Economy Key in Syria Uprising
Consequences of current instability on employment, job market and inflation cannot be underestimated
Syria’s political situation has inevitably affected its economy. The market is far from encouraging for workers and the economic situation is instable.
As Syrian officials’ sonorous statements continue, depicting the regime and its leader as the tender father who solves many problems, the issue has arisen of frozen capital that is unable to address basic needs. According to some economists, some eight per cent of the banks’ reservoir even left Syria in the last three months.
The current political regime seems to be clueless as to what to do. It finds itself obliged to deal with the consequences of the “economic coup” led by the previous government of Prime Minister Naji al-Otari over the last seven years. The current government and the Baath regime cannot simply go back to the economy the way it was before it became what the Otri’s government described as Syria’s “Social Economy”.
All this comes with an increase in poverty which now affects 35 per cent of the population, and an increase of unemployment amongst Syrian youth which now runs at more than 30 per cent, according to data from the evaluation of the tenth five-year plan.
The first-step solution, as suggested by the new government through its various ministries, is providing 100,000 jobs and increasing the salaries for public sector employees. But this conflicts with the issue of liquidity, as raised by the central bank.
Moreover, it also conflicts with the lack of real work for those newly hired by those ministries which have opened their doors to job applicants. All of this marks the failure of Syria’s new prime minister, Adel Safar, in solving the problem of hidden unemployment, which previous governments tried to root out.
The rates of poverty and unemployment are not the only obstacles for Safar’s government. The growth rates dropped from five per cent to three per cent in the last six months. And there are additional agricultural, industrial and trade problems which have surfaced in the economic field.
Safar’s government is face-to-face with another problem: the devaluation of the Syrian lira during the last two months to more than 17 per cent of its value versus US dollars, despite the central bank’s efforts during past years to stabilise it in accordance with the currency basket it adopted.
This actually resulted in making inflation the way to increase value, despite official denial.
These days we find tens of pro-regime marches on one hand, and hundreds of anti- regime demonstrations on the other, which have led to the crippling of Syria’s economy. There is a notable decrease in the figures for imports and exports in the last six months, accompanied by the meagre number of tourists coming to the country and the security restrictions they face.
The Syrian stock market, considered by some as the mirror of the Syrian economy, showed a notable decrease in companies listed on the stock exchange, the result of the withdrawal by a large number of stock holders from the exchange process, and due to major contributors distancing themselves from direct interference to adjust the rate index.
All of this has put the Syrian economy in a murky situation, also greatly damaged by the political and security efforts by the regime against what it considers vandals and gunmen.
The regime will not be toppled by the daily popular demonstrations alone. The consensus is that the economy will play a major role and help to topple it if the crisis continues for one or two more months. In the meantime, the ordinary Syrian citizen remains waiting for his bread and the day when he can live free of the political and economic conflicts that are currently crushing him at the time being.
