It’s the Economy Stupid – Ehsani Comments

Anyone wanting to know why Syria has not signed the European free trade agreement (Association Agreement) that was finally OK’ed by the EU states recently need look no further than this article in Arabic هيئة تخطيط الدولة تفضح الدردري !!, written by Ali Aboud and reprinted by Ayman Abdelnour’s All4Syria. In English the title is “The State Planning Commision Exposes Dardari.”

Abdullah Dardari

Abdullah Dardari

Abdullah Dardari was the head of the State Planning Commission in 2005 and is responsible for writing the Tenth, Five-Year Plan. Dardari was kicked up stairs in 2006 and named Deputy Prime Minister in charge of the Economy, although he does not have authority over a ministry or even a commission.

Tayssir Raddawi was named to replace Dardari as Head of the State Planning commission. Raddawi, who is close to Finance Minister Hussein, has been the number one critic of the 10th five-year plan and never loses a chance to point out the failures of the plan and of the previous five-year plan. He has called it “not populist” because the people don’t understand it. Dardari has been a major promoter of free trade. His efforts took Syria from “socialism” to a “social market” economy. But the impact of liberalization has had many damaging effects on Syrians – in particular – lower income Syrians.

How much of this is due to Dardari’s short comings and bad planning and how much is the necessary pain of getting out from underneath the failure of socialism and incompetence of central planning? I don’t know. My sense is that Syria is due for a lot of economic pain in order to escape bad habits and past mistakes no mater who plans the transition. Dardari had a very small staff. He was fighting large ministries, which fought him every step of the way. He had few experts to help him. Those that were outspoken and gave honest, but impolitic, assessments of the true extent of Syria’s economic problems and the source of corruption were drive out by people other than Dardari. In short, Dardari has had one hand tied behind his back. All the same, Syria has no social network to catch those who are getting crushed by liberalization. But where should the money come from? Somebody deserves the blame – I am just not sure it is Dardari.

Here are some scary facts. The following is a translation of Raddawi’s critique of the liberalization process:

1- The environment for Investment is weak and productivity is low.
2- Low private sector participation, intense global competition and a major collapse in raw material prices.
3- The GDP growth rate that Syria has is unlikely to persist given the continued inconsistencies which have been identified prior to the economic plan.
4- General Low productivity and weak institutional and administrative reforms.
5- Low technology usage in production
6- Continued high unemployment especially for the youth
7- Income is still unfairly distributed between individuals and regions
8- What high economic growth has been witnessed needs a set of metrics to ensure that it continues in both the medium and long term
9- Dependence on foreign demand is difficult since Syrian exports have not improved in both 2006 and 2007
10- A rise in the SYP exchange rate by close to 10% has had a negative effect on exports
11- Falling both private and public investment by close to 12% is a negative sign and runs counter to the economic plan.
12- Worker productivity is still poor compared to other developing countries.
13- The ranks of the unemployed are expected to increase especially for the youth.
14- The economic indicators for manufacturing have fallen significantly because of older machinery, higher costs, lack of worker skills and idle production.
15- The absence of any regular evaluation by the industry ministry of existing policies and whether goals have been met.
16- The failure to earmark enough funding to expand public sector light manufacturing.
17- Public sector light manufacturing needs new investment in machinery and a faster response function from its management regardless whether this may bring inflation.
18- The failure of the relevant government agencies to conduct regular evaluation of both private and public sector entities to help identify shortfalls.
19- Economic planning must not be built on slogans and wishes but must be realistic.
20- The fall in investments in 2007 was due to the lack of clarity in law number 8
21- The private sector is still small or medium size and is still managed mostly by a family structure.
22- The improvement in tax collection ex oil does not reflect the principals of fairness judging by the falling direct tax revenues and the rising indirect tax receipts.
23- There is still a significant amount of tax evasion judging by the fact that the growth in nominal GDP was not matched by indirect tax revenues and as non-oil tax receipts don’t match the fall in taxes revenues from oil.
24- The above tax revenue deficit has had a negative impact on income distribution and reorienting the national economy.
25- Eliminating subsidies partially on some items has had a negative effect on living standards as prices rose.
26- The existence of a stock of foreign currency outside the banking system may add to economic pressures in the event it is exchanged into Syrian Pounds.
27- In spite of the existence of private banks, government owned banks continue to dominate when it comes to both loans and deposits.
28- Inflation has risen to 17.8% in the first half of 2008.
29- The current account is not stable due to the deterioration in the trade deficit.
30- Even though the ranks of those under the poverty line has dropped, there is still 12.2% below what is regarded as extreme poverty while 34.5% under the poverty line
31- There is still no law to facilitate rental financing even though this has been presented to the economic counsel.
32- Wages and salaries now make up 30% of total GDP in 2007 after falling from 32% in 2005. Real wage growth also fell from 9.9% in 2005 to 3.2% in 2005.
33- The implementation of the economic liberalization program has had a negative effect on income and spending due to a fall in real economic growth.
34- There is still no solution to the pollution of the water used for residential, industry or agriculture.
35- Per capita water availability is down to 747 m3 per year which is a level below the water poverty level of 1000 m3.
36- 8% of agricultural land has suffered degradation due to the environmental changes.
37- Land truly used for agriculture has fallen by 2.6% due to increased urbanization and water resources which has increased the risks of investing in agriculture.
38- The agriculture insurance laws is yet to be issued which has made it difficult to implement the past contracts between producers and marketing institutions to help regulate the market. The absence of private marketing concerns with deeper pockets has not helped in organizing the marketing either.
39- The volatility of raw materials has slowed down the implementation of investments in agriculture.
40- The failure of most tenders or managing them effectively to fit the feasibility studies of development projects.
41- Even though a number of laws have been passed, failure to implement them has resulted in deteriorating resources and encroachment on agricultural land.
42- Extended weakness in both private and public Tourism institutions.
43- Goals were unmet in air transport due to the low number of available aircrafts.
44- The unavailability of laws governing BOT type investments and the failure to allocate funding to the government owned entity in charge of highway and road construction.
45- The reluctance of the private sector to invest in high cost infrastructure projects has resulted in the lack of detectable improvement in the road and rail networks.
46- Nothing has been done about the identified inconsistencies in the economic plan.
47- Low investment spending has resulted in lower budget deficit but this made the level of investments inconsistent with the economic plan.
48- Revenues have fallen short for many reasons including the lack of a credible system that of taxation and the avoidance of tax evasion.
49- There is still no strategic plan to deal with the public debt in way that would balance the needs of the national economy as a whole.
50- The level of interest rates is still not conducive to increased investments.
51- Most of the policies that were crafted to deal with the economic crisis are yet to enter the implementation stage.

I asked Ehsani for his comments, which are posted below:

The 51 point-criticism of Dardari and the so-called economic reform plan is extraordinary in both depth and scope. The reformers are being blamed for everything from high raw material prices to low investments, productivity and economic growth that have left 34% of Syrians  (6.8 Million) living below the poverty line, which is 2$ a day. No punches were spared. Even the country’s exchange and interest rates were deemed too high for both exports and investments.

The tone behind the scathing attack is one that identifies with the suffering of the working class — poor workers and farmers — who have seemingly suffered the brunt of the recent economic reforms that are underway.

While few solutions are offered, it is clear that the author is calling for more public sector investment in both agriculture and light manufacturing coupled with more taxation of the rich through direct rather than indirect taxes.

While such solutions may appease  die-hard Baathists, they conveniently overlook the true causes of our economic malaise. Dardari’s liberalization process did not start us down this road. On the contrary, the long absence of liberal reforms brought us to this point. The Baath has been in charge of economic policy for over 40 years. Undoing the damage caused by extensive reliance on  subsidies amid a population explosion and persistently weak economic growth will not be easy.

Some would argue that the economic reformers ought to have provided a wider safety net as they embarked on their program. That criticism fails to explain from where the funding of that safety net would come. The country’s coffers are under severe pressure. One of the criticisms that I have been sympathetic to has to do with taxation distribution. Syria’s very wealthy do not pay their share of taxes. Most boast of their ability to evade taxes and wonder why they should pay any tax given the lack of services. This is a classic chicken and egg problem. Services are weak because tax receipts are low and tax payers don’t want to pay since they receive no services.

