Syria's president, Bashar Al Assad gave an address in which he offered to rewrite the constitution to permit the formation of opposition political parties by the end of the year.


Senior officials stressed that this meant Syria was on the path to "democracy" and suggested the rule of the Baath party was coming to an end.


However, Syrians across the country continued their protests, now in their fourth month. At least twenty protestors were killed last Friday, the day when protests reach their peak.


Assad also warned against the threats the economy faces should the protests continue. The IMF has already revised its growth forecast for Syria from 5.5 percent to 3 percent. Syria has been struggling to attract foreign direct investment prior to the start of the riots.


June 16-28, 2011



Analysis and Forecast: Increasing Risk


The address given by the Syrian president has failed to appease the protestors. Although it carried substantial concessions, which would have been unthinkable before the start of the riots, the momentum the protests have gathered appears unstoppable, and calls now are clearly for a total regime change.


Unless the regime makes rapid, more dramatic concessions, the riots will continue. The regime will unlikely change the violent way it has been dealing with protestors. This will likely only lead to further unrest, as more human atrocities are committed. The effect on the Syrian economy will likely be disastrous. Although the IMF has revised its growth estimate to 3 percent, the likelihood is that there will be a contraction in the economy. Tourism has all but essentially disappeared, and the peak season this year has been completely lost. Tourism represents over 12 percent of the GDP and provides up to a quarter of the country’s earnings in foreign currency. Tourism-related industries also provide over 12 percent of the total employment. Even if a solution is speedily found, the damage on the country’s economy will likely be need considerable time to repair. The overall economic and political assessments are both negative and likely to deteriorate further.