In the next phase, the new Syria begins rebuilding its institutions in general, and its economic ones in particular, after the end of the former era of the Assad family, amid talk of convening a national conference and considering drafting a new constitution, to move the country to an era characterized by freedom, democracy, human rights, social justice, and human dignity. .
There are several challenges at the economic and social levels in Syria that make those in charge slow down regarding the transitional period and focus on good options for managing the transitional phase. Among those challenges was what was published in a report issued by the World Bank in May 2024 about the level of well-being of Syrian families, including: Poverty rates among Syrians reach 69% of the total population, and extreme poverty reaches 27%.
There are other challenges that must be taken into account regarding the fair distribution of wealth in the new era, and the need for economic policies to be more biased towards those affected by the former era of Bashar al-Assad, especially those affected by the repercussions of the period that extended from 2012 to 2024.
This is in addition to the reconstruction requirements, which some have estimated at about $300 billion. The issue of rebuilding homes destroyed as a result of the bombing by Assad’s planes and his aides is at the top of the reconstruction agenda, and having support programs to help individuals build or restore their homes.
The legislative structure also needs various amendments, although during the first days of the caretaker government headed by Muhammad al-Bashir, a number of decisions were taken regarding facilitating the economic environment, most notably those related to liberalizing the exchange rate and foreign exchange trading, as well as some decisions related to customs transactions.
Free market option
The regional and international climate is dominated by trends towards a free market economy, but there are repercussions that give many countries specificities related to freedom of trade or dealing with foreign investments, as well as the presence of a role for the state in economic activity, either for economic and social repercussions or matters related to national security.
After the disintegration of the Soviet Union, Russia experienced a state of political, economic, and social chaos during the Yeltsin era, but with the arrival of Putin, the situation in general and the economic situation in particular were rearranged. We found that Russia, which allows a major role for the private sector, has repositioned itself with regard to the presence of a significant role for the state in Economic activity.
The English economist John Chang mentions in his book “Kicking the Ladder Away…Development Strategies and Evolution in the Ancients” that developed countries, in their beginnings on the path of development, were very cautious with regard to freedom of trade and the movement of capital, and did not accept freedom of the market until they were able to do so on both the public and private levels. .
We can say that the case of Syria after its revolution that overthrew the dictator Bashar al-Assad can speak of its orientation towards a free market, but through transitional stages that gradually qualify the economy and society.
The specificity of the Syrian situation
The period in which Al-Assad and his regime took up arms against the Syrian people – and part of the opposition was forced to take up arms, confront him, and eventually overthrow him – led to a decline in many of the country’s economic indicators, from a decline in growth rates, and a decrease in the value of the output to less than 8 billion dollars, after… That was approximately $61 billion in 2010.
Media outlets quoted the head of the Damascus Chamber of Commerce, Basil al-Hamwi, as saying, “The new Syrian government informed businessmen that it will adopt the free market model and integrate the country into the global economy, in a major shift away from state control over the economy for decades.”
Although this statement carries a kind of optimism for merchants, it carries many challenges at the development level, as the country has emerged from war, and there is a severe shortage of many goods and services, especially in the areas that were controlled by the Assad regime.
Merchants usually tend to make quick profits, and what concerns them is profit rates and their continuity, whether that is the result of working in local or imported goods, but this view is not taken into consideration within the framework of the development construction of a country searching for stability and construction after the state of war it has experienced.
Productive activity usually provides real and stable job opportunities, in addition to its contribution to increasing the added value of any economy, and helps build a strong domestic product. Therefore, the more the production process relies on local production requirements, skilled labor, and self- or local financing, the more this leads to economic prosperity.
Allowing the free market in the areas of trade, investment, and openness to the outside world in the current state of the Syrian economy will make the country merely a market for foreign products, and will not put the country’s productive sector in a state that allows it to compete with foreign products. Rather, producers may decline in their activity, as a result of the inability to compete. And weak returns on their productive activity.
Therefore, it is necessary to have a development plan aimed at building productive sectors and providing them with the necessary support, especially with regard to customs tariffs and organizing the contributions of foreign investments, whether in the service or production fields.
There are positive elements that characterize the Syrian labor market, including the presence of behavior that respects work as a value among a large segment of the population, as well as the quality in the work and services provided, especially the service and professional sectors.
We must be aware that the economic environment in Syria is distorted as a result of the practices of the Assad regime. The Syrian private sector suffers from major problems, including weak financing capabilities, because the state controlled most of the productive activity, and the space it allowed for the private sector was granted to those loyal to the regime according to the “rule of giving in exchange for loyalty.”
When we look at the available data on the Syrian economy, we find that the credit granted to the private sector in 2010 was approximately 20% of the gross domestic product, while in the same year in Egypt this percentage was 36%, according to World Bank database figures.
Correcting this distorted environment on the economic level requires rearranging it to move towards the right direction, and not dedicating the new situation to brutal capitalism under the pretext of adopting the free market.
US President Donald Trump during his first term, engaging in a trade war with China, and the American agricultural sector being harmed by the taxes imposed on it by China; We found him providing $14 billion in support to affected farmers.
It can be said that rebuilding the Syrian private economy to be qualified for the free market and the challenges it imposes on its actors are among the necessary requirements for the current Syrian government or the governments following it.
It is expected that it will take time for the existence of economic and financial entities, medium and large, that are suitable for existence in the free market and integration into the global economy. As for talking about small or micro entities, these entities do not operate in a vacuum, but for their success, especially in the industrial and production aspect, it is required that they be linked. With large or medium entities.
Mixed system
The conditions that Syria will experience, assuming it reaches a state of political and security stability, require at least a decade for it to flourish economically. Therefore, it requires adopting a mixed economic identity that combines the presence of the public and private sectors, so that the public sector works according to economic foundations, and at the same time opportunities are available. To build a strong private sector that is given spaces in economic activity that increase its potential to participate and compete at the local and external levels.
The presence of the public sector in economic activity, provided that it operates according to economic principles, would create balance and competition with the private sector. The uniqueness of this sector facilitates the practice of monopoly and leads to the imposition of certain patterns on consumers.
If it is necessary to adopt the free market, then Syria should turn to the model of what is known as social capitalism, which preserves the rights of people to the extent that preserves their dignity, and undermines the profits of capitalists in a way that creates a societal balance, such as progressive taxes, preventing monopoly, regulating competition, and having legislation. Prevent conflicts of interest.
