“Syria’s Economy Tsar Says the Middle Class is Reviving” by Ibrahim Hamidi

"Dardari Says the Syrian Middle Class is Reviving Due to Economic Reforms"
by Ibrahim Hamidi
2008-03-10 (Translation thanks to BBC Monitor)

Text of report by London-based newspaper Al-Hayat website on 8 March

[Report by Ibrahim Humaydi from Damascus: "Syrian Deputy Prime Minister Confirms Gap Among Classes, Increase in Number of Rich, but Denies Poverty Is Increasing. Al-Dardari: Syria Needs To Liberalize its Economy]

In an interview with Al-Hayat, Syrian Deputy Prime Minister for Economic Affairs Abdallah al-Dardari declared that his country's economy is facing new challenges represented by a growing demand on energy supplies, the need to find 1bn euros annually for electric power, and the rising prices of agricultural products and their connection with "food security" resulting from rising oil prices. He asserted that Syria has no choice but "to work harder on structural economic reform and liberalizing more economic sectors from their current restrictions."

He pointed out that the rich in Syria "are growing richer but the incomes of the poor are also improving." He said that "the gap between classes is more conspicuous now" but without meaning that "the middle class is disappearing." He added that poverty is "a harsh and profound reality" but the Syrian Government is working to provide "social security."

Noting that Syria's domestic challenges are connected with poverty and unemployment, he asserted that reform "is an intellectual, administrative, and executive challenge." He added that it is not an easy process that hinges on the adoption of a collection of laws but is a difficult subject that requires development of mentalities and administration.

He said: "If we compare the Syrian situation with other economic reform experiences, we will find that the briefest reform process lasted 17 years while the tenth Syrian five-year plan is only one and a half years old. If we remember that the intellectual beginnings of economic reform appeared during the Ba'th Party's 10th regional congress in June 2005, this means that reform has been going on for two and a half years. Therefore, historically we are in the early stages of reform."

He pointed out that the overall economic growth rate "reached 5.1 per cent in 2006, a percentage that is documented by the IMF." He noted, however, that new figures show that current growth is around 5.5 per cent while GNP growth reached 6.5 per cent in 2007."

Al-Dardari admitted that "there is no way that every person will benefit to the same degree," noting that this is impossible because people are at different levels of education, experience, skills, and ability to seize opportunities." He asked: "Is growth meant to be perpetual?" He said that "the questions are more numerous than the answers in the first stage of economic reform and no one can claim that he has the answers to all the questions."

He added: "Whenever I visit my home village, people ask: What does a growth rate of 9 per cent per cent mean when all we see are rising prices of gasoline, sugar, and rice. This is what the villagers see."

He said: "Today Syria is moving towards a more balanced and better situation with regard to what are termed economic basics. Growth is a necessary condition but alone it is not enough. What would be enough is for growth to include all the Syrian people."

Speaking about economic challenges and economic weak points, he said that the first challenge "consists of completing and expanding economic reform policies and liberalizing the Syrian economy of the many restrictions that hamper it."

He remarked: "It is true that we covered a lot of ground but we still have a very long way to go. If we assume that someone will say that we are not telling the truth and that the growth rate is only 3 per cent, what is the solution?

Syria needs to see results. We need to entrench and expedite structural economic reform. We need a greater push to liberalize the economic sectors. Does this country have any other options available?"

According to what Al-Dardari explained, the second challenge consists of "ensuring that the Syrian economy is competitive.

He said: "And what does competitiveness mean in its institutional, legislative, productive, and service aspects? It means the Syrian economy's ability to produce high quality products and services and to be able to attract local, Arab, and international investments. The important challenge is to reduce unemployment, create a secure job market, and develop effective job market policies."

The Syrian deputy prime minister explained that "in its narrow definition set by the International Labour Organization, every person who did one hour in the week preceding the survey is not regarded as unemployed. Unemployment in Syria went down from 12.5 per cent to 8.1 per cent of the overall labour force between 2004 and 2007. Can I then say that unemployment has dropped? No, because it is still high."

