The contemporary Syrian economy has passed through two main eras: the first in which Syria was moving toward building a social economy (early 1960s through the 1980s), and the second in which Syria was moving toward liberalizing its economy. The latter era witnessed the adoption of the social market based economy (1990s until present). In the former era, the Syrian government led by the Syrian leader party (Al-Baath) nationalized many of the main sectors and assets, such as the banking and insurance sector, the transportation sector, water, electricity, and refineries. It also took control of the importation of main products and restricted the importation of so-called luxury products. Moreover, it controlled the ability of the private sector to get foreign exchange to finance its needs.

Instead of achieving the goal of further developing the country and protecting its new industrial sectors, the strict control and overprotection, along with an acute principal-agent problem in public sector corporations, worked against developing Syrian industries.

In the 1990s Syria started changing its policy to create a less controlled environment. In 1991 Syria adopted the so-called Number 10 Act for Investment. This act aimed at encouraging foreign and domestic investments in Syria through some tax exemptions, and allowed exceptions regarding the restrictions imposed on the import of goods by these new investments. The adoption of this act caused a booming era for the transportation sector in particular, in which many private companies were established.

In 2001 Syria made serious steps toward the liberalization of its economy, starting with the banking sector. A new act was adopted to allow private banks to operate and finance foreign trade. In 2004 several private banks were created and commenced serving the Syrian market. Afterward, Syria liberalized its insurance sector, where the Law No. 43 of 2005 was enacted. This law allowed private insurance companies to operate in the Syrian market. Moreover, in 2005, Syria adopted a new law by which the Damascus Stock Exchange was created. This new development was considered a big step toward the liberalization of the Syrian economy.

In terms of liberalizing its trade, Syria finished working on the Greater Arab Free Trade Agreement January 2005. Moreover, it signed a free trade agreement with Turkey in January 2007. Syria is still to sign the Association Agreement with the European Union, although Syrian economists are still skeptical about the benefits that Syria could get out of this association. Syria continued the liberalization of its trade and in May 2008, it liberalized the importation of 20,000 products.

In 2007 the country experienced an increase in the gross domestic product (GDP) growth rate from 5.1 percent in 2006 to 6.5 percent in 2007, which is considered one of the highest levels that the Syrian economy has reached for a long time. However, the trade deficit reached 83 million Syrian liras, because both imports and exports increased.

The role of the private sector in developing the Syrian economy has recently grown. The private sector accounted for 65 percent of the GDP compared to 35 percent for the public sector. The deficit faced by public sector corporations (288 million lira) is mainly responsible for the declining role of the public sector in the growth of the GDP. The deficit is attributed to several factors such as bureaucracy, corruption, and, most importantly, the subsidies that the Syrian government is paying through the selling of some basic products (diesel) at nominal prices. In April 2008, the Syrian government made a decision to halt the subsidies for the consumption of diesel beyond a certain limit (1,000 liters for each family). This decision was thought to have a long-term impact on the Syrian economy. This impact would be in terms of an increase in the prices of both products and services.

Although the financial figures in 2007 reveal a significant decrease in the inflation rate (from 10.6 percent in 2006 to 4.4 percent in 2007) and in the unemployment rate (from 12 percent to 7.6 percent), and an increase in the GDP per capita, Syria is still facing serious problems in terms of the high population growth rate and the concentration of its exports on few products (mainly crude oil, where the production is decreasing, and raw cotton). Moreover, the persistent rejection of privatizing the public sector constitutes a serious obstacle toward further developing the Syrian economy.

Bibliography:

Andrew Jeffreys, Emerging Syria 2006 (Oxford Business Group, 2006);
Igor Oleynik, Natasha Alexander, and Karl Cherepanya, Syria: Investment & Business Guide (International Business Publications USA, 2004);
“Syria: The Economy,” countrystudies.us (cited March 2009).

