As Commodity Prices Soar, the Income Gap Rips at Society’s Middle

Photo: The cost of many basic foods, like at this market in Amman, has doubled. Some in the middle class are tilting toward poverty.

The Middle East is being hit with high rates of inflation caused by sky rocketing prices for primary commodities and basic food stuffs, high unemployment, and the dismantling of age old subsidies. Many Arab countries have been pulling the plug on food and energy subsidies for decades.

Syrians are facing a double whammy – radical hikes in food and petrol prices combined with slashes in state subsidies.

In Lebanon, prices have risen by 43 percent over the past 21 months while the official unemployment rate stands at 10 percent, although independent estimates put it at 20 percent.

In Egypt, "food prices rose by up to 50 percent, a hard blow to the poor, who spend a higher proportion of their incomes on foodstuffs." writes Reuters. Consumer prices rose 14.4 percent in the year to March, the highest inflation rate in more than three years. Mubarak responded on Wednesday by proposing a 30 percent increase in basic public-sector salaries, which start at about 300 pounds ($56) a month. He told his government to find the extra revenue to cover the extra cost. Police are stationed heavily about the city to prevent the sort of protests that rocked the city in April.

In Jordan, security forces recently arrested three activists for distributing leaflets calling for a general strike to protest food prices and government policies that fail to help the poor, activists said on Sunday. Jordan's government has enforced steep fuel price rises and the cost of everything from bread to apartments has soared, hitting many people hard. Activists say the authorities have in recent weeks refused permission to allow any public protests against the price hikes. 

Robert Worth of the NYTimes recently wrote and interesting analysis of the regional tensions stemming from run away inflation.

Even as it enriches Arab rulers, the recent oil-price boom is helping to fuel an extraordinary rise in the cost of food and other basic goods that is squeezing this region’s middle class and setting off strikes, demonstrations and occasional riots from Morocco to the Persian Gulf.

Many in Jordan are feeling the squeeze of higher prices. At a mall in Amman, the empty aisles reflect people’s inability to spend.

Here in Jordan, the cost of maintaining fuel subsidies amid the surge in prices forced the government to remove almost all the subsidies this month, sending the price of some fuels up 76 percent overnight. In a devastating domino effect, the cost of basic foods like eggs, potatoes and cucumbers doubled or more.

In Saudi Arabia, where inflation had been virtually zero for a decade, it recently reached an official level of 6.5 percent, though unofficial estimates put it much higher. Public protests and boycotts have followed, and 19 prominent clerics posted an unusual statement on the Internet in December warning of a crisis that would cause “theft, cheating, armed robbery and resentment between rich and poor.”

The inflation has many causes, from rising global demand for commodities to the monetary constraints of currencies pegged to the weakening American dollar. But one cause is the skyrocketing price of oil itself, which has quadrupled since 2002. It is helping push many ordinary people toward poverty even as it stimulates a new surge of economic growth in the gulf.

The Middle East’s heavy reliance on food imports has made it especially vulnerable to the global rise in commodity prices over the past year, said George T. Abed, the former governor of the Palestine Monetary Authority and a director at the Institute of International Finance, an organization based in Washington.

Corruption, inefficiency and monopolistic economies worsen the impact, as government officials or business owners artificially inflate prices or take a cut of such increases.

“For many basic products, we don’t have free market prices, we have monopoly prices,” said Samer Tawil, a former minister of national economy in Jordan. “Oil, cement, rice, meat, sugar: these are all imported almost exclusively by one importer each here. Corruption is one thing when it’s about building a road, but when it affects my food, that’s different.”

In the oil-producing gulf countries, governments that are flush with oil money can soften the blow by spending more. The United Arab Emirates increased the salaries of public sector employees by 70 percent this month; Oman raised them 43 percent. Saudi Arabia also raised wages and increased subsidies on some foods. Bahrain set up a $100 million fund to be distributed this year to people most affected by rising prices. But all this government spending has the unfortunate side effect of worsening inflation, economists say. Countries with less oil to sell do not have the same options.

In Syria, where oil production is drying up, prices have also risen sharply. Although it has begun to liberalize its rigid socialist economy, the government has repeatedly put off plans to eliminate the subsidies that keep prices artificially low for its citizens, fearing domestic reprisals.

Even so, the inflation of the past few months has taken a toll on all but the rich.

Thou al-Fakar Hammad, an employee in the contracts office of the Syrian state oil company, has a law degree and earns just less than 15,000 Syrian pounds, or $293, a month, twice the average national wage. His salary was once more than adequate, and until recently he sent half of it to his parents.

But rising prices have changed all that, he said. Now he has taken a second job teaching Arabic on weekends to help support his wife and young child. Unable to buy a car, he takes public buses from his two-room apartment just outside Damascus to work. He can afford the better quality diapers for his son to wear only at night and resorts to cheaper ones during the day. He cannot send anything to his parents.

“I have to live day to day,” he said. “I can’t budget for everything because, should my child get sick, I’d spend a lot of what I earn on medication for him.”