He pointed out that unemployment in the 16-24 age group exceeds 18.4 per cent. This, he said, poses a big challenge for Syria and for job market reforms, which must take into account the need to protect the rights of older working people while providing opportunities for the young to enter the job market. Al-Dardari announced that the overall labour force amounted to 4.879 million in 2006.

Asked about the energy challenge, he said it is represented by the fact that "the rate of energy consumption is growing faster than the level of local production." He explained that energy demand is growing by 10 or 11 per cent annually while the economy on the whole is growing by 5 or 6 per cent and will reach 7 per cent at the end of the current 10th five-year plan. This means that "no matter how fast you run, you will not be able to provide the country's energy needs."

He said: "The world is moving in the direction of relying on alternative energy sources but these require investments and their costs are still very high."

He announced that Syria "needs 1,000 MW of electricity annually that cost 1.5bn euros. Hence the energy issue should be handled in a comprehensive manner and from a strategic perspective. We need to work strategically on this issue."

He said that he believes "it is a tremendous challenge to overturn the equation until energy production is equal to or greater than the demand, and this requires 20 years of growth."

He noted that the "third challenge to the Syrian government consists of agriculture, especially as the balance of food security in the world has changed and a quarter of global wheat production goes to produce bio-fuels, which caused wheat prices and food prices in general to double in one year." He said that a ton of wheat, which used to cost $200, now costs $450 but there has no been no rise in the prices of barley, animal feed and milk. He remarked: "The economic issue is very complex today and is very difficult to manage."

He explained the effect that this has on food security and Syria's policy on agriculture, saying: "There are challenges resulting from the higher oil prices. This is the first time that food prices are so closely linked to the oil price. However, what interests us in our agricultural policy is to provide food security, that is, Syria's needs of basic foods without relying on other countries. This will continue."

He asserted that "there is no escape from agricultural subsidies." He pointed out that some technical experts are studying this issue "but we cannot say let us leave it as it was last year when a ton of wheat cost $200 while it costs $450 today."

He added: "Animal feed was plentiful but today supplies are not secure worldwide."

He described his understanding of the definition of a middle class by saying that "it is the segment of the population that is able to provide a dignified standard of life for itself, is educated, cultured, and broadminded and is able to take the initiative."

He pointed out that statistics indicate "a significant increase in the past three years in the number of people who are self- employed in Syria" and added that the working middle class in the country is at a stable 28 per cent of the overall workforce but the rate of those who are self-employed is rising rapidly, at around 10 per cent in 2006- 2007, from 26 to 29 per cent of the total workforce." He said that this is one of the signs that the middle class is reviving.

On the condition of being poor, he said: This phenomenon "is not merely economic but also psychological. Discrepancies in income today do not indicate rising poverty. It is connected with the method of consumption. I mean formerly Syria's rich did not spend their money in Syria. They used to go to Beirut, Paris and London. Now there are opportunities for liberal consumption in Syria that has made the phenomenon of rich and poor more conspicuous. One must isolate the phenomena and determine where they stand within the economy. Are they results or causes? Are they a social phenomena or actual economic realities?"

He spoke about the results of measuring the rate of poverty in Syria:

"It has been determined that those who live on less than one dollar a day are 0.6 per cent of the population. How many Syrians live on 50 lire per day? They are very few. If they have no income, society will help. Do not forget that the Syrian social security system is excellent."

He said that the number of those who live on less than 2 dollars a day is "less than 10 per cent of the population" and that a large number of families "receive remittances from abroad." He declared: "Syrian society is balanced and possesses methods of absorption and balance."

Originally published by Al-Hayat website, London, in Arabic 8 Mar 08. (c) 2008 BBC Monitoring Middle East.

