Saturday, May 27, 2006

Does Syria's President Have The Will Or ConvictionTo Reform? By EHSANI2

Does Syria’s President have the Will or conviction to reform?
May 26, 2006

Since the think tank members at Creative Syria have already tackled the issue of reforms, I was not sure whether there was any value added in writing further about this subject.

By coincidence, a friend had already asked me to comment about this subject last night. Having already written back to him, I decided to post my thoughts below:

Syrian political reforms are unlikely to take place anytime soon. The President has recently listed security as first on his agenda. Some people think that this is a direct result of the recent events in Iraq. To be sure, however, security has always been Syria’s top priority under this regime. Indeed, it is only when one fully understands how much this leadership is preoccupied with security that one can fully appreciate what Syria is all about. Against many odds, this regime has been able to stay in power for close to 40 years. The longer it has been able to stay in power, the more convinced it has become that its preoccupation with security in not only warranted but a prerequisite for survival. All calls for political reform is viewed with great suspicion. Pushing for such reforms is seen as a prelude to weakening the grip of regime, which will ultimately lead to its downfall. The regime is unlikely therefore to want to tinker with a survival formula that has served it very well over four decades. Since the Moslem Brothers attempted to overthrow it back in the early 1980’s this regime has been very wary about loosening its tight fisted control. Behind the scenes, it has adopted an “us against them attitude” which has implicitly recognized the fact that the majority Sunni population would choose to get rid of the regime at the first opportunity that gets presented.

Issues relating to the economy are also best understood with the above background in mind. The regime is convinced that the majority of its citizens would like them gone at the first opportunity. They also know that reaching the highest office in the land is a historic opportunity that may never get repeated again. So long as they are in power, they feel the need to stash as much money as they possibly can in their Swiss and Dubai accounts. Leaders of the Middle East know that they will never get their chance again. They feel the need to accumulate as much wealth as possible before their time is up. What is surprising is that they never feel that what they have accumulated is enough. Perhaps we would have done the same had we been in their shoes. Checks and balances are totally absent. Power is so absolute and greed is so hard to avoid that the regime leadership feels that it is just too easy to accumulate wealth and if they don’t do it, someone else will.

Some may argue that fixing the Syrian economy is a very hard exercise. I actually think that it is relatively straightforward. It does not take a genius to figure out what is wrong with the current system and therefore what is needed to fix it. The only question, however, is does the will exist to fix it?

The Syrian economy is in trouble for two reasons:

An overbearing public sector that acts as a tremendous burden on the country’s resources.

An incredibly complex set of laws and regulations that stifle the progress of the weak private sector and the entrepreneurship spirit.

There is no conceivable way for the Syrian economy to improve so long as the state share of the Gross Domestic Product is as high as it is. The Government has no business running businesses.

In Syria, the state is in involved in nearly every sector of the economy. It fills, bottles and distributes mineral water and beer to the exclusion of the private sector. It manufactures tires, glass, cement and sugar. It owns hotels. It has consistently provided the worst products and services to its own consumers. It has lost massive sums of money every year. It has created breeding grounds for corruption, mismanagement, fraud and outright theft. The misallocation of resources has been massive. The bleeding of the state treasury to keep these businesses afloat has been staggering. Year after year, promises have been made that mangers at these state enterprises will become more accountable and skilful. Year after year, the losses keep piling. All measures to fix this problem have failed and will continue to fail in the future. Only by completely getting out of the business of running businesses would the Syrian government help its people and economy. Wholesale dismantling and privatizing the state enterprises is the only solution. Pakistan suffered from the same problem. Their solution was direct and bold. They have successfully embarked on one of the most aggressive privatization efforts in the world. As the state gets out of business, the private sector will fill in the vacuum. Syrian officials have been very reluctant to follow suit. They have publicly raised their concerns about the social repercussions that may follow such privatization schemes. Where would the state employees go and who would hire them they ask. How can the country manage this transition they wonder. While it is true that there will be inevitable dislocations and losers, doing otherwise is postponing the inevitable.

But before one recommends the outright closing and selling of state enterprises, critical decisions have to be made on taxation and regulatory matters which is the second point highlighted above. The current laws and regulations are so complex that it is next to impossible to find a Syrian citizen who has never broken them. Indeed, some think that the government has refused to simplify or abandon these regulatory hurdles so that every citizen can be accused of having broken a law at some stage in their lives. Importing a product into the country forces you into a maze of bureaucracy and corruption that may involve scores of documents and some 47 signature that you will need to obtain before you have satisfied all the regulatory requirements. This forces the importers to bribe and the state employees to be corrupt. Such examples can be found in every facet of the Syrian business world. Corruption has become and will continue to be a way of life. It is inevitable in an economy that is overburdened with arcane set of laws and taxation. No foreign businesses will entertain thoughts of investing in a country like this. Niether would Syrian expatriates.

Syria’s only solution is to emulate Dubai. The ruler of that Emirate runs a one-man show. His signature is the only thing needed to advance the interests of the business sector and the economy as a whole. Whatever is needed to make it easier for international and domestic businesses to come and invest, the ruler is willing to do. It is this will to act that is missing in Syria. Bashar needs to tell Mr. Makhlouf and the rest of his family that enough is enough. He needs to encourage his family and others that the days of exclusive dealings have to stop. They now have to compete with the rest of the citizens for business in a fair, transparent and competitive manner.

Dubai has to import its labor resources from the Indian subcontinent. Syria does not. Just like Vietnam has recently positioned itself as the new low cost-manufacturing center in Asia, Syria must do the same in the Middle East. It must set up massive Free Zones similar to Dubai’s Jebel Ali. It must do everything it can to attract foreign investors to set up shop in these tax free zones. These companies will hire Syrian workers and help bring down the alarmingly high unemployment rate. Attracting these companies or the Syrian expatriates to come and invest needs to take the form of a Presidential decree. The country can start doing this through the free zones first and then the domestic economy later. There is no reason why Syria cannot become the new manufacturing low cost producer in the region. In the next 10 years, the country will border the EU when Turkey enters the union. The country should be working feverishly at making full use of this opportunity.

Syria’s leadership feels that tight and draconian security measures are a prerequisite for them to stay in power. The experience of the early 1980’s has convinced them that political reforms is nothing but a trap and a slippery slope that will ultimately be used by their opponents to topple the regime.

On the economic front, the government has been reluctant if not paranoid about the consequences that will follow if it were to privatize its economy and dismantle its state enterprises. The longer the state keeps the subsidies and the artificial employment of their labor force, the harder it will become to stop this vicious circle.

The President has to order his immediate family and others to stop the outlandish accumulation of wealth through patronage and corruption. Billions have been made. Enough is enough has to be Bashar’s new message.

Before a wholesale dismantling of the state sector takes place, a Presidential order has to take place to set up massive free zones for foreign investors and expatriate Syrians. This can then be followed by systematic domestic reforms of all the insane taxes and regulatory hurdles that have strangled the private business community. As these laws are amended and abolished and as corporate taxes are lowered and simplified, the private sector will start to participate in the economy. As this sector expands and invests, hiring will follow. But to do this, the President has to have the conviction and will to stay the course. He needs to articulate to his nation that socialism is dead. The private sector will from this point on carry the torch at the expense of the public sector that was never equipped to run a business in the first place. The losses that are currently incurred by every single state enterprise will save the state treasury billions. These funds can now be earmarked to revamp the education system and worker training to better prepare the national labor force for the global economy that has eluded Syria thus far.

On the surface, Syria’s problems seem insurmountable. In reality, Syria’s solutions are clear. What is missing, however, is a bold leadership that will admit the mistakes of the past and articulate the road for the future. Dubai’s massive success is an example to emulate. It has taken the mere signature of one man to turn that dream into reality. Bashar can do the same and turn this great nation around if he so wishes. His country sure needs it but does this President have the will or conviction to carry out these sorely needed changes?


At 5/27/2006 01:20:00 AM, Blogger VIVA LIBAN said...

This post has been removed by a blog administrator.

At 5/27/2006 01:53:00 AM, Blogger Alex said...


For those who keep accusing Joshua of being a one-sided regime advocate, can you go back to your favorite blog and check three things:

1) How often do they invite other people to post comments that are very different from their own points of view? not in the readers' comments section, but as full articles (like Ehsani's here)

2) check their recommended links. how many of them link to blogs owned by commentators who spend all their time opposing you?

3) how many of your favorite writers can easily admit it when they make a mistake?

Joshua often posts Michael young's articles, he links to Tony Badran's excellent but very negative blog, when he realizes he made a mistake he can gladly tell Michael: "You are right" ...

So he has at least the right to freely express his own points of view without each of you "democracy lovers" attacking it with your most refined and civilized 4-letter words.... how many other bloggers will allow you to insult them and not remove your comments?


Very interesting, You did a good job illustrating government corruption and incompetence.

The only thing I want to add, is that there are other, external factors, which are real ... not only excuses made up by the regime. I wish you can account for those in your future road map ... and I wish the regime can decide to take the risks necessary in tackling the problems which are under its control.

At 5/27/2006 03:22:00 AM, Blogger t_desco said...

Instead of Qatar one could cite Iraq as an excellent example for the kind of "reforms" proposed by Ehsani and the highly beneficial effect they had on Iraqi society (high unemployment fueling the insurgency and ethnic tensions)...

Paul Krugman:

"Much has been written about the damage done by foreign policy ideologues who ignored the realities of Iraq, imagining that they could use the country to prove the truth of their military and political doctrines. Less has been said about how dreams of making Iraq a showpiece for free trade, supply-side tax policy and privatization — dreams that were equally oblivious to the country's realities — undermined the chances for a successful transition to democracy."
NYT, 5.4.04

(my emphasis)

"The insurgency took root during the occupation's first few months, when the Coalition Provisional Authority seemed oddly disengaged from the problems of postwar anarchy. But what was Paul Bremer III, the head of the C.P.A., focused on? According to a Washington Post reporter who shared a flight with him last June, "Bremer discussed the need to privatize government-run factories with such fervor that his voice cut through the din of the cargo hold.""
NYT, 6.29.04

Joseph Stiglitz:

"When the Berlin Wall fell, the countries of Eastern Europe and the former Soviet Union began transitions to a market economy, with heated debates over how this should be accomplished. One choice was shock therapy - quick privatization of state-owned assets and abrupt liberalization of trade, prices, and capital flows - while the other was gradual market liberalization to allow for the rule of law to be established at the same time.