At the same time, a new class of entrepreneurs, most of them with links to the government, has built gaudy mansions and helped transform Damascus, the Syrian capital, with glamorous new restaurants and cafes. That has helped fuel a perception of corruption and unfairness, analysts say. On Wednesday the state-owned newspaper Al Thawra published a poll that found that 450 of 452 Syrians believed that their state institutions were riddled with corruption.

“Many people believe that most of the government’s economic policies are adopted to suit the interests of the newly emerging Syrian aristocracy, while disregarding the interests of the poor and lower middle class,” said Marwan al-Kabalan, a political science professor at Damascus University.

The same attitudes are visible in Jordan. Even before the subsidies on fuel were removed this month, inflation had badly eroded the average family’s earning power over the past five years, said Mr. Tawil, the former economic minister. Although the official inflation rate for 2007 was 5.4 percent, government studies have shown that middle-income families are spending far more on food and consuming less, he added. Last year a survey by the Economist Intelligence Unit found that Amman was the most expensive Arab capital in cost of living.

Mr. Abdul Raheem, the clothing store employee in Amman, said, “No one can be in the government now and be clean.”

Meanwhile, his own life has been transformed, Mr. Abdul Raheem said. He ticked off a list of prices: potatoes have jumped to about 76 cents a pound from 32 cents. A carton of 30 eggs went to nearly $4.25 from just above $2; cucumbers rose to 58 cents a pound from about 22. All this in a matter of weeks.

“These were always the basics,” he said. “Now they’re luxuries.”

Syria: Public sector salaries up by 25 percent
Posted: 04-05-2008 , 07:48 GMT

Syrian President Bashar al-Assad on Saturday issued a decree, stipulating a raise of 25 percent to the monthly salaries and wages for the civil and military workers of the state ministries, administrations, public establishments, companies of the public sector, municipalities, popular work, the permanently confiscated companies and private schools and similar public sector bodies. According to SANA, the Syrian leader also ordered a raise of 25 percent to the pensions of the retired civilians and military veterans.

The news agency quoted Syria's Finance Minister Mohammed al-Hussein as saying that more than two million people will be affected by the increases which will be effective from May. Syria's state employees earn an average monthly salary equivalent to US$175.

According to AFP, Assad's decision to raise salaries came as sources in Syria reported the price of heating oil had climbed by 340 percent per litre on Saturday. Over the past week the price of foodstuff including vegetables, meat, milk, cereals and cooking oil has grown by 30-60 percent, prompting the government to stop the import of certain cereals including lentils and bulgar wheat

The Syrian government more than tripled the price of gas oil on Saturday, kicking off a program to remove big subsidies on the fuel.
Khalid Oweis, Reuters

Pump owners said a liter of gas oil went up to the equivalent of 54 U.S. cents from 15 cents. The state imports large volumes of the fuel at around $1 liter.

An official in the ruling Baath party told Reuters last month that preparations were under way for the gradual removal of gas oil subsidies, which cost the treasury $9 billion a year.

Gas oil is used in Syria on a large scale for industry, transport and heating.

The gas oil price increase came as the government announced a 25 percent hike in public sector salaries to help the population absorb rising living costs and the impact of subsidy cuts.

The increase, which will take effect this month, covers 2 million public workers and retirees, the state news agency said. Syria has a population of 18 million.

The government has taken limited steps to liberalize the economy and lower subsidies in recent years to counter U.S.-led efforts to isolate Syria and the impact of falling production of crude oil, the main source of hard currency.

Petrol prices went up sharply in the last two years to 87 U.S. cents a liter.

Syria's top cellphone firm posts 29 pct profit rise
Sun May 4, 2008 by Khaled Yacoub Oweis

DAMASCUS, May 4 (Reuters) – Net profit at Syria's largest mobile phone operator Syriatel rose 29 percent in 2007 to 6.67 billion Syrian pounds ($150.2 million) compared to the year earlier, according to annual results published on Sunday.

An increase in customers and an expansion of services were behind the improvement, said Syriatel, which is negotiating to be taken over by Turkish counterpart Turkcell TCELL.IS(TKC.N: Quote, Profile, Research).

Revenue rose 24 percent over the same period to 39.4 billion pounds ($856.5 million) and subscribers rose 33 percent to 3.34 million, comprising 55 percent of the Syrian market.

Network Capacity rose by 1.4 million lines to 4.7 million and infrastructure for an advanced 3G broadband Internet service was set up but the lack of government approval has delayed full launch of the service, the company said.

"The service will increase our customers and solve the Internet bottleneck problems of Syria," Syriatel said in an advert in local newspapers.

Syriatel is at least 69 percent owned by Rami Makhlouf, who is the target of U.S. sanctions imposed on him in February as part of a U.S.-led campaign to isolate the Baath Party-led government in Damascus.

Gulf shareholders own a minority share of Syriatel, which has a 10 percent stake in a Yemeni mobile operator with 120,000 subscribers.

Makhlouf, the cousin of President Bashar al-Assad and Syriatel's chairman, is negotiating to sell most of his share to Turkcell for an estimated price of around $1 billion.

