As the global economic crisis begins to fade, new opportunities are emerging for some of the countries in the region. For its part, Syria was able to avoid this crisis for the most part even though some of its sectors were affected due to their relations with markets in Europe and the Gulf region. The affected sectors include manufacturing, industry, and services.
Tourism, however, a growing source of revenue for the Syrian economy, was picking up in volume despite world decrease in that sector, keeping the Syrian economic heart beating. Midway through 2010, Syria seemed relatively stable both politically and economically as other countries in the region experience turbulence in either or both respects. Nonetheless, despite the rosy pictures and outlooks, there’s much to be concerned about in terms of sustainable economic growth, an objective that will increasingly underwrite political stability in the region and certainly in Syria.
[The rest of this post was incorporated into an article published by Middle East Policy Journal: “The Political Economy of Syria: Realities and Challenges,” Middle East Policy, Vol XVIII, No. 2, Summer 2011, pp. 46-61. Below is an excerpt from the conclusion of the article, addressing policy recommendations that aimed at curtailing Syria`s rent-seeking and economic injustice and averting political turmoil in the future.
Oh well! Access the entire article on Middle East Policy here.]
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Based on the foregoing review of Syria`s recent political and economic dynamics and current socioeconomic realities, one can put forward the outlines of a set of policy recommendations:
(1) Develop and launch a top-level campaign announcing a new social contract to replace the now-defunct socialist formula and usher in a real transition to a mixed economy. Key to this campaign would be the elimination of the obstructive Article 8 asserting the domination of the Baath party, effectively to the exclusion of truly independent political parties. This campaign should be adopted and led by the president and the top leadership. It should be coupled with the creation of an independent economic team (not just one trusted architect) empowered to monitor and execute its various components. Crucial to the effort would be reinforcing the independence of the judicial branch to protect and adjudicate economic contracts and rights that are now subject to arbitrary decisions by strongmen.
(2) Rein in rent seekers who benefit from distinctions and privileges without providing any added value in terms of employment, exports, innovative production, infrastructural renewal or even growth. This is a tricky process, considering how entrenched and intertwined some of these actors have become with the top leadership. This component of reform cannot be executed abruptly and cannot target everyone at the same time. Therefore, it should provide alternative incentives for especially privileged actors in order to succeed in the long run and gain support among some of the major actors targeted.
(4) Transcend the public-private axis of debate and engage in a conversation centered on management, productivity and the public good. Such a debate will emphasize the goal of reaching the optimal division of labor between the two sectors based on their resources and comparative advantage in relation to the enterprise in question. The first step is to end the underhanded practice of piecemeal privatization that robs the public while enriching the few. Piecemeal privatization occurs when the legal ownership of an enterprise remains public while some or most of its component functions are privatized under some abridged rationale of productivity.
(5) Invest in refurbishing the economic institutional structure (not just the personnel) to reduce bureaucratic hurdles to productivity and widen spaces for individual and institutional initiative based on well-crafted, comprehensive economic goals. The first step would have to be a clear and sober articulation of the relationship between government, regime and party in light of the limping, albeit moving, "social market economy" that emerged from the tenth Regional Baath Conference in 2005. The second step would follow from the first in delineating lines of authority, division of labor and coordination among the myriad institutions and agencies within the public/governmental sectors. The third step must be a serious effort at redefining the party`s position vis-à-vis its socialist rhetoric, which has become dangerously out of step with reality, serving primarily as a tool for those whose personal interests would be harmed by reforms.
(6) Introduce a legal framework to monitor the revolving door between economic policy makers and those who benefit from them. Policy makers might not be directly involved in business, but their immediate relatives and former (or future) partners often are. Furthermore, this would preempt the situations witnessed in countries such as Egypt, where business interests that are overstepping their bounds increasingly dominate cabinets and parliaments. This legal separation would promote transparency while reducing rent-seeking.
(7) Devise and launch a plan that aims at overhauling the educational system to keep pace with global and local economic change. An increase in human capital is crucial to long-term capacity building. The plan must modernize traditional institutions but also emphasize and create better post-secondary alternative educational routes that provide professional training. Syria, with its remarkable human capital, might be a pioneer in fundamentally redesigning educational structures and opportunities to fit a changing world economy.
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[Access the entire article on Middle East Policy here]