Syria Plans Steps to Revive Economy, Enter Global Arena

WITH Syria's image in the West polished somewhat by its participation in the Gulf war coalition, Damascus is taking steps to move Syria's economy into the wider international arena. In a recent interview, Baddradin Challah, a senior economic adviser to the Syrian government, spoke about a number of imminent changes. These include improving telecommunications services, developing gas power, stabilizing the currency, boosting trade and investment, and expanding tourism.

One newly approved measure is the installation of 600,000 new telephone lines - a 150 percent increase in service for the nation's 14 million people. Mr. Challah says a German company is expected to take this project.

``Up to now it was easier for me to drive from Homs to Damascus to do business with officials than to phone,'' says one manager from that city of half a million, 113 miles north of the capital.

Improved service will also be a boon for anticipated new trade ventures. Travel agents, development companies, and nongovernment organizations have found their prospects limited, especially without fax lines and direct-dial access. Direct dialing from the United States to Syria was made available only after Syrian President Hafez al-Assad met with President Bush in Geneva last fall. Facsimile machines are scarce; most companies here still operate through telex.

The key to expanding international trade is the stabilization of the Syrian pound. For years, several exchange rates were in effect here, with the bank rate dropping as low as a quarter of the unofficial rate. This hindered exports, so whatever trade Syria engaged in was largely limited to what was specified in bilateral agreements, such as with the Soviet Union.

``That's all over now,'' says the 86-year-old Challah, who still puts in a full day of work between his family farm, his office, and his conferences with Damascus-based ambassadors. He wears a tarboosh, the red felt Turkish-style hat rarely seen in Syria today.

Long an influential public figure here, Challah has worked particularly hard to establish new trade guidelines. He seems pleased that the Soviet Union now trades with Syria only on a cash basis.

``With a realistic exchange rate for the Syrian pound, imports should increase; this in turn will encourage local production for export,'' Challah says, adding that Syria will soon fix the pound at between 40 and 45 per dollar, up from about 25 per dollar today.

Restrictions on Syrian businesses will also be lifted, allowing the private sector to import vehicles, tires, and other spare parts with greater ease. Syrian nonresidents (such as those working in the Persian Gulf) are being encouraged to import and to invest. With a more favorable exchange rate, it is hoped they will no longer shy away from bringing earnings home.

Exports are also a major concern for the new economic policymakers. Syria has a surplus supply of cotton, but it is barely competitive on world markets. The same is the case for shoes made here. And agricultural production, while it has potential, still lags.

Another high priority for Syria is the development of gas power facilities. ``When Turkey cut back the Euphrates River for a month, Syria's electrical source was threatened and there were severe cutbacks in industrial output for those weeks,'' Damascus hydrologist A. F. Misky reported last year.

Challah promises ``no more electrical cuts.'' He says a US company and a Dutch company recently were awarded contracts to convert two of Syria's hydroelectric plants to gas operations. But progress will take time. Gas has only recently been found in major quantities in Syria's far northeast areas of Deir Ez-Zur and Hassakiya, where US oil companies have been drilling in recent years. No pipelines exist to take the gas west to the industrial regions.

Tourism - a commercial sector that remains completely undeveloped in Syria - is another concern of the new economic scheme. Challah estimates tourism could generate 25 percent of the nation's income. But this too is a large task, since business dropped off sharply last fall with Iraq's invasion of Kuwait.