‘Syria’s Revenues in Danger,’ Finance Minister Warns – Discussion by Ehsani2

Ehsani2 – Syria Comment's "Mr. Economy" – initiated a discussion in the previous comment thread about Syrian Finance Minister's interview with Syria News in which he ran though some economic forecasts and proclaimed that the country's revenues were in danger. Ehsani answers questions on why he things that is so. It is an interesting discussion and deserves its own post. (T_Desco promises a run down on the new Brammertz report. He gives a few preliminary observations below.)

First here are two recent articles demonstrating that the government is worried.

"Crackdown on state corruption in Syria" by The Oxford Business Group on Tuesday, 13 March 2007: (Thanks Atassi)

Syria has launched a high-profile crackdown against corruption among state employees, part of its campaign to enhance public accountability, reduce losses and improve the country's image.

Here is an article on Syria's talks with Iraq on linking their energy networks in a deal that could lead to the country importing Iraqi crude as its own production declines, a senior Syrian official said on Tuesday.

Syria produces 400,000 barrels per day of crude, of which half is exported, but its two refineries in Homs and Banias have been unable to cope with domestic demand for fuel for years. Syria wants to resume its role as a main conduit for Iraqi oil exports through its Banias terminal on the Mediterranean and eventually take in crude for three refineries it plans to build, Abdallah al-Dardari, deputy prime minister for economic affairs, said. "Linking the two oil and gas networks is in our mutual interest. We are studying with the Iraqi side how Syria could become an important link to deliver Iraqi output to the world and to the Syrian market," Dardari said.

"There are detailed plans to link the commercial, transit and oil infrastructure. The Syrian side of the pipeline is ready and we are also ready to revive a project to build a new pipeline."He added. "Syria is the closest point for Iraq on the Mediterranean and it's in Iraq's interest to export crude efficiently. We also have a stake in earning transit fees and using Iraqi crude to operate a group of refineries we plan to develop," he said.

"We are concerned to see stability and prosperity in Iraq.We need the Iraqi export market and closer commercial ties. Projects to develop our ports and highways are geared toward Iraq," Dardari said….

Dardari said building new refineries that would stop the financial drain is a priority. Despite delays, he said the government was negotiating financial and legal details with China to build a 70,000 bpd refinery in Deir al-Zour. "We are in the final touches. It will handle Syrian light and heavy crude as well as Iraqi flows," he said. A consortium that includes Gulf shareholders is being formed to build another 140,000 bpd refinery in Deir al-Zour, he said. Venezuela and Iran have been approached to build a second refinery in Homs and 18 companies have submitted offers to overhaul the Banias refinery.

Now for Ehsani's comments and the discussion: 

EHSANI2 said: Dr. Landis,

As you recall, I have long held the view that the Syrian economy’s prospects were in a much worse shape than was commonly believed.

On their part, most government officials had followed the unified and consistent theme that there was nothing wrong with the economy. Indeed, all we heard was that investments were soaring and that a 7-8% economic growth was in the offing.

The article below needs no comment. I expect it to be the first of many that will start to warn the public that the country’s finances are in a desperate position. Only three sectors in the public sector are not in the red. Oil is going to be experiencing a deficit as early as 2008. If higher tax collections is going to indeed be the only source of future revenue, then God help this country’s economy.

When the country’s Finance Minsiter claims that the government’s “revenues are in danger”, there is not much else to say for the rest of us.

http://www.syria-news.com/readnews.php?sy_seq=50255

syrian said:

Ehsani2,

 

What do you make of a Syrian Minister talking about potential financial difficulties for the government.

It can indicate that the government is prepping the ground for privatization and possible government layoffs (get rid of the bloated bureaucracy). Remember they are working (supposedly) on establishing a stock market by the end of 07 which would serve as a great tool to dump the big government owned businesses that do nothing but bleed the economy. So, in a sense, that can be positive news. I will have to read the article again more slowly since my Arabic is not what it once was.

EHSANI2 said:

Syrian

You are absolutely right. They are laying the groundwork for the lifting of subsidies and “hopefully” for the divestiture of some of most bleeding public sector companies.

Desperate situations call for desperate measures.

In this case, hopefully privatization and the lifting of the subsidies will be the means to turn this ship in the right direction after 44 years of sailing into the abyss.

ausamaa said:

Ehsani2,

There are immense difficulties for sure, and balanced privatiztion is important, but lifting of subsidies? I doubt it!

As to the Finance Minister, on the two occasions when I met while he was doing the rounds outside Syria, he was for privatization but he was worried about a repeat of the Egyptian experience.

As to the news about the falling Oil revenue, I would take that with a pinch of salt. The true figures of the oil reserves were never publicized. The fields are extensions of the Iraqi fields. Very close actually.

His message in the Article four fold:

1- We intend to tax the “evaders” and will be tough with them, BUT the courts have the final word.
2- We need investment and we depend on it, so investors are safe,
3- Public Spending has to be curtailed
4- We need HELP, our Oil revenues are falling

But I do believe that it should be taken in the general context of the political dialouge going on. He is primarily highlighting the fact: Don’t forget that we need financial help!

But again Ehsani2, what is needed most is the Human Element. The managerial and the entrapernual element. They will bring in the money. They know where it is, they know how it is made, they helped make it for the investors, and they speak the language of those investors. Their mere presence would be an assurance to investors and to the country.

Gibran said: (March 16th, 2007, 11:19 pm / #) Edit

Brammertz: Lahoud’s Term Extension a Motive Behind Hariri Killing
A U.N. commission probing the assassination of ex-Premier Rafik Hariri said the extension of President Emile Lahoud’s term was one of three motives behind his killing.

majedkhaldoun said: (March 16th, 2007, 11:21 pm / #) Edit

corruption, and money taken out of the coubtry by Asad family and his loyalist, such as Khaddam Shehabi Makhloof etc. are major reason for the budget to be in such condition, one will ask how come real estate prices are such high,yet the tax on real estate is low,my bill for property tax on my house in Maliki is $20 , I was told my house worth $20 million lira last year, the same house in the USA have a tax bill of 2400 dollar, the goverment must be reduced, 2 million employee is too large for Syria, probably 1/4 of them are security forces,this is the cost of dictatorship.

ugarit said: (March 16th, 2007, 11:31 pm / #) Edit

$20 tax for a $400,000 dollar home! No wonder the government is running out of money. Where I live in the US the rate is 0.88/100 dollars.

EHSANI2 said: (March 16th, 2007, 11:58 pm / #) Edit

Majed,

The system is broken. The example that you cited is one of so many things that need a total overhaul.

Ausamma,

The minister is telling you that oil is running out. Most independent analysts confirm this. Just because Iraq has an abundance of oil does not mean a neighboring country of her will also have it in abundance.

Your last paragraph was as follows”

“They know where it is, they know how it is made, they helped make it for the investors, and they speak the language of those investors. Their mere presence would be an assurance to investors and to the country.”