Today, there is a broad consensus that shock therapy, at least at the level of microeconomic reforms, failed, and that countries (Hungary, Poland, and Slovenia) that took the gradualist approach to privatization and the reconstruction of institutional infrastructure managed their transitions far better than those that tried to leapfrog into a laissez-faire economy. Shock-therapy countries saw incomes plunge and poverty soar. Social indicators, such as life expectancy, mirrored the dismal GDP numbers.

More than a decade after the beginning of the transition, many postcommunist countries have not even returned to pre-transition income levels. Worse, the prognosis for establishing a stable democracy and the rule of law in most shock-therapy countries looks bleak.

This record suggests that one should think twice before trying shock therapy again. But the Bush administration, backed by a few handpicked Iraqis, is pushing Iraq towards an even more radical form of shock therapy than was pursued in the former Soviet world. Indeed, shock therapy's advocates argue that its failures were due not to excessive speed - too much shock and not enough therapy - but to insufficient shock. So Iraqis better prepare for an even more brutal dose."
February 2004
Iraq's Next Shock Will be Shock Therapy

What Stiglitz said in this prophetic lecture about "Trade Liberalization in Iraq" (Sep 23, 2003) is also valid for Syria (particularly the first 17 minutes). You can still watch it here.

At 5/27/2006 03:57:00 AM, Blogger majedkhaldoon said...

do you really think they will take your advise, whoever get used to do something will keep on doing the same ,there is no limit for greedy person, especially if he is in power, also looking at the poor syrian people as I walk through the streets of damascus, and in the rural area, why they should forgive those who stole billions, and took them out to europe and Dubai, and the people are very poor. you yourself said that the rulers know that the people want them out as early as possible, more and more people are in jail.

At 5/27/2006 04:18:00 AM, Blogger 10452 said...


Please don't start glorifying Landis as well, it'll get to his head again, and will encourage him to make more ridiculous statements, and repeat "bel dam, bel rouh, nafdik ya Bachar"100 times in front of his screen.

As to your questions :

1) How often do they invite other people to post comments that are very different from their own points of view? not in the readers' comments section, but as full articles (like Ehsani's here)

-- All the time, I don't know which blogs you're following, but you haven't found any that post different point of views, then I think you should reevaluate your blog list.

2) check their recommended links. how many of them link to blogs owned by commentators who spend all their time opposing you?

-- All the time. Same commet as above.

3) how many of your favorite writers can easily admit it when they make a mistake?

-- Many of them, and much more then Landis. His last post concerning AI's number is further proof that he is not able to recognize his mistakes, instead trying some pathetic excuse. What is more alarming, is that Landis is a professor (I hope without tenure, although I don't know) which sells this propaganda to his students.

Of course he has the right to freely express his opinions, and he has been doing so, but I think the main issue here is his intellectual dishonesty, that is simply not worthy of a University professor.

At 5/27/2006 06:31:00 AM, Blogger SimoHurtta said...

It doesn’t take a genius to make a list like Eshani2 made of necessary steps and then claim that this is the way to economic prosperity. A genius is needed to perform that tasks mentioned in that list. Saying and doing is not the same thing. I could write an equal list for Mongolia, Nigeria etc. and say go on boys, problem solved. The sad thing is that each step needs careful considering and execution. Establishing tax free zones do not bring investors and factories if the country is under sanctions and the political future is mildly said uncertain. Corruption doesn’t stop by saying stop corruption. Law are not changed instant. It takes years to change or create new legislation. Privatization most certainly has huge social and wealth distribution problems, as we saw in Russia, Ukraine, China, India etc.

Naturally Syria must develop in an economical sense and many things must and should be changed. But the biggest question with Syria’s economical development is the problem with USA’s sanctions and Israel. On what circumstances USA will end its efforts disturbing Syria’s economy? It is more or less clear that only a regime change is enough USA’s and Israel’s present regimes. The bad thing for Syria is that it with high probability leads to the “democratic” process we see in Iraq and Afghanistan.

In a way it is amusing to see, how people criticize the Syrian regime for lack of economical development, when the country is under sanctions and all its efforts are disturbed by outside players. In case Syria would not be pressured economically and politically, the critic would stand a better “moral ground”. Now it is like blaming the major of a city surrounded by a hostile army not to providing a good living standard to the city’s people and forgetting the army outside the city.

The main foundations of a growing economy are security (security in the society and of holding the earned / invested property) and predictability of the society’s future development (= stability). Not so much democracy as we can see in United Arab Emirates, Bahrain, Kuwait and Saudi Arabia, which are de facto dictatorships ruled by families. Even we for some strange reason do not describe them as dictatorships. On the other hand the new “democratic” Iraq has now achieved the levels of corruption and direct robbery the world has hardly ever seen in modern times. Everybody, Americans and Iraqis, are robbing everything that is not nailed to the floor. Saddam was in many ways a “saint” compared to the “democratic” robbers who replaced his regime.

Free markets, simple or no laws are no solution if there is no security and stability. A perfect example of this is Somalia, where there are no complex laws and regulation by the government. In a way Somalia is ultra conservatives dream country. No unnecessary government making business for real entrepreneurs “difficult”, healthy free competition in its purest natural form. No taxes to cut the healthy profit margin etc.

Free markets are not without problems in developed free market countries. Enron and the Californian power crisis is a perfect example what will happen if markets are deregulated to fast. The same has happened in Nordic countries (Sweden, Norway and Finland) which opened a couple of years ago their electricity markets to free competition. The prices have almost doubled, the energy companies profits have sky rocketed (which they use to buy competitors in foreign countries) and naturally the income and options of the managers (not workers) of energy companies. Energy markets in Nordic countries and even in USA are dominated by a couple giant players who can control the market as they like by for example “repairing” a power plant which causes a healthy rise in the electricity exchanges prices. Now in Finland is huge struggle against importing cheaper electricity from Russia. Naturally the big players do not want it to happen, because of domestic self-sufficiency (like in a regions free market zone could be a single country’s energy self-sufficiency). Also this little battle is linked to giant global energy game (forces (domestic and foreign) which want Finland to join NATO do not like energy co-operation with Russia). Ironically the heavy industry is supporting the electricity importing because it would lower the prices and stabilize markets. The bad thing for us small and big customers is that this energy sectors privatization and deregulation hurts the whole country’s / region’s economy.

Free markets work on all the sectors where there is enough competition and real control by the government watching that the rules of competition are in reality functioning. Privatizing the country’s only cement factory doesn’t create competition.

At 5/27/2006 06:33:00 AM, Blogger George Ajjan said...

Ehsani's post was a rare treat because it addresses the regime's shortcomings without sugar-coating, and puts them in historical context, without just bashing and bashing ad nauseum. And he suggests a peaceful and realistic (albeit difficult) way forward.

Is is never too late to change the economic system to a market economy. On this economic point, I concur with Ehsani. Obviously many people here find that unpalatable, but can anyone disagree with Ehsani's criticism of the regime's omnipresent hand in the economy?: "It fills, bottles and distributes mineral water and beer to the exclusion of the private sector. It manufactures tires, glass, cement and sugar. It owns hotels."

This is just not efficient. Governments in ANY country do not possess the core competencies to run such businesses efficiently. Ehsani is right that this inevitably leads to corruption. The reason I say that with confidence is that the same thing happens here in the United States. In Passaic County, New Jersey, where I live, elderly people are forced to sell the homes in which they've lived for decades because property taxes are too high. The County government, a layer in between local municipal government and state government, demands more and more taxes every year for such things as running a hospital, and providing duplicate services related to roads and infrastructure (plenty of jobs for political cronies to hand out there!) Not to mention, a law enforcement presence that is growing beyond limit. If you have ever watched The Sopranos, you will understand the degree of corruption because that show is filmed in this very area.

On the one hand, this makes me depressed for Syria's chances - if the USA, with a free press and democratic elections can still suffer from such corruption, Syria has no hope because the situation is far worse.

But on the other hand, as Ehsani suggests, Bashar needs to pull a "Sheikh Mohammed" and just issue presidential decrees to begin dismantling the overbearing state-run economy, at least to a reasonable level that some would not classify as "shock therapy". In Syria, he does not need some legislative approval to make sweeping change for the good of the country. He has the power to do it alone. He only needs the courage.

At 5/27/2006 07:42:00 AM, Blogger Zenobia of the East and West said...

This post has been removed by a blog administrator.

At 5/27/2006 07:54:00 AM, Blogger ActiveListener said...

Viva Liban wrote: “Have you ever contracted factories in Syria to produce something and sold it on the world market? I did with more than 150 companies for decade.”

If that is true, what a waste of experience and information – I wish you would bring it to this discussion instead of bizarre hallucinations and abuse about Ehsani(about whom you know nothing and whose comments you have not properly read and responded to).

I’m serious, I would be interested in what you know and can tell us - there were glimmers there, but obscured by the unpleasant ranting.

Alex, your remarks on Dr Josh are spot on and I’m glad you made them. I certainly don’t always agree with the Landis world view, but I firmly disagree with 10452, who has slipped into being insulting, judgemental and dismissive in ways that Dr Josh himself does not. Nor would I label Josh as “intellectually dishonest” – quite the opposite, sometimes to his own detriment.

Simohurrta, you can take away all the sanctions, wipe Israel off the map, and still nothing much can develop unless you have enormous vision, energy and massive hard work from whoever is leading Syria.

George – I am sure some things are bad and unjust in Soprano-land, but the big difference is that those using guns to seize and keep their power, violently liquidating those who don't give them respect or present a threat and making a lot of cash from drugs and extortion are fictional criminals in the TV series, not the government “leaders” we have in Syria who do exactly those things in real life.

Perspective, perspective – it’s time to re-read Ehsani.

At 5/27/2006 08:11:00 AM, Blogger ActiveListener said...

Zenobia's comment:"What threatens you is the successes of the jewish population of this world.... the fact that 16 million jewish people on the planet - as a collective culture - did more for human advancement in Science, Art, Philosophy, business, and just about every intellectual field and acadmia....than billions of arabs have in the last seven hundred years" is far more ignorant, offensive and racist than the silliness of Viva Liban. In fact, it keeps people like VL revved up and no wonder.

I would have thought this was the wrong site to be pushing half-baked theories of Jewish superiority over Arabs. Lots of other sites you can go to for that.

At 5/27/2006 08:18:00 AM, Blogger EHSANI2 said...


