President Bashar Assad approved sweeping economic reforms for Syria on Saturday, December 2, including the establishment of private banks to end nearly 40 years of government monopoly of the banking sector.
Government officials told Reuters the approval came during a meeting of the Regional Command (RC) of the Baath Party headed by Assad which also approved issuing a law on banking privacy and the establishment of a stock market.
Officials said the meeting directed the appropriate authorities to discuss amending foreign currency exchange laws so the Syrian pound's price would reflect the free market rate.
Economic sources said these were part of economic reforms promised by Assad when he took office on July 17 following the death of his father, President Hafez Assad, on June 10.
The younger Assad, a 35-year-old British-educated eye doctor and army officer interested in computer science, has adopted several economic and political reform measures during the last three months.
The economic sources expected specialized economic and monetary committees to start preparing immediately the special laws and regulations to cover the activities of private banks.
The sources did not give a specific date for private banks to start operating.
There are at least three rates currently used to determine the price of the Syrian pound: the “neighboring countries rate” of 46 Syrian pounds to the US dollar, which covers nearly 85 percent of the country's transactions, the official rate of 11.2 pounds to the dollar, and the customs rate of 23 pounds to the dollar.
A senior official told Reuters the RC meeting was devoted to discussing economic reforms included in Assad's policy speech to parliament on July 17.
“The meeting approved the establishment of private banks as shareholding companies. These could be wholly private or joint private-public companies,” the official said.
“The meeting also approved the establishment of a stock market and mandated the concerned authorities to amend the foreign currency exchange law so the rates would reflect the free market prices,” he said.
No further details were immediately available.
Syrian Minister of State for Planning Issam Zaim told Reuters last week licenses would be granted soon to private Syrian banks and Lebanese banks to operate in the country.
The establishment of private banks will end the government's control of the banking system which has been enforced since 1963 when the Baath Party took power and nationalized the banking sector as part of an overall nationalization campaign.
The minister noted the expected Syrian measure had been preceded by the establishment of private banks in Syria's free trade zones over three months ago.
He said the government now was trying to adopt urgent measures to reform the banking sector which economic sources has described as “primitive”.
Zaim is one of the main architects of the economic and administrative reform programs of the government led by Prime Minister Mohammad Mustafa Mero which took office in April.
The minister said priority should be given to the Syrian private sector to engage in banking, to be followed by the Arab private sector. — ( Jordan Times )
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