I am sorry but I don’t get it. The capital that is outside Syria is massive. It has not come back. What has come back to the country is a tiny fraction. Such investments do very little to improve the fiscal position of the government’s ledgers. I cannot see how this government can embark on a credible wave of privatizations or lifting of subsidies. Instead, the changes that are likely to come will be of the too-little-too-late category which has been the hallmark of this government’s economic policy.

The Syria of today is in desperate need of bold, decisive and visionary economic policy. Regrettably, what it will get is a cautious, indecisive and slow set of reforms that will do little to address the challenges facing it.

ausamaa said: (March 17th, 2007, 12:17 am / #) Edit

Ehsani 2,

Oil, we will not know about. The oil minister says 2022!

What you Qouted was in reference to my saying that the Human Element is important. The Manegerial and Entrapernual Element; hence the “they know where the money is, they know how to get it..”

And, no Sir, I am not talking about “Syrian” money outside. I am not counting much on “such” money! I was talking about the massive capital you mentioned which is outside Syria. Gulf primarily. They are just looking for a way to invest it. Out of frustration, most of it is being pourd in Real Estate projects in Dubai, Bahrain and Qatar.

And your last paragraph seem to only highlight my point: the Human Factor. “Bold, decisive and visionary economic policy”, can not be expected to grow on trees. Sure, not on the existing trees. You are talking about total shakeup. With which I cannot agree more. It is needed. But is it gonna happen? Not if it is TOTAL. You are asking incumbants to vaccate their seats, and you have no assurance of the compatibility of the successors. And So, you have to accept a somewhat slower pace with a Big input from the outside. You need good change management. I would not trust the System to implement it, but at the same time I would not want to see it left to the likes of Ernest Young and KPMG alone.

I wish it was simpler!

EHSANI2 said: (March 17th, 2007, 12:27 am / #) Edit

“You are asking incumbants to vaccate their seats, and you have no assurance of the compatibility of the successors.”

This is not what I said. Syria’s economic system is akin to a patient diagnosed with a dangerous disease. The government keeps convincing us that an advil will do the job. It will not. I am afraid that the patient will end up dying.

Syrian said: (March 17th, 2007, 12:29 am / #) Edit

Ehsani2,
I would be interested to hear the reasoning that leads you to be so pessimistic.

EHSANI2 said: (March 17th, 2007, 12:40 am / #) Edit

Syrian,

Which part would you like me to expand on? The fiscal situation? The labor situation and the low GDP growth relative to the growth of the labor force? The lack of an export policy? The insufficient infrastructure to attract business?
The lack of property rights? The subsidies system?

ausamaa said: (March 17th, 2007, 12:47 am / #) Edit

Ehsani2, of course you did not say that. But it was implied in “the bold visionary economic policy”. You can not have Al Hassan and Dardarri wake up one morning and put out such a policy. The good persons they are. But it is just not gonna happen. Look at that example $ 20 per year on an Al Maliki house! Hell, we have four houses in Damascus, and I never really bothered what taxes we pay on them. Look at that example and tell me how easy it would be to reform such a system overnight. hell, you can imprison as many people as you want, and Damascus will be calm next morning. Try to implement that $0.80/$100 propert tax mentioned above, and next day the army would not be able to get to into Damascus.

Ehsani2, again, and without taking any from the importance of change, but it is not that easy or simple.

And why did you skip over my remark that I am not counting on expat “Syrian” money to come into Syria to develope it? I hope it was unintentional, because if like myself you beleive that we should not count on it, then this leads to a worse conclusion; the WHOLE system, people and government. And that leads to examining wider considerations relating to other more important areas.

“We” need To change! We can not just dump it on the System and turn our back. “We” are the System.

Not to imply that we should despair, but if we do understand our collective shortcomings, then we will have a hope.

norman said: (March 17th, 2007, 12:55 am / #) Edit

Ehsani2 and Syrian , I hope the subsidies in general and on a wide scale will be lifted but that should accompany support for the poor Syrians untill their income increase , rich Syrians should pay market value for products and that will decrease smugling to Lebanon and Jordon , they can do that like what we do in the US via subsdies on elecric and Gas bills for the low income Americans,most poor Syrians do not have cars to worry about Gasoline prices.

Majed , as you well know that many Syrians park their money in real estate , that make some people own many houses and with low taxes on real state owners do not have the presure to rent or sell empty houses ,that increases the problem of housing availabelty ,
To correct these problem ,first house should not have taxes (that will increase housing ownwrship )but taxes should be paied on all other houses and should be clear that money can not be given from father to children without paying gift tax so people will not avoid paying taxes by puting the after the firs house in the children names .having more houses available will decrease the prices and children will be able to start their families without living with their parents.

majedkhaldoun said: (March 17th, 2007, 1:01 am / #) Edit

Ehsani;
I agree total overhaul is necessary, but should not include major increase in tax, nor it should be sudden, it must be gradual, remeber tax is close to be a crime.( I am from Milton Friedman school) in USA the tax is extremely high, as for Ugarite, remember your tax on property is .11/100 dollar, the rest is to pay for schools,hospital and bonds etc,which is not for services for the real estate. but again the cost of dictatorship is very high,since they need protection from the people.

Syrian said: (March 17th, 2007, 1:14 am / #) Edit

Ehsani2,

It is this statement that made me ask the question.

I cannot see how this government can embark on a credible wave of privatizations or lifting of subsidies.

Can you see a different government able to embark on a credible wave of …

What are the different charactaristics of this other government and can the current government do anything to morph into a credible one.

Syrian said: (March 17th, 2007, 1:17 am / #) Edit

P.S. I found this study (undated) which you may have seen. Just skimming through, there seems to be quite a bit of activity in the “reform” arena.

20 Page pdf file Here

EHSANI2 said: (March 17th, 2007, 1:34 am / #) Edit

Privatization and lifting of subsidies is likely to face a significant opposition. The security apparatus will warn against it. The Baath party dinasors will vote against it. The President is unlikely to push for it in this political environment. This is why I made the statement that I made. Taking risks is not the hallmark of this leadership. Maintaining the status quo has served it well. Versions of the status quo is what we will get. Changes are likely to be of the too-little-too-late category for as long as they eye can see. Indeed, Syrians have become genetically programmed to prefer the go-slow approach. Dramatic and bold changes are always met with calls of caution, patience and let-us-not-rush type of mentality. The Advil tablet approach rather than a cancer-removing surgery is what the nation has been taught to embrace. The result is Chinese-torture style cracking of the system.

Syrian said: (March 17th, 2007, 1:53 am / #) Edit

The opposition to wholesale privatization and lifting of subsidies is not likely, it is absolutely there. The problem is not one of will, it is ability. Fixing the Syrian economy fast will require measures that no one is able to accomodate. Massive layoffs, increasing prices and complete destruction of the production system (as lousy as it is, it still produces) is not an overnight undertaking. The attraction of foreign investment can indeed create jobs that are superior to the jobs granted by the government and can start the incentive process for people to seek those jobs.