Diplomats and financiers told Reuters this week that he United States was putting pressure on Turkcell to abandon the takover.

The U.S.Treasury Department has warned American investors in Turkcell, which is listed in Istanbul and New York, about the company's plan to buy Syriatel, they said.

Turkcell denied on Thursday there was U.S. pressure on the company to scrap the deal and said that the talks with Syriatel were continuing. Turkcell had expected the negotiations to conclude in March.

The Treasury Department has designated Makhlouf "a regime insider whom improperly benefits from and aids the public corruption of Syrian regime officials." The move was made under an expansion of the sanctions announced in an executive order by President George W. Bush on Feb. 13.

The order freezes any assets Makhlouf holds under U.S. jurisdiction and forbids American citizens or entities from doing business with him. Makhlouf, 39, has denied the U.S. charges. He said he did not have assets in the United States and his businesses were legitimate.

The propane cylinder is up to 250 Syrian pounds from 145.

Rice Says Mideast Peace Deal Achievable but Henry Siegman, writing in the Nation, exclaims:

It is hard to believe that after the long string of failed peace initiatives, stretching back at least to the Madrid conference of 1991, diplomats are recycling these failures without seemingly having a clue as to why the Israeli-Palestinian conflict is even more hopeless today than before these peace exercises first got under way. The scandal of the international community's impotence in resolving one of history's longest bloodlettings is that it knows what the problem is but does not have the courage to speak the truth, much less deal with it. …

There is no prospect for a viable, sovereign Palestinian state, primarily because Israel's various governments, from 1967 until today, have never had the intention of allowing such a state to come into being. It would be one thing if Israeli governments had insisted on delaying a Palestinian state until certain security concerns had been dealt with. But no government serious about a two-state solution to the conflict would have pursued, without letup, the theft and fragmentation of Palestinian lands, which even a child understands makes Palestinian statehood impossible. …

 

 

Comments (268)


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251. Naji said:

…And on Gibran’s 125th B-day…!!!!!!??

الحكومة اللبنانيّة تشكو المقاومة في الأمم المتحدة
نيويورك ـ نزار عبود
http://www.al-akhbar.com/ar/node/72651
أبلغت الحكومة اللبنانية دوائر الأمم المتحدة بأنها تعدّ تقريراً عن شبكة اتصالات المقاومة وعن الوضع في مطار بيروت الدولي، لعرضه على مجلس الأمن قبيل انعقاد جلسته المتعلقة بتقرير الأمين العام بشأن القرار 1559 في 8 أيار الحالي. ومن المتوقع أن يتضمن التقرير معلومات تفصيلية عن كل ما توصلت إليه الاستخبارات اللبنانية عن شبكة الاتصالات، وكذلك معلومات تؤكدأن مطار رفيق الحريري ليس آمناً. وبناءً على ذلك، ستوصي بوضع رقابة دولية عليه.
وأكد فرحان الحق ذلك لـ«الأخبار»، أمس، وهو المتحدث الرسمي باسم الأمين العام للأمم المتحدة بان كي مون. وأضاف: «تلقّينا إشعاراً من الحكومة اللبنانية بأنها سترسل تقريراً عن شبكة الاتصالات التي سمعنا عنها، وعن الوضع في مطار بيروت الدولي، ونحن ننتظر ذلك».
ونفى أن تكون الأمم المتحدة قد طلبت التقرير. كما رفض تحديد كيفية اتصال الحكومة اللبنانية بالمنظمة الدولية، شفهياً أو خطياً.
لكن «الأخبار» علمت من مصادر مطّلعة أن مندوب لبنان الدائم لدى الأمم المتحدة، نواف سلام، هو من بادر إلى الاتصال بمكتب الأمين العام وبرئيس مجلس الأمن الحالي، مندوب بريطانيا جون ساوورز، وأبلغهما بالأمر. كذلك، فإن وزير الثقافة اللبناني، طارق متري، الذي يزور نيويورك حالياً لإحياء الذكرى 125 لولادة الشاعر جبران خليل جبران، يشارك في الاتصالات لهذه الغاية.

عدد الثلاثاء ٦ أيار ٢٠٠٨

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May 6th, 2008, 9:34 am

 

