In Focus |Notes on the People’s Assembly’s Discussion of the Draft of the General Budget
On the first of November 2020, the Syrian People’s Assembly began discussing the draft general budget for 2021, in the presence of the Minister of Finance. It is believed that the budget discussion will continue until November 3, 2020.
The budget, approved by the President of the Syrian regime and referred to the People’s Assembly, amounts to 8.5 trillion Syrian Pounds (3.6 billion US Dollars) at the end of October 2020. The People’s Assembly Budget Committee discussed the budget as well as holding public discussions about it before it was official approval by the Assembly.
It appears that the People’s Assembly will approve this or next week at the latest, and it will be ratified and adopted as the official budget for the next fiscal year 2021. Here we highlight three main notes concerning the budget:
1- The current financial budget, with its approved total amount of (8.5 trillion SP), is larger than any previous budget passed in the history of Syria when evaluating it in the SP. However, it is considered one of the lowest budgets put by the regime when calculated in foreign currency as the 2020 budget was 4 trillion SP, around 9 billion USD, while the 2019 budget was 3.8 trillion SP, nearly 9 billion USD. The 2021 approved budget is valued at around 3.6 billion USD according to the current Syrian Pound exchange rate (2350 SP per USD). In addition, the value of the Syrian Pound is expected to witness further decline during the next year which means a decrease in the actual capacity of this budget.
2- The size of the deficit declared in the 2021 budget is 2.4 trillion SP (approximately 1 billion USD), or nearly 30% of the total resources. However, of the resources included in the budget, the investment resources were estimated at 2.5 trillion SP (1.1 billion USD) which is a figure based on an expected improvement in the economic situation and end to the war and crisis Syria is currently experiencing according to the Minister of Finance. As such, it is unexpected that these figures will be realized rather only slightly more than half of this figure will be achieved around 1.5 trillion Syrian Pounds (550 million USD).
Current revenues are estimated at 3.4 trillion SP (around 1.5 billion USD) which is dependent on the Syrian economy achieving a significant recovery. The year’s revenues were estimated at less than 1 trillion SP (430 million US Dollars) and it is expected that next year’s revenues will not increase to a figure higher than 2 trillion (860 million USD).
Therefore, the real deficit in 2021 is expected to exceed 4.8 trillion SP (around 2 billion USD), and we may witness the government’s inability to ensure the provision of support for basic commodities or implement projects and perhaps, to a lesser extent, it may pay state employee’s salaries later than usual.
It is also necessary to follow up the implementation rates of the budget for 2020 to ascertain what has been actually spent? For 2020, 4 trillion SP was declared for spending, however only part of this was spent due to the difficulties facing the regime government, especially in securing the necessary revenue. In the financial statement discussion in the People’s Assembly, it was mentioned that the amount spent on project implementation did not reach 23% of the allocated sum, and that the government is unable to secure its needs. The situation indicates that the government will continue to experience difficulties as the current budget figures have been greatly inflated for media reasons and to prove that the Syrian regime is still in control of the situation, the administration and economy in Syria.
Unit of Analysis and Thinking - Jusoor for Studies
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