The poster that you are referring does not deserve to be on this forum. His remarks have therefore been deleted.

One word in support of what Alex and Active Listener have said about Dr. Landis:

As many of you have noticed by now, my own personal views have differed from those of Dr. Landis on a host of issues thus far. I have never personally met him. He does not know my real identity. Yet, he wrote once publicly inviting me to post on his blog anytime I wished. I have since taken him on this offer on a number of occasions. As Alex said, you cannot but admire the man for allowing a person like me to post without having it edited or approved by him. Moreover, through my later correspondence with him, I have come to know a man who is willing to engage, agree and disagree. He has consistently done with this with an open mind and humility. Even though he would state an opinion, he would follow it up by saying that “I know that you disagree and you could be right”. He consistently encourages me to post and write on whatever topic I deem appropriate. This is not only the sign of intellectual honesty but also the sign of an intellectual open mind. You don’t have to agree with Alex or me for sure. Dr. Landis will have his opponents and critics, which is natural and even healthy. It is regrettable to see a number of our fellow readers consistently go beyond the boundaries that we must strive to keep within.

At 5/27/2006 08:31:00 AM, Blogger George Ajjan said...

ActiveListener - let's be clear - the only comparison is that big overblown government-run industries and bureaucracy exist everywhere, to the detriment of the citizenry, and the more of it there is, the more opportunity for corruption.

You don't need to be a violent mafia-style leader to oversee mis-managed state-run economic sectors that encourage corrupt practices. That's my point. There is a strong case for privatization everywhere.

At 5/27/2006 08:40:00 AM, Blogger ActiveListener said...

George, what you say is right, and I wasn't dismissing it. We could spend the next couple of days debating the relative merits (and in some proven instances, serious demerits)of privatization.

But let us not forget the elephant in the room, taking the air and blocking the doorway and windows so Syrians can't move even inside their own heads.

At 5/27/2006 09:10:00 AM, Blogger George Ajjan said...

Understood, ActiveListener.

But let's debate the economic factors in serious quantitative terms finally on this blog.

I would like to hear from IC, SimoHurtta, Ugarit and the others who have chastised free-market thinkers on this blog: do you think the Syrian government should be running hotels? Manufacturing cement? Bottling beverages?

In which sectors would you support privatization? How could you see this being accomplished? Fine, we've seen negative arguments against "shock therapy". So please describe for us the middle ground. I am sure we would all like to read about proposed solutions for economic progress.

At 5/27/2006 11:27:00 AM, Blogger Anton Efendi said...

Given how Josh always had the propensity to go to great lengths (or lows, whichever you prefer) to polish and propagandize on behalf of these kleptocratic thugs and how he has always swallowed (and reproduced) their propaganda hook, line and sinker, especially when it comes to Wunderkind Dardari, taking his inflated and exaggerated and incomplete numbers, promises, grand fantasies and spin and spinning them even more on his behalf, I thought it quite hilarious to see this report from Syria News.

اقتصاديون للدردري: النمو الاقتصادي لم ينعكس على الشعب .. فمن أين لك هذه الأرقام؟

الاخبار الاقتصادية

تضخيم أرقام السياحة السورية أدت إلى تضخيم أرقام الدخل القومي
الأرقام التي كشف عنها "مسؤول السياسية الاقتصادية في سورية" عبد الله الدردري طرحت العديد من التساؤلات في الأوساط الاقتصادية

لاسيما إعلانه في المنتدى الدولي للاستثمار الذي عقد مؤخرا في دمشق أن معدل النمو الاقتصادي وصل إلى 5.5 في المئة العام 2005، خلافاً للرقم الرسمي السابق الذي كان يشير إلى نمو قدره 4.5 في المئة.
ورغم أن الدردري فسر هذا الارتفاع في نسبة النمو إلى "الزيادة الكبيرة في الصادرات غير النفطية وعائدات السياحة والتدفق الاستثماري وارتفاع العائدات الضريبية بعد تخفيض الضريبة وتوسيع دائرة الضرائب"، إلا أن الأوساط اعتبرته "رقما إعلاميا مضخما أكثر منه رقم واقعي"، ومنهم من طالب بالتعامل بشفافية والكشف عن المصادر الحقيقية لهذا النمو.
وتطرح الأوساط الاقتصادية تساؤلات عديدة لسبب بسيط وهو أن أي نمو يجب أن ينعكس "على حياة الشعب ومستوى دخله" فكيف تحققت تلك النسب المرتفعة نوعا ما، في ظل ارتفاع أسعار المواد الأساسية لعيش المواطن كالخضار والفواكه واللحوم بنسب تتراوح بين 20 ـ70%، فيما مستوى الدخول متدني في سوريا ولا تتجاوز بالنسبة للغالبية العظمى من الشعب 200 دولار أمريكي في الشهر.. فمن أين أتت تلك الأرقام؟.
الخبير في المجال النقدي الدكتور محمد جمعة يشير إلى أن الرقم المطروح (5.5 بالمئة) هو ضعف النمو السكاني في سوريا والذي تبلغ نسبته 2.4% ويضيف: "أنا كاقتصادي لا أكتفي بأن يتحقق هذا المعدل, إذ لا نقول عنه أنه نمو جيد إلا في حالة واحدة, إذا انعكست ثمار هذا النمو على عامة الشعب ودخله..أما إذا لم يتم ذلك فمن حقنا أن نتساءل أين ثماره؟ خاصة مع سوء توزيع الدخل القومي بالنسبة لأصحاب الأجور إذ لا تزيد حصتهم منه عن 20% ".
وفيما ينوه جمعه إلى عدم تشكيكه بالرقم مع الانفتاح الاقتصادي الذي تعيشه سوريا والإصلاحات المتبعة في المجال النقدي لكنه يطالب بـ"مبدأ الشفافية" لمعرفة مصدر هذا النمو.
من جهته يقول صافي شجاع الباحث الاقتصادي في قسم الدراسات التابع لـ"سيريا نيوز" إن "هذه التقديرات مجافية للواقع خاصة اذا علمنا انه تم اعتماد تدفق الاستثمارات الأجنبية على أرقام التشميل ، وبتنا نعلم مشكلة التشميل والتنفيذ في سورية فنسبة تنفيذ المشاريع الصناعية لم تتجاوز 12% من المشاريع المشملة منذ العام 1991 حتى العام 2004 ", ويتساءل شجاع "هل لمس الاقتصاد السوري بكافة قطاعاته ثمرات هذا النمو، وبالأحرى هل شعر المواطن السوري بتحسن وضعه المعيشي والاقتصادي وزيادة فرص العمل " .
ويضف الباحث في "سيريا نيوز" أنه "بحسب تفسير الدردري فإن عائدات السياحة ساهمت في هذا النمو, ووفقاً للإحصائيات الرسمية فإن قطاع السياحة حقق نمواً بنسبة 15% العام الماضي (2005)، أي بما يقدر بالضعف مقارنة بتسعينات القرن الماضي، حيث كانت النسبة لا تتجاوز 8% ".
يقول شجاع إن مقارنة المعدلات المحققة عالمياً في قطاع السياحية لم تتجاوز 3% فيما بلغت 8% فقط في منطقة الشرق الأوسط، متسائلا "ما هي الزيادة في عدد سياح سورية حتى نقول أنها قياسية بالنظر إلى المستويات العالمية؟", وحذر شجاع من "تضخيم أرقام السياحة السورية لأن ذلك سيكون له أثر سلبي سيؤدي إلى تضخيم في أرقام الدخل القومي لأن السياحة تساهم بنسبة مهمة في هذا الدخل، الأمر الذي ينتج عنه أرقام غير منطقية ووهمية عند تقديرات الدخل القومي وهذا ما حدث فعلاً عندما تم تقدير نسبة النمو في الاقتصاد السوري مؤخراً بحوالي 5.5% معتمدين على هذه التقديرات".

جورج كدر ـ سيريانيوز

At 5/27/2006 11:30:00 AM, Blogger VIVA LIBAN said...

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At 5/27/2006 12:16:00 PM, Blogger Frank said...


I like Ehsanis piece. It has the sense of urgency required.

However as you have pointed out elsewhere, Syria suffers from a lack of trained administrators.

I listened to Paddy Ashdown telling us the order he found useful to sort out a country, recently.

First you sort out the judiciary and the police so they are honest.

Then you unshackle the small businesses. He said he cancelled 50 laws in a week, and then set up a task force to buldoze its way through the rest of the obstacles to setting up a small business.

After that you get stuck into this parliamentary democracy stuff.

However this needs to be done withing a framework of a working civil service backed up by an army that does what it is told. Paddy had 60 thousand NATO troops to deal with anybody who wanted to argue the toss.

So essentially I agree with what needs to be done. But as Lou Gerstner says Having a strategy is one thing but execution is everything.

At 5/27/2006 12:31:00 PM, Blogger 10452 said...

Active Listener - Please tell me where I have been insulting on this post. I make it a point to not slip into the diatribes and racist posts that some idiots on both sides have endulged in.

When Landis says that Lebanon gets an F in security because one out of 27 Lebanese was killed during the civil war, without mentioned the main culprit behind those deaths then I am sorry, but there is no other way to qualify his posts other then intellectually dishonest.

When Landis says that Syria gets an A in security because only 78436 people died and NOT 80000 like AI suggests, then please tell me what is honest about such a posts.

When Landis comes out with the "pushed against the wall theory" on why Syria had no other choice but to kill Hariri, then please give me the adjective which would best qualify his analysis?

Differing opinions is fine and healthy, but extremism and propaganda is frankly nauseating.

I wish people, and particularly supporters of Landis would be more outspoken about his ridiculous posts, his blind defense of the Syrian regime, Bashar & co, and the cheap propaganda that he feeds his students and readers on this blog.

At 5/27/2006 02:04:00 PM, Blogger EHSANI2 said...


You state that one needs to sort out the judiciary and police so they are honest.

The judiciary and police are not dishonest. They are underpaid. If you and I were to be paid $200 a month, I can assure you that we would both be so-called dishonest. No human being can make an honest living at this wage. Certainly not when the system is set up so that you can supplement and augment your salary through non-wage income. For the Syrian judiciary and police to do their job effectively, they need to be paid well above the country’s per capita GDP. These funds do not exist today because the state treasury is asked to cover the losses of the state enterprises. Once the state is cleared of this burden after the privatization of its losing enterprises, the available funds will go towards this urgent need to raise the salaries and benefits of this group. As I argued earlier, education and worker training will also need to get their share.

