he number of tenders issued by state-owned corporations has declined dramatically in recent weeks on the back of international sanctions and reduced expenditure by the Government.
The daily official gazette in which public sector institutions publish their tenders has now been trimmed to a handful of pages.
 
Although, formally, the State’s 2012 budget has been significantly expanded, in practice the Government has suspended almost all large investment projects and reduced its current expenditures to a strict minimum as it battles with lower revenues on the back of the severe economic downturn facing the country since the beginning of a popular uprising last year.
 
A few weeks before the end of 2011, the Syrian Prime Minister, Adel Safar, asked state institutions and companies to reduce by 25 percent all their overhead expenses, excluding salaries.
 
Tenders opened to international companies have also almost been entirely stopped as the Syrian state faces the twin problem of dramatically lower foreign currency earnings, because of the ban imposed by the EU on oil exports and the flight of tourists, and of international sanctions that have rendered doing business with Syria extremely difficult for international corporations even when formal sanctions are not imposed on their sector of activity.
 
The energy sector has been particularly impacted because it is directly targeted by the sanctions. Hence, the Public Establishment for Electricity Generation and Transmission, which is in charge of the electricity sector, has, for instance, postponed at least four times the deadline for bids for some of its projects, including the construction of new power plants, because international engineering companies have not responded to the offer to bid.
 
Similarly, the Syrian Petroleum Company has reduced sharply its almost daily issuance of tenders to both local and international companies.
 
This reduction in Government expenses is impacting the activity of a large number of local suppliers and middlemen who relied to a large extent on Government tenders for their revenues.
 
The Government remains, indeed, the single largest investor and employer in the country. In 2010 it contributed to around a third of GDP.