Ehsani2,

In your opinion, can the government be in the process of building a foundation from which a private economy can emerge? If not, what things can they do to facilitate the process faster?

When I ask about what they can do, I am asking you to take into consideration the popular opposition to the different policy alternatives that they may come up with.

norman said: (March 17th, 2007, 2:04 am / #) Edit

Syrian , interesting discution.I am enjoying it.

majedkhaldoun said: (March 17th, 2007, 2:04 am / #) Edit

why should the syrians give Bashar another seven years?
Are we better off now than what we were seven years ago?
Is inflation is under control?
Is the eceonomy is better?
is our relation with the arab countries improving,especially Lebanon,KSA or Egypt?
did we get back the Golan Heights,or is our army is stronger today that there is hope of regaining the Golan Heights?
is the enviroment better,the health care is improvingthe goverment services are improving.
is there freedom of speach,or the people who talk are still go to jail,? did we abolish emergency rule?or law # 49,or military tribunals for civilians who speak their mind?
do we have democratically elected representatives?
seven more years of what?

ugarit said: (March 17th, 2007, 2:06 am / #) Edit

Let’s not forget the impact on the Syrian economy of the 1.2 million Iraqi refugees in Syria.

ugarit said: (March 17th, 2007, 2:09 am / #) Edit

Let’s hope that Milton Friedman’s economic “philosophy” is not implemented in Syria. It would be a disaster.

http://www.counterpunch.org/grandin11172006.html

EHSANI2 said: (March 17th, 2007, 2:15 am / #) Edit

Syrian,

A private economy can emerge when the government offers the sector an environment of reduced red tape and less burdensome regulation. The private sector is not allowed to enter into a fair competition in sectors where the public sector already has presence (and it is plenty).

What they “can” do is embark on an export drive concentrating on labor intensive industries. For that to happen, Syrian and foreign industrialists need to feel safe in investing the vast amount of money that is needed for such capital intensive manufacturing businesses. For that to happen, infrastructure needs to be overhauled. This is what they can do. I doubt that it will happen.

Ugarit,

What “philosophy” would you recommend?

majedkhaldoun said: (March 17th, 2007, 2:20 am / #) Edit

investment can not succeed where there is dictatorship, you need democracy for investment to succeed.

norman said: (March 17th, 2007, 2:36 am / #) Edit

Majed , Spain under Franco was very successful.and that was a dictatership.

Syrian said: (March 17th, 2007, 2:42 am / #) Edit

What they “can” do is embark on an export drive concentrating on labor intensive industries. For that to happen, Syrian and foreign industrialists need to feel safe in investing the vast amount of money that is needed for such capital intensive manufacturing businesses.

1. Is it labor or capital intensive industries you are promoting.

2. Every industry in Syria is likely to be Labor intensive. With labor being the cheap resource, investors will either seek labor intensive projects or will substitute labor for capital in order to take advantage of the cost savings. To give you an example, since my wife is not of Arabic heritage, I tend to rely on canned products for my middle eastern cuisine. I had wondered why I was not able to find canned middle eastern food of Syrian origin. Well, one day I found a canned pickled eggplant product that was the product of Syria, and I had to get some. Wouldn’t you know that the kind of can used was clearly not the automated type (Had a top that could be pried open with a fork.) The stuff was clearly canned by hand and I could not bring myself to eat it because I was concerned about the contamination possibilities that come up when you are hand packing for exports. The point is, canning is much cheaper in Syria when done by people than it is when done by machines. And as much as the government would like to modernize and introduce efficient technology, the incentive structure is there to use people and not machines.

Infrastructure is expensive but I believe the system is being overhauled. It was not long ago that I read somewhere that the government was providing additional phone lines and communication lines. I had seen an estimate that private automobile ownership increased 50% after the government reduced the import tarrifs on automobiles. New roads will be needed to accomodate this growth in automobiles and the government will have to provide them. Also, do not forget about the proposed improvements to the Tartous harbor, proposed rebuilding of the Iraqi oil pipeline, talk of trying to build new oil refineries…

majedkhaldoun said: (March 17th, 2007, 2:47 am / #) Edit

Norman
I disagree IN 1995 a group of physicians(syrian american doctors) we presented the goverment with a plan to build GM factory in Syria,to build cars, it was denied.

norman said: (March 17th, 2007, 3:01 am / #) Edit

Majed, 1995 was before Bashar took office , try now to open a factory , I think you will see diffrent reaction.

Alex said: (March 17th, 2007, 7:29 am / #) Edit

لا لقاء بين الملك عبد والاسد قبل قمة الرياض
GMT 6:00:00 2007 السبت 17 مارس
صحف مختلفة

الرياض: قالت صحيفة الاخبار اللبنانية في عددها الصادر اليوم نقلا عن مصادر عربية واسعة الاطلاع ان لا لقاء سيعقد بين الملك عبد الله والرئيس السوري بشار الاسد قبل قمة الرياض وذلك على خلفية امتعاض السعودية من خطاب الاسد في اب الماضي والذي تضمن عبارة انصاف الرجال.وقالت الصحيفة ان زيارة الشرع الى مصر ومحادثاته مع الرئيس مبارك الثلاثاء الماضي اضافة للتوضيح الذي طرحه نائب الرئيس السوري لم تسفر عن أي اختراق حقيقي في العلاقات الثنائية السورية السعودية، رغم الكلام المعلن للمسؤولين المصريين والسوريين عن عدم وجود أي تدهور فى هذه العلاقات.
وقالت المصادر ان وساطات مصرية ويمنية لم تسفر عن اي نتائج وان الملك عبد الله اكتفى بالقول انه سيلتقي الاسد خلال القمة كغيره من الرؤوساء.

من جهة ثانية، تلقى الملك السعودي والرئيس المصري أمس اتصالين هاتفيين منفصلين من الرئيس الأميركي جورج بوش، بحث خلالهما معهما “الوضع في العراق وعملية السلام وتأليف الحكومة الفلسطينية الجديدة، والوضع في لبنان وإيران”، بحسب المتحدّث باسم البيت الأبيض طوني سنو.

DJ said: (March 17th, 2007, 8:08 am / #) Edit

Well Ehsani2,
If the oil is running out, how come we’ve stricken a 2 $ billion deal with Shell to prospect for oil around Deer Al Zoor area?

DJ said: (March 17th, 2007, 8:14 am / #) Edit

Dr. Landis:
Given the significance of Minister Al Hussein’s statement, don’t you agree we need a fresh post dedicated only for discussing it?

t_desco said: (March 17th, 2007, 1:38 pm / #) Edit

Unfortunately, I was unable to complete my analysis of the previous reports, but I am glad to see that the new Brammertz report confirms the impression that significant progress has been made in the investigation (they may even have found the video camera which was used to film the Adass tape (!); see §47) and that an extremist group was most likely involved in the attack, though it may not have acted on its own:

“44. … Another working hypothesis is that while an extremist group may have been involved in part in committing the crime as outlined in the tape and note, this group was actually manipulated by others for another objective not related to its own organizational aspirations.”

