 25%14 Convention 13% 20% 6% 15%15 Expatriate 34% 25% 8% 25%16 Urban Entertainment 3% 3% 1% 2%17 Beach and Mountain 1% 0% 0% 0%18 Weekend 3% 5% 1% 4%19 Personal 10% 6% 1% 7%2021 Total 100% 100% 100% 100%

Number of Visitors2324 Cultural 3,341 6,395 35,846 45,581 25 Religious Christian 3,341 7,379 10,118 20,837 26 Religious Shiite 3,897 14,758 4,625 23,280 27 Business 40,365 52,636 8,817 101,818 28 Convention 18,373 39,354 4,192 61,919 29 Expatriate 47,881 49,192 6,071 103,144 30 Urban Entertainment 3,619 4,919 723 9,261 31 Beach and Mountain 835 - - 835 32 Weekend 4,176 9,838 867 14,881 33 Presonal 13,362 12,298 1,012 26,672 3435 Total 139,190 196,769 72,270 408,229

Estimated Distribution of Visitor Nights3839 Cultural 5,305 26,536 127,054 158,895 40 Religious Christian 5,305 30,618 35,862 71,785 41 Religious Shiite 6,189 61,236 16,394 83,820 42 Business 64,105 218,409 31,251 313,765 43 Convention 29,179 163,296 14,857 207,332 44 Expatriate 76,042 204,120 21,517 301,680 45 Urban Entertainment 5,747 20,412 2,562 28,721 46 Beach and Mountain 1,326 - - 1,326 47 Weekend 6,632 40,824 3,074 50,530 48 Presonal 21,221 51,030 3,586 75,837 4950 Total 221,053 816,481 256,157 1,293,691

Source: Tourism Workshop Participants, Consultant

153

Annex 8

Old City Information

Table 1: Chamber of Commerce Members in Old City, by Type, 2008

Table 2.1: Chamber of Industry Members in Old City, by Type, 2008, Pt. I

Table 2.2: Chamber of Industry Members in Old City, by Type, 2008, Pt. II

Table 3: Old City Establishments by 2-Digit Industry, 2005 Survey

Table 4: Old City Establishments by 3-Digit Industry, 2005 Survey

Table 1: Type of Companies Registered with the Chamber of Commerce, Located in the Old City `