Compare with this article by Suad Jarous in al-Sharq al-Awsat, November 9, 2007: "Fears of the Collapse of the Middle Class in Syria and the Lifting of Subsidies"

Comments (68)


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51. offended said:

One more thing: Dardari claims that economic reform has only started on 2005 (two and a half years ago), and that in the grand scheme of things, you can’t measure the effectiveness of those reforms YET.

The question is, where were we before that? Why weren’t we proactive on addressing the issues of energy and subsidies?

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March 11th, 2008, 5:42 am

 

52. Shai said:

Alex,

What are you doing up still? I sent you some mail… thank you for yours.

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March 11th, 2008, 5:51 am

 

53. Alex said:

Offended,

Pre-2004 … they were expecting everything to progress differently. they were counting on France, England, and Saudi Arabia to help Syria with expertise, investments, and grants … etc.

Instead … things changed. All the promises were gone .. all the partners became fierce enemies … all the plans were put on hold.

There was a transition period of two years … 2004-2005 during which the Syrians were

1) Busy with trying to deal with American invasion of Iraq which looked like it was successful at first (After Baghdad fell quickly), and knowing that Syria was next.

2) Busy with the repercussions of the Hariri assassination … they had to withdraw from Lebanon … etc

3) Busy trying to establish other partnerships. Opening to turkey, strengthening ties with Iran, and other Asian partners.

Post-2005 economic planning assumes the following big one: We will need to survive and grow without any help from America, Europe, or America’s Arab allies.

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March 11th, 2008, 5:56 am

 

54. Majhool said:

SYRIAN

So we agree that the fix is political. however we disagree on how the resources can be allocated:

Lifting emergency law does not cost a lot of money; I can argue that the overcrowded military and intelligence services cost a lot of money and unnecessary and anti-business fear.

As for democracy, few points

1) Rule of law is a different from democracy. I never advocated chaotic parliamentary system for a country such as Syria, in the contrary I believe in the virtues of a strong executive governing.
2) The problem with the regime is not that fact that it’s not democratic. the problem is that it’s unpopular with wide segments of the society. which result in a very expensive and repressive survival mechanisms (Intelligence, negative defensive policies, mafias, Buthayna Shaaban etc.)
3) Why not share power with a strong popular representative prim minister instead of marginal ones we has (Zoubi, Mero, Outry)?? I mean marriage is not enough don’t you think?

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March 11th, 2008, 6:35 am

 

55. Majhool said:

Alex,

I have friends from Zimbabwe who are making millions there. Does that make Zimbabwe a great economy? Similarly I am sure there are many opportunities to makes lots of money in Syria.

“We have to admit that Bashar scored a decisive victory”

So what? King Assad the first,scored 10 times more victories and what did we get? an economy in ruins!

I don’t see any value in glorifying a leader’s victory over his people and other regional powers. I am looking after the average man

You are not a liar, but you do spin things a little. and you are nice guy. mabsoot?

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March 11th, 2008, 6:40 am

 

56. offended said:

Alex, I agree with you…
However, and I am writing at the risk of sounding pessimistic or cynical; the ultimate reality of the depleting energy, rising demand and exhaustive subsidies should have been predicted long ago.
We always tend to say that we ‘were busy doing this’ or ‘we were busy doing that..’ but the fact of the matter is that these tangling things and distractive issues will never stop….
Again, I don’t want to sound critical or pessimistic, that’s just my two fils ..

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March 11th, 2008, 6:50 am

 

57. Majhool said:

Offended,

I agree with you. but let me assure you (Alex told me) that once peace is struck with Israel (sometime next year) that everything is going to be ok. lol

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March 11th, 2008, 6:54 am

 

58. Alex said:

Offended,

It is ok to be pessimistic at your age : )

I remember when I was very young this Time magazine article from 1983

“A more serious threat to the regime may be the country’s worsening economy. Plummeting oil revenues and bad harvests have drained foreign reserves. According to an International Monetary Fund report, Syria’s total reserves (excluding gold) dropped from $927 million in mid-1981 to $40 million by early 1982. Electricity is now rationed nationwide. Though unemployment figures are not released by the government, more people are out of work than a year ago and inflation is on the rise.”