As to the importance of policy execution, I could not agree more. But is it not the task of a leader to make sure that agreed upon polices are executed and implemented?

Regrettably, we are yet to agree on what I consider the obvious on the theory side.

At 5/27/2006 02:26:00 PM, Blogger SimoHurtta said...

Simohurrta, you can take away all the sanctions, wipe Israel off the map, and still nothing much can develop unless you have enormous vision, energy and massive hard work from whoever is leading Syria.

Who has been speaking of whipping Israel of the map? You not me. However the fact is that Israel is a local military super power which with its behaviour in Palestine and aggressive politics has had serious consequences in the neighbour countries life and possibilities. It is not anti-Semitic to say that. Maybe Israel and USA should finally understand that the 1967 borders and a nuclear free Middle East including Israel is the only way to build a lasting peace. The USA’s public announcement of protecting Israel is an enough strong safety guaranty.

I would like to hear from IC, SimoHurtta, Ugarit and the others who have chastised free-market thinkers on this blog: do you think the Syrian government should be running hotels? Manufacturing cement? Bottling beverages?

As I have said many times before “free-markets” can exist in business areas where there is enough competition. Hotels certainly belong to that segment. Bottling beverages also is a rather competed segment. Cement factories belong to strategic industries and it demands considerable amounts of capital, mining and energy production. Probably it is wise to keep cement factories under state ownership until the economy is more developed.

Maybe I should cast the question back and ask with what price and to whom the state owned industries should be sold? Like in Russia and Ukraine to old party members and gangsters or maybe to US companies? Do Syrians own the capital to buy the factories or are they all going under foreign ownership? How is the income from privatization to be shared among the population? Like most countries by giving privatization “notes” to all citizens or only through the government’s budget? As you American Syrians can see the privatization equation is not so simple as it seems. It is certainly easy to say privatization is the solution. It is much more difficult to see that the ownership is good honest hands and the privatization income is distributed so that it benefits the whole society for a long time.

George Aijan using state owned companies on strategic and / or capital intensive industries has been common practice in West European countries when they were developing. Most of European countries still have huge state owned companies (the state is the majority stock owner). China and India are full of state owned companies.

It is really amusing to see how many of the free-trade funs who before spoke about democracy problems, want the economy to be rebuilt with one man dictatorship ala Dubai or Bosnia. Democracy means democracy also in economical matters. Certainly one man can dictatorship can solve things faster and sometimes better than democratic governments. Well not in all cases. Proconsul Bremmer created in Iraq an astonishing chaos even he had more power than Saddam and could do what ever he wanted. Should we give proconsul Bremmer (and Pentagon) a new change to prove his talent and rebuild Syrian economy as a new emperor of Syria?

At 5/27/2006 03:07:00 PM, Blogger George Ajjan said...

As for the Ehsani/Frank exchange above, I am reminded of a discussion with a friend of mine during my last visit to Syria. I was asking his opinion about the potential for continued reform, political and economic, throughout the society. He responded, "Do you think people really want reform, when they know all they have to do is a bribe a policeman with 50 SP to get things done?"

This is not to suggest that we should just give up the quest, but merely to offer a perspective that shows how systemic the problem is and that it requires a very large effort to change a whole mentality.

As for SimoHurtta's reply, I thank him for participating and offering a sincere assessment of a middle ground: that well-developed sectors like hospitality and food manufacturing are good targets for privatization. His argument that industries like cement stay under state control for now is sensible and his comparison to Western Europe is valid.

As for capital, let's say $6 billion of Syrian capital laid in Lebanese banks alone. I am not interested in debating how much of this is Rami Makhlouf's money, so let's say $5 billion belongs to regime cronies. $1 billion belongs to middle-class and upper-class Syrian businesspeople. Is that reasonable?

Now, this is not even counting Syrian expat capital from Europe or the Americas or elsewhere.

If the state auctioned off, in an equitable process, competitive sectors that SimoHurtta agrees are fair game for privatization, what do you think would be the NPV of $1 billion of assets that Syrian citizens could acquire?

And respectfully, SimoHurtta, L. Paul "proconsul" Bremer and American mistakes in Iraq have nothing to do with Bashar al-Assad's ability to "pull a Sheikh Mohammed". Nor does the World bank, the IMF, US sanctions, trade agreements with Europe, instability in Iraq, or any other external factor. The discussion is simply an internal one about Syria's opportunity to make real economic reforms.

At 5/27/2006 03:37:00 PM, Blogger Innocent_Criminal said...

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At 5/27/2006 03:43:00 PM, Blogger Innocent_Criminal said...

Well I guess anything can happen, like this being the first time that Ehsani’s post makes sense to me. I even agree with most of his assessments. Except the Dubai example which might be a bit too ambitious and highly unrealistic. If “Pulling a Sheikh Mohammed” was a simple as Ehsani suggests then why the hell dont other countries who might be better positioned than Syria follow suit????? Its because Dubai and Sheikh Mohammed’s case is UNIQUE and doesn’t revolve around Sheikh Mohammed alone. I would have suggested a more “realistic” example such as Turkey and/or Malaysia. But nevertheless the core message is clear.


I never chastised Free Market Economy. On the contrary I am all for it in every aspect but I disagreed with Ehsani’s (IMHO) naïve approach and suggested-solutions to the economic problems. I felt that he was not taking into account the many intricate factors that make the Syrian economic society. A simple example for this is your friends comment about bribing policemen. And its not all the governments fault, if someone might come along and try to change things (for the better) he/she will run into extreme resistance from the public themselves. And please remember the comment I left on your blog criticizing the LACK of free market rules when dealing with the African continent.

Privatization is a process and cannot be implemented over night. Therefore, I believe the priority for privatization should be the infrastructure sector since its a key factor of all other sectors and improving it will have positive effect on others. I think its about high-time that our infrastructure gets to breath and thrive after years of neglect from socialist governance.

At 5/27/2006 06:19:00 PM, Blogger SimoHurtta said...

And respectfully, SimoHurtta, L. Paul "proconsul" Bremer and American mistakes in Iraq have nothing to do with Bashar al-Assad's ability to "pull a Sheikh Mohammed". Nor does the World bank, the IMF, US sanctions, trade agreements with Europe, instability in Iraq, or any other external factor. The discussion is simply an internal one about Syria's opportunity to make real economic reforms.

Well interesting, to reform Syria’s economy without considering external factors. How on earth is that possible? A new US free trade business theory? Syria needs external markets. Syria needs import. Syria needs foreign financing. Dubai is certainly not a “closed” bubble and Sheikh Mohamed has much more options than Bashar al-Assad. Dubai is a small country, not under sanctions and far from Israel.

Respectfully George Ajjan external factors have very much to do with Syria’s economical possibilities and future as you as an educated business consultant know perfectly well. Maybe as a US republican you do not want to see some realities – like L. Paul "proconsul" Bremer’s economical achievements.

If the state auctioned off, in an equitable process, competitive sectors that SimoHurtta agrees are fair game for privatization, what do you think would be the NPV of $1 billion of assets that Syrian citizens could acquire?

Actually I do not fully understand your questions logic. Do you mean to what value one billion grows in a certain time frame? To calculate the net present value (NPV) a time frame is needed. You also need the discount rate. Well if you mean what I suppose you mean, after three years with a discount rate of 5 percent the value of assets would be USD 1.15 billion. Much depends from internal and external factors. If the “external problems” are solved Syrians can hope for more (= more buyers in competition in auctions), if the situation gets worse much less (=less buyers). So my estimate is 0.8 - 1.3 million USD.

At 5/27/2006 07:16:00 PM, Blogger Zenobia of the East and West said...


Thanx for continuing to attempt to elaborate on your hypotheticals and ideas. I still feel that your presentation lacks specifics or seems rather abstract and cliche at times. I think that so many people in the comments already articulated the questions and critiques that come to mind for myself also. SimoHurtta always seems to be channeling my mind and articulating what i would wish to say but better than i could say it always.
For example, I totally agree that privatization in itself is insufficient. It seems clear from the discussion between Active L, George and SimoH that there needs to be distinctions about what kinds of industries we are including and in what way sectors of an economy are privatized and opened up - and definitely clarification about WHO ends up owning these industries and businesses. Again, as I complained of - in the previous debate from your last piece, I think it very naive to think that opening markets to foreign investment alone will put money into the economy. If syrians cannot be the owners (don't have the money to be) - then they will simply end up as exploited labor with no money staying inside Syria. Another thing that comes to mind, is that sectors such as health care have been disasterous in the private sector in America totally raping the public. Therefore, I agree with SH that certain raw material resourses and human necessities should not be for private profit corperations to manipulate. Natural resources SHOULD be regulated and at least subject to restrictions in terms of ownership and control staying inside the country.
I believe that a country can transition (not through dramatic shock changes) to more open markets while at the same time ensuring that there are protections against exploitation of labor and resources and also with adequate distribution of the wealth created. Usually that IS done in part through corporate taxation and regulation. But the western american models never privilege these concerns. I assume that the regulation and taxation that you are complaining about is due to the level of bad gov't organization and extreme corruption, but these are distinctions that could be clarified.
I think your arguments would be more convincing, if you could show that you have any of these concerns yourself. You clearly do have adequate concern about gov't corruption, but what about the rest of the flaws in the capitalist models. Syria has the excellent opportunity of creating a system that could have the best of all worlds, since it does not have to be a slave to the World Bank because of debt.

Another point, regarding the mention of sanctions.... made only by SH again. Thanx for bringing this to attention.
My cousin is a senior economic analyst for the American Embassy in Damascus. I asked her last year about her job situation currently, which up till now was basically to tour around networking all over syria, cataloging and creating profiles of potential investment possibilities for foreign investors and particularly American investors. I asked her how the hell she actually sells any ideas or projects under the current political situation. She basically told me that the whole situation is bizarre in that she is given this position by the Embassy but at the same time... the possibilities for success are completely hindered and quashed by the fact that the sanctions make it nearly impossible to have adequate resources and materials to allow for the foreign investment to actually be carried out. It is the United States as much as the syrian government that is stifling the process and progress of growth.