Description of Company Description of Company Description of CompanyAdhesives Trading 7 Engines & Machinery Spare Parts Trading 8 Men's Garment Trading 2 Soft Drinks & Carbonated Water Trading 1Agrawood & Incense Trading 1 Exhibition Organizing 3 Men's Garments Manufacturing 54 Solar Energy Systems & Components Trading 1Agricultural Equipment & Accessories Trading 6 Eyeglasses Trading 6 Men's Underwears Manufacturing 4 Spectacles & Control Lenses Trading 1Agricultural Equipment & Machinery Spare Parts Tradin 7 Fabrics Textiles Embroidering 3 Metal Cabinets & Enclosures Manufacturing 2 Spices Trading 13Agricultural Pecticides Trading 12 Farming of Poultry 2 Metal Drums & Barrels Manufacturing 1 Spinning & Weaving Equipment & Spare Parts Trading 5Agricultural Tools Trading 16 Fencing & Barbed Wire Trading 1 Metal Ores Trading 2 Sport Equipment & Articles Trading 1Agricultural Tractors & Machinery Trading 2 Films & Photography Materials Trading 1 Mini Store 24 Sports Wear Trading 7Alcaholic Drinks Trading 2 Fish & Seafood Poructs Trading 3 Motorcycles & Spare parts Trading 8 Sports Wears Manufacturing 28Arab Wear Trading 9 Fishing & Hunting Requisites Trading 1 Non Edible Oil Trading 1 Stationery, Drawing & Writing Instruments Trading 7Arabic Gown Manufacturing 2 Flour Trading 4 Non Ferrous Metal Trading 5 Steel & Basic Steel Products Trading 32Audio-visual Recording Equipment & Accessories Tradi 4 Flowers & Plants Trading 7 Non-Ferrous Metal Casting 2 Suitcases & Travel Requisites Trading 14Auto Spare Parts & components Trading 23 Fodder Trading 24 Novelties Trading 13 Suitcases Manufacturing 4Automobile Trading 2 Food & Beverages Trading 139 Nuts Roasting & Packaging 1 Sweets & Candies Preparing 2Baby Wear Trading 19 Foodstuff Supply Services 4 Nuts Trading 22 Tanned Leathers Trading 1Basic Industrial Chemicals Trading 6 Four Star Hotel 1 Olive Oil Milling 1 Tannery & Dyeing Materials Trading 6Beauty Requisities Trading 27 Freight Clearing Services 1 Olive Oil Trade 7 Tea Trading 1Bicycles & Spare Parts Trading 1 Fresh & Chilled Meat Trading 4 Oriental Carpets Trading 6 Tents & Tarpaulin Manufacturing 1Biscuit Manufacturing 3 General Contracting 39 Packing & Packaging Materials Trading 2 Tents & Tarpaulin Trading 17Bleaching Products Manufacturing 2 General Trading 6 Paint & Varnish Trading 29 Textile Trading 428Blenkets, Towels & Linens Trading 13 Ghee & Vegetable Oil Trading 1 Painting & Frames Trading 5 Threads & Yarns Trading 195Bolts, Nuts, Screws & Nails Trading 30 Gifts Trading 13 Paper Trading 13 Three Star Hotel 2Books Binding 1 Glass & Mirrors Trading 5 Pastry Preparing 4 Tiles & Flooring Materials Trading 2Brooms & Cleaning Articles Manufacturing 2 Gold & Precious Metal Products Manufacturing 5 Perfumes & Cosmetics trading 39 Timber Trading 32Building & Construction Materials Trading 60 Goldsmith 27 Photographic Equipment & Accessories Trading 3 Tobaco Trading 2Building Contractors (Multi Floors) 1 Grain Mills 7 Pipes & Fittings Trading 2 Toys & Games Trading 22Building Hardware & Tools Trading 22 Grains, Cereals & Legumes Trading 4 Plastic & Nylon Raw Materials Trading 1 Trade of Casings 6Cafateria 1 Grocery Store 8 Plastic Bags & Containers Trading 12 Trade of Computers & Accessories 6Calculators & Spare Parts Trading 3 Handbags & Leather Products Trading 19 Plastic Bags Manufacturing 1 Trading of 18Cargo Services 11 Handbags, Wallets & Belts Manufacturing 3 Plastic Fabrics Trade 1 Trading