Proposed expenditures matched proposed revenues because budgets submitted for approval were balanced. However, actual expenditures usually fell considerably short of those planned, although the fragmentary data available in 1987 generally precluded measurement of the amount of difference. In the 1980s, budgets began including planned deficits, and investment spending repeatedly trailed allocations. Only 70 percent of Syria's 1984 investment budget of LS17.85 million was actually spent. Expenditures fell under two headings--the ordinary budget covering current (recurring) expenditures and the development (capital) budget. Beginning in the early 1960s, capital investments had become a much more important part of the budget. Development expenditures amounted to 42 percent of total expenditures in 1964, increased to 50 percent in 1970, and peaked at 64 percent in 1976. However, by 1980, development expenditures had fallen back to 50 percent and in 1985 fell to 45 percent of total expenditures. In the 1980s, normal proposed revenues (taxes, duties, fees, and surpluses of public sector enterprises) usually financed proposed current expenditures, with a small remainder to help with capital investments. Foreign aid and domestic borrowing financed the rest of the development budget.

Throughout the 1970s and 1980s, defense spending dominated current expenditures. Some observers maintained that in the 1970s defense spending accounted for approximately three-fifths of current expenditures, although such amounts were not reflected in official statistics (see fig. 2, Government Expenditures by Sector, 1985). Offically, defense spending rose from LS675 million in 1970 to LS4.6 billion in 1978, increasing at an average rate of 27 percent a year during this period. In the 1985 budget, defense spending again accounted for the greatest portion of current expenditures. However, the LS13 billion 1985 defense budget reflected only a 9 percent rate of growth, slower than that in previous years. However, a related item, internal security expenditures, accounted for a further LS672 million in the 1985 budget. Most of the remainder of current expenditures covered operating expenses of ministries and agencies--largely personnel costs (see table 7, Summary of Proposed Budget Expenditures, 1981-85, Appendix).

Identifiable payments on the public debt amounted to LS135 million in 1976 and 1977, less than 1 percent of total expenditures. The 1984 budget allocated LS1.8 billion to the public debt, equal to 7.6 percent of current expenditures.

Identifiable price subsidies amounted to LS600 million in 1977 and LS1.4 billion in 1985, accounting for 9 percent and 6 percent of current expenditures. Subsidies rose rapidly in the mid-1970s as a result of higher rates of internal and international inflation. The government attempted to keep meat, bread, coffee, sugar, diesel fuel (for irrigation pumps), and other essential items within reach of the poor the subsidized prices for sugar and diesel fuel, for example, were about one2db nequarter of the regular market price in the 1980s.

In the 1970s, the government demonstrated its commitment to economic development through sizable increases in the development budget by increasing investment expenditures an average of 26 percent a year. Although they increased substantially from LS1.4 billion in 1970 to LS14 billion in 1980, growth of investment expenditures slowed to just 6 percent a year in the 1980s.

Data as of April 1987