The digital transformation project for government services in Syria is facing a violent shock, after the electronic payment system failed to perform its function at the country level, due to factors that experts say include weak infrastructure, power outages, communications and electronic connectivity, and the absence of integrated banking services.
Since the beginning of last January, the Electronic Citizen Service Center, which was established by the Ministry of Communications and Information Technology to move government services from the traditional form to the electronic form, announced that its network with its three channels (Anjaz, the Consular Office, and the Arab and Foreigners Portal) had stopped working several times, as a result of “maintenance and rehabilitation work,” which led to the suspension of 65 electronic services that the center claims it was providing through its portal.
Some banks’ applications also went out of service due to the internet outage and the suspension of the electronic payment system, causing many problems for people who have financial obligations to government agencies that need to be paid on time.
pre-transition dilemma
For his part, Muhammad, a subscriber to the youth housing project in Damascus, complained about the interruption of the electronic payment service at the Real Estate Bank (government) and the Syrian Payments Company, for intermittent periods, and the responsible authority justified its interruption due to the interruption of communication lines between him and the service providers.
He explained to Al Jazeera Net that the service later returned, but was soon cut off again, and the situation continued to return and then go back and forth. He pointed out that the Public Housing Corporation, the entity concerned with the housing project, refused to extend the settlement of the status of subscribers who had failed to pay their installments, and attempts are being made to find a way out of this predicament.
In the same context, Munir complained about the ineffectiveness of another application belonging to a government bank, and he tried to activate it more than once, to no avail. He was forced to visit one of the bank branches to activate it, and when he returned home, he found that it was not working.
Wael also tried to obtain an urgent passport, through the electronic platform of the “Immigration and Passports Department”, to join one of the universities “outside the country” that informed him that his enrollment had been accepted, but he found that the platform was not working, so he was forced to go to a library near the Immigration Department headquarters and complete his transaction in exchange for a sum of money.
Unsuccessful government measures
During the past three months, the electronic payment system has been subjected to a wide campaign of criticism, launched by media outlets – both government and private – and electronic platforms – loyal and opposition – accusing the government of imposing the system on citizens, at a time when the financial sector suffers from flabbiness and weak inclusion, and the communications and internet sector suffers from weak infrastructure. Before making it mandatory, it is supposed to provide smooth access to the services provided by these sectors and enable citizens to use them.
In the same context, Dr. Shafiq Arabash, Professor of Economics at Damascus University, criticized the performance of the system. He said that the services that the government implemented electronically in a mandatory manner created cases of congestion, overcrowding and confusion for the citizen and the service providers.
“We are not ready for this transition in the way the government wants, because we do not have the infrastructure,” he added in statements to the local Al-Watan newspaper. “The main problem is that the government has believed since it took office that the basic solution to all problems, especially economic ones, is to stabilize the exchange rate. It believes that through electronic payment it can view and manage the money supply in a way that serves the exchange rate. Despite all the uneconomic and unpopular measures it has implemented, it has not succeeded in doing so.”
He pointed out that the dollar exchange rate was around 900 liras at the beginning of the current government taking over its work, while it has currently reached around 15,000 liras in the parallel market, while prices have doubled to the equivalent of 600%.
Arabash wondered: “If the government is unable to provide simple ATM services well, how can it move towards implementing and obligating people to an electronic payment project, for which the necessary technical infrastructure is not available?”
Strategy with 12 programs and 49 projects
In August 2021, the government of President Bashar al-Assad’s regime adopted a digital transformation strategy consisting of 3 axes:
- E-government services.
- Improving the efficiency of government performance.
- Enabling environment for digital transformation.
According to an official source, it aims in its entirety to involve the communications and information technology sector in the gross domestic product, activate transparency, the process of combating corruption, and replace the mechanism for providing public services with an automated, transparent and comprehensive digital mechanism.
The strategy is implemented in 3 stages:
- Building infrastructure to support digital transformation, extending from 2021 to 2023.
- Transition to interactive services: Investing in these structures by launching and implementing digital transformation programmes and projects, extending from 2023 to 2027.
- Digital transformation, extending from 2027 to 2030.
Expected support for a crumbling economy
On the other hand, analysts believe that the real goal of this transformation is to improve the image of the economy, which has been exhausted by the war between the Assad regime and its opponents for 13 years, after Syrian-Arab relations witnessed an openness, which Damascus hopes will be translated into support that will pull its crumbling economy out of the abyss.
According to estimates by World Vision and Frontier Economics in their latest report, its losses are expected to reach $1.2 trillion over the next ten years, and its cumulative losses may increase to $1.4 trillion by 2035.