of Blinds 1Carpets Manufacturing 2 Hides Tanning 1 Plastic Hoses Trade 19 Trading of Chemical Products 62Carpets Trading 15 Hides Trading 21 Plastic Houseware Pots & Utensils 11 Trading of neck ties 1Chandeliers Trading 13 Home Furniture Manufacturing 8 Plastic Products 2 Tyre Retreading 1Chemical Fertlizers Trading 9 Home Furniture Trading 10 Plastic Sheets Manufacturing 1 Tyres & Rims Trading 16Chemicals for Paint Industry 4 Hotel Management 4 Plumbing & Saintary Contracting 2 Underwear Trading 38Children Wears Manufacturing 55 Household Brassware Industry 2 Powder Detergents Manufacturing 1 Uniforms Manufacturing 6Children's Underwears Manufacturing 4 Houseware & Utensils Trading 50 Power Distribution Cables Manufacturing 2 Used Auto Spare Parts & Requisites Trading 5Coal & Firewood Trading 5 Import & Export Office 643 Prerecorded Cassette Trading 8 Used Electrical & Electronic Appliances Trading 2Coffee Trading 7 Industrial Plant Equipment & Spare parts Trading 2 Printing of Textile Fibers & Textiles 1 Vegetable Oil Productiom & Refining 1Cold Drawing Copper Wires 2 Industrial Solvents Manufacturing 3 Publications & Stationery Outlet 42 Vegetables & Fruit Trading 4Confectionery & Chocolate Trading 18 Industrial Solvents Trading 11 Pumps, Engines, Valves & Spare Parts Traidng 14 Veterinary Medicines Trading 3Conferences & Seminars Organizing 1 Industrial Sponge Trading 2 Raw Materials Trading 1 Wall Paper Trading 4Contact Lenses Manufacturing 1 Injection Plastic Products 8 Ready-made Garments Trading 338 Waste Plastic Trading 1Contracting of Civil Engineering Works 2 Inter Urban Buses Services 4 Refrigerators, Freezers & Water Coolers Manufacturing 1 Watches & Clocks Manufacturing 3Cookers & Cooking Stove Manufacturing 2 Invitation & Greeting Cards Trading 4 Refrigerators, Washing Machines & Household Electrica 47 Watches & Spare Parts Trading 13Cotton & Natural Fibers Trading 1 Irrigation Equipment & Requisites Trading 10 Restaurant 9 Water Heaters Trading 1Cotton, Wool Spinning & Weaving 16 Jewellery Trading 6 Ropes, Sacks & Jute Bags Trading 42 Water Treatment Equipment Trading 10Crystal Products Trading 1 Ladies Garment Trading 15 Rubber Products Manufacturing 2 Weighing & Measuring Services 2Curtains & Upholstery Fabrics Trading 18 Ladies Garments Manufacturing 53 Salt Trading 1 Wooden Décor Products 1Dairy Products Trading 11 Ladies Tailoring 4 Sanitaryware Trading 68 Wool & Animal Hair Trading 15Detergents & Disinfectants Manufacturing 5 Ladies' Underwear Manufacturing 86 Sawmilling & Planning of Wood 2 Workshop Hardware & Tools Trading 19Detergents & Disinfectants Trading 2 Live-stock Trading 36 Seeds Trading 15Documents Copying Services 2 Local Sweets Preparing 7 Sewing & Embroidery Requisites Trading 27 Subtotal 1,064 Domestic Gas Distribution 2 Locks & Keys Trading 3 Sewing Machines & Spare Parts Trading 34Electrical & Electronic Appliances Spare parts Trading 3 Lubricants & Grease Trading 1 Shoe Making 1Electrical Fitting Contracting 16 Management Consultancies 4 Shoe Trading 74Electrical Fittings Trading 10 Manufacture of Wearing Apparel 68 Shoes Manufacturing 36Electronic Instruments Devices & Eqipment Repairing 1 Marble & Natural Stones Trading 1 Slippers & Sandles Trading 2 Total Identified by Type 4,150 Electronic Precision Instruments Trading 17 Mason 38 Soap Manufacturing 13 Blanks 1,987 Engineering Office 1 Medicines Trading 7 Socks Manufacturing 1 Total Accounted for 6,137