Syria had 40 millions only! .. and “plummeting oil revenues” too … since 1983.

Now Syria has an 18 billion dollar reserve … and those plummeting oil revenues of 1983 are still plummeting …

Who knows what will happen next year …

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March 11th, 2008, 7:05 am

 

59. offended said:

Majhool,
I wonder whether your agreement with me was part of the sarcasm that had enticed the ‘lol’, but anyway I am glad we have some common ground….let’s see if I can change your mind about other stuff as well…

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March 11th, 2008, 7:32 am

 

60. Alex said:

استكملت دمشق التحضيرات اللوجستية للقمة العربية المقررة في 29 و30 آذار الحالي، في وقت ما زالت مسألة المشاركة تلقي بظلالها على مجمل الاتصالات والتحركات السياسية، والتي كان أبرزها، أمس، الاتصال الهاتفي الذي أجراه الرئيس بشار الأسد بالرئيس الليبي معمر القذافي، وإعلان رئيس الوزراء العراقي نوري المالكي أنه سيرأس وفد بلاده إلى القمة، فيما أكدت الدوحة رفضها خيار المقاطعة.
وذكرت وكالة الأنباء الليبية «جنا» أنّ القذافي تلقى اتصالاً من الأسد، تناول آخر المستجدات المتعلقة بانعقاد قمة دمشق، مشيرة إلى أنّ هذا الاتصال يأتي «في إطار التشاور المتواصل بينهما بشأن القمة».
إلى ذلك، أعلن المالكي أنه سيرأس وفد بلاده إلى قمة دمشق. وقال المستشار الإعلامي لرئيس الحكومة العراقية ياسين مجيد إنّ «وفداً حكومياً رفيعاً سيرافق المالكي، ويضم عدداً من الوزراء بينهم وزير الخارجية هوشيار زيباري».
من جانبها، نفت الرئاسة العراقية أن يكون الرئيس العراقي جلال الطالباني قد اعتذر عن عدم المشاركة في قمة دمشق، موضحة أن «مشاركة المالكي في القمة تأتي نزولاً من الرئيس الطالباني عند رغبة المالكي لوضع ترتيبات لعقد اتفاقات» من دون إعطاء مزيد من التفاصيل.
من جهته اعتبر رئيس وزراء قطر الشيخ حمد بن جاسم بن جبر آل ثاني إنّ «القمة ليست ملكاً لسوريا، بل هي قمة عربية بحسب القرارات التي وقع عليها القادة العرب»، مؤكداً أنّ «المقاطعة لا تنفعنا، فنحن لم نقاطع مؤتمرات السلام، وذهبنا كلنا إلى أنابوليس وكنا نتشاجر من سيذهب أولاً، فالأولى أن نذهب إلى سوريا، ونتشاجر هناك مثلاً». (تفاصيل ص 14)
إلى ذلك، نظمت وزارة الإعلام السورية، أمس، جولة للإعلاميين على مواقع عمل واجتماعات القمة، وتحدث معاون وزير الإعلام طالب قاضي أمين أمام حشد من الإعلاميين عن 750 استمارة طلب تقدم بها صحافيون محليون وأجانب لتغطية القمة.
وبد واضحا خلال الجولة، التي استغرقت ساعتين، حجم الجهد الذي وضع في خدمة هذه المناسبة، علماً أن إمارة قطر تعهدت بتنفيذ وتمويل قسم كبير من الأعمال، لا سيما مواقع إقامة الزعماء العرب والضيوف الأجانب الكبار بالقرب من مكان انعقاد الاجتماعات، حيث تكفلت شركة «الديار» القطرية ببناء وتجهيز 26 فيلا رئاسية فخمة خلال وقت قياسي، وذلك على مساحة 60 دونماً كانت حديقة في السابق.
ويرفرف علم الشركة القطرية في إحدى ساحات هذا الموقع، فيما يتولى حراسة الموقع منذ الآن عناصر من قوى الأمن الرئاسي، التي حددت للصحافيين فيلا ضيافة واحدة للتصوير، وتحديداً في صالون الاستقبال الذي تضمن زاويتي استقبال واستراحة، و طاولة اجتماعات ومكتباً من النوع الفخم.
وبدت القاعة التي ما يزال شعار الجامعة الضخم ينتظر التعليق في صدرها، كورشة عمل تخضع للمسات الأخيرة، في وقت تركز الجهد الأكبر خارج القاعات، وتحديداً على بوابة قصر الأمويين والطريق المؤدي إليه، حيث جرى توسيع طريق مطار دمشق الدولي، وزرعت على جانبيه الزهور والأشجار، كما يجري تحسين مظهر مداخل القصر.
وخصصت وزارة الإعلام السورية أربع قاعات إعلامية موزعة بين وسائل الإعلام المختلفة، فيما أعلن أمين أن الحكومة ستؤمن 18 جهاز بث خارجي، مشيرا إلى أن المركز يمكن أن يستوعب 40 جهازاً.
كما ستزود القاعات الإعلامية بكل ما يحتاجه الإعلاميون من وسائل اتصال، مع العلم أن هؤلاء سيقومون بتغطية القمة عملياً من هذه القاعات، حيث لن يسمح لهم بالدخول إلى قاعات الاجتماعات، فيما يملك التلفزيون السوري الحق الحصري لنقل وقائع الجلسات المفتوحة لمختلف المحطات مجاناً.
وذكرت مصادر رسمية إن الاجتماعات المغلقة للقادة العرب ستكون «واحداً لواحد»، أي أنه سيسمح لكل منهم بمرافق واحد، أمّا الاجتماعات الموسعة فستكون «خمسة لواحد»، أي أنه سيسمح لكل من هؤلاء بخمسة مرافقين.