At the same time, the “motive to assassinate Hariri” discussed in §52-63 seems to point to Syrian and/or Lebanese opponents of Hariri rather than to an extremist group (e.g., it is unclear to me why such a group should be particularly concerned about Hariri winning the 2005 elections).

The new report merits a more detailed analysis and I will try to post more about it later.

trustquest said: (March 17th, 2007, 1:56 pm / #) Edit

I know some of the commentators are experts in their fields. My question is to Ehsani 2?
It seems to me that the government in Syria are too fragmented that the mister of finance on one wave and others on different waves. We hear from one minister but we do not see public and expert participation although there are plenty. This could be normal in Syria before 2000; however this is intolerable and is unacceptable in open economy. The government did not find their way in dealing with current and mounting economic problems. They need investors, experts and public participation but they keep all silenced. I believe they stuck with their own making and they are showing inability to find a way out of it. The recent news about widening Faisal Street and the confiscation of big part of the old city, shows how government is unable to stop its self from shooting themselves in the foot. Stupid acts continue, they could not realize that killing a sector dealing with building materials, a whole market, Almankhlia, with over 900 shops which has a face value (froogh) about 18 billion Syrian pounds, not to mention the chunk of the old city properties which is priceless is actually a removal of a big segment from the economic engine of the country. The old set of minds of the sixties, they still look at themselves as the savoir and at the merchants as the fat money mongers who are bad people who they should not worry about, are still life and well well. As an engineer working for a consultant in the USA, I find these types of projects are disastrous to the economy. Please if you can comment on this subject I do appreciate that.

EHSANI2 said: (March 17th, 2007, 2:47 pm / #) Edit

Dear Trustquest and all the other participants,

One of the main areas of contention with my writing on the economy seems to concern the issue of the oil industry. Some believe that by 2010 the country will start to face a declining output. Many don’t believe this. Instead, they think that this is too alarmist and that 2022 is the earliest for such problems to surface. For the record, the issue is not whether the oil will run out. It is that the country’s demand for energy is running ahead of its ability to export it. As this product’s import bill exceeds what it earns from its exports, the government’s finances will suffer immensely. This is what this minister was trying to tell us.

More generally, the fact that we are even discussing and arguing over this point is a clear indication the country’s economic planning is non-existent. Given the importance of this sector to the country, one would have thought that a professional and objective study would have been performed and then presented to the public by now. The guesswork must stop. Syriacomment readers and others must rely on hard figures and data form the government rather than arguing amongst themselves with subjective statements that add little to our understanding of the basic facts. My comment here is not directed exclusively at the oil sector. The labor situation is very alarming. The number of jobs being created is far below the number of new people entering the labor force and seeking jobs. For the record, this occurs when a country’s economy grows below its potential (defined as the growth of the labor force plus productivity). The government seems largely silent on the issue and its repercussion on society.

But who is in charge?

As far as I recall, this President is yet to make a single appearance to exclusively discuss the economy. Why hasn’t he taken the time to make a speech to inform the public about the country’s oil sector and about the fiscal challenges facing its people? Instead, what we are left with is reading through the tealeaves to understand what Dardari, Hussain or others have to say. One is for privatization. The other is against it. One says that the oil sector could be in trouble by 2020. The other says that we need not worry till 2020.

This must stop. We need to learns “facts”. The president needs to step forward and articulate “HIS OWN” economic views and agenda.

One suggestion is for him to appoint one person to be the country’s economic czar. That person must report to the President himself. He must be a respected figure in international finance. He must have the respect of the international community of bankers and investors. He must set a new standard by declaring his full wealth before taking office. In sum, his integrity and qualifications must be beyond any doubt, He must finally get introduced to the world with this brief statement by the President:

“I have appointed this man to be the country’s economic czar. He reports to me directly. He promotes and represents my personal agenda. The buck stops at his desk when it comes to any questions or policy matters relating to the economy. I want to assure the people that I will hold a daily briefing with this man and will be personally involved in this critical issue given its importance to the country’s people”

Comments (44)


1. Alex said:

Ehsani,

First, I do agree with you to some extent. Although, as I said before, they will manage somehow to keep things under control, like they always did int he past… for example, through increased foreign capital inflows for the next few years.

Another point that I discussed with you in the past; The mentality of leadership in Damascus is as follows: In our on-going role in Middle Eastern regional conflicts, if we are to succeed in projecting strength, we will need to generally avoid volunteering information that make us look vulnerable to pressure… economic weakness would imply that we need the help of the west and of Arab allies (rivals) generating this kind of public impressions on the other side.

They hope that many conficts will be on its way towards settlements eirther within a year (If Bush and others decide to modify their behavior) or in three years (a year after this administration leaves office).

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March 17th, 2007, 4:07 pm

 

2. EHSANI2 said:

Alex,

Do you really think that by avoiding to volunteer information that you are somehow confusing your enemies about the true state of your weakness? I would be willing to bet that the the U.S., Israel, EU, KSA and most others have a very good idea about the true picture of where the country stands.

My point is that the President needs to get personally involved. I, for one, would love to know his “personal” economic leanings. Surely, we deserve to know at least that after 7 years.

Majed,

You asked if I had any names to suggest as an “economic czar”. Once the President decides, I am sure that a number of highly qualified people would step forward if the President portrays firm commitment and personal interest in ensuring the success of this endeavour.

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March 17th, 2007, 4:23 pm

 

3. Alex said:

Ehsani,

Governments know, but I said “public” impressions.

I am not really against your suggestion … I am just explaining how it works when politicians (not only the Syrian ones) try not to sound alarmist in public.

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March 17th, 2007, 4:39 pm

 

4. G said:

Oh come on Ehsani, why won’t you play along with Alex’s pro-Bashar propaganda and repeat everything the regime says like Alex does “to project strength”!?

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March 17th, 2007, 5:47 pm

 

5. ausamaa said:

Are things that bad? Do they have to “avoid’ sounding alarmist? Is the government going to run out of cash soon? Is the Syrian economy heading for a collapse? Are we missing the train of a “Paris III” sort-of-thing in order to prevent an imminent implosion of the economy as happening next door to a fully fledged free economy?! I do not know, but it sure does not look like it! Not to say that we are in an Economic Paradise, we are not. We can hardely make ends meet perhaps. But we are not broke, nor are we on the verge of an impeding economic crisis. So, is crying Wolf very pertinnet right now? Today?

Some above ask for “a commitment” to change. As whoever is in charge is not committed to change! In the past few years, and despite the existintial threats Syria has been facing, new things kept poping up on the economic horizon; private banks, private universities, new laws, stock exchange, attempts at economic modernization and reform. For sure, not what we all “wish” for. But there is movement! Are those not signs of the requested “commitment”?

