Big: Syria deregulates its economy to further rapprochement with Washington

[Hannah Bell]

Porsche, the luxury carmaker, opened its first sales and service centre in Damascus, Syria, last May. It is testimony to the increasing wealth enjoyed by a thin social layer in the last five years that this fiercely protectionist and nationalist regime has sought to integrate into the wider regional economy and improve relations with Washington.

The government of President Bashar al-Assad has partially opened up the banking sector, and Lebanese and Gulf state banks have moved in. It has slashed corporate taxes, import duties and subsidies and lifted restrictions on prices and imports. After more than 40 years, the stock exchange has reopened. As yet, just 12 companies, mainly banks, are traded...

Syria has now achieved observer status at the World Trade Organisation, a step towards full membership, which was only possible due to Egypt’s support and the abandonment by the United States and Israel of their long-standing vetoes against Syria’s bid to join...

The turn to the market and 5 percent annual economic growth in recent years has not brought better living standards for workers and the poor. It has served to increase social inequality in what has always been a grossly unequal society. The vast majority of Syria’s 21 million population have experienced only rising prices—inflation is now running at 15 percent a year—and ever increasing poverty as wages fail to keep up with inflation (see “Growing poverty in Syria”).

http://www.wsws.org/articles/2010/jul2010/syri-j13.shtml


This is a major political shift, I think.

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Growing poverty in Syria

Poverty in Syria has increased significantly in the past five years. The United Nations Human Development’s study of Poverty in Syria 1996-2004 is the most comprehensive statistical report currently available. It found that the wealth gap widened and 11.4 percent of people, or 2.2 million of Syria’s 21 million population, lived in extreme poverty, defined as unable to obtain their basic food and non-food needs, a sum equal to SYP92 or US$2 per capita per day. Syria Today reports that a new United Nations Development Programme report due out shortly states that this figure rose to 12.7 percent in 2007.

A 2007 Central Bureau of Statistics report shows that the number of people living in poverty—those only able to cover a “reasonable amount” of their basic needs—rose from 30.1 percent to 33 percent between 2004 and 2007. But since 2007, the situation has deteriorated sharply. The property real estate boom and the removal of some of the subsidies have increased the cost of living.

The turn to the market and inward investment has led to few new decent-paying jobs, while the lifting of trade restrictions has increased imports and led to a fall in exports to Turkey and other countries, forcing small traders and services out of business. Unemployment is officially about 8 percent, but unofficial estimates put it at about 20 percent, with many more under-employed...

Forty percent of Syria’s population live in illegal housing, homes or extensions built without planning permission. In Damascus, up to 50 percent of buildings have been constructed illegally. But without legal entitlement to their homes, families find themselves excluded from numerous social and financial services.