252. Naji said:

شروط دعم المقاومة
خالد صاغيّة
http://www.al-akhbar.com/ar/node/72627
تتبنّى الحكومة الحالية، بحسب بيانها الوزاري، دعم المقاومة. لكنّ البيان، كأيّ نص آخر، يمكن أن يخضع لتفسيرات وتأويلات مختلفة. وهي تفسيرات يتولّاها حالياً رئيس الحكومة فؤاد السنيورة ووزير الشباب والرياضة في مرجعيون وضواحيها أحمد فتفت. ووفق أحدث هذه التأويلات، تدعم الحكومة المقاومة لكن بشروط، منها:
1ــــ ألّا يُجري عناصر المقاومة أيّ اتصال في ما بينهم من دون أن يخضع للتنصّت من جانب السيّد ميشال معوّض الذي يودّ متابعة تفاصيل نقاشات المقاومين، تمهيداً لمشاركته في قرار السلم والحرب.
2ــــ أن يتخلّى حزب اللّه عن ترسانة الصواريخ التي يملكها، ويستبدلها بالمنجنيق.
3ــــ أن يُخطر السيّد حسن نصر اللّه قوى الأمن الداخلي بمكان وجوده أوّلاً بأوّل، وأن يوعز مدير هذه القوى بفصل عنصرين من شرطة السير لحماية الأمين العام لحزب اللّه.
4ــــ أن تُحصر المربّعات الأمنية داخل بيروت وضواحيها بمربّعَيْ قريطم وكليمنصو.
5ــــ ألا تقدم المقاومة على أي عمل عسكري قبل استئذان عمّار حوري.
6ــــ أن يشرف قائد القوات اللبنانية سابقاً، ورئيس هيئتها التنفيذية حالياً، السيّد سمير جعجع على تدريبات المقاومين، يعاونه غسّان توما.
7ــــ أن تمرّ كلّ المساعدات للمقاومة عبر رئاسة مجلس الوزراء، لينال كل من الوزراء حصّته.
8ــــ أن يُطرد السفير الإيراني من جمهوريّة المختارة.

عدد الثلاثاء ٦ أيار ٢٠٠٨

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May 6th, 2008, 9:39 am

 

253. Shai said:

A very interesting article in Ha’aretz, about the need for Israelis to start listening to the suffering of the Palestinians:
http://www.haaretz.com/hasen/spages/981037.html

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May 6th, 2008, 9:44 am

 

254. Qifa Nabki said:

This is good news:

Pro-, Anti-Government MPs Adopt Butros’ Electoral Law
Pro-government MP Ghassan Tueni and opposition MP Ghassan Mkheiber have adopted what has been known as the “Butros Draft Electoral Law” as a formal proposal for the 2009 parliamentary elections.
At a joint press conference on Monday, Tueni and Mkheiber said they had referred the draft law to Parliament Speaker Nabih Berri.

Berri, in turn, referred the draft law to a special committee for examination.

Addressing Berri in a letter read at the conference, Tueni said the decision to adopt the law was made after “it has become essential to propose some sort of electoral framework.”

The Butros Law was named after national electoral law commission head Fouad Butros.

Tueni uncovered that head of Parliament’s Justice Committee Robert Ghanem was going to summon committee members to study the draft law.

He denied that MPs from the ruling March 14 coalition were boycotting any parliamentary committee meetings.

Mkheiber, for his part, stated the reasons behind his and Tueni’s endorsement of the new framework.

Mkheiber, an MP from Gen. Michel Aoun’s Change and Reform Bloc, said that he and Tueni submitted the Butros Law for immediate consideration by the appropriate parliamentary committees “since there appears to be a consensus regarding the adoption of an electoral law so as to avoid a return to the (2000 framework).”

Beirut, 06 May 08, 10:43

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May 6th, 2008, 11:09 am

 

255. Qifa Nabki said:

AIG

I think the government is making a mistake.

They’re going back to the kind of politics that got us into this mess, namely trying to find the other side’s weak spot and exploiting it. In this case, the weak spot is its Christian support. The government is trying to capitalize on the defection of Murr to draw even more Christian supporters away from the Change & Reform Bloc by scare-mongering about Hizbullah’s phone network “which extends even into Jbeil and Kesrouan.”

This is pure, cynical politics, which is nothing new. But we’ve seen that it hasn’t worked, so they should have figured it out by now.

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May 6th, 2008, 11:14 am

 

256. Naji said:

QN,
There has always been consencus about the Boutrous electoral law and districting… in fact it was created by consencus… and every time somebody, from either side, proposes a new law or scheme, he always starts by declaring support for the Boutrous law…!! Welcome to Lebanese politics…! 😉

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May 6th, 2008, 11:16 am

 

257. Akbar Palace said:

The Neocon chorus is singing loud these days.

Alex –

No one is singing as loud as the jihadists from Gaza, South Lebanon and Tehran.

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May 6th, 2008, 11:26 am

 

258. ugarit said:

EHSANI2: “Syria can of course reduce the financial blow by continuing to subsidize the commodities that experienced the largest jump in price. Doing so, however, means more red ink for its fiscal books.

Given the sizable public sector and the red ink already on the books, offering more subsidies at present makes little sense.”

Do you realize how offensive your statement is about the people in Syria? Avoiding red-ink is more important than reducing people’s suffering!!! How could you?

Neo-liberal supply side economists are peddling voodoo economics.

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May 6th, 2008, 1:31 pm

 

259. ugarit said:

AIG “Mearseheimer has some nerve. Benny Morris is the foremost expert in the world about the 48 war.”