Total in File 6,141 Subtotal 541 Subtotal 1,461 Subtotal 1,084 Unaccounted 4

# of Companies Registered




Product# of

Companies% of

Industry

% of all CoI

Companies

Textile SectorBRAID WEAVING 5 1.9% 1.4%

CARPETS FOR PRAYER& DECORATION 1 0.4% 0.3%

CARPETS&MATS 1 0.4% 0.3%

CHILDREN WEAR 6 2.3% 1.7%

COVERS SEWING 1 0.4% 0.3%

JERSEY 9 3.4% 2.6%

JERSEY&LACE 1 0.4% 0.3%

LADIES UNDERWEAR 10 3.8% 2.9%

MECHANICAL EMBROIDERY 30 11.4% 8.6%

MECHANICAL TEXTILE PRINTING 1 0.4% 0.3%

MECHANICAL TRICOT 2 0.8% 0.6%

MEDICAL STRAINERS 1 0.4% 0.3%

MEN& CHILDREN SOCKS 1 0.4% 0.3%

NON-WOOL CARPETS 1 0.4% 0.3%

RASCHEL VELVET 1 0.4% 0.3%

READY MADE CLOTHES 74 28.0% 21.1%

READY-MADE LADIES OUTWEAR 5 1.9% 1.4%

SEWING TRICOT 8 3.0% 2.3%

SHIRTS&PYJAMAS 5 1.9% 1.4%

SILKEN TEXTILES& FURNITURE TEXTILES 1 0.4% 0.3%

SPORT WEAR 7 2.7% 2.0%

SYNTHETIC& ARTIFICIAL THREADS 1 0.4% 0.3%

TEXTILE 12 4.5% 3.4%

TEXTILE DYING 2 0.8% 0.6%

TEXTILE PRESSING&BURNISHING 1 0.4% 0.3%

THREADS TWISTING 2 0.8% 0.6%

TRICOT 70 26.5% 20.0%

TRICOT& GARMENTS 2 0.8% 0.6%

TROUSSEAU 1 0.4% 0.3%

TWISTING CHANEL 1 0.4% 0.3%

YARNS COATING BY G0 OR S0 THREADS 1 0.4% 0.3%

Total Food 264 100.0% 75.4%

Sector Totals

Chemical 43 12.3%

Food 16 4.6%

Engineering 27 7.7%

Textile 264 75.4%

Total 350 100.0%

Source: CoI Membership Roster for Old City, 2008

Table 2.2 Old City Members in CoI, by Industry and Type of Product, 2008, Part II

Table 3: Old City Establishments by 2-Digit Industry, 2005 SurveyTableA4

Economic Activity 2-Digit Code # of Estab'ts

# of Work-ers # of Establ'ts

# of Work-ers

2 2 0.0% 0.0%329 Animal breeding 12 2 2 0.0% 0.0%

1,961 5,027 14.2% 20.9%331 Production of food products 15 59 158 0.4% 0.7%

332 Production of textiles 17 466 1347 3.4% 5.6%

333 Production of clothes 18 266 899 1.9% 3.7%

334 Production of leather products 19 209 650 1.5% 2.7%

335 Production of wood products 20 194 423 1.4% 1.8%

336 Production of paper related products 21 45 120 0.3% 0.5%

337 Print and related 22 86 241 0.6% 1.0%

338 Production of petroleum products 23 1 4 0.0% 0.0%

339 Production of chemical related materials 24 2 5 0.0% 0.0%

340 Production of plastic materials 25 1 1 0.0% 0.0%

341 Production of glass materials and related 26 19 30 0.1% 0.1%

342 Production of steel and iron 27 312 560 2.3% 2.3%

343 Production of metal products and related 28 55 113 0.4% 0.5%

344 Production of machines and tools 29 3 4 0.0% 0.0%

345 Production of furniture goods 36 239 457 1.7% 1.9%

346 Construction materials 45 4 15 0.0% 0.1%

10,893 17,971 78.9% 74.7%348 Wholesale of machinery and vehicles 50 226 300 1.6% 1.2%