In the opinion of this writer, Syria’s problem is not that the reforms have been too fast but rather too little too late. A massive culture of dependency on the state has grown up in Syria; it is so pervasive that average Syrians have come to regard subsidies and government jobs as their right.

Syria’s economic challenges are likely to be enormous. The 51-point document must serve as the best illustration of that. Solutions like increased investment in the public sector caused the problem in the first place; they will not solve it.  Similarly, solutions relating to increased investment in agriculture conveniently overlook the fact that Syria suffers from a severe shortage of water resources. Less dependence on agriculture that heavily depends on water and not more must be the answer.

It is time for bold leadership in economic matters. There are no easy solutions, given the daunting set of issues the country faces. Arguing and bickering between the reformers and the hawkish Baathists merely delay finding a credible set of solutions that have been in short supply thus far.

Comments (74)


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51. jad said:

‘Do you mean Rafik Hariri? He’s dead.’
الله يرحمو

‘Syria killed him.’
عمرو خالص

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November 3rd, 2009, 6:54 am

 

52. Nour said:

Syria had nothing to do with the killing of Rafiq Hariri and even the international tribunal that your hero Saadeddine was calling for is now moving away from such a claim.

I know that the Now Hariri piece was an op-ed, and it was a silly op-ed as it was clearly aimed at villifying Syria. It had no factual content to educate its readership, but merely loaded and charged accusations, along with farcical claims and contentions designed strictly to incite hatred toward Syria, which has been the specialty of certain racist Lebanese propaganda outlets.

As for the Al-Ra’i article, I don’t really put much into it as I never expected anything out of the US government, which has proven time an again that it is wholly committed to serving the interest of the racist, cancerous Jewish entity. What I find more interesting are the comments on the side by the readers, most of whom express admiration of Syria and its steady, consistent position.

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November 3rd, 2009, 7:26 am

 

53. jad said:

Off topic:

Some of you may like this news:
الإدارة المحلية تلزم الأبنية الحديثة بتركيب السخانات الشمسية
http://www.syria-news.com/readnews.php?sy_seq=104030

However, it should be more organized than this.
To work it must be implemented on every building, not only the new ones and it should be specify as ONE and CENTRAL for the whole building occupants and also to promote solar panels not only for hot water but also for electricity.
The most important piece they missed is to support all this rules with a good program to help people achieving what the city is asking for by having special loans with some banks and technically smart group of personnel to demonstrate and explain step by step how to do that for public.
Rules alone doesn’t make any change.

Check out what SF municipality is doing, they have a Solar Map for the whole city and they are willing to work with any building to help them financially and technically to do that.
http://sf.solarmap.org/

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November 3rd, 2009, 5:12 pm

 

54. idaf said:

Ehsani, OTW, FP and all,

This was an excellent discussion. I enjoyed reading every word. I sure hope that both Dardari and Raddawi (if he can read English!) are reading this. But more importantly, I hope the people in Qasr el-Shaab are.

The skirmishes between Dardari and the “old guards” have been going for years now behind closed doors. Only recently that this became public. It is only healthy that these criticisms are being discussed in the media today (something unimaginable 10 years ago in Syria). One should note though that the Raddawi and the hard core protectionists are the more vocal ones (empowered recently by the global economic crisis). I don’t recall reading any rebuttal from Dardari on criticisms publicly hurled at him for years. This can mean one of two things, he either prefers to work and deliver results to prove his policies (generally Baathis on the other hand subscribe to the populist school of Fedel Castro and love to shout from a podium), or he might be confident enough that he has the ear of the president and is not worried much about defending his reputation.