Benny Morris is an apologist for the ethnic cleansing of Palestine. The expert is Ilan Pappe. I recommend that you read his “The Ethnic Cleansing of Palestine”

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May 6th, 2008, 1:50 pm

 

260. Welcome | Project on Middle East Democracy said:

[…] In a discussion of the effect of such economic woes like food prices and rising inflation, Joshua Landis finds the middle class in the Middle East increasingly “tilted toward poverty.” Landis looks at Syria, where both a rise in food and oil prices is coupled with a decrease in state subsidies, Jordan, Egypt, and Saudi Arabia. […]

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May 6th, 2008, 1:51 pm

 

261. norman said:

Ugarit ,

I am not Ehsani, but don’t you think Syria would be better off subsidising poor people instead of subsidising products , food stamps for low income families is better than subsidising the poor and the rich at the same level with this plan that they have and had for many years.

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May 6th, 2008, 1:59 pm

 

262. Alex said:

http://www.champress.net/?page=show_det&select_page=14&id=26134

Syria’s prime minister says that the cost of the 25% increase in salaries is about $1.25 billion per year and that Syria’s reserves are sufficient to allow the government to protect Syria’s economy from regional and international challenges (or developments) for generations to come. He also mentioned that Syria is among the least indebted nations in the area and that the Syrian currency has held its value well.

أكد رئيس مجلس الوزراء المهندس محمد ناجي عطري أنّ تحريك أسعار المشتقات النفطية عبر رفع سعر مادة المازوت لـ 25 ليرة لليتر الواحد و 250 ليرة لأسطوانة الغاز المنزلي ستصب نتائجه في دعم المستوى المعيشي للمواطنين من خلال إعادة توزيع الدعم الحكومي ليصل لمستحقيه الحقيقيين .
و خلال لقائه مساء أمس مع ممثلي المؤسسات الإعلامية بحضور نائب رئيس مجلس الوزراء للشؤون الاقتصادية ووزراء المالية و الزراعة و الاقتصاد و العمل والإعلام والداخلية والنقل والنفط ، شدد عطري على أنّ مادة الخبز هي خط أحمر وأسعارها لن تتغير مطلقاً، كما أن الحكومة ليس لديها رؤى اليوم ولا غداً لرفع أسعار مادة البنزين .
و لفت عطري إلى أنّ زيادة الرواتب والأجور بنسبة 25 بالمئة التي أصدرها الرئيس بشار الأسد شملت أكثر من 1ر5 ملايين من العاملين في القطاع العام والقطاع الخاص والمشترك والمتقاعدين. وأوضح أن تكلفة هذه الزيادة تبلغ 58 مليار ليرة سورية وتصل إلى حدود سبعين مليار ليرة إذا أضيفت التعويضات الأخرى التي يتقاضاها العاملون في الدولة بموجب هذه الزيادة الغير مسبوقة التي لم تمر على رئيس الوزراء كما قال منذ عقود ، وهي كانت زيادة طبيعية وليست زيادة لمواجهة حالة طارئة .
و قال عطري أنّ الاقتصاد السوري قوي ومتين لافتاً الى نقاط قوته المتمثلة بأن سورية من أقل الدول مديونية في المنطقة وأن الاحتياطي الذي تملكه يكفيها لأجيال قادمة بما يكفل دعم هذا الاقتصاد في مواجهة المتغيرات الدولية والإقليمية فضلاً عن صمود الليرة السورية أمام هذه المتغيرات.‏‏

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May 6th, 2008, 2:45 pm

 

263. norman said:

Israel confirms secret contacts with Syria
Posted : Tue, 06 May 2008 11:54:05 GMT
Author : DPA
Category : Middle East (World)
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Tel Aviv – Israeli Defence Minister Ehud Barak confirmed Tuesday that Israel has been holding secret contacts with Syria with a view to resuming peace negotiations. Barak confirmed Israel had been exchanging messages with Syria via foreign mediators and said this was done with his knowledge.

“Israel has an interest in removing Syria from the circle of hostility, and every (Israeli) prime minister, from the right or the left, of the past 15 years wanted this,” Barak told Israel Radio.

“All the messages are with my and our knowledge,” Barak said.

He did not comment on Turkey’s reported role as mediator.

Both Turkish Prime Minster Recep Tayyip Erdogan and Syrian President Bashar al-Assad had said separately late last month that Turkey had been mediating between the two enemy states about a possible resumption of peace negotiations. Israel had not yet commented.

Erdogan had been in Damascus late month, reportedly to discuss the issue.

Al-Assad had told a Qatar-based newspaper almost two weeks go that Syria and Israel had been exchanging messages through Erdogan since April 2007.

“Mediation efforts between Damascus and Tel Aviv intensified mainly after the war on Lebanon in summer 2006,” al-Assad told al- Watan in the April 24 interview.

Al-Assad also claimed that Erdogan had told him Israel was ready to withdraw from the Golan Heights in return for peace with Israel.

He said the sides were first trying to find “common ground” through the Turkish mediator, but that there would be no secret peace talks with Israel and that if the talks were revived, they would be held in public through Turkey’s mediation.

Israel captured the Golan from Syria during the 1967 Arab-Israeli war.