Finally, to Active Listener, on the subject of my 'racism' (laugh!) yeah........ i am really known for
You know what, I am a true humanist! I am devoid of any feeling that anyone on this planet (race, culture etc etc) has any superiority. On the big scale of things I believe we all have more similarity as creatures than difference.
All peoples and cultures have both similar and unique contributions. I think the arabs are a fabulous people to have graced the earth as well. And, if I made an obnoxious comment pointing out the also fabulous contribution of people of jewish ancestry to culture and progress in recent history,, well I did so out of anger at Mr. Liban's vile attitude. I suspected that he must be deeply plagued with inferiority terrors to think so irrationally. I don't find his words to be "silliness" at all. I think they are offensive annd destructive to this blog and to ME politics and life overall, and they should not to be tolerated. I was shocked at the silence of the writers in this comment section - that they don't shut that shit down immediately (there were five or six people on here before me, and nobody says a word!) why don't you respond to his nice quotes from Ben Franklin this somehow justifies anything. Hello, yes, antisemitism was alive and well in american history -as well- long before it infected the middle east. And I am not impressed Mr. Liban that your words were actually a 'polite' version of what you really think. That only proves how incredibly hateful you are. I am truly sorry that history and perhaps the suffering of Lebanon has made you so.
Active L, why don't you please tell HIM to go spew his hate on another blog. Not me.

At 5/27/2006 07:29:00 PM, Blogger VIVA LIBAN said...

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At 5/27/2006 08:03:00 PM, Blogger VIVA LIBAN said...

This post has been removed by a blog administrator.

At 5/27/2006 08:14:00 PM, Blogger Zenobia of the East and West said...

you know what, I happen to be Syrian and Scandinavian, but if I was Jewish - I would be proud of it...

wow, you should get your paws off my site and off my blog.....

I feel only distain for your obvious psychosis.

and if i become a queen again one day - I am going to cut off your head and put you out of your misery!

I want the blog administrator to please take all of this off this garbage is embarrassin....I don't want this sicko anywhere near me...or contaminating my life like this.

At 5/27/2006 09:33:00 PM, Blogger syrian said...


As always, I appreciate your commitment to market economics yet I must raise some issues with you current post. The problems I have with the post have nothing to do with the advantages of a market economy over whatever seems to be the current system. The problem lies more in the inconsistencies present in the presentation of the material itself. You lay the background to illustrate the environment under which reform must take place, and it is bleak indeed. The survival of the regime requires the coordination and the maintenance of the interests of a few powerful individuals and, to a lesser extent; it requires the maintenance of the interests of some low level individual with little or no national power. In a society where a significant source of income for policemen, judges and civil servants is corruption, it would be a real threat to their livelihood if you were to implement policies that would eliminate a potential source of income.

Oddly, you proceed to describe the solutions as relatively easy and would only require the will of a single man. I will get back to this later.

Your example of Dubai ignores a couple of things that makes it incomparable to the situation in Syria. In Dubai, the Emir’s power is derived from a culture that recognizes and willfully accepts him as an absolute ruler; all power emanates from the Emir as it has for the last thousand years. The second difference between Dubai and Syria would be that Dubai has a huge reserve of oil resources and small population; this means it is much easier for a mistake to go unnoticed. In Dubai, a billion dollar mistake can be buried under ten billion dollars of added spending and the mistake can be quickly forgotten. The Syrian president does not have either of these luxuries.

You say “Power is so absolute and greed is so hard to avoid that the regime leadership feels that it is just too easy to accumulate wealth and if they don’t do it, someone else will.” I find it hard to believe that an intelligent person such as you believes in the existence of absolute power. All power is subject to some set of constraints regardless of how concentrated it may be. The power of the Syrian regime is no different. It is a highly concentrated power but it is not absolute and it must take into account the popular reaction that will ensue when different policies are implemented. If anything, I think the biggest obstacle to privatization is the concern the regime may have to the reaction of the man on the street. This is evident in the example of not too long ago when the regime removed the subsidies on diesel and reversed the policy when it proved too unpopular. I believe the subsidy removal policies would only work if supplemented with a negative income tax that will put cash in the hands of the lowest income groups; a negative income tax would protect the needy from the harmful effects of privatization without providing a subsidy to rich Syrian or Jordanian and Lebanese consumers.

On the issue of inconsistency in presentation, I take strong exception to a reform method by which a single person is empowered to initiate economic reform without the political structural changes that are needed to give the reform any permanence. Authoritarian rule and Markets are not compatible precisely because a significant portion of the resources have to be directed to the maintenance of the authority of the regime. When a group starts to threaten the centralized regime it has to either be bribed through handouts or arrested and jailed. In the case of Pakistan, the development push has driven a wedge between the well-to-do and the masses. I interact with quite a few Pakistanis in my day to day activities and I can give you my informal assessment that they either love or hate Musharraf. You can probably guess what characteristics the Musharraf lovers share… The interesting thing is that I am yet to meet a Pakistani who is indifferent to the presidency.

If you want to argue for reform then you must argue for structural reform. A shift in the entire structure of government to a position where power is more diffused and the legal system is a result of compromises between different power groups that would protect the interests of a disinterested layman.

I find it amazing that a lot of intelligent people fall into the trap of inconsistent argument (not that I am always consistent). For example, from the Creative Syria group I spotted the following:

“Despite all the fanfare surrounding the launch of the government campaign against unemployment, unemployment rates continue to hover around 30%, according to most estimates.” Ammar Abdulhamid

Mr. Abdulhamid fails to recognize that a 30% unemployment rate is probably the result of government policies. We should be lucky if the government campaign does not result in even higher unemployment rates.

Rime Allaf says “In its most recent five-year plan, the government speaks of establishing a "social market economy" (one of the baffling "reforms" of the Baath Party Congress) in a period of 20 years, without explaining how this will happen.” Here the criticism is centered on the inability of the government to provide details of the five-year plan. I think a more appropriate criticism would be the fact that the government still operates on a five-year plan basis. This statement implicitly accepts the government role as a central planner of economic activities which is highly inconsistent with the principles of a market economy.

Zenobia in an earlier comment said, “If syrians cannot be the owners (don't have the money to be) - then they will simply end up as exploited labor with no money staying inside Syria.” What Zenobia fails to recognize is that one of two things has to happen;

• either the money has to be allowed in the country to employ Syrians or
• Syrians leave the country and follow the money

If Syrians are going to be exploited I think it would be better for them to be exploited inside the country. (Of course the concept of exploited labor is a totally different topic that I would love to discuss in detail at some other time.)

At 5/27/2006 10:09:00 PM, Blogger ActiveListener said...

Zenobia, I’m sorry, you can keep declaring yourself to be this or that, but you are the one who should apologise to this blog and have your comments removed.

You think it’s acceptable discourse to screech: “You are a stupid ass fucker, pretentious, pathetic, finger up your ass Lebanese. Grow up! Forget about 'jews' and fix your own world.”
And you also think that the provocative statement: “the fact that 16 million jewish people on the planet - as a collective culture - did more for human advancement in Science, Art, Philosophy, business, and just about every intellectual field and acadmia....than billions of arabs have in the last seven hundred years" is offset by the response (when rebuked): “I think the arabs are a fabulous people to have graced the earth as well”.

Viva Liban is clearly unbalanced and a crank and he’s been censored by the site administrator. We see this here from time to time. But you’ve escalated and kept it coming by rushing in to pull his levers and push his buttons with your own offensive comments.

You may have some sincere and thoughtful things to say. But like the disturbed VL your writing is swamped by unreadable diatribe. My advice is that you reflect in depth on the writing tone of Josh and many of the others here and start modelling yourself.

I hope your cousin and her employers are at ease with your comments above on her job.

(By the way, I have come to understand how glib comments that put Jewish people on a superior pedestal and dismiss “billions or Arabs” are far, far more damaging to “this blog and to ME politics and life overall” than any rabid rantings by the VLs of the blogspehere – who incidentally, as you concede may have some life-shattering experiences with Israelis in Lebanon behind their attitude.)

At 5/27/2006 10:37:00 PM, Blogger George Ajjan said...


Of course external factors will influence Syria's economic development. I think you know that I know that, but the point I was making was that the standard litany of external excuses, while an ominous hinderance to Syrian reforms in several areas, does not apply to Bashar al-Assad's ability to at least begin to dismantle some of the inefficient state-run sectors which you yourself agreed are fair game for privatization.

You are correct, the Dubai analogy is not a perfect match, but as IC said, "nevertheless the core message is clear."

As for the NPV, sorry I didn't mean to give you corporate finance homework, we've all done enough of that in our lives already, and actually the question was more rhetorical. The point being: if the Syrian government auctioned off enough of the public sector that non-regime private Syrian capital could purchase, I suspect the new owners, if they managed the facilities well and operated in healthy competitive sectors, would find very, very good results that would add jobs to the Syrian economy, even given some adverse external factors.

At 5/27/2006 10:41:00 PM, Blogger norman said...

Ehsani,s post is very stimulating and the best thing about it is that it offers solutions instead of shouting at the Asad family as we see on other blogs ,they call Asad a dictater now ,what will they call him if has the same powers as the Shikh of Dubi ,the Syrian goverment should get smarter and know that you do not need to manage a busness to be partner in it, In the US through taxes the federal goverment is my partner for about 39% and the state of NJ for about 12% Syria,s goverment can do the same and the desire of private busness to make more will translate int more income for the govement then it can pay higher wages to goverment employees . judges and police then ask them not to axcept bribes and make it illegal to bribe or axcept bribes with a free phone number to report violaters and ask local prosecuters to follow up on complains with undercover opperations and prosecution ,Syria tried to lift subsidies on some products only to have the opposition complainig about the high prices ,Syria has to lift the subsidies if it wants to stop smugling but needs to protect the poor by providing food stamps and coupons for heating oil to the proven poor ,the money saved can be used to increase the wages of all goverment empolyees ,about privetising goverment projects ,the goverment should stop starting new projects that private buisness can start and sell projects that are not pprofitable and limit it,s investment to projects that are needed and can not be established by the private secter.The Syria goverment should encourage small buisness as it is the catalest for the economy and to decrease unemployment and increase GDP as it is more than 50% in many economies .

