The private sector in areas controlled by the Syrian regime recently resorted to reducing its employment amid a severe economic crisis and a decline in the profitability of all business sectors in the country, which exacerbates the already high unemployment rates, threatening thousands of additional families to descend into the quagmire of poverty and destitution.
Damascus Chamber of Commerce member Imad Al-Qabbani said that the private sector has recently resorted to reducing the number of employees due to the recession in the markets, the inability to sell products, and weak purchasing power.
In a statement to Al-Watan newspaper, which is close to the regime, in mid-May, he added that the Syrian employee is the biggest loser from the repercussions of this reduction in the number of workers.
For his part, Majdi Al-Jamous, a professor at the Faculty of Economics at Damascus University, confirmed that the unemployment rate in Syria exceeds 37%, while the disguised unemployment rate has exceeded 85%.
In a related context, Shafiq Arabsh, a professor at the Faculty of Economics at the University of Damascus, indicated that the economy is in a state close to “complete paralysis,” stressing that the labor market in Syria suffers from a major structural defect due to the migration of Syrian workers, and that all productive sectors in Syria produce at a minimum level. .
The decline of the private sector
The private sector in regime-controlled areas is suffering under the weight of the high prices of energy carriers, the high cost of production requirements and the difficulty of providing them, the restrictions imposed on imports, the weak purchasing power of citizens, and the closure of a large number of industrial facilities and factories in the past few years.
Syrian economist Younis Al-Karim attributes the private sector’s reduction in the number of its workers in regime-controlled areas to “low profitability” resulting from a number of factors, most notably:
- The severe weakness in the purchasing power of Syrians (average salaries do not exceed $25).
- Blatant security interference in the economy, and the state forcing businessmen to pay it money to control the collapse of the Syrian pound.
- Production costs have risen to unprecedented levels.
- Decline in import and export activity resulting from government restrictions.
- Restricting businessmen with economic laws that restrict their activities.
- Restricting them and forcing them to sell their property or participate in “warlord” money laundering operations.
- Flooding the market with goods illegally imported by warlords.
Al-Karim confirms in an interview with Al-Jazeera Net that the regime’s continued adoption of these policies will ultimately lead to a sharp contraction in the size of the private sector’s business on the one hand, and on the other hand to the inability of the public sector to provide services, and thus an increase in their costs compared to the average income as a natural result of the disappearance of the competition responsible for prices drop.
This would push the institutions of the Syrian regime to “contract with the outside world” to provide services priced in dollars, which would mean the failure and impotence of all economic plans proposed to improve the living situation in areas under its control, according to the expert.
Rampant unemployment and disguised unemployment
The phenomenon of disguised unemployment is affecting regime-controlled areas at a rate of up to 85%, due to the decline in production levels in various service and industrial sectors, and the employment of a surplus workforce.
Experts believe that disguised unemployment is an expression of a significant decline in the productivity of the workforce, or the failure of this productivity to contribute effectively to the gross product. Disguised unemployment appears when the number of employees exceeds the number necessary to carry out the same job tasks, or when the number of employees is more than what is required to achieve success. Same level of productivity.
Al-Karim points out that this type of unemployment in Syria is concentrated in government sector institutions, as a result of “the public sector employment policy, which accumulates employees who do not provide any services, which would lead to large losses and government deficits, and ultimately lead to the privatization of institutions.” Or offering it to participation due to its low capabilities and inability to meet the needs of citizens.”
He added that this type of unemployment also leads to a decrease in productivity, an increase in bribery and corruption, whether in employment or obtaining services, and to the employment of workers who do not have any experience, which is “another form of militarization.” Soldiers discharged from the regime’s army are often employed in the public sector. Without having the necessary qualifications.
For his part, Abdel Azim Al-Mughrabel, a Syrian economist and researcher at the Jusoor Center for Studies, attributes the reasons for the high unemployment rate in regime-controlled areas to:
- Destruction of industrial and commercial facilities.
- Foreign investments stopped.
- Problems facing the private sector.
- Currency devaluation, high inflation and low wages.
Regarding the impact of unemployment on the economy and individuals, Al-Mughrabel says: “Unemployment increases the state of productive paralysis and stops the wheel of development, which leads to faltering economic activity, followed by an increase in crime rates and societal problems.”
While Al-Maghribal believes – in an interview with Al Jazeera Net – that the spread of disguised unemployment is mainly due to the regime’s government’s attempt to reduce the effects of the unemployment phenomenon by employing employees in the public sector who are not really needed, and to the state of incompatibility between education and institutions, which has created a gap between those searching About work and the actual needs of the labor market.
An ongoing economic and living crisis
According to Al-Mugharbel, the Syrian economy has reached a state of complete paralysis as a result of the deterioration of the industrial sector, weak production, the decline of the agricultural sector, the exit of traders from the markets, and the opening of many sectors for private investments, such as the health sector, education, tobacco, and others.
A recent World Bank report, dated May 24, expected the Syrian economy to continue to contract during the current year by 1.5%, compared to 1.2% in 2023, indicating that more than a quarter of Syrians live in extreme poverty.
While the Assistant Governor of the Central Bank of Syria, Maha Abdel Rahman, announced, in a televised interview on May 20, that the inflation rate had increased by 122% until last April.
Abdel Rahman attributed the high inflation rate to Western sanctions, weak production, the trade balance deficit, and the deficit financing situation to which the government resorts.
Syrians in regime-controlled areas are suffering from the worst living conditions since the beginning of the war in the country about 12 years ago, and about 90% of them have been living below the poverty line since 2021, according to UN reports.
A World Food Program report, last May 23, estimated the number of people suffering from food insecurity in Syria at 12.9 million people, including 3.1 million others who suffer from severe food insecurity.