Sysco

Sysco is a North American food distributing company. Through its subsidiaries, Sysco engages in the marketing and distribution of a range of food and related products primarily for foodservice or food prepared-away-from-home industries in the United States and Canada. Its customers include restaurants, hospitals, nursing homes, schools, colleges, hotels, and motels. Sysco was incorporated in 1969 and employed around 51,000 people as of January 1, 2007. Sysco is a Texas-based company with headquarters located in Houston, Texas. Sysco is quoted in the New York Stock Exchange with the ticker symbol of SYY. It has approximately 13,500 shareholders (as of August 1, 2007).

Sysco’s key products include fresh and frozen meats, canned and dry products, frozen fruits, vegetables, baked goods, poultry, dairy products, paper and disposables, seafood, beverages, and janitorial products. Sysco, while distributing nationally branded merchandise, also provides products packaged under Sysco’s private brands. The company uses the following brands in marketing its own products: Sysco, Arrezzio, Jade Mountain, Casa Solana, Block and Barrel, and House Recipe.

The company operates through three business segments: Broadline, Sygma, and Others. The Broadline segment provides the distribution of a full line of food products and a wide variety of nonfood products to both Sysco’s traditional customers (e.g., restaurants, hospitals, schools, dormitories, hotels, and industrial caterers) and chain restaurant customers (e.g., regional and national hamburger, sandwich, pizza, chicken, steak, and other chain operations). The Sygma segment is a network of foodservice distribution facilities, experienced in distributing to chain restaurants. The segment distributes a line of food products and a variety of nonfood products to chain restaurants. These services are supported by special physical facilities, vehicles, material handling equipment and techniques, and administrative and operating staffs. Diverse products are distributed by the Sygma segment. These include a line of frozen foods, fresh meats, fruits, and vegetables. The Sygma segment also provides a wide range of nonfood items, including tableware, such as silverware; cookware, such as pans and utensils; restaurant and kitchen equipment and supplies; paper products, such as disposable napkins, plates, and cups; and cleaning supplies.

The Others segment includes the company’s specialty product services, which include custom-cut meat and lodging industry products subsegments. The specialty meat subsegment distributes customcut fresh steaks, other meat, seafood, and poultry. This subsegment also provides special foods for the Asian cuisine foodservice market. The lodging industry products subsegment, on the other hand, distributes personal care guest amenities, equipment, housekeeping supplies, room accessories, and textiles to the lodging industry.

Sysco was founded in 1969 by John Baugh in Houston, Texas, as a wholesale food distributor. The company went public in 1970. Sysco expanded its operations by choosing to grow by acquiring other companies. Today, the company operates in 177 distribution facilities throughout North America to provide its services to about 391,000 customers (as of July 1, 2007). Ninety-two percent of the company’s 2006 revenues come from the United States, whereas its Canadian operations account for only 8 percent. Throughout its operations, Sysco uses its subsidiaries, which are more than 180 companies scattered in different parts of the American market, including Sysco Kingston, Buckhead Beef Northeast, Fowler and Hunting, FreshPoint Central Florida, Sysco Food Services of Jackson, and Sysco Food Services of Calgary.

There are many reasons why Sysco may be regarded as a successful company. One of the reasons may be its strong market positioning. Sysco is the largest marketer and distributor of foodservice products in North America with a large market share in the highly fragmented foodservices industry. Sysco’s market dominance drives it to expand its business with less hindrance. The second reason may be its gigantic distribution infrastructure, which extends throughout the United States and Canada. Sysco has strong distribution infrastructure compared to its competitors, and this distribution network gives the company a competitive advantage against its rivals. Another reason may be the company’s thriving financial management. Sysco’s revenues have grown continuously in previous years. A consistent revenue increase paves the way for future growth for the company and strengthens its market position.

Bibliography:

Philip Graber, Selling to SYSCO: A How-to Guide (Technomic Information Services, 2003);
Andrew McAfee and Alison Berkley Wagonfeld, Business Intelligence Software at SYSCO (Harvard Business School Publishing, 2004);
SEC-EDGAR, www.sec.gov (cited March 2009);
Sysco, www.sysco.com (cited March 2009).

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