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March 11th, 2008, 7:44 am

 

61. offended said:

Alex,
My pessimism is not a state of mind, it has more to do with reality. Poverty is not a delusion as Mr. Dardari tried to explain. It is real. And more and more people are getting poorer.
The fact that my family and I are doing well doesn’t mean I can’t relate to those people. It’s become harder to get admission to a decent college (without paying the hefty ‘parallel education’ fee). Private universities are still out of reach for average families. Government jobs (which are described as secure although very low paying) are dwindling, the government is no longer obliged to hire engineers after graduation. Fresh graduates have no choice but to immigrate. I know people who have worked very hard and done everything they think is right and they still can’t get a grip on a decent life. On the other front you’ve got a population issues that have almost sprawled out of control. The irony of it is that the poor are multiplying more and faster than the others who are doing better than them. Housing is still a major problem. If you manage to get a subscription with an honest developer (who will not rip you off of your life saving), then it is either going to take a lifetime for the development to finish, or you will be forced to sell your subscription prematurely with marginal profit.

How could I be optimistic after all this?

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March 11th, 2008, 7:50 am

 

62. offended said:

LOL Alex,
I’ve just realized that my last comment sounds like as prolonged episode of Maraya or Bok3a’ Doo’

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March 11th, 2008, 8:02 am

 

63. Alex said:

Offended,

I agree with everything you observed. I know you were in Aleppo few months ago.

But … The pendulum always swings to the other extreme at some point … Syria was socialist for decades… and now the Ehsanis will take over for some time… there will be inflation, and there will be a greater distance between the rich and the poor. But those 20-30 billion dollar investments from Qatar and the UAE will surely have a trickle down effect .. gradually.

I know that “the regime” used the excuse of regional conflicts in the past to explain why no economic progress took place .. but hte past few years, this was a valid excuse … managing to run a country while the United States refuses to let anyone sell you spare parts for your CIVILIAN airlines is not easy.