Growth, Development, Modernization, Privatization, and Investment. Who doesn’t want that? We all want it. And it is the duty of those in charge to deliver this. It is their duty to deliver this at the “fastest” possible rate and in the most “balanced” manner possible!

So, both, a “Possible” and a “Balanced”, have to be taken into account. And both the “balanced” and the “possible” have to be synchronized with another variable: the higher political interests of the State. Which is more important now? Securing a loan of $250 million to “improve” a certain highway, or to “pay for” a new anti-aircraft system to defend the country? I for one think the defence componont as more necessary, now. You may not. And you may add that we are wasting money on Arms we do not use. But I would say that if it was not for those Arms, and for that army, Olmert will be dictating to us what we should be having for dinner before we know it. So, there we have it. Wether we like it or not. And you know what? Somehow, the “regime” as it is called by many, has been managing to do both. Somewhat successfuly in my opinion. And dont ask me how!

And there is a little trick here. They, all those loving soles around us, they do want us to develope, to have a better performing economy, to jump on the wagon and immerse ourselves in the lush and lovely world of Market Ecconomy. They love us, dont they? They really care about us, dont they? They love to see a prosperous and economically flourishing Syria, dont they? Well, I dont want to sound synical, they sure do, but at a hidden and at an implied “price”! And if you ask me what that price may be, I will tell you; the price is “Syria” as we know it and as we see it. Syria, as in a leading Arab force. Syria as an influential Arab power. Syria as in a standing and defiant guardian of what the whole Arab Nation wants and strives for. Lebanon, Syria can have it within two days of asking for it. Hell, take it but keep your voice down, they will say. The Golan, Oh, of course, its yours after all, but you will forget about the other stuff,Right? Is this rethoric, mere rethoric, I dont think so. We have been drinking those things since childhood. We can not dissown them even if we wanted to. Not very “global-like”, and not very “free-market-like”. But very facts-of-life like. Can we be so naieve a to expect that we can undertake the task of Economic Development in full stride without expecting Israel (our nice, peaceloving, non-expansionst next-door nieghbour) to be planning to torpedo that at the first possible chance. Or has Israel changed? Maybe it is not the Israel we read about when we were children? You tell us. If Israel has changed, and we have tried to be accomdating to such a change, please let us know. Then, we can look for another gameplane. If it is the same Israel that we know and it has not changed? Then tell us how we can build a Vibrant Flourishing Economy, Maintain the ability to Defend our policy, and join the glorious path to Globalization, Modernization, and Development.

That was too, long I know. And it sure does not fall in the scope of Economic Development. It does not exactly mesh with pure economic-growth and competitive-advantage, wealth-maximization, and resources-optimisation as I live it and work in it every day. But it goes to the basics in a way. Those are some basic matters we have to agree on. Let us at least be clear with ourselves. Let us have a clear vision of what we want and what we want to be, and what we can afford to keep and what we can afford to give up. And to give some thought to what we will be “allowed” to be in either situation. After all, we do not exist in a vaccum. Nor in dreamland.

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March 17th, 2007, 6:53 pm

 

6. majedkhaldoun said:

the increase in population, due to one million Iraqee immigrant,and child birth.
rainfall this year is very low.
the recent aggression,by Isreal against Lebanon.
decreasing oil revenue.
All the above,if you add to them possible war this summer,may decrease tourism, Syria may face the economic crisis sooner than later.
some are calling for civil disobedience,by not paying taxes.
things are not bad now,deterioration will be preceded by falling Lira,inflation,and decline in real estate prices, sanction can cause things to get worse, I think we are 5 years away from a crisis

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March 17th, 2007, 8:22 pm

 

7. syrian said:

Ehsani2,

You have repeatedly, in this blog, demanded that the Syrian government get out of the business of running businesses. You have tirelessly argued for the benefits that would come from a free market system (with which I largely agree) But then you turn around and start talking about the need for economic planning on the part of the government. Am I confused or are you demanding that the government actually create a new office to direct economic activities (Economic Czar).

The free market, as you know, is self regulating and does not rely on a “plan”. The market forces resources to move in the appropriate direction. As products become short in supply, it will demand a higher price and less will be demanded. The oil industry (the whole industry. production platforms, refineries and subsidies) needs to be privatized so that it can be run more efficiently. The primary reason the refineries cannot cope with the demand is because oil products are heavily subsidized which creates the incentive for people to overconsume. Its not that the production cannot keep up with demand, it is the subsidies that are creating artificially high demand.

There are plenty of hard numbers to support the fact that keeping price artificially low creates shortages and Syrian consumers are no different. When given a subsidy, they will demand too much and it will be difficult for seller (in this case the government) to keep up.

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March 17th, 2007, 8:24 pm

 

8. EHSANI2 said:

Syrian,

No economic planning. The economic czar is a suggestion i make to facilitate the directing of the President’s orders to move the economy into privatization and the disposing of the government controlled assets. It is also to ensure that no one acts as a stumbling block when it comes to executing the policy.

Your description of the free market in allocating resources is right on target. Resources will be directed to their most efficient use without the need of an economic planner who thinks he can model and predict the behaviour of a whole nation 5 years out.

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March 17th, 2007, 8:33 pm

 

9. ausamaa said:

Ok, let us take another approach!

First:

What are the WORST things about Syria’s Economy that we can do something about?

In my opinion, they are as follows:

1- Petty Corruption.
2- Red Tape.
3- Competency, Responsibility and Acountability at the macro and micro levels (lack of, that is).

Can we make a coherent and conssitant effort to address those crippling issues?

When you speak to investors today about investing in Syria, those are the first issues they site as an impediment to their entry into the market. Not all the issues, but the first three. And they are not distictively charectaristic of Syrian economy, they are a region wide epidimic.

Can we not do that before aiming at tackling other economic issues relating to privatizaton, labour intensive industries, …etc,?

Second:

Syria is an agricultural country. Is it not? If so, have we given this sector its due attention? Have we serviced that sector? How much do the MENA import in terms of agricultural products? What is our share? What are our export standards? How sound is our Export and our Marketing network? Have we fully tapped the potential of this sector which is immediately availlable for us to ‘toy” with, or have we “jumped” to other more investor-fiendly and more “exequisit” “development” venues?

Can we not do that before we take a nosedive into tackling other economic issues relating to privatizaton, labour intensive industries, …etc,?

Are those not some “basic” things that we have to “attend to” first?

Just some thoughts.

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March 17th, 2007, 9:26 pm

 

10. ausamaa said:

And I am sorry guys, Free Market is not as self regulating as we make it out to be. Not even in the most developed western economies. Heard of the FTC, FCC, SEC and the rest of them? They are there to guard and regulate that self “unregulating” market.

If that holds true in the Ultimate Capitalist society, then it holds true a hundred times more in our “under developed” markets.