349 Wholesale of household materials 51 2565 4214 18.6% 17.5%

350 Retail 52 7908 13090 57.3% 54.4%

351 Hotels, motels, restaurants 55 194 367 1.4% 1.5%

702 852 5.1% 3.5%353 Land transportation and related 60 14 36 0.1% 0.1%

354 Logistical and transport services 62 2 2 0.0% 0.0%

355 Transportation services 63 601 767 4.4% 3.2%

356 Financial services 65 0 0 0.0% 0.0%

357 Services related to financial services 67 5 6 0.0% 0.0%

358 Real Estate activities 70 10 17 0.1% 0.1%

359 Rental offices 71 0 0 0.0% 0.0%

360 Engineering services 74 70 24 0.5% 0.1%

244 204 1.8% 0.8%362 Government offices 75 5 5 0.0% 0.0%

363 Higher education 80 4 10 0.0% 0.0%

364 Health activities 85 154 22 1.1% 0.1%

365 Sanitary services 90 1 3 0.0% 0.0%

366 Entertainment 92 18 30 0.1% 0.1%

367 Other activities 93 62 134 0.4% 0.6%

369 Total (without NEC) 13,802 24,056 100.0% 100.0%

Source: 2005 Establishment Census, prepared by Mahmoud Ramadan for GTZ

Agricultural Activities

Production Activities

Wholesale, Retail, Restaurants, Hotels

Transport, RE, Finance, Engineering

Government, Education, Health Infrastructure

Table 4: Old City Establishments by 3-Digit Industry, 2005 SurveyTableA3

Economic Activity 3-Digit Code # of Estab's # of Workers

243 Animal breeding 12 2 2

244 Production and process of food products (meat, fruits, fishes, veg 151 8 22

245 Production of dairy products 152 2 6

246 Producing and processing food materials made of cereals, flours, 153 14 35

247 Producing food products 154 35 95

248 Producing textiles 171 66 170

249 Producing textile materials 172 96 289

250 Producing textile materials of cotton materials ('Triko') 173 304 888

251 Producing clothes 181 266 899

252 Producing and preparing leather staff 191 150 481

253 Producing leather products 192 59 169

254 Processing and preparing wood as raw materials 201 65 149

255 producing wood materials as flat boards, etc 202 129 274

256 Producing and processing paper materials 211 45 120

257 Printing production 221 66 205

258 Printing advertisement materials 222 18 34

259 printing related productions 223 2 2

260 Production of petrol products 23 1 4

261 Producing plastic materials in its initial shapes 241 - -

262 Producing chemical materials 242 2 5

263 production of plastic materials 251 1 1

264 Production of glass materials 261 4 10

265 Production of other household materials not classified above 269 15 20

266 Production of hard metals 271 293 525

267 production of valuable metals 272 1 1

268 Production of metal materials in shapes 273 18 34

269 production of metal constructions 281 16 30

270 Production finished metal materials 289 39 83

271 Producing machines and other tools 29 1 4

272 Production of special machines and devices 292 1 2

273 Production Household devices 293 1 2

274 Production of house furniture 361 175 324

275 362 2 4

276 Production of precious metals 369 62 129

277 Constructional works 454 4 15

278 Whole sale and repair of vehicles with engines and fuels and oth 501 12 18

279 Repair and wholesale of machineries with engines 502 187 265

280 Wholesale of vehicles accessories 503 7 10

281 Wholesale trade and repair of motorcycles 504 6 6

282 Sale of fuels for machineries 505 14 19

283 Wholesale and trade of goods except heavy machineries and mot 51 4 5

284 Offices related to wholesale 511 423 762

285 Wholesale of raw agricultural materials and animals 512 213 305

286 Wholesale of Household materials 513 1,600 2,675

287 Wholesale of intermediate agricultural materials and others 514 297 428

288 Wholesale of devices and equipments 515 5 10

289 519 23 34

290 Retail sale of personal staff, and motorcycles, 521 837 1,355

291 Retail sale of food products, drinks, tobaco, 522 1,330 2,233

292 Retail sale of goods in specialised stores 523 5,130 8,608

293 Retail sale and repair of personal and household goods 526 611 894

294 Hotels, motels, guest houses, 551 10 16

295 Cafes, ice-cream shops, sandwich and fast food shops 552 184 351

296 Land Transportation and related activities 60 14 36

297 Offices related to cargos and transportation 621 2 2

298 Offices complimentary to transportation agencies 631 601 767

299 Financial services 65 - -

300 Offices and activities related to financial services 671 5 6

301 Real estate activities 701 10 17

302 Real estate activities 702 - -

303 Rental offices 711 - -

304 Legal and financial offices 741 53 76

305 Engineering services 742 16 23

306 Commercial activities others 749 1 1

307 Governmental bureaus 751 5 5

308 Elementary schools 801 1 3

309 Higher education 803 - -

310 Adult education 809 3 7

311 Health related activities 851 138 226

312 Health activities 852 15 21

313 Social activities 853 1 1

314 Activities related to sanitary and cleanness 900 1 3

315 Entertainment centers 921 14 25

316 Other entertainment activities 924 4 5

317 Other activities 930 62 134

318 NULL 985 261

319

320 Total Classified 14,787 24,646

Total including Not Classified 13,802

Source: 2005 Establishment Census, prepared by Mahmoud Ramadan for GTZ