Either case, one could only understand the smart policy by the Syrian leadership for giving both the economic reformers and the populists competing roles in Syria’s current transitional economy. Firstly, they will balance each other and make sure that a gradual and incremental progress is made with close assessment of social impact. Any government will not risk going far and fast into one direction without assessing its popularity, if only for political survival. In Syria’s case the regime was courageous enough to pursue the unpopular and somewhat painful reforms even under severe existential external threats for the past 4 years. On the other hand, the full throttle double digit growth cases of China and Dubai are not applicable in Syria’s regime case. It is not as much in control as the regimes in those two places. Although, not many objective analysts can argue that Bashar does not enjoy the support of a majority of Syrians today, the regime still fears the backlash of the monster created during the past 40 years.. a society highly addicted to populist policies and responses from government. This addiction to government subsidiaries by a big portion of the Syrian society is what’s empowering the old guards. They are still relatively powerful and popular and this is why one should understand the gradual steps and competing forces at play between reformists such as Dardari and the conservative old guards. Imagine the damaging demagogic responses of those populists if economic reform were put in “high gear”. Take for example the case of Dubai: the double digit growth in Dubai for the last decade is decried today by the Dubaians who are left today with huge debts and dramatic social, societal and cultural changes that they are not able to coop with. The government is not nearly as popular as it was a year ago among its citizens. It is common today to hear thought leaders criticize the sheikh himself publicly (something unheard of in most gulf sheikhdoms). One can only imagine the magnitude of the reaction of those subscribing to populist ideologies within the historically “revolutionary” Syrian culture! Politicians democratically elected or not, need to calculate their survival and stability, be it Syria or the US.

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November 3rd, 2009, 5:17 pm

 

55. idaf said:

On a separate note, this is very refreshing..“without exaggeration, this is a revolution”.. indeed:

http://www.aaiusa.org/washington-watch/4358/j-street-again

J Street Again
By Dr. James Zogby
Posted on Monday November 2, 2009

On October 25th the Arab American Institute and J Street convened a joint meeting, that brought leaders and activists from both communities together as an expression of our shared commitment to advance a just and comprehensive Middle East peace. Two nights later, my wife Eileen and I had the pleasure of attending the J Street Gala Banquet. Because it was such an extraordinary event, I want to share some observations about the night.

First and foremost was the size and composition of the assembled crowd. A week or so before their conference was to begin, with registration nearing 900, J Street leaders were still hoping to reach 1000, their announced goal. Then came a wave of attacks on the group from hardliners in the pro-Israel camp. When I asked a J Street leader whether the criticism was having an impact, he replied “a little negative, but a huge positive impact”. Their event, for example, lost about a dozen of its 160 Congressional sponsors, but retained almost 150. And their registration swelled to 1,500!

As we entered the room it was clear that spirits were high. Jewish activists from the left and center of the political spectrum had spent three days in packed sessions debating policy and program. They had differences, to be sure, but were of one mind in their commitment to project an alternative pro-Israel, pro-peace perspective, and to legitimize a U.S. debate on the way forward toward peace.

As I looked around the room, I realized that I knew many of those present. Some from Middle East peace work we had done together in the 1990’s, and others from civil rights and other progressive coalitions in which we had participated. In his opening remarks, J Street Executive Director Jeremy Ben-Ami made the observation that while J Street is new, it is made up of thousands of Jewish political leaders and activists who have long been engaged in the struggle for peace and justice. What is new is that they have found one another, and have come together to challenge the status quo—that up until now has maintained that there is only one way of being pro-Israel

I was reminded of a metaphor Jesse Jackson used back in the 1980’s when he described the millions of unregistered voters he hoped to empower through his Presidential campaign. They were, he would say, like “so many stones laying around” needing only to be put together and built up to become a wall—an edifice that can provide strength.

I was also struck by the Arabs and Arab Americans who were in attendance, and the profoundly respectful and gracious reception they (we) were given. Several Arab ambassadors were there, one of the evening’s emcees was an Arab American, a video of a message from Jordan’s King Abdullah opened the session, and our joint Arab American-American Jewish meeting was discussed by one speaker and greeted with wonderful applause.

An Israeli friend, with whom I had both debated and worked during the 90s, commented on this Arab presence. She remarked that it was ironic that J Street was being attacked by hardliners because a few Arab Americans had contributed to the group, and some Arabs attended their function, at the very moment when these same hardliners are saying that the Arab world must reach out and declare their interest in peace. They say, she went on, “we have no partners” but here are the partners, and yet they criticize us. I think, she concluded, they don’t want partners.