Peace negotiations between Israel and Syria broke off in 2000, when Barak, then prime minister on behalf of the centre-left Labour Party, offered to withdraw from most of the strategic plateau, but wanted to keep a buffer strip along the Sea of Galilee’s eastern shore, at the foot of the Golan. Syria rejected the offer.

Israeli media have reported that in its messages to Syria, Israel asked Damascus whether in return for peace, it would be willing to distance itself from Iran, Lebanon’s Shiite militant Hezbollah movement, and the Palestinian Hamas.

Copyright, respective author or news agency

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May 6th, 2008, 4:03 pm

 

264. SimoHurtta said:

Ugarit ,

I am not Ehsani, but don’t you think Syria would be better off subsidising poor people instead of subsidising products , food stamps for low income families is better than subsidising the poor and the rich at the same level with this plan that they have and had for many years.

I have worked in the past as an industrial economist in a bank so I could express my modest opinion about the subject.

Actually subsidising necessity prices is much more cheaper for the government than running a wast organization and bureaucracy to to evaluate those in need and for dividing the money. In underdeveloped countries also this social benefit distribution system is much more vulnerable for corruption than a price regulated “social” system.

Naturally there is a limit how much a country can regulate prices and pay real money for the producers to keep the prices artificially low. However price regulation with basic necessities was widely used in West European countries until 80’s when the inflation was much higher than it has been during the past decades.

Basically the system works so that the government demands that grain is sold with a fixed price and bakers are demanded to sell the bread with a fixed price. That doesn’t cost the government basically anything. The theoretical losses for the national economy is the difference if the grain would be sold by world market prices out of the country – fixed price and for the government the loss of the hypothetical taxes of that business.

The IGs should remember that also Israel uses price regulation. Even today. Bakeries to demand another raise in bread prices.

The biggest newspaper in Finland, Helsingin Sanomat, had a story with an hilarious picture about how in USA in gasoline stations are held prayer sessions asking God to reduce the gasoline prices. One Church PR person said in the article that we have to ask help from God because the government is not doing anything. When the economical situation in USA worsens, which it with high certainty does, the government has to begin to use price regulation.

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May 6th, 2008, 4:45 pm

 

265. norman said:

Simo,

Don’t you think that if the Government subsidise products then these products will find their way to neighbouring country where there is no subsidy so practically Syria and the Syrian people will be subsidising Lebanon , Jordon and Iraq and possibly Turkey so that will not improve Syria’s difficit .

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May 6th, 2008, 5:28 pm

 

266. Alex said:

AIG,

He is by now the type of character what you get when you live in the west and interact often with NGOs and Democracy Think tnaks ..etc.

But if you are expecting him to be “elected” in Syria .. then it won’t happen. The real brotherhood did not go through the same transformation that their exiled leader went through.

BBC MidEast: Al-Arabiya Interviews Syrian Muslim Brotherhood
2008-05-06 11:53 (New York)

Dubai Al-Arabiya Television in Arabic at 2010 gmt on 2 May interviewed
in its “Frankly Speaking” programme London-based Ali Sadr-al-Din al-
Bayanuni, controller general of Syria’s Muslim Brotherhood.

Syrian regime “lost justification for existence”

Al-Bayanuni said that “this [Syrian] regime has lost the justification
for its existence and continuation as it has already lost its
legitimacy.” He adds that this is how the Syrian people view the
situation, emphasizing that “foreign parties, however, might have a
different view that matches their own interests.” He says that “Israel
believes that this regime should continue to exist while the USA has a
different opinion, but we in Syria, as the Syrian people, opposition,
and Muslim Brotherhood, believe that the mainstays of this regime
still exist and that this regime continues to rule using violence,
terrorism and coercion”.

He added that “the Syrian regime lost its legitimacy when it came to
power by force,” and that “it is assuming power now according to the
emergency law and based on an article of the [Syrian] constitution
that was imposed on Syria, which states that “the Ba’th Party is the
leading party for the state and society”; in other words, they have
imposed themselves on the society, state, economy, and politics.” He
added that “it is true that they are assuming power in the name of the
Ba’ath Party, but what we really know is that those who are in power
are a group of families who are dominating the fate of the Syrian
people.” He explains that the Syrian people are aware of this fact and
that the regime is illegitimate and is susceptible to collapse,
emphasizing that “the Syrian people are actively working to change
this regime in the wake of their total despair of correcting it”.

1980s Crackdown

Al-Bayanuni said that the Muslim Brotherhood did not have a “military
wing” and that the Syrian regime is held responsible for the bloody
events of the 1980s “when it provoked the entire population, not only
the Islamists”. He adds that there was a popular uprising at the time
“when the people felt they had reached a dead-end and were cornered,”
explaining that not only had the Muslim Brotherhood participated in
this uprising, but also professional unions, educated people and all
“categories of society”.

He said that the regime fabricated these events in order to cover up
its attack on the Muslim Brotherhood. He explained that “since its
inception in 1945, the Muslim Brotherhood has been well known for its
clear history of political participation. Its members participated in
the successive parliaments and governments and were an essential part
of political life in Syria by means of democratic action.” He
emphasizes that “the Muslim Brotherhood adopts a political project
that is based on serving and defending the Syrian people and country.”
He added: “Our political programme, which we launched a few years ago,
titled ‘the Political Project for Syria’s Future’ calls for freedom,
democracy, diversity, multiplicity, peaceful rotation of power and the
principle of citizenship for all citizens”.