The head of the Syrian regime had issued Law No. 21 of 2023, which requires the adoption of bank accounts to meet the financial claims of professionals and activities.
While the Syrian government preempted the presidential law, and announced in 2020 that it would adopt the use of the electronic payment system, and would require citizens to conduct almost all financial transactions online, including paying public utility bills, telephone bills, traffic violations, and financial fees.
Who benefits?
Professor of Economics and former Director of the Central Bank of Syria, Dr. Duraid Dergham, believes that electronic payment meets the needs of the government and not the needs of the citizen, as the needs of lending, saving and insurance are not met through electronic payment, but rather only payment needs are met through it, and relatively.
He explained in his study that there is a shortage in the number of traditional outlets available (branches, offices, agents) for withdrawal, deposit and transfer, especially in large villages and some neighborhoods in cities, criticizing the inability to track performance, due to a lack of data and information.
Daragham attributed the reason behind the failure of electronic payment in Syria to the lack of purchasing power, as it is not possible to convince someone to deal with electronic payment if his monthly salary is only enough for two weeks, indicating that there is aversion among those with limited income from this system, and their refusal even to save in banks, due to inflation and withdrawal restrictions that vary according to decisions from time to time.
Normally, a citizen deposits all his money in the bank and pays from it as needed. What happens in Syria, in Daragham’s opinion, is that the citizen replenishes his account when he has to pay the bill, which incurs additional costs in transportation fees to reach the account replenishment centers, which means waiting in lines. In addition, forcing citizens to pay electronically also means commissions on deposits, withdrawals, and payments. Here, things go the other way around, because logic dictates that the bank must do its job, and commissions are an exception.
5 Foundations for Building a Successful Digital Environment
Official government reports confirm that the authorities concerned with the e-transformation project have not yet been able to complete the first phase of the announced strategy (building an infrastructure that supports this transformation), which was scheduled to be completed in 2023.
However, interactive services, such as the electronic payment system and others, were implemented, despite the failure of the unified network connection between financial and banking institutions on the one hand and the Syrian Electronic Payments Company and private payment companies on the other hand, and the absence of the required technological tools and logistical support.
Syrian information technology expert Rashid Al-Bunni believes that there should have been five foundations before moving to this transformation, which are:
- Infrastructure
- Legislation and Policies
- Digital skills
- Financing
- Governance
Speaking to Al Jazeera Net, he said: “The availability of these foundations requires work programmes that can be implemented with time frames and performance indicators to measure the progress and achievement of each stage.”
Al-Bani focused on the clear discrepancy between what the Syrian government decides in this regard and the available capabilities to implement what it decides, indicating that the conflict that the country is witnessing has dried up the sources of the economy and turned Syria into a fragile state unable to secure the means of life for its people, due to the significant decline in the performance of the productive sectors, the collapse of the value of the local currency, and the rise in inflation to very high levels, in addition to the lack of citizen confidence in government institutions, including banks, on which the electronic payment system depends primarily.
Al-Bunni said that the indicators of the failure of the digital transformation strategy in Syria at the present time are the lack of political stability, the absence of security and safety, the spread of corruption, the fluctuation of state authority, and clientelism in the economy with the lack of transparency, governance, and enforcement of the law.
bet on the losing horse
The electronic payment project is considered one of the basic projects that the government is betting on its success within the strategy of digital transformation of government services, and reaching a digital society that keeps pace with technological and cognitive progress in the region and the world.
During the opening of a workshop that focused on digital transformation in the financial and banking sector, the Deputy Minister of Communications and Technology in the Assad government, Fadia Suleiman, acknowledged the great difficulties facing the digital transformation project in Syria, including the issue of human resources.
She pointed out in a statement that the project suffers from the issue of financing, as launching such projects requires huge investments, and therefore the ministry may be forced to find different sources of financing.
In recent years, Syria has recorded a weak performance in the capabilities and components of its digital economy, and the digitization of its economic sectors at the macroeconomic level, according to the Arab Monetary Fund’s 2020 Digital Transformations in Arab Countries Report, achieved a low score, not exceeding 1 out of 5 in 3 sectors (agriculture, manufacturing and non-manufacturing industries), while it achieved a score of 1.71 in the services sector within the ranking of Arab countries in terms of the index value (1 is weak, 5 is high).
The value of its digital economy index, according to infrastructure, policies, regulations, digital skills, financing and governance, according to the source, reached 26.06, which is a negative value that reflects weak performance at the transformation level.