The content of the night’s program was also quite moving and worthy of note.

The Rabbi who opened the dinner with a prayerful reflection spoke of his personal attachment to Israel, the members of his family who survived WWII to find refuge there, and how they had prospered but still lived in fear and insecurity. He then moved to include in his prayer concern for the Palestinian people noting that if Jews acknowledge one God then their compassion and concern for life must be extended to all mankind, Israelis and Palestinians alike.

Other speakers developed this theme with one of the most eloquent moments of the night coming when J Street’s Director Ben-Ami spoke of his group’s resolve to be, “a voice that cares not simply about our people’s destiny but about the future of the Palestinian people – not just because it is in our interest, but because Palestinian children deserve a future and freedom, hope and happiness every bit as much as Jewish children.” His remarks, like those of the Rabbi, were greeted with applause.

It was also important to note how significant the entire night was for the dozens of Members of Congress who were in attendance. For those who had long been advocates of a just peace, they found reinforcement, and for those who have been afraid to speak out, they were able to see, and hear, the emergence of an alternative voice that makes debate on Middle East issues possible.

As one attendee noted, “without exaggeration, this is a revolution”. The three days, beginning with the joint Arab American-American Jewish meeting, to the banquet at its conclusion, marks the birth of a movement and, one hopes, a transformation not only within the Jewish community’s internal debate, but in Arab American-American Jewish cooperation.

This effort will, no doubt, face obstacles and be challenged by those on all sides who are locked into old patterns of behavior and destructive ideologies based on fear of, anger at, and exclusion of “the other”. But, what I and many others saw over the three days was that a powerful voice has been born calling for change. And it is new.

In the 1990s, when we came together, we did so because leaders in the White House pressed us to work together and Israeli and Palestinian leaders on the White House lawn validated the effort. This time is different. We emerged and came together on our own, with a will not only to build a partnership, but to export its spirit to the Middle East despite the incapacity or unwillingness of Israeli and Palestinian leadership to do so.

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November 3rd, 2009, 5:24 pm

 

56. EHSANI2 said:

Idaf,

As usual, your comments are always spot on. There is no doubt that the leadership faces a fine balancing act when it comes to caliberating the speed and depth of the economic reforms.

I still stick to my view that Syria’s problem is simply that there is not enough economic growth to go around. The fact of the matter is that whatever reforms have taken place have missed the 8-9% economic growth target.

Deciding on how to cut the cake and who gets what is always hard. Having to make distrubution decisions with a small sized cake for so many people is that much harder.

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November 3rd, 2009, 7:20 pm

 

57. Off the Wall said:

IDAF
Thanks for both your post and the Zogby’s article. I believe that Dardari’s position is akin to an economic Czar as opposed to a ministerial position. From those who know him personally, I understand that he is quite, non-combative person who likes to do more than talk. This is a new breed and I sure hope that he has the president confidence, which so far seems to be the case.

I fully agree with you that getting the debate out is healthy, but I hope that the reformer’s side get more active. At the same time, and as you described, the addiction to subsidy has made much of Syria reliant on the government and made the short-term day-to-day interests of many Syrians aligned more with the conservatives than with the reformers. It is possible that more vocal attitude on the reformer’s side may result in a backlash and in strengthening the conservatives position, who seem to be encouraged, behind the scene by a socially conservative prime minister, whose economic position oscillates between that of a none-populist deficit hawk, and populist reform slowing position. As you said, with these debates being taken into the public arena, Syria is witnessing a healthy development. A smart policy indeed.

NORMAN and EHSANI2

I agree that rigid state planning is counterproductive. But countries on the verge/in the process of major transformation need a vision that establishes development priorities and contingency actions. This can only be accomplished with some sort of a consensus based plan, or call it a road map. Such will identify key industries to support in terms of granting private sector access, performance metrics so that state coffers, loans, and tax breaks are used to serve the vision, and monitoring and enforcement rules that minimizes the role and effect of greed in economic development. IMHO, a national economic plan aims at two things only, the first is to improve the average living standards of the widest swath of citizenry, and second to ensure that such improvement is sustainable and self propelling. Way easier said than done.