Muslim Brotherhood “moderate”

Concerning popular support for the current regime, Al-Bayanuni said
that “such support normally shows in an atmosphere of freedom in which
the Syrian people can express their opinion,” adding that the number
of Muslim Brotherhood members in the last parliament, prior to the 8
March 1963 coup, was higher than the number of Ba’th Party members. He
said: “If the Muslim Brotherhood does not enjoy popular support, then
why has the Syrian regime been fiercely fighting its members?” He
added that President Bashar al-Asad considers the Muslim Brotherhood a
top danger that should be eradicated, as his father did years ago,
pointing to the law [ known as Law 49] was issued in 1980 that
levelled capital punishment against the Muslim Brotherhood members. He
added: “The Muslim Brotherhood members do not have any special
ideology, but they adopt moderate Islamic thoughts far away from
fanaticism and extremism. The Syrian people in general are religious
and characterized by moderation. There is a large Islamic trend in
Syria that adopts this moderate course, whose members do not belong to
the Muslim Brotherhood, but we, as Muslim Brotherhood members,
consider ourselves part of this wide popular trend, which adopts this
moderate thought.”

Muslim Brotherhood’s Syria “to be based on rotation of power”

Asked whether the Syrian state would become a religious, mainly Sunni,
regime rather than a secular regime, if the Muslim Brotherhood were to
assume power in Syria, Al-Bayanuni says: “In our declared and aspired
political project and within our political alliances, including the
Damascus Declaration and the National Salvation Front, we emphasize
that our target is the establishment of a civil state that is founded
on institutions, justice, equality, multiplicity and peaceful rotation
of power, particularly that the Muslim Brotherhood’s acceptance of a
democratic rule is not something new.” Nakuzi notes that this conforms
to the US project in the region. Al-Bayanuni says that the US project
in the region is not a democratic one; rather, it reflects a project
of the US interests, explaining that the principles mentioned above
are Islamic values before being democratic values. He says that “there
is no contradiction between present democracy and Islam,” emphasizing
that the democratic regime is the closest regime to the Islamic rule.
Asked what will be the fate of other sects in Syria, if an Islamic
regime comes to power, Al-Bayanuni said that, based on the principle
of citizenship, all citizens are equal, regardless of their sectarian,
ethnic, religious, or political affiliations, noting that the Syrian
opposition includes members of all sects.

Al-Bayanuni said that the Syrian regime has been postponing the issues
of freedom and democracy until this liberation takes place, which we
do not know when, adding that “the Syrian regime, which appears to be
an opposing and resisting force, as it used to call itself ‘the
country of steadfastness and confrontation’ is in fact, as everybody
inside and outside Syria knows, very far from steadfastness,
confrontation, opposition, and resistance”.

He said that the Golan Heights front, which remained calm since its
occupation in 1967, is a proof, adding that “the Syrian regime is
concerned about resistance only in order to employ it in implementing
its political designs; it is concerned about resistance in Lebanon and
about liberating the Shiba Farms [Lebanese territory occupied by
Israel], but it is not concerned about liberating the Golan.” He added
that the Syrian people are well aware of this fact and how “on the
pretext of resistance, steadfastness, opposition, and foreign
pressures it postpones all reforms.” He says that the Syrian regime
behaves with a bighearted spirit when Israel raids Syrian territories,
but “tightens its grip and uses its military force against the Syrian
people.” He added: “Any observer of the Syrian situation, the Syrian
front, the Syrian-Israeli ties, and the open and clandestine contacts
between Syria and Israel can realize that the discourse on opposition,
resistance, steadfastness and confrontation is void and an attempt to
outbid other Arab states.”

Continuing, Al-Bayanuni notes that Israel’s concern about keeping the
Syrian regime in existence and about breaking its isolation,
particularly in the wake of recent Israeli readiness to withdraw from
the Golan in return for peace with Syria, falls within rewarding the
Syrian regime for its peaceful policy towards Israel. He adds: “Israel
prefers to have a weak regime that is susceptible to blackmail and
pressures rather than a national regime that might come to power.” He
says that when a democratic regime assumes power in Syria, no deals
will be concluded with Israel. He wonders who has designated the
Syrian regime to sign a peace agreement with Israel and whether the
Syrian Government or regime has the legitimacy to negotiate with
Israel on behalf of the Syrian people.

Alliance with defecting former Syrian vice-president

Asked to explain how the Muslim Brotherhood is allying now with a
former Ba’thist; namely former Syrian Vice President Abd-al-Halim
Khaddam. Al-Bayanuni explains that the Damascus Declaration allows the
Syrian regime figures to interact with the Syrian opposition,
emphasizing that “we do not antagonize the Ba’th Party because of its
being a political party, but we stand against the coercion and
terrorism exercised by the Syrian regime against the Syrian people”.
He explains that the Muslim Brotherhood has allied itself with
numerous opposition parties, including Ba’ath defectors, and that
Khaddam left the regime, took the side of the Syrian people and became
part of the Syrian opposition.