So, at the end, we do still need State Planing. Competent State Planning of course. But State Planning nevertheless. Without it, some one will take the Lira and run with it. And we will be stuck with sixteen million disillusioned Syrians, in addition to another million or so dissappointed Iraqi guests!

Let us not make “false promisses” at this stage!

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March 17th, 2007, 9:38 pm

 

11. Syrian said:

The FTC, FCC, SEC, FDA, ATF and all the other regulatory bodies in the US are established with the justification of protecting public interest. They do not interfere in the pricing and production decisions of the private firms. In the cases where prices are regulated you would find that these are instance of Natural Monopolies which are not the dominant force in a market economy.

There is no doubt that a credible legal structure that protects the interests of the public as they might be affected by the private enterprise pursuing its own interest is needed. There is no doubt that corruption, red tape are the antithesis of a free market and must be minimized or abolished.

But ask yourself, where does corruption come from? Is there a single private business where bribery is prevalant. All the people who get fired because of corruption (as cited above) work in government enterprises that lack the mechanisms for proper accountability. The best proven mechanism for the implementation of accountable systems is PROFIT. Owners of enterprises who are interested in profit will implement all the necessary guards so they would not be robbed blind by their employees and the ones who do not will lose their place in the market and be replaced with ones who implement appropriate accountability measures.

Ausamma, when you talk of state planning I gather you mean the construction of a legal system and not the setting of production quotas for government owned companies and I can agree with that. However, on the small chance that you mean we need to simply find better people to run the current system I would say that you might be disillusioned. Its not the people who are ruining a good system its the other way around. You start off with a bad premise, that people will do good because they should and its the moral and right thing to do and you will end up with a system that corrupts people.

In the 1970’s the Jimmy Carter attempted to control the price of gasoline which had arose considerably by setting a ceiling. The market responded with sever shortages and a stagnant economy. The US seems to have learnt a valuable lesson from that experience and today any talk of controlling prices of a commodity that has a significant effect economywide is quickly dismissed.

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March 17th, 2007, 10:11 pm

 

12. ausamaa said:

Of course I understand what regualatory agencies function is. But again, what is the Fedral Reserve? Not a government agency? Independent? fine but a State Tool in the end.

And not to disapoint you, I just happened to really have a large degree of State Planning in mind. As in setting qoutas like you mentioned! Not Stalin’s like of course, but Syria is not your vast and uncontrollable CCCP exactly. And we are still at the crawling stage in the terms of the Free Market we seek. Don’t be alarmed. It is happening all around us. Who is planning the economies of such “citadels” of economic liberlisation in our area, such as KSA, Emirates, and Kuwait? Usualy its “a” Majlis Al Takhteet Al A’ala (Higher Planning Board) or somthing like that. A State planning committee(!!)in the end.

How much of KSA’s and Kuwait’s economy is contolled by the STATE? Not much, just the Oil Sector,and the Government sector perhaps! Right? Sure, but it so happens that 90% of their economy is dependent on the Oil and on the Government sectors!!

Sorry, I have to add, as we move on through this transitional period, i.e., from Crawling to Walking, then State Planning will evolve and give more space and bigger role to Regulatory Bodies.

But, Yes I believe Big Brother will stay around, if only to insure that Need and Greed are kept under control.

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March 17th, 2007, 11:03 pm

 

13. Syrian said:

Ausamaa,

Who decides on the quotas and what is their motivation. How will you ensure that the quotas are met. What will you do if you set a quota on wheat production and a drought destroys half the crop. How would you determine what is a valid reason for not meeting a quota. Should the government control the price of wheat? how about the price of bread? how about the price of Cake?

If the government controls the price of oil and keep it artificially low then they are in effect reducing the cost of producing just about anything that can be produced and we should see a boom in production? Why don’t we?

The KSA and gulf region economies have been hot because the price of oil has been going through the roof. KSA had plenty of economic problems (aside from all the other social problems that exist in the KSA) before the price of oil started to rise. The price of oil is determined in a free world market so all this wealth, regardless of how it is controlled and spent or misspent, is the result of a free market working its magic.

The fact that other countries may decide to impose subsidies and quotas (OPEC quotas are monopolistic devices that have nothing to do with the quotas we are discussing) does not make it right. They simply can hide it behind the large wealth that they have but the fact will remain that every dollar spent on subsidies is a dollar that can be better spent somewhere else.

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March 17th, 2007, 11:33 pm

 

14. ausamaa said:

I can not argue against most of what you said. But we are not there yet. We need guidance, we need some measure of control, a measurse of prioritaization. We are more like an enfant who needs the support of its mother. It is not like we propose a law, take a vote, enact that law and hoopla.. we are at Free Market street! Sort of a bit more complicated than that. I just do not see a Free Market Economy materializing from a semi-deficiant and redundant State Controlled Economy overnight. Unassisted and Unguided. And if you can not trust a state commission to look after it, can you trust a bunch of experimenting, profit-oriented, despite well-meaning entrapenuers to guide it to safety?

Let us not argue much about that now, we are miles from that crossing anyway. The base is more important, the basics are! This we will not quarrel over. Once we are near at least.

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March 18th, 2007, 12:42 am

 

15. ugarit said:

“Thrice-Told Tales
Those Israel-Syria Peace Talks

By HARRY CLARK

Gabriel Kolko’s work as a historian casts a giant shadow, but his recent account of “Israel, Iran and the Bush Administration” (CounterPunch, February 10/11) is open to challenge. The Israeli peace talks with Syria, which Kolko finds of “enormous significance,” are a thrice-told tale which has not yet come true, least of all because of intervention by the United States. ……”

http://www.counterpunch.org/clark03172007.html

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March 18th, 2007, 1:00 am

 

16. Alex said:

Ehsani, Ausamaa, Syrian, Ugarit

Here is a lighter look at where Syrian economy was 70 years ago.

Just imagine where we will be 10 years from now.

Have a good weekend.

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March 18th, 2007, 1:06 am

 

17. EHSANI2 said:

Alex,

As usual, you always add the funniest tidbits to the discussion. Watching the video, it is amazing how little has changed since then! The bread is still sold the same way (it is soon cooled on cars and the pavement). The “sous” guy is still very much the same. In some sense, may be this is why we still all love this country!

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March 18th, 2007, 1:18 am

 

18. norman said:

Alex, thank you ,that was interesting .

I have never seen a Syrian in the US who is not succesful even without being in the oil indestry ,I am trying to say that the Syrians can succeed with or without oil , actualy i have more hope for them if there is no more oil , they will make them work harder ,
I do not think that the goverment needs to privetise the goverment owened companies , they just need to make it easier for people to start any buisness they want and fail if they start a buisness where there is a stiff competition let people make as much money as the market can bear as long as they are paying their fair taxes , let us say 15% , some people might say that that will make it difficult for the poor to recieve these expensive services ,that is right but by paing taxes the goverment could expand on the services that it provides the poor , after all people who can pay now go to Lebanon and get these services.

