Continuing in the publication of a series of interviews that cover the economic and living-standards crisis in government-held areas of Syria and the debates about its causes and solutions, I turn now to an interview I conducted on 1 January 2021 with a resident of Latakia province and led an auxiliary formation for the Syrian army (I refrain from mentioning the interviewee's name and exact identity as per his request). Any parenthetical insertions in square brackets are my own.
Q: In general how do you assess the living and economic situation in Syria?
A: First let us consider the economic policy of the Syrian republic. Syria according to the Syrian constitution is a socialist state. And the policy of the social market economy was declared in the time of the prime minister al-Otari [NB: prime minister of Syria from 2003 until 2011]. And monopoly agencies were banned in general. And despite the word 'socialism,' we have found many of the private sectors that rely on family companies and also closed joint-stock companies. If the word 'socialism' remains a title that does not describe the true economic policy, instead of the socialist state guaranteeing the support of the system through national production, we find a retreat in this support before the beginning of the Syrian war and that retreat increased after it because of the economic pressures. The state has remained in support of the health, educational and agricultural sectors as well as some oil derivatives, while the private sectors have entered to cancel the oversight of the government and its control over many of the local products because of the policy of the social market economy. And the corruption of the bureaucratic system has led to collapse of economic facilities especially in fields of importance like factories of sugar, oil [e.g. for cooking] and textiles.
With the beginning of the war many of the government facilities went out of service, and many of the very wealthy businessmen left and the system of self-reliance collapse because of the loss of the primary produced goods locally and the destruction of most of the facilities. Here was the error of the administration of the crisis by the economic team that did not put in place an emergency plan to ration imports and protect the foreign exchange that must be used to buy the strategic goods and prepare compensatory local industries. And with the decrease of the value of the Syrian pound and the loss of the foundational products in the markets, the inflation has increased and the foundational goods have become scarce. And the purchasing power among the citizens has become weak. And the economy has become a war economy, not built on the foundations of the productive or business economy.
Instead of the government undertaking a general survey of the size of the economic productivity and the harm that has occurred because of the war and the siege, and preserving the foreign exchange and investing in it, we find it has put in place a superficial and brittle first-aid plan, and it does not pay attention to the needs of the citizens, as it has formed an economic plan that relies on the concept of collection of taxes to fill the treasury of the central bank, instead of putting in place an economic emergency plan.
Some of the influential businessmen have been given rights of exporting goods that from the outset the citizen needs on a daily basis and relies on, like vegetables and fruits. So they have been exported with the aim of broadening the availability of the foreign exchange, at the expense of the need of the citizen, which has led to the increase of their prices: also the electricity that was being sold in large quantities to Lebanon. And amid the rise of prices of fuels and foundational food goods, the citizen has become unable to manage his limited income even to be able to purchase his needs and meet his daily food requirements.
Q: Of course the past year has witnessed a sharp collapse in the value of the Syrian pound. Some say that it is because of the Western sanctions on Syria. Others say that the reason is the financial crisis in Lebanon. What is your opinion on this matter? How have the Western sanctions impacted life in Syria?
A: The economic siege is not the cause of the poverty of the Syrian people. The collapse of the pound, its cause was apparent and clear from the beginning of the war but its results delayed in appearance. The state's loss of the oil and gas wells and loss of the most important fields of agriculture of wheat and cotton in east Syria have led to the collapse of the business budget and the loss of foreign exchange reserves from exports, and the reduction of the quantity of local production subsequently. And instead of exporting, it has begun importing and bleeding its foreign exchange reserves.
After the Caesar law and what happened in Lebanon, we have found that the financial system to get around some of the sanctions in addition to many of the very wealthy businessmen who have deposited their wealth in Lebanon's banking system have taken their wealth out of Syria and those assets have been frozen. This has led to the suspension of their economic activity. But, the hoarding of the basic vital products by some of the names is the cause of the state of extreme poverty we have reached.
For example: millions of dollars have been designated to import modern mobile devices and cars instead of building a factor for sugar or oil and supporting the farmer to grow these primary crops.
Large and numerous taxes are targeting the low-income earners and employees, while we see the giants of the businessmen and capitalists are avoiding taxes in collusion with government institutions.
The bleeding of the state's treasury for the interest of services and luxury projects with the aim of satisfying what does not exceed 5% of Syrians and they are the class of the wealthy, at the expense of production projects that serve the 95% of the poor Syrians.
And the most important thing: when you do not have a survey system, you cannot put in place a plan to overcome the crises or read the threats or assess the dangers and put in place plans to avoid them.
In the end: the economic situation is heading for the worse because all the government solutions are first-aid solutions that do not concord with the size of the bleeding. The inflation will increase and there won't be a solution before the citizen whose average monthly income reaches $20, whereas he needs $200 to reed his family with the basics of life.
The economic program is built on taxing. It will not change. The state has removed its hand from supporting the oil derivatives, which has increased the prices of the some of the local products and transportations. The state has removed its support from bread. And now there has remained no sector supported by the government except the collapsed health sector and the educational sector that is in a bad state.
Q: Yes. So in these circumstances what is the solution to get out of this crisis?
A: The solution is to form an economic team that puts in place a number of priority aims. The first is to secure the requirements of life of the second. The second is to stop all the luxury projects and to agree on first-aid production projects, followed by a long-term plan to rebuild the infrastructure for the strategic industries.
What I mean:
Reconsideration of the imposition of taxes so they should become progressive according to the income and assets, instead of collecting them from the citizen and the one of limited income.
Second: the customs duties of priority goods and equipment relevant to industry and production need to be cancelled.
Third: preventing the hoarding of the import activity for specific persons and rationing imports for basic goods only.
Preventing the export of local goods and limiting export to the surplus only.
Rationing and austerity in budgets of administrations and administrative ministries in terms of expenses and petty expenses, which are the most important avenues of corruption and waste.
Establishing economic courts with laws of deterrence and reducing the bleeding of the resources of the small industrialists and production people through the widespread compounding of corruption. On the roads their wealth is subject to bleeding from tolls imposed on the movement of their goods inside Syria, which compounds these bleedings on the price of goods to reach expensive prices for the citizen.
Finally there must be facilitation and encouragement of small production projects.
And in conclusion: the Syrian economic issue is complicated and its foundation is completely collapsed. It cannot be easily rectified. It needs rebuilding from the foundation, because corruption, bureaucracy, and destruction of the infrastructure have led us to this state. We have gone past the stage of anticipating the dangers and putting in place plans to confront them. The ship has sailed.
Even if the planning and implementation were to begin, the necessary time period to revive the economic state is great, and the economic state of the society is in the gutter.
Q: Last question. Some in the West hope that the economic collapse will lead to the bringing down of the government and the so-called 'political transition.' Do you expect that this will happen if the situation continues as it is and becomes worse?
A: A society that has suffered from eight years of war, destruction, displacement and lack of the basics of life is a society used to its current circumstances. People have come to the state of thinking about how can they secure a loaf of bread more than thinking of the cause of the lack of its availability.