But .. the corruption .. they can really do much better there. that is my biggest disappointment with them.

The rest, I heard mostly convincing arguments why they did not move faster… although I would have taken some risks on some issues.

Dardari works very hard. He is a good man.

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March 11th, 2008, 8:11 am

 

64. MSK said:

Ya Alex,

Do you think that the corruption is systemic or do you think that the regime (i.e. Bashar & his close co-rulers) has a real chance to combat it?

Personally, from my experiences with similar regimes I am very skeptical. I just can’t see how the Syrian regime, which includes at its highest levels people like Rami Makhlouf, can successfully push through an anti-corruption scheme, even if it wanted to. What could it offer all those corrupt officials (in ministries, administrations, courts, police, etc.) as a substitute for the current bribes?

–MSK*

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March 11th, 2008, 9:02 am

 

65. Akbar Palace said:

The poster that appears in the picture that you referenced however, replaces the words “This regime occupying Jerusalem” with the word “Israel”, so the English translation on the poster is correct, but it doesn’t match the original quote.

Apples and apples if you ask me.

QN –

Thank you for the translation. This is just another example of what Israel, the US and the West is up against. You have a country with a violent, intolerant ideology that has no problem funding and glorifying terrorists and suicidal bombers. This ideology has cost the lives of thousands of Middle Easterners, Israelis, Americans, Europeans, and Asians.

And the sympathizers here on Professor Josh’s “peace site” should be ashamed of themselves.

Good work, you simply cant trust these people here on SC, thank you for exposing them. We will now give you the Honorary “Sherlock Holmes” detective award for exposing them for the frauds that they are!

Enlightened,

This wasn’t my work. Other observers of the Middle East simply scan the news reports from AFP, AP, Reuters, etc and show the interested public what the MSM doesn’t want us to see. I found the link at another anti-terror website. The bottom line: the excuses for Ahmadinejad were numerous, and in the end, these “bad” translations have proved to be accurate. I guess you can call us Westerners who are very concerned with this madman “neocons”.

Keep up the good work your efforts are being noticed here.

I guess. But whether my posts are being noticed or not doesn’t matter to me. I personally enjoy cutting through the misinformation.

Your work is not frivolous, these “nice” “people ” only want your destruction…

Tell me something I don’t know.

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March 11th, 2008, 10:55 am

 

66. EHSANI2 said:

Dear Majhool,

I would like to come to the defense of my good friend Alex regarding your exchange with him earlier. It was me indeed who stated earlier that the level of corruption in Syria had gone down recently. Let me explain:

People like Mr. Dardari for example are not corrupt. Following repeated questions on my last trip to the country, I was assured that Mr. Dardari receives an above average salary that makes it possible for him to avoid having to resort to bribery. Rumors are that he gets paid close to $10,000 a month in salary paid directly from the Presidential Palace.

This is a vast improvement from the past. A person at Mr. Dardari’s position was expected to be a prime target of bribery and elicit under the table payments. It is my understanding that this type of activity has been reduced rather significantly when it comes to key ministerial positions.

None of us can be naïve to think that corruption in Syria is not pervasive. It is. But, it is not as blatant as before. I bring the example of Mr. Dardari as a case in point.

My friend Alex was correct in quoting me on this topic.

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March 11th, 2008, 2:06 pm

 

67. Karim said:

Ehsani ,what can do men like isam zaim or dardari in front of members of asad and makhlouf family,can they say no it’s too much ?in this case dardari is not very different from abdulrauf al kassem who was prime minister in the 80’s .here is not located the corruption but amongst the civil servants and the barons of the regime and their sons…no one can deny that under bashar ,corruption is higher than it was before 2000 it’s so obvious.

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March 11th, 2008, 3:41 pm

 

68. Enlightened said:

AP said:

“Tell me something I don’t know.”

Akbar, please re read my earlier post, you missed something , really missed something.

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March 11th, 2008, 9:42 pm

 

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