The issue of “revitalizing the economy” is at the forefront of the Syrian scene after it suffered severe damage to its resources and material assets, and the war during the last decade turned it into a fragile economy that suffers, according to global indicators, from fragmentation and setbacks, which negatively affected growth rates, production, trade, and capital flows.
While the government of the Syrian regime is trying to take many measures to revive the production, investment and monetary sectors, which are the sectors most affected by the conflict, taking advantage of the relative calm witnessed on the war fronts, despite the absence of supportive resources and the lack of peace, security and stability, analysts believe that these measures are merely compensatory solutions, intended to compensate The losses suffered by the oil, trade, tourism and industry sectors, which had huge impacts on the state’s resources that were invested by the military machine, are not solutions to the problem of the economy, which has been suffering from a structural defect for decades.
While others described the economy as hybrid, lacking an identity because it relied on selected strategies and conflicting policies, which failed to achieve standards of growth and fair distribution of wealth and income, and helped an influential class to monopolize its spoils and establish financial empires that generated huge illegal revenues in the absence of the rule of law.
Recover without supportive resources
For his part, Kenan Yaghi, the former Minister of Finance in the Assad regime, expected that economic growth would achieve 1.5% this year, pointing out that the international sanctions imposed on Syria hindered the arrival of financial transfers, at a time when the economy – whose losses amounted to about 300 billion dollars, according to less – needed it. Estimates – to support and loans to rebuild infrastructure, he said.
He explained in televised statements, during his participation in the annual meeting of Arab financial bodies and institutions held in Cairo last May, that the goal that the government is working on is to search for engines of self-growth through developing the private sector, given that the economy has begun the recovery phase. It takes some time for positive results to appear on the ground.
On the other hand, economic expert Abdel Sattar Dimashqiya ruled out that the measures taken by the government during the past three years had contributed to protecting the economy from its continued deterioration, and considered it “merely a limited movement or a temporary treatment that lacks a clear strategy, and determines the true identity of the economy and its future path.”
He described the claim that it could recover and grow in the absence of supportive resources, security, stability and the rule of law as “exaggerated speculation.”
In his speech to Al Jazeera Net, Dimashqiya explained that the Syrian economy since the 1980s has been suffering from imbalances, disturbances and distortions, which were greatly exacerbated during the war, as it incurred additional losses, ranging from the destruction of its physical assets and the decline in the volume of foreign capital and foreign investments, to the deterioration of domestic production numbers. Both industrial and agricultural, relying entirely on imports and foreign aid to fill the gap.
According to a study prepared by the Syrian Center for Research Studies:
- The economy’s losses amounted to about $530 billion, equivalent to 9.7 times the GDP of 2010 at constant prices.
- The percentage of destruction of infrastructure as a result of battles in the country reached about 40%.
- The study revealed that the country’s public debt has risen to about 208% relative to the gross domestic product.
- According to the study, the local currency has lost about 97% of its value.
- Unemployment rates reached 42%.
In the same context, another study, conducted by the international aid agency World Vision, with the participation of Frontier Economics, indicates that the economic cost of the conflict after 10 years amounted to about 1.2 trillion US dollars. Even if the war ended today, according to the study, its costs would continue to accumulate, reaching $1.7 trillion in 2035.
What economic model now?
The Syrian economic system has undergone profound transformations over the past five decades, and has suffered from a disproportionate marriage between its “socialist” identity included in the constitution, and its de facto “liberal” identity.
It was called a “planned socialist economy” in the 1971 and 1973 constitutions, but the economic policies and laws that followed with the issuance of Investment Law No. 10 in 1991 gave a different impression.
Lamia Assi, former Minister of Economy in Naji Otri’s government, criticized this imbalance, and said on her page on a digital platform, “It is illogical for the country’s economy to be led by a group of conflicting opinions, based on different references, one liberal, another socialist, and a third who has no identity other than his personal whims and interests.” “.
But the marriage ended, according to researcher Rasha Sirop, when it lost its identity with the issuance of the 2012 Constitution, and began to lack a constitutionally defined characteristic after the “socialism” inherent in it was abolished and its place was replaced by the private sector as a partner of the public sector in the national economy. At the conclusion of her research on the identity of the Syrian economy, she asked, “What is the nature of the state’s economic ideology after socialism was constitutionally abandoned, even though the constitution is not only a legal document, but also an economic document that expresses the state’s economic aspirations?”
Why did the three experiments fail?
The confusion between non-synonymous terms leads to distorted performance on the reality level and negative outcomes, the societal effects of which have become clear during the last two decades, according to the expert Damascene, as he considered the transformation through shock from a socialist economy (planned and centrally managed) to a liberal market economy that caused three shocks (developmental). productivity and social) resulting in an absence of justice in the distribution of wealth and unprecedented poverty (regular, monetary and extreme), the rate of which increased significantly with the state’s withdrawal from carrying out its social role.
Damascene explained that the social market economy, which was adopted as an ideology in the years of openness that Syria witnessed in the period 2005-2010, paved the way for the emergence of a young class of the sons of first-line leaders in the regime, who benefited from their administrative positions, built illegal wealth and laundered their money in projects. Services, entertainment, and finance, and later controlled the internal and external trade sector, with the participation of new economic actors who joined the client network that the regime led during the war.