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November 3rd, 2009, 7:26 pm

 

58. EHSANI2 said:

Idaf,

Dubai was like a car speeding at 120 miles an hour in a 60 mile limit zone with no seat belt on.

Syria is like a car speeding at 30 miles an hour in a 70 mile limit zone panaroid about what would happen if it pressed on the accelerator a little.

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November 3rd, 2009, 7:32 pm

 

59. idaf said:

Ehsani,

I totally agree, the pace of reforms is much slower than the road permits. Even Bashar agreed with you on this repeatedly :)

I don’t think it would’ve been harmful if Syria pushed that accelerator a bit, but regime reformers will tell you that “when we took power we were immediately confronted with Iraq war, Bush regime change, Hariri fiasco and now the economic crisis”.

They would say (and many would agree) that there were just too many speed bumps, deep holes and checkpoints on that road, not to mention that the 1950 over-packed Citroën deux chevaux vapeur they were driving was out of gas with an overheating rear engine… and with no seat belts in the first place :)

OTW,

You are probably right. I tend to agree that the reformers know that if they open their mouth in response to their conservative critics it will be a loosing battle publicly. The society’s addiction to the old system is way too strong. It will be smart of them if they keep their head low and keep doing what they’re doing.

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November 3rd, 2009, 8:38 pm

 

60. Majhool said:

Tying taxes on income to services, and in the case of billionaires, is laughable. The opportunity to make income (the availability of consumers, and even labor) in any society is on its own tax worthy. The arguments (Tying taxes on income to services) hold only on taxes imposed on low income households and business hence the notion of “deductions” in order to make ends meet and on local taxes, when the return is tangible.

If one imports rice and make billions and then avoids paying taxes (excuse is poor infrastructure, education and/or health rendered by the government) then in my mind this prison worthy felony.

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November 3rd, 2009, 9:39 pm

 

61. OFF the WALL said:

IDAF
and no airbag!

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November 3rd, 2009, 9:59 pm

 

62. ehsani2 said:

Idaf,

Sounds like that car could have qualified for the cash for clunkers program. I am sure US taxpayers would not have even noticed.

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November 3rd, 2009, 10:07 pm

 

63. jad said:

OTW,
I got this present for you form my last trip ‘somewhere’:
Enjoy!
http://img27.yfrog.com/img27/9360/img0207lk.jpg

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November 3rd, 2009, 10:13 pm

 

64. hassan said:

With the driver holding the passengers captive at gunpoint while his colleagues in the front seat shoot AK-47s at all of the neighboring cars indiscrimnately.

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November 3rd, 2009, 10:31 pm

 

65. Hassan said:

JAD,

The US let you in their country!?!?!?! You support a government of terror. A government that was friendly to Carlos the Jackal, to Abu Nidal. They made a biiig mistake.

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November 3rd, 2009, 10:46 pm

 

66. jad said:

LOL, I agree :)
BIIIIIIG mistake.
I guess they didn’t know what trouble they put themselves in having someone like me in the states.

About your ‘CAR’ comment, well, accidents happen and In Syria we call them:
قضاء و قدر
Try to live with them, wear a bullet proof vest, hard hat or metal helmet, buckle your seat belt and stop whining.

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November 3rd, 2009, 10:56 pm

 

67. Off the Wall said:

Jad
Thank you for the gift, I saved the image. Nice of you to remember me while visiting “somewhere”. I liked the prevalence of SALES signs and the crowded displays and shelves, looks pretty much like how my brain feels now. :)

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November 3rd, 2009, 11:44 pm

 

68. Hassan said:

Jad,

Re your car comment.

Accidents happen. Well its unfortunate that innocent Lebanese, Iraqis, Kurds, and Palestinians have to be the victims of the “accidents” “caused” by the Baathist-Allawi regime in Syria.