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March 18th, 2007, 2:20 am

 

19. Ford Prefect said:

Very interesting discussions indeed. I would like to hear something regarding introducing personal income taxes in Syria. Why would the government be responsible for anything towards individuals if the same individuals do not pay income taxes? What about also introducing VAT like in Lebanon? Of course all of the above would come as part of the overhall of the economic policies of Syria and requiring all the Ba’athists to attend ethics training.

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March 18th, 2007, 11:41 am

 

20. Unforgiven said:

I read ur discussions with great interest but I noticed that you are taking ideological stances rather than economic analytical approach. Privatization and lifting of subsidies, whoever reads this article and comments will reach a conclusion that the problem is diagnosed and the fix is there: privatize and remove subsidies. Who said that this will benefit Syria…? Who said that the layoff of, say, 500,000 employee will boost the Syrian economy. And, by the way, where are those investors queuing to buy a share in the state-owned sector. And on the subsidies issue, do you really believe that removing subsidies overnight will help fix the economy. Indeed, it will improve the public finance but did you think about the impact of inflation or the impact on the cost of production. That is competitiveness.
Many countries in the region took the route you are proposing but we don’t hear about an “Egyptian miracle” or “Jordanian miracle”. Rather, we hear about an “Asian miracle” where economic policy didn’t correspond completely to the outdated Washington Consensus you advocate….!!

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March 18th, 2007, 1:47 pm

 

21. ugarit said:

Alex:

Thank you for sharing that video. It’s priceless.

“France Urged Israel to Invade Syria During War

by Ezra HaLevi

(IsraelNN.com) France urged Israel to invade Syria during the war against Hizbullah this past summer.

Army Radio reported Sunday that French President Jacques Chirac contacted Prime Minister Ehud Olmert via a secret channel at the very beginning of the war in Lebanon. He informed him that France would support an Israeli invasion of Syria.

Chirac asked that Israel act to topple the Assad regime, and promised in return to block any moves against Israel within the United Nations or European Union……”

http://www.israelnationalnews.com/News/News.aspx/121878

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March 18th, 2007, 2:04 pm

 

22. majedkhaldoun said:

Solana was in Damascus,he offered some help to syria,who in response said, we do not care about european offers, it is the USA that holds all the cards, that is what Muallem said.europe is concerned about Lebanon, and Lebanon only,they are not concerned about Iraq , which they consider as USA concern,europe seems to concentrate on the HARIRI MURDER TRIBUNAL, what they offer in return is a smile, nice words ,hand shake and empty promises,,Syria looks at europe offers as a trap,they do not heed their offers,USA will use the syrian response as another evidence that syria is not co-operating,and continue their intransigence,Syria should have given Solana positive promises,and keeps communications, so far,I believe, their response has been harsh ,the next 6 months are important to pass peacefully,many changes will occur, france will have new president, Blair and Chiraq will be gone,Olmert is in trouble,and Iraq bush plan is coming to failing end, also Lahoud in Lebanon will be gone ,and political vaccum will paralize Seniora goverment,more likely the health of some arab leaders may deteriorate.
It would be very wise if Bashar starts reform in syria,by advocating freedom and democracy,end corruption,and send those officials ,who profit illegaly,to court,abolish emergency law,and law#49,then he will come out winner,but the hope is so little,I doubt he will do it.

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March 18th, 2007, 2:46 pm

 

23. Nur al-Cubicle said:

Isn’t Lebanon in worse shape than Syria?

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March 18th, 2007, 2:56 pm

 

24. Ford Prefect said:

Alex, thanks for sharing the priceless video. I was intrigued by the graphics at the end of the Damascus segment that was referring to Damascus inhabitant “….to whom time means little.” So true then and so true now. You dig, Atassi 😉

Ugrait, thanks for the posting. I read the same article in the Jerusalem Post this morning. This is typical French cowardly behavior. Get someone else to do what you want, but when you feel threatened at all (soldiers in Lebanon), double-cross everyone. As authentically French as a glass of a Saint Emillion Bordaux!

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March 18th, 2007, 3:09 pm

 

25. Ford Prefect said:

Nur al-Cubicle,
Yes, orders of magnitude worse.

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March 18th, 2007, 3:10 pm

 

26. EHSANI2 said:

What is interesting to note is that given my constant negative comments on the health of the economy and its future prospects, I find myself doing the opposite to what one would expect from such a pessimist.

My personal investments in the country are on a steady increase. I think that there are some good selective business opportunities at present. There is no doubt that the ship (which was sailing in the wrong direction) is turning around. When the turn does occur in earnest, these opportunities are going to be immense. The country is virgin. This is the time to start setting up a foundation that can act as a base for a future expansion should my hopeful scenario come to fruition. It seems now that on a daily basis, I get a call or get to hear about new business opportunity in the country.

In a nutshell, my negative descriptions on the macro level stand in contrast to what I have been personally doing on the practical side. From a risk/reward perspective, the upside far exceeds the downside for capital commitments in this country.

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March 18th, 2007, 3:53 pm

 

27. Ford Prefect said:

Ehasani2,
I love your practical side and the upside of your capital committment. I share both with you 😉

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March 18th, 2007, 4:00 pm

 

28. Atassi said:

EHSANI,
I am in total agreement with your perspective on investing in the Syrian economy. As you know, I am fully invested in the new Syrian industry trend. Looking to add more in the near future

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March 18th, 2007, 5:20 pm

 

29. ausamaa said:

See, then there IS light at the end of the tunnel.

And I love that idea of introducing Personal Income Tax. Even if a very minimal ammount say 0.5% (O.005) on middle and low incomes.The intention of such step is to make all wealth figures accessible. The collections revenue will pay for the adminstrative costs involved, and it will encourage those “sleeping on” non-contributing wealth (property and real estate) to try to think about better ways to utelize their “wealth”.

But VAT, I dont think so yet. One step at time.

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March 18th, 2007, 7:37 pm

 

30. ausamaa said:

MAJEDKHALDOUN,

Where did you read the stuff about Syria’s response to Solana?

I hope that “THAT” was Syria’s response to Solana which I prayed for one day before he got to Damas. Especially in the light of the above articles about Chirac’s advice/request to Olmert. To hell with making friends, if they are of such caliber and with such intentions. Any way, opportunistic France will come around soon enough. They really beleive in the Frankphone mission and they are the everhopefulls. They also will want those Oil Fields in eastern Syria which they discovered in back in the forties and kept under wrap until twenty years ago. Especially with Iraq’s oil out of their reach now.

By the way, why is the Lebanon Deal not finalized yet? POTUS has not really decided about what he wants to do here yet? Someone has told the Surge working and he believed them? Hope Springs Eternal in this nieghborhood! Ask me!

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March 18th, 2007, 7:57 pm

 

31. norman said:

Ehsani, if you want to start a Syrian mutual fund , I will be interested.