He attributed the failure of the Syrian economy in the various stages it went through to several reasons, including:
- Adopt terminology experimentally, regardless of its appropriateness.
- The lack of a strategy that defines the identity of the economy and the way it performs.
- There is a gap at the levels of administration (rule of law, protection of property rights, level of corruption) and public accountability (level of participation, respect for public freedoms, and government transparency).
- Following a policy of preference and clientelism within the scope of personal and factional economic interests protected by the power of power and corruption.
Assad reinterprets socialist economics
Five years after the beginning of the conflict, different views emerged from officials and economics professors about how to save what was left of the economy, after former Prime Minister Imad Khamis admitted, in a speech before the People’s Assembly in late 2016, that the country had turned into a farm for some. Crisis traders. He linked his government’s inability to meet the demands of its people to four reasons: the difficulties facing the economy, war, crisis merchants, and corruption.
But the most prominent viewpoints were recently stated by President al-Assad on two successive occasions (a meeting of the Central Committee of the ruling Baath Party, and his meeting with Baathist economics professors in Syrian universities), where he once again proposed the term socialist economy as a proposed path that can be worked on after reinterpreting it as follows: :
- Socialism, for us, as we understand it, is social justice. We cannot return to written and academic definitions and old theories, which are full ownership of the public sector and the abolition of the private sector. With this definition and in this form in practice, Syria was never socialist.
- Ideology is fundamental to the Baath Party’s approach and cannot be abandoned. When we say ideology, it is socialism, which is the social aspect.
- Finding a balance between the economic rules and the social rules, and this means that we walk a precise line in which the economic aspect is not abstract at the expense of society because in this case we will turn into a capitalist party, and we cannot move on the contrary towards the social aspect in the abstract because then we will be a bankrupt state. .
- Our vision of the term social market economy is simplified. The market is competition, and the process is the process of developing socialism, nothing more and nothing less. But if we keep the word market alone, this means that we have turned into a brutal market economy. The word social is what preserves the socialist approach while maintaining competition in relation to the market. .
- The state ruled by the Baath Party is a state for all its people. So what is the program or approach that the Baath Party can adopt that expresses the intersection of interests between the various segments? We must look at the working class or the poor from an economic perspective before we look from a social perspective, because the social perspective turns the party to charitable work, while the economic view turns it into economic work.
What’s new in Assad’s interpretations?
According to economist Ahmed Salama, the modified socialist economic theory did not provide anything new if we go back years. It has been talked about since 2005, when the government chose the market economy as a path after the failure of its socialist experiment, and appended it to the phrase “social” to allay the fears of economists, researchers in public affairs, and various segments of society, who found in it an official declaration of the state’s intention to abandon its role.
He added, in his speech to Al Jazeera Net, that the verbal connotations of the point of view presented by Al-Assad reflect a return once again to an old experience, the justice of which only the regime’s entourage, army and intelligence officers, businessmen, and merchants actually benefited from when the marriage between the socialist and the liberal under the title of social gave them the opportunity to manage their interests and maximize Their profits were at the expense of 92% of the population at the time. The number of those living below the poverty line, according to a report by the United Nations Development Program in 2005, was about 2.2 million individuals, and the number of those who could not provide for their basic needs was 5.3 million others suffering from poverty in general.
He pointed out that an analytical study of the trade balance, issued by a semi-governmental research center in 2016, reported that the trade balance suffered a deficit over a period of 21 years, which placed the GDP in a state of deficiency and inability to meet internal demand (total spending on investment and consumption) and undermined growth opportunities. .
Salama believed that working with this modified theory had previously failed the economy in three main tests:
- At the level of public fiscal policies, government programs have not achieved any sustainable growth.
- At the level of social spending, the Assad regime failed to neutralize the negative impact of its economic policies on classes that lacked a social safety net.
- Failed to balance the labor market and distribute incomes when unemployment rates rose to high rates, and degree holders turned to the parallel economy to work in professions that do not require competencies such as their academic specializations.
The Fourth Way of Development and Reconstruction
In this regard, economic expert Munir Al-Hamsh believes that historical experiences in most Third World countries have proven that independent development is the correct path to reaching a true elite. He pointed out that the trend towards a market economy and economic liberalism before the events of 2011 led to transformations in production structures, which resulted in Structural imbalances have deepened from the beginning of the war until now, as a result of the turmoil and chaos that occurred in economic and social policies.
In a recent panel discussion held by the Economic Sciences Association, he called for the adoption of a development model that goes beyond the proven models (the socialist, liberal, and compensatory model), which he called “the fourth way of development and reconstruction,” which is based on a policy of combining market mechanisms and planning mechanisms, with the aim of raising the material and cultural level of citizens and improving their living conditions. .
He pointed out the need for this model to present a program that combats poverty, eliminates income and wealth differences, addresses unemployment and ignorance, and achieves sustained economic growth that is accompanied by fair distribution, and thus achieves social justice.
Munir Al-Hamash pointed out that the work program for the post-crisis phase must confront two important issues:
- The first: post-crisis justice and addressing social rifts.
- Second: The issue of the identity of the national economy, and this issue is determined by the constitution. Although it defined the identity of the economy as a free economy, and the state was supposed to intervene, this intervention was not planned. Rather, economic policies were often reactions without scientific study imposed by them. Practical realities in the market.