Asked whether the Muslim Brotherhood is cooperating with the USA to
topple the Syrian regime, Al-Bayanuni said: “The Syrian opposition
focuses on and adopts the method of internal change by Syrian hands.
It does not approve any aggression on Syria on the pretext of changing
the regime, as what happened in Iraq. It rejects any interference in
Syrian domestic affairs. It calls for peaceful and democratic change
that would be carried out by Syrian hands.”

He adds that what the opposition needs from the world community is to
expose the Syrian regime; particularly since it is being protected in
the Arab and international arenas, explaining that “toppling this
regime is considered a red line by these countries and Israel.” He
said that when this cover is removed, “many elements within and
outside the regime will then be ready to begin the change process”.

USA dialogue

Asked whether the Muslim Brotherhood has been engaged in any dialogue
with theUSA, Al-Bayanuni denied that there had been any direct
negotiations, adding that the National Salvation Front held a number
of meetings with US officials in Washington to explain its project.
Concerning US support, he said that Washington does not support the
movement and that the Syrian opposition has a national programme that
contradicted the US interests. He said that “the Syrian regime is
supported by Israel and international forces and is pinning much hope
on settling its status with these international forces”.

Iran ties

Asked what type of relations their aspired regime would have with
Iran, Al-Bayanuni explained that Iran was actively infiltrating into
the Syrian society to convert Sunnis to Shi’is, with the Syrian
regime’s support, utilizing the poverty of some groups of the Syrian
people. He warned of future “sectarian sedition” if matters continued
to move in this direction. He added that Iran had great economic,
political, security, and military influence on Syria, noting that “the
Syrian regime has isolated itself from its Arab surroundings and
embraced Iran” to a great extent that exceeded the alliance that tied
the two countries together a number of years ago.

Syria “involved” in killing of Lebanon’s Al-Hariri

Asked whether the Muslim Brotherhood believed that the Syrian regime
had actually killed former Lebanese Prime Minister Rafiq al- Hariri,
Al-Bayanuni said that those who were aware of the Syrian crimes in
Lebanon would definitely believe so, adding that the method by which
the Syrian regime handled Al-Hariri’s assassination indicated that it
was involved in the crime. He added that investigation and the
International Tribunal would confirm this assumption, wondering “if
the Syrian regime were innocent, why would it have hampered holding
the international tribunal?”

Israel ties and support for Hezbollah

Asked whether the Muslim Brotherhood project called for destroying or
coexisting with Israel, Al-Bayanuni said: “Our political project is a
civilized one, and if we adopt the course of resistance, it is because
it is a legal right by all peoples whose territories have been
occupied.”

Concerning his support for Hezbollah’s resistance, he said that they
supported the Lebanese resistance when it was real resistance against
occupation, “but now, since Hezbollah has stopped being a resistance
party and turned into a party that is engaged in the Lebanese conflict
on sectarian basis, obstructs normal life and the formation of the
international tribunal and insists on the continuation of the
constitutional and presidential vacuum in Lebanon, we are certainly
against these stands”. As for the destruction of Israel, he said that
their project called on Israel “to implement international legitimacy
and withdraw from the territories that it had occupied”.

Originally published by Al-Arabiya TV, Dubai, in Arabic 2008 2 May 08.

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May 6th, 2008, 6:37 pm

 

267. SimoHurtta said:


Simo,

Don’t you think that if the Government subsidise products then these products will find their way to neighbouring country where there is no subsidy so practically Syria and the Syrian people will be subsidising Lebanon , Jordon and Iraq and possibly Turkey so that will not improve Syria’s difficit.

Of course a tiny part finds the way out of the country. But most of the bread, wheat, rice, gasoline etc is used domestically. But so they would if there are big value added or other taxes or price difference because of competition, or the lack of it in one, between countries. We Finns buy alcohol from Estonia where it is cheaper (less taxes) and Norwegians almost every thing from Sweden and Finland where everything is cheaper. Even Russians come nowadays to buy some things from Finland where they are cheaper.

By the way Norman I would speak about price regulation not substitutes. As said much of these subsidises do not cost the government a penny. Well the country looses in theory some potential income. If Syria produces for example gasoline with the production cost of 100 and it is sold to local people with the cost of 110 when world market price would be 200, it means that the oil producer looses the income potential of 90 units. If the needed oil would be sold domestically with the world market price this 90 unit would be “pulled of” from the local economy. So this 90 can be seen as a social income transfer to the people.

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May 6th, 2008, 7:46 pm

 

268. abraham said:

QN said:

I thought she was going to rip off her shirt to show how much chest hair she had.

Ugh, that is a most despicable thought. I was more expecting her face to rip open and a little slimy creature to crawl out declaring, “I AM THE ZIONIST WITHIN!”

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June 20th, 2008, 11:41 pm

 

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