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March 18th, 2007, 8:16 pm

 

32. Ford Prefect said:

Norman, smart idea. I Roger that.

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March 18th, 2007, 8:53 pm

 

33. norman said:

I read somwhere that about 30% of Syrians make more than 30,000 Syrian pounds and 30% make between 10,000 and 30,000 and 30% make less than 10,000, Syria should have income tax to make people participate in their goverment and country ,that will make them think about the services they want and what they are willing to pAY to have these services ,to make that less painfull ,Syrians with less than 10,000 Syrian pound monthly income should not have to pay but above that 15% flat tax rate with deduction for Goverment registerd charities and first home morgages seems to be fair .
The question how to make people pay taxes ,Employees will pay as they get their paycheck so that is easy , people in buisness will pay stimated taxes every three month certified by certified acountants , that will decrease cheeting as the more people envolved in tax preperation the more difficult to cheet.VAT will be very painfull for the poor which is the reason why it was not implemented during Clinton first term therefore VAT should not be an option collecting taxes makes it unneccessry for the govermnet to own buisnesses as through taxes they are partners in all buisnesses .

on the side ,To all softwere engineers , can anybody creat a softwere that can be part of the commet section of the blogs and correct spelling , I do not think a softwere like this is available , making such a softwere could be a money maker ,propably can be sold to google and other blog companies.good luck to you.

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March 18th, 2007, 8:55 pm

 

34. Joshua said:

Dear Norman,
For spell check, all you have to do is add Google’s speller to your your Google toolbar, which is very easy and an excellent service. It is what I use. Alternatively, once you post your comment, if you then click on the “edit” link, you will get a pop-up window with many tools on it, one of which is a dictionary, but not a spellchecker – a bit more laborious, but handy for one or two words that you may suspect you are spelling wrong.

Ehsani and all the Syria investors, I couldn’t help but laugh at your dire predictions countered by your optimism. Done like true Shami tujar, except you confessed to your investments.

Here is an article in al-Hayat, which uses some optimistic growth numbers.

Syria’s Chances to Succeed in Combining Liberalism and State-Controlled Economy
Mohamed Ibrahim Al-Hayat – 18/03/07//

Successive governments in Syria embarked on slow reform and dubbed it a drive for deliberate reform. This drive depends, above all, on homegrown elements; and its objective has been defined as the transformation into a market economy of a social nature, or the social market economy.

In the case of Syria, this means enforcing financial and administrative reform in the public sector’s institutions rather than selling or privatizing them in order to avoid laying off hundreds of thousands of employees. It also means allowing the private sector, in parallel with the public sector, to have access to the various sectors that used to be monopolized by the State….

A look at the reality of the Syrian economy these days shows that the slow, or deliberate, paces of reform have achieved tangible success on more than one level. For example, the budget deficit fell to 5% of the GDP thanks to the government’s austerity policy. The economic growth has maintained a rate of 4% to 5% for more than four years. The volume of investments jumped from $1.5 to $8.5 billion over the past three years.

On the monetary level, the Syrian pound has maintained stability in light of the abundance of reserves of hard currencies valued at $18 to $20 billion. Foreign trade was liberalized, and the banking system was restructured through the establishment of 10 private banks so far in addition to the government’s specialized banks.

However, these successes have not managed to curb the wide-scale unemployment, even among academics, in addition to the hidden unemployment in state-run institutions and the public sector, which is estimated at 30%.

These institutions still suffer from the low level of productivity, efficiency and competitiveness, and dampened spirits of creativity and widespread corruption, in spite of the tangible success of the efforts to eliminate these phenomena from the government’s agencies. The same thing applies to most sectors of the Syrian economy, including private organizations and companies.

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March 18th, 2007, 9:23 pm

 

35. Joshua said:

By the way, I am coming with a response to Young. No insults. I have been taking my own advice and letting things cool so I won’t comment in anger.

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March 18th, 2007, 9:31 pm

 

36. majedkhaldoun said:

it is just and fair that the cost of services provided to the Iraqi(million of then) should not be a burden on Syria, Iraq must provide part of the oil revenue to syria, This could be 6 million dollar a DAY.

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March 18th, 2007, 9:50 pm

 

37. Ford Prefect said:

Joshua,
To underscore your Shami tujar parallel, a foreign correspondent, reportedly, was once roaming the Hamediyyeh Souk in Damascus. Interested in knowing whether one of the merchant’s little 8-year old son was into math, he asked the boy: “what is 7×6, young man?”
The little boy, with witty Damascene brilliance, immediately answered: “Are you buying or selling, 3ammo?”

We all are, aren’t we?

Can’t wait for your reply to the Young Neocon Likudi in Beirut.

Cheers.

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March 18th, 2007, 10:07 pm

 

38. ugarit said:

So how would one start a telecommunication business in Syria that’s going to be a partner with a Turkish one? Are there weblinks for this?

🙂

http://www.doingbusiness.org/ExploreEconomies/?economyid=183

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March 18th, 2007, 10:16 pm

 

39. Ford Prefect said:

Norman,
Regarding a spellchecker for your blogging pleasure, Joshua has introduced a good idea using the Google bar. Alternatively, I found the best way to post a spelled-checked comment (whether you use Windows, Mac, or Linux) is to write your comment in your favorite word processor. Once you are happy with your comment after spellchecking it, use the magic of Cut and Paste from your word processor into the blog’s comments section. You can review your pasted comment and adjust it for line breaks as necessary. An added advantage to this would be having your own personal saved copy of your comment.

Keep up your writing anyway Norman – I enjoy it.

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March 18th, 2007, 10:18 pm

 

40. ugarit said:

Ford Prefect:

You’re a Linux user? 🙂 I have been for about 12 years.

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March 18th, 2007, 10:21 pm

 

41. Ford Prefect said:

Ugarit,
Yes, and a big “Yeah” to you for being another great Syrian blogger using Linux (no wonder your comments are so good and smart!) I alternate between Suse and OSX. I use Windows mainly when I need to fall asleep. Alex is the big Linux guru here.

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March 18th, 2007, 10:39 pm

 

42. norman said:

Thanks ford prefect , I think i will continue writing without spellcheck so i can have an excuse for my bad writings.

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March 19th, 2007, 12:25 am

 

43. ugarit said:

Ford Prefect:

Thanks for the complements! I started with Slackware, then Redhat, Mandrake/Mandriva, FC, RHEL, Centos, Debian, Knoppix and now Ubuntu.

Great to hear that Linux is becoming more popular with the Syrian community.

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March 19th, 2007, 1:34 am

 

44. Syria Comment » Archives » Ehsani on Syria Comment over the Years said:

[…] On April 4, 2007, a warning about state revenues was raised. “As you recall, I have long held the view that the Syrian economy’s prospects were in a much worse shape than was commonly believed. […]

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September 4th, 2011, 4:04 pm

 

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