Higher commodity and oil prices … .. How Syrian economy would deal with world changes…??
Developments , economic problems and bottlenecks at the global level in recent years, especially 2007-2008 represented in financial market volatility that led to the emergence of turbulence in international economics.
that led to crises in the world banking sector, due to recession credit, which was caused by the collapse of the real estate market crisis of American and the attendant crisis of real estate loans in addition to the continuing rise of oil prices , which is close to $ 120 a barrel and continued high commodity prices due to climatic factors and causes of seasonal factors such as drought and diseases in addition to slow growth in global economy and deteriorating purchasing power of money linked to the dollar. Given this difficult reality there is no way of shed light on the economic impact of commodity and oil price developments on the Syrian economy and how to deal with these variables .. Using grain in biofuel production.
Dr. Matanius Habib, a former oil minister and professor of economics at Damascus University finds that raising price is a global phenomenon and not confined to Syria. it has only two main reasons first one is high oil prices, because oil is an essential material for production of all goods and services and thus it increased the cost of goods and services in the world, The second reason is the large military expenditures of United States would certainly affect the less goods production and supply on the world market and thus higher prices.
using grains in biofuel production, Dr. Habib continued ,could be a third factor, which increases grain farming to meet the needs of industrial fuel production but on the other hand diminish food supply in the market, and thus its prices decreased. “Mechanism Recent Market “.
Dr. Habib finds that in Syria, drought and the prices of foreign exchange over the cost of imported materials, whether they are simple materials for agricultural production or final consumption goods, where Moreover, Syria’s moving from centrally planned controlled economy to severe incomprehension of market economy because the government believed that market mechanism ensures a balance between supply and demand either by increase production or opening the economy to foreign imports. The recent market mechanism couldn’t move in the requisite speed, believing that the government eased up its interventions in the market for fear that would undermine the transition to a market economy and thus may be reluctant to business cycle in the development of the national economy for fear of state intervention.” Method of positive intervention ”
He added: “When the market mechanism was not effective the government moved to the positive intervention method which can be effective if official institutions import goods even they were competing for local production. the government has also taken measures such as raising the purchase price of wheat, barley, maize and cotton, that would stimulate agricultural and increases production which may slow the rise in prices,
Dr. Habib said that government should create a transitional stage for a longer time for transition from a planned economy to market economy. Rising prices reduce the volume of liquidity while Economic Advisor Dr. Khalid Zamil finds that despite all the attempts by the government to control prices but they Continued to rise, and this in turn will lead to negative effects not only on economy but on social and health as well as the administrative and productive level , what would have major implications if it continues, as the continuing increase in commodity and products prices which would aggravate the suffering.
Dr. Zamil said that loss the state of competitive advantage in attracting and business development, and local industries affected by foreign competition, weak and retreat of domestic and foreign investments in addition to the cost increase productivity and cost of development and management, and the emergence of problems and issues of economic and social negative imbalance of trade, is one of the reasons that led to the rise in prices Commodities. high commodity leads to reduce the volume of liquidity available to consumers and this leads to a change in the pattern of consumption of goods, including that inflation is expected to rise in the coming period due to the decision to lift the prices of fuels ,so the government must take precautionary measures to protect the groups most affected, he added.
Dr. Zamil find that provide direct financial aid to the poor workers and lessen taxes could be released over this matter. Indicates to the ways to cope with rising prices in the hands of the Syrian government, which owns some of the tools that enable them to reduce abuses happening in prices, through the revitalization of institutions consumer markets the balance of payments support through increased exports in addition to attracting investments and development downsizing of external indebtedness and to agree on a fair tax policy and reducing customs duties to reduce costs to importers who in turn, but rather to reduce the margin of profits. Pointing out that these solutions may be temporary and limited stage and therefore the objective analysis of the base of the Syrian economy will enable us to know the real reasons and then propose appropriate treatments accordingly. Neutralize the impact of rising oil prices, Dr. Ziad Znbuah professor of economics at Damascus University said that In the case of Syrian economy, we must distinguish between the four classifications of goods compared to a level of oil … including oil derivatives that have subsidized prices and administrative relations with market changes internally or externally on the one hand and considering that there are concentrated in oil imports in the one government institution and therefore full control over prices. on the other hand, to neutralize any effect could be reflected in the rise in world oil prices on domestic price levels and remains the only impact on the amount of support borne by the state of the global price differential on the price level. In terms of raw material prices had gone up … because the global boom and heightened demand , Including cement and iron.
as for food commodities we can not say that the rise in food prices that occurred recently due to external reasons , We have semi-Food self-sufficiency and what we import cannot be described as a big shortage in the market .A positive impact on domestic prices as the intensity of competition for local products led to lower prices and reduce some of the prices of others, The reason for the high prices of these commodities in the last year in particular, due to emergency periodical and climatic factors in addition to the high demand, we hope to be better next season.” Focus on high-yield crops”