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November 4th, 2009, 1:49 am

 

69. norman said:

Ehsani, Idaf, Jad and OTW ,

What do you think about changing from income tax to sale tax , would that be easier to implement and collect taxes without a major tax collecting agency ,

OTW ,

I think that government should only be in ventures that can not be done by the private sector, like airports , railroads , major state roads , seaports , airline at least the national one but let the private sector join and compete , the government should help the private sector with the know how with money and low interest loans so that they can do the work while the state collecting some kind of taxes .

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November 4th, 2009, 3:46 am

 

70. majedkhaldoun said:

There are rumors that we will have new goverment soon,in Syria,and Naji Otri will be removed, and it is possible that Dardari will be the next prime minister

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November 4th, 2009, 4:07 am

 

71. majedkhaldoun said:

«دير شبيغل» تكشف تفاصيل قصف موقع الكبر السوري

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November 4th, 2009, 4:29 am

 

72. LeoLeoni said:

Ehsani, thanks for your articles, please keep them coming.

I believe that there is a silent majority within the people that are totally supportive of the economic reform plan and liberalization policies. Is the cake being cut properly? Maybe not, but we are not the anomaly here. Most countries have suffered a similar path when shifting from central planning to free market system (Russia and China are a great example). As long as the cake keeps expanding, we will eventually see the wealth being dispersed down. The car is a great analogy. The car already started to move, despite hitting a major road bump (credit crunch crisis), it’s still moving. There is no need to pull the hand break right now and go on the reverse. That is what the conservative populist ideologues want to do.

norman said:
“What do you think about changing from income tax to sale tax , would that be easier to implement and collect taxes without a major tax collecting agency”

Both sales and personal income taxes are important for government revenue. Personal Income tax is where the majority of the government revenue comes from. Most developed countries don’t have a problem with verifying and collecting income tax from EMPLOYEES. It’s more difficult to account for the income of proprietors because they tend to understate their profits by incurring additional expenses on their business. It’s also widespread for restaurant or shop owners to use an extra “hidden” cash register. They understate the sales coming from the “hidden” cash register and use them for tax purposes. All in all, accountability requires an efficient tax collecting agency backed up by strong prosecutors and laws. Prosecutors/Tax collectible agency could be given extra incentives to go after tax evaders by earning bonuses on every crime/criminal/evader convicted, etc. That is just one method of trying to create some incentives to reduce corruption.

majedkhaldoun said:
“There are rumors that we will have new goverment soon,in Syria,and Naji Otri will be removed, and it is possible that Dardari will be the next prime minister”

If what you are saying is true, then I see that as a positive step in the right direction. Dardari is definitely on the right track with the initiation of the economic liberalization policies. We need to see more technocrats and academics in government and less ideologues. The prime minister role has traditionally, in the past few decades or so, been more focused on internal affairs, something that would fit with the nature of reforms and the role that Dardari is pursuing. Also, it would give him the legitimate power to initiate more “daring” reform policies that Ehsani and many others have been calling for. Truthfully, I was never fond of Otri’s policies. The latest discord regarding the new personal status laws, in which Otri was supportive of the sectarian changes, tipped it off, and I am sure many citizens had similar feelings.

Dardari for prime minister will definitely be in a better position to PIMP OUT OUR RIDE!

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November 4th, 2009, 8:50 am

 

73. Off the Wall said:

Norman
I agree with LEOLIONI on the tax issue. Both are important, with sales taxes going for localities. But with no sales taxes on essential food items.

I am all for what you said in terms of infrastructure. But infrastructure is a tricky issue. One must also budget in the plan operation and maintenance cost. As we can see in the US, the state of many highways, bridges, and dams is in such disrepair that now requires major investment in maintenance. This can only be done by the government (in terms of financing) but in terms of actual construction, it has to become private sector.

Also we must not forget soft infrastructure. Research centers, universities (not the buildings), and data collection and monitoring of water, environment, health, and other indicators. This is as important as hard infrastructure.

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November 4th, 2009, 4:35 pm

 

74. Syria Comment » Archives » “Has President Assad Stepped Up Economic Reform?” by Ehsani said:

[...] on al-Reddawi’s “51 point critique” of the liberalization process, which can be read here.  That post triggered a debate between Dr. Omar Dahi, an economics professor at Hampshire College, [...]

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January 12th, 2010, 10:42 pm

 

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