At 5/27/2006 10:48:00 PM, Blogger Zenobia of the East and West said...

well, Active Listener, I disagree with you. I let him have it his own style. Frankly, I don't have a record of talking offensively or abusively on this blog or any other, so if i was vulgar for one minute it was to give him a slap of his own medicine. Clearly i didn't realize how inflamed he would become as a result...or how mentally unbalanced....but obviously i realize that now.
but, i still disagree with you. I don't think anyone else but you claimed that my comment(s) were an 'unreadable diatribe'. What i said about jewish culture to him was only my (yes, provocative) suggestion that he has a huge problem in his soul precisely because all evidence on this earth contradicts his desire to see jewish people as 'scum' of the earth. I wasn't intending to put anyone on a pedestal or dismiss anyone. I may have defended a group of people, but I wasn't attacking any group, and I think that is a huge difference. I thought i explained myself.

Forget it now, as I don't appreciate to be lectured in this patronizing way by you, particularly when you have nothing to say to our disturbed friend to take him to task. I do not excuse his violence.
I certainly learned my lesson.

At 5/27/2006 11:11:00 PM, Blogger EHSANI2 said...

Lots of great comments and an excellent discussion:

The concerns and questions that have been raised with respect to Privatization are of course real and valid. What do you sell or keep? Who are the buyers? Is the process transparent? Is the government selling at the right valuations? It goes without saying that all these issues need to be addressed in a judicious and systematic manner. I am confident that enough expertise can be brought to ensure that the types of concerns that have been raised are addressed properly. I consider such issues tactical in nature. The strategic issue is whether the Syrian leadership should swallow the pill, admit that the current system cannot possibly continue any longer and decide to hand the baton to the private sector. Should the government keep some strategic industries? Absolutely. The country needs to at least start to change route and turn the ship around. Unless Syria starts the process of privatization, there is no conceivable way to turn this country around. This is the single biggest obstacle facing this nation. Recent studies have shown the average state employee works at 30% of capacity. In effect the country is wasting massive resources and is throwing its much needed into a bottomless black hole.

There is no question that it is easy for me to recommend this route from afar. Presiding over a country that will potentially have to displace millions of people as a result of the inevitable dislocations that will follow privatization is another matter. The social and short term economic security concerns will dominate. Policy makers are unlikely to follow my suggestions. They may wish they never got into this problem in the first place. Given the choice, they may never have chosen to use this economic model with the benefit of hindsight. They are now trapped. They are fully aware that they will never succeed in making these state enterprises profitable. They are fully aware that these concerns are decaying in front of their eyes. They know that the workforce is underutilized, under trained and underpaid. But all they can do is sit and watch this patient suffer a slow death. They are like a deer caught in a head light. Regrettably, I have very little confidence that this government has the will or the backbone to make these hard choices. It is a lot easier to continue with the status quo and blame the inevitable failures that will follow on sanctions, Israel, Zimbabwe, or the weather. Will they look in the mirror and admit that they have failed? Will they tell the Syrian people that this socialist system that they enacted and supported has proven to be an utter failure? I truly doubt it. What is more likely is that the government will stay the course and will continue the promises of reforms that will never have an impact on this extremely sick patient.

I guess I have answered my own question. The current Syrian leadership “may” have the conviction that a change is needed but they certainly do not have the will to change.

For Syria to turn the country, its leaders must address the nation and explain that changing course is required. Contrary to what many of you fear, I am totally convinced that a reinvigorated private sector will fill in the vacuum. Once taxes are reduced and the regulatory landscape is loosened, the private sector will blossom. Will there be some state employees that will not be rehired? Absolutely. The late Joseph Schumpeter coined the phrase “creative destruction” and this is precisely what Syria is going to have to learn to live with. As businesses get destroyed others will be created in their place. Nothing remains stationary in truly vibrant economies. Syria is an ideal candidate to follow Dubai’s example because it has an abundant labor force, superb geographical location and relatively cheap electric energy. I am convinced that this is an idea worth exploring. Everyone keeps accusing me of offering simplistic solutions. In reality, the solutions are indeed simple. Putting them into action however requires strong, visionary and bold leadership.

At 5/27/2006 11:38:00 PM, Blogger norman said...

Ehsani , I agree with your last note but i think Syria has the backbone to follow up on reform but they are tring to be sure that the private secter is willing and able to invegerate the economy before they dismantle the public secter and i do not think you can blame them as the private secter has opsticles from lack of expetise to lack of funds and loans.

At 5/28/2006 12:40:00 AM, Blogger VIVA LIBAN said...

I sure hope President Assad is not reading this crap that all of ya posting here. Mr. President, these puppeteers are nothing more than brainwashers paid by someone hopping that you will just buy the crap and drop Syria and Lebanon in the Jewish Canine to devour it.

Ehsani is just the next SORROS. If you want to have the Syrian Lira worth less in purchasing power than it's values as the recycled paper in weight, just go ahead and take one word out of this well orchestrated brainwashing and implement it. It is more poisonous to Syria than all those poison pills Dardari feeding you.

Anyway, I know your excellency is pretty sharp and smart, you are too busy with the important stuff and that you know that the whole Middle East, if not the planet is going to shit when the first shot fired at Iran.

At 5/28/2006 12:46:00 AM, Blogger VIVA LIBAN said...

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At 5/28/2006 01:02:00 AM, Blogger Nafdik said...


You suggest:
"Syria’s only solution is to emulate Dubai. The ruler of that Emirate runs a one-man show."

Even though I agree in general with the reforms you recommend. There is a very important issue that should not be forgotten when thinking our ruler:
Bashar is not the ruler of Syria. Unlike Hafez who was the actual ruler of the country and who used his tribal allegiances, and various power systems to fortify his rule; Bashar is a figurehead that was installed by a group of profiteers who did not want the golden goose (Syria) to stop laying its eggs for them.

Bashar is not the leader of the mob. The mob is the one who selected him as its spokesperson. Bashar has no real power by himself.

I am not saying this as an excuse to give Bashar time to acquire power, rather as an affirmation that any hope based on Bashar goodwill is useless. The man has no power and is unlikely to gain power ever.

At 5/28/2006 02:29:00 AM, Blogger SimoHurtta said...

I guess I have answered my own question. The current Syrian leadership “may” have the conviction that a change is needed but they certainly do not have the will to change.

In reality, the solutions are indeed simple. Putting them into action however requires strong, visionary and bold leadership.

Ehsani2 to get some advance in this discussion we finally have to come to the question who is the bold new leadership that will emerge from “nowhere”. As you yourself said the present leadership is not “capable” for reforms and a new “Sheik” is needed.

If Syria politics is reformed in the “democratic” style we see now in Iraq = a fierce long power struggle between ethnic groups and relative new and weakly organized political movements, it will take a long time before the country’s political situation is on a level that a strong coalition and bold leader could emerge. Iraq is actually in a better situation when / if the security returns. The huge (potential) oil income makes possible for a politically fragmented and weak government to throw money around like crazy and some economical development is unavoidable. Syria doesn’t have that “luxury”.

So Ehsani2 who will be the new “Dubai Sheik”? Will he be a Syrian a) democratic political leader, b) military dictator or c) is for the economical miracle man proconsul Bremmer arranged a new contract.

At 5/28/2006 11:24:00 AM, Blogger said...

صالح النعامي - الجزيرة نت 28/5/2006 :

بات في حكم المؤكد أن حرص وزير الخارجية الإسرائيلي مؤخرا وفي مناسبات عدة على التعبير عن تأييده للتصعيد الأميركي ضد سوريا وتفضيله التخلص من النظام الحاكم هناك، لا يعبر بالمطلق عن موقف الحكومة الإسرائيلية وقادة أجهزتها الأمنية، ناهيك عن المحافل المسؤولة عن بلورة التقييمات الإستراتيجية في الدولة العبرية.

فقد كشفت صحيفة "معاريف" في عددها الصادر بتاريخ النقاب عن أن رئيس الوزراء الإسرائيلي ومعظم وزرائه وقادة جيشه ورؤساء الأجهزة الإستخبارية يبدون خلال المداولات السرية تحفظات كبيرة إزاء السياسة الأميركية تجاه سوريا.

وكما أكدت الصحيفة فإن هناك ما يشبه الإجماع داخل المستويات السياسية والعسكرية على أنه من مصلحة إسرائيل بقاء نظام الحكم الحالي في سوريا، وأن كل البدائل التي تطرح لخلافة هذا النظام تعتبر "كارثية " بالنسبة للدولة العبرية ومصالحها الإستراتيجية.

ليس هذا فحسب، بل إن بن كاسبيت المعلق السياسي في الصحيفة يقتبس عن شارون خلال إحدى هذه المداولات السرية قوله "من الأفضل الحفاظ على الوضع القائم.. من الأفضل وجود دول عربية متخلفة ودكتاتورية مستقرة ومنضبطة حتى تعرف على الأقل أين تبدأ وأين تنتهي".

وأحد الاستنتاجات التي خلصت إليها هذه المداولات كان الاتفاق على أنه لا يمكن أن تكون سوريا أضعف في المستقبل مما هي عليه الآن في ظل حكم بشار الأسد.

وورد في تقييم قسم الأبحاث التابع لشعبة الاستخبارات العسكرية الإسرائيلية المعروفة باسم "أمان" المسؤولة بشكل عام عن تقديم التقييمات الإستراتيجية للعلاقات مع العالم العربي، أن "سوريا بشار الأسد دولة ضعيفة ومفتقدة لجيش ذي أهمية وتتغذى من إشاعات الماضي".

At 5/28/2006 11:32:00 AM, Blogger said...

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At 5/28/2006 07:46:00 PM, Blogger EHSANI2 said...


If it were my choice, I would start the immediate search for a Syrian Turgot Ozal.

A professional military chief would then be the guardian of the country’s secular institution.

Syria needs to rewind the clock back to 1980 Turkey and learn how that country turned itself around since.

Is this a fantasy? Perhaps. But we can at least dream.

At 5/28/2006 09:32:00 PM, Blogger Pascal The Fucking Arab Barbarian said...

Let me understand you better EHSANI2, are you looking for a "Syrian Nationalist professional military chief" to guard Syria transition or one of those Israeli-Western puppets like "Zaim and Nasser" who act like a Nationbalist but makes secret deal and is on the payroll of these powers?

Are you looking for one that will strengthen teh Syrian armed forces, equip it with the lates t technologies, work for the liberation of Iraq and Syrian Golan, work on forcing the U.N. to implement all the worthless resolutions it passed about the Golan, maintain the unity with Lebanon and expand it to other countries. Permit economic development, investments, scientific reaserch and maybe develop and expand Syria's energy resources by building a Nuclear reactor to generate it. etc.. etc..

Why I have the feeling that all you really wants is another stooge?
that will permit SOROS foundation and offices to be open in Damascus.

HEHEHEHE. "KARITHA" is how the Jews described a change of regime in Syria.

At 5/28/2006 10:13:00 PM, Blogger EHSANI2 said...

> May 29 -- Pakistan's economy will probably grow
>at an annual pace of as much as 8 percent over the next five
>years, matching neighboring India, on record foreign investment
>and rising consumer spending, Prime Minister Shaukat Aziz said.
> ``We are creating gradually a middle class which is driving
>consumption,'' Aziz, 57, a former Citibank NA executive, said in
>a May 22 interview in the capital Islamabad. ``It's a very
>viable economy and it is growing. We have roughly reduced
>poverty by about 8 to 10 percentage points.''
> Pakistan's $118 billion economy expanded 8.4 percent in the
>year to June, the fastest pace in two decades, as consumers
>spent more on cars, motorcycles and mobile phones. The return of
>overseas investors who sidelined the South Asian nation which
>borders Afghanistan due to security concerns after the terrorist
>attacks on the U.S. may help Pakistan match the pace of growth
>in India, the second-fastest expanding major economy after China.
> Pakistan's economy is set to grow between 6 percent and 8
>percent this year, which will help the nation's annual per
>capital income surpass the $800 mark, Aziz said.
> ``Growth is based on strong macroeconomic fundamentals and
>a structural reform agenda which has been broad-based and
>deep,'' said Aziz, who will complete his first term as prime
>minister in October next year. ``Reforms are based on a
>philosophy which is deregulation, liberalization, privatization,
>transparency and good governance.''
> `No Sweet-Heart Deals'
> Pakistan's Privatization Commission is set to sell a 51
>percent stake in Pakistan State Oil Co., the biggest supplier of
>the fuel, by June 30, the asset sale agency said May 25. It will
>also sell management rights in National Investment Trust Ltd.,
>the largest mutual fund company, next month, the agency said. In
>June it sold a 26 percent stake in Pakistan Telecommunication
>Co., the biggest phone company, to Emirates Telecommunications
>Corp. for $2.59 billion.
> ``There are no sweet-heart deals in Pakistan anymore,''
>Aziz, who was elected prime minister by the parliament in 2004,
>said. ``Today, Pakistan offers a level playing field to all
>investors. We are one of the few countries where no sectors are
>tabooed to invest whether local or foreign.''
> Aziz was appointed finance minister by President Pervez
>Musharraf in 1999 to help turn around the South Asian country's
>economy that at the time had barely one month of foreign
>exchange reserves and where the government had almost defaulted
>on its foreign debt repayments.
> Foreign Investment
> Now Pakistan has foreign exchange reserves of $13 billion
>helped by record overseas direct investment of $3 billion in the
>10 months to April 30. Two loan packages from the International
>Monetary Fund have also helped the country raise $1.9 billion in
>three foreign currency debt offerings since 2004.
> Pakistan estimates it will get $3 billion of foreign
>investment annually to sustain its economic growth rate, Aziz
>said. Companies from China, Singapore and the Middle East are
>investing in Pakistan, while Japanese companies such as Toyota
>Motor Corp. make cars in the country, he added.
> Temasek Holdings Pte, Singapore's state-owned investment
>company, this year bought a 72.6 percent stake in Pakistan's NIB
>Bank Ltd. and it also plans to start an asset management company
>in the south Asian country.
> Still, a faster pace of expansion in Pakistan's gross
>domestic product may not be sustainable without further changes
>to improve economic efficiency, said economists including Sakib
>Sherani from ABN Amro Bank in Islamabad.
> `More Realistic'
> ``The government needs to be more realistic about GDP
>growth targets,'' Sherani said. ``Growing at 7 to 8 percent on a
>sustainable basis is beyond Pakistan's capacity without real
>institutional strengthening.''
> Pakistan's long-term foreign currency rating was raised in
>November 2004 by a level to B+, or the fourth non-investment
>grade, by Standard's & Poor's after lowering to within two
>levels of default status in October 1998 after the country
>tested nuclear weapons and attracted sanctions including a ban
>on aid and loans from countries in Europe and the U.S.
> The resumption of aid and loans after the country supported
>the U.S.-led war on terrorism in 2001, has helped Pakistan's
>benchmark stock exchange index to climb 10-fold, reaching a
>record on April 17.
> Pakistan's 8.4 percent economic growth rate last year
>compares with an average 4 percent pace in the decade starting
>1990, when according to the government the poverty rate in the
>country almost doubled to 33 percent.
> India's Economy
> India's economy is expected to expand at an 8 percent pace
>this year, matching the rate of expansion of the previous three
>years, Finance Minister Palaniappan Chidambaram said May 23. The
>$775 billion economy expanded 7.6 percent in the three months to
>Dec. 31 from a year earlier.
> Pakistan's government is boosting farm production, which
>accounts for a quarter of the country's gross domestic product,
>to reduce poverty in rural areas, Aziz said. Agricultural
>reforms have made the ``farmer better off today,'' he said.
> Peace with India will also help to reduce poverty in the
>region, he said. A peace treaty offered by India's Prime
>Minister Manmohan Singh this year ``must be driven by dispute
>resolution,'' he said.
> ``We remain cautiously optimistic'' about peace talks with
>India, Aziz said. ``We have tied trade and business relations
>with India with the resolution of Kashmir dispute. So progress
>on Kashmir will determine the progress on trade and investment
>ties with India.''
> U.S. Ally
> Aziz was also tasked with taking forward the peace process
>with India started by his predecessor Zafarullah Khan Jamali in
>2003. The South Asian nuclear-armed neighbors began repairing
>relations including resumption of sport and transportation links.
> The two countries came close to fighting a fourth war in
>2002. Two of the previous three wars between Pakistan and India
>were fought over control of Kashmir, which is divided between
>the two nations and claimed by both in full.
> Pakistan and the U.S. have a ``common interest'' in
>fighting terrorism, Aziz said. ``Pakistan has made good progress
>to reduce the scourge'' of terrorism, he added.
> Pakistan became a key a U.S. ally in its war on terrorism
>after the country provided intelligence and logistic support to
>U.S. forces to attack Afghanistan in 2001. In 2004, the U.S.
>announced Pakistan as a key ally outside the North Atlantic
>Treaty Organization.
> Since 2003, Pakistan's security forces have been hunting in
>the country's tribal regions for Taliban and al-Qaeda fugitives
>who fled Afghanistan after attacks by U.S. forces. Afghanistan's
>President Hamid Karzai said Pakistan's religious schools were
>inciting people to fight a holy war in his country, Agence
>France-Presse reported May 19.
> Pakistan opposes the use of force against its western
>neighbor Iran, Aziz said. Force will not solve any problem but
>will have severe consequences for the region, he said.
> ``Iran has the right to use nuclear technology for peaceful
>purposes meaning for power generation,'' Aziz said. The U.S.
>says Iran is building nuclear weapons.

At 5/28/2006 10:24:00 PM, Blogger Pascal The Fucking Arab Barbarian said...

Why not! They will be fools not to build a bomb or 800 of them with the delivery capability that rival those antiquated ICBMs. After all, India, Pakistan and of course the Jews build a humoungous arsenal. For what? and why country like Iran and Syria can not own the bomb. If I was leading Syria, I will build one using own technology that far superseed the antiquated means and methods now used and not just tell teh world what the hell you gonna do about it but heaven too. You mess with my country, you are messing with god, and it is not fake Yehwe. If he can send afeds and locust, will do the same, plague the one will mess with us. That is life dude. Survival of the fittest. This is how nations like Syria makes it for 8000+ years. ARMAGEDON BABY, ARMAGEDON.

At 5/28/2006 11:16:00 PM, Blogger Frank said...


I suspect that your point about an underpaid judiciary and police force reinforces your point about whether the government should be running lossmaking industries and enterprises.

If they are wasting their money on providing "jobs for the boys" then they cant pay for honest judges and cops. If getting something done is on the basis of a large note or a small brown envelope investors run for home.

Creation of employment requires a few major industrials to provide a core set of industries. These industrials are subject to scrutiny by their shareholders and also by the financial authorities.

If there isnt a working system to bring about fair resolution of disputes and to enforce management of IPR and the repatriation of funds then we "qualify the opportunity out"

I can't do sensible project management or set up supply chains where the whole process is vulnerable to somebody who won't stamp a form because he hasn't been incentivised.

You can't do economic transformation with just SME. Mao Zhe Dong tried this and set China back decades.

Before someone says this a chicken and egg problem, it isnt. There are always sources of funds to straighten out an administration as preparatory work for an economic transformation.

I suspect we are moving towards a conclusion that restructuring of salaries for certain sectors of the public service, and a root and branch purge run by a clean pair of hands similar to General Musharraf's exercise should be part of the five year plan.

At 5/29/2006 12:08:00 AM, Blogger Joe M said...

The comments is pretty long and i did not manage to read them all, but while I agree with the idea that Syria needs change, I disagree with the thrust of the types of changes that EHSANI proposes. I am more along the lines of SimoHurtta. I think that it is absurd that EHSANI proposes all these extreme economic reforms as if they can happen magically. t_desco is right to refer to the work of Stiglitz on these issues.

But more then pointing out the people who i agree with on this post, i want to reference a couple issues that i think are missing or wrong from EHSANI's original post. When i hear die-hard free marketeers talk about privatization, i always wonder whether they understand why there is government in the first place. Unlike what they seem to believe, it is not just to isolate power in the hands of a corrupt group, but to try to normalize wealth and protect those who are weak against those who are not. Even the Syrian government knows and believes this. If you allow for extreme privatization like EHSANI proposes, you will further disenfranchise the great many people who were too poor to take part in the privatization, or who were reliant on the advantagous conditions that the public sector afforded them in the first place. While privatization and market economics do generally make things more efficient (if, as SimoHurtta pointed out, there is enough competition), it does not take into consideration what is most fair. You can't just make the assumption that more private enterprise makes more things available to more people and gives people incentive to participate, blah blah blah. The problem in countries like Syria is that the vast majority of the population do not have access to credit or have the ability to participate in such a privatization anyway. So what happens if a wild privatization creates an oligarchy like it did in Russia, and formalizes the poverty of those who no longer have access to things that were public goods before? What is the goal of these privatizations, just to give people incentive to participate in the economy? That might be a good thing, but at the very very least, the weakest and poorest have to be protected in some way. How do you expect some fallah and their donkeys to go to Damascus to take part in the auction of the state own hotels? Who from the country side has the information and the capability to do that? I mean, the majority of the Syrian population rely on the state to support them in some way, so what happens when you take that from them? Privatization has some advantages, but it also has disadvantages. I think it is more important to take the disadvantages into consideration then it is to act like the advantages are limitless. If you want stability, democracy and prosperity, you can't go around distancing large groups of people from protections they were once afforded. The Russia privatization was a complete disaster. And even, the state has nationalized some of the industries it had privatized. Russia is 1000 times richer then Syria, yet they have had to move back to many of their old ways. What do you think will happen to a tiny, poor and sanctioned country like Syria?

The one thing i do agree with EHSANI about is that the legal system on Syria is problematic. There are too many weird and useless laws that might have had a good reason to existing one some point, but are no longer worth the paper they are written on. But i don't think it is a serious suggestion for some all-powerful super dictator to come through and just check off all the good and bad laws and fully re-organize all 100 billion Syrian laws to the advantage of all the people. So, really, when EHSANI talks so strongly about privatization and legal reform, I think he is making a big mistake. To me, it is amazingly telling of the mentality of the Syrian ex-patriots that they are always expecting a miracle to happen and magically fix all the problems in the country. In order for their to be serious change, honest change, it has to come from the bottom up. There is just no other way. The Syrian people are best positioned to assess their own needs and conditions. So, if i were to propose a reform that is absolutely obvious (that EHSANI completely ignored) and essential, i would propose that the Syrian opposition and Akhwan work together to fight for very limited, local elections. Of course, this is just a first step and hopefully there could be full democracy at some distant point. But you are being irrational and dangerous if you want Bashar to automatically open the presidency up to elections. On the one hand, it would probably throw the country into chaos if there was a dramatic political shift like that. But also, it hopefully is not very threatening to the national leadership if the people are able to elect (for example) local city councils that serve as advisers to local mayors (or something like that). If you want legal reform, you are crazy to just go in there and tear up all the laws that you think don't work. You have no idea what the reactions will be to laws being destroyed like that. But, if you are to allow limited local elections, you can start to build a more solid legal framework based on the will and needs of the people. Also, if the elections are very limited (maybe even to just Baath party members, or only to serve as advisers to local authorities), you will create alternate power bases that represent the will of the people. That would protect the people from the possibility of Syria becoming an anarchy like Iraq because change would no longer mean that all the institutions would totally be destroyed. Plus it would be more likely to be in the interests of those in power, like Bashar, because he would still have control but it would be a method to weed out corruption and to bring in new ideas and fresh faces, while opening the government to a level of transparency that is necessary for local government to function. I think that this type of this is much much more positive of a reform then to focus on privatization as though it is going to save Syria. Syria's problems run deep, and just switching the names of the oligarchs in control of the country's wealth is not going to change the essential injustices in the country. Again, it is amazing that EHSANI did not even mention a reform like this, and worries me very much about the mentality of those ex-patriots who are urging change in Syria. Why do they focus on the economy and not the political situation? I don't know, but i fear that the are more interested in making money from Syria then in bringing justice to the people.

Further, i was very disappointed that EHSANI talked about “free trade zones” without ever mentioning the ones created in Jordan. Those provide a perfect example of the type of thing that would likely happen to Syria if it went that route. As we all know, Jordan has vast “free trade zones” that have basically become toxic work camps for Indian and Indonesian laborers. Jordan has hundreds of major international corporations working in these zones, producing clothing, electronics, beauty supplies and all kinds of things. But these zones have not created growth or wealth in the country. From what i remember reading about them some time ago, they are mostly owned by a small group of big players who simply rent out the facilities to the highest bidder. A large number of former houseworkers decided to leave the slavery of house cleaning and move to the slavery of sweatshops, and now they almost totally supply the workforce of companies like Victoria's Secret and others that operate in the zones. So, i think it is very abstract to say that you change laws and provide “free trade zones” and start to privatize and all will be well. Especially when the case next door seems to show obviously that that did not happen. Plus, Dubai is simply an inappropriate example to compare with Syria. Not only do they have vast supplies of Oil and Gas, they also serve as a sanctions buster for trade with Iran. So, if you wonder why there is so much trade there, you might want to consider these factors as well. Having a rich country next door with 70,000,000 people denied access to international markets (for everything but carpets and nuts) does a hell of a lot for your economy if you are willing to break the sanctions.

I want to add that in his last post Landis did a good job in pointing out that Bashar has begun to open up the banking system in Syria. This is far far more important then privatization itself. Unless the average Syrian has access to lines of capital and forms of credit, there is no advantage in trying to open the country to private enterprise. The ones who can afford to deal in the private sector will have an instant monopoly of it. And in this respect, actually, there is a big advantage to the already existing oligarchy that infests Syria, they can be forced to repatriate they wealth to bolster the standing of local banks. I have no idea where is the money that our good friend Makhlouf has stashed, but the most patriotic thing he could do is to make his wealth accessible to Syrian banks so that they could use it to provide credit to average Syrians. If Bashar had some guts, he would force the richest people in the country to support Syrian banks with their wealth. If the banks were flush with cash, they could start offering loans at good rates and the average Syrian might at some point be able to deal in this great free market ESHANI speaks of. And for those with less means yet, the access money could be utilized in a way similar to the Grameen Bank in Bangladesh (though, at better interest rates). My point is that if you want to talk about the private sector, you can't just talk about state owned enterprises like they are the only problem, but you have to realize that access to capital is the key to any successful capitalist system. Otherwise, the results are just the same as a planned economy, or any other monopoly. And again, a reform like this could be easy and popular, but would have profound impact. Plus be more stable and beneficial to a larger number of people then just privatizing state owned enterprises because you think they are inefficient.

Anyway, i have said enough for now. I just wanted to make those points. I am curious to hear what people have to say in response.

At 5/29/2006 12:37:00 AM, Blogger syrian said...

"if you are to allow limited local elections, you can start to build a more solid legal framework based on the will and needs of the people."

"If Bashar had some guts, he would force the richest people in the country to support Syrian banks with their wealth. If the banks were flush with cash, they could start offering loans at good rates and the average Syrian might at some point be able to deal in this great free market ESHANI speaks of."

First elections and democracy (limited). Then force people to put their money in banks???

At 5/29/2006 08:00:00 AM, Blogger George Ajjan said...


Interesting post, thanks for adding it. However, if you reread the discussion you will find that there was somewhat of a consensus reached that privatization in more competitve industries made sense, but the state should keep control of strategic industries. Ehsani's point was a strategic one about "turning the ship around", he did not advocate the details of the new course. Definitely, privatization would have to be done very carefully so as to avoid as much as possible the mistakes made in similar efforts in other nations that had negative consqeuences for the citizenry.

At 5/29/2006 09:46:00 AM, Blogger Zenobia of the East and West said...

JOE M. :


You summarize so much of the issues of concern, certainly for myself, and I think many others about how distribution of wealth as an essential piece - is something that must be dealt in a situation where privatization is going to be implemented. I also appreciated the two points that I also tried to say something about (but didnt do such a great job as you) - that is - how does one insure that the money made be the oligarchs or the investors will stay inside Syria and even more importantly be made available for use by average people. BANKING, YES.

And, LABOR, was also a big problem for me that Ehsani barely said a word about. All the free zones - and privatization is a huge recipe for exploitation of labor and as you pointed out (maybe migrant labor) but doesn't necessarily ensure that living wage employment is improved for the general citizenry.
Government IS needed, and question always comes down to what type of governing.

Last but not least, you ideas about building democracy - from the bottom up - using for example local elections and coalitions - was also excellent. So, Concrete as opposed to an annoying abstraction! thank you. Zenobia

At 5/29/2006 10:14:00 AM, Blogger EHSANI2 said...

Joe M said the following:

Government is there “not just to isolate power in the hands of a corrupt group, but to try to normalize wealth and protect those who are weak against those who are not”.

Welcome to the world of socialism and communism that Joe M advocates here. When you hear about governments attempting to normalize wealth, it is the destruction of wealth that will be the end result. Every government that has tried to have a cake cut in equal pieces to so-called normalize wealth ends up with a cake so small that there is nothing to go around any longer. In contrast, every government that has adopted free market economics has succeeded in creating a big cake to go around. Not everyone will have an equal share to be sure. But the size of the cake is at least large enough to pass around. The case of Pakistan, which I posted above, is a good example. Does anyone think that it is a coincidence that a country can turn around its fortunes with such results as soon as it adopted its new economic framework? In less than five years it was able to have the largest foreign currency reserves in its history after having started from the lowest ever. Its growth rate is projected to exceed over 8.0% for the next five years. This is close to six times faster than the growth in Syria. Can you imagine what Syria will look like if it starts to grow that fast? Let me give an example. The Syrian labor force currently increases by close to 2.5%. The labor force is defined as those who are actively seeking work in the population. This number translates to 200,000 people a year. If the gross domestic product grows by less than this 2.5%, these new job seekers will not find the job openings that they need. Were the economy to grow by 5.0%, not only would the new 200,000 people find work but an extra 200,000 of the currently employed will also find jobs and this is when the country’s current unemployment rate will stop rising and start to decline. Now, if you add another 2.5% to the growth rate and if Syria was to achieve Pakistan’s growth, fully 500,000 a year can move out of the unemployment pool. This is on top of the new 200,000 that entered the labor force. Now, just imagine if this goes on for the next 5 years. The result will be that 2,000,000 unemployed Syrians will find work as the unemployment rate continues to steadily drop. For these events to unfold, the economy needs to grow at significantly higher rates than today. Time is not on our side. Remember that every year that we fail to do so, a new 200,000 join the ranks of the unemployed (assuming constant levels of productivity of course).

But how do we achieve faster growth?

Not without the private sector is the short answer. The unemployed Syrian people need the government to get out of the way and let the creators of jobs and owners of capital commit their resources to the country’s future. Whether it is the domestic owners of capital, the Syrian expatriates or the foreign investors that will carry the torch it is important to note that none of these three groups will decide to invest or risk their capital in the Syria of today. The Baath party is not a business friendly host. Rather than make it easy to come and invest, it invents such arcane laws and regulations that only an idiot would decide to come and start a business in the country today. Instead of encouraging private enterprise, they rely on the government to run businesses and employ people. But all they do is create fake and masked jobs. By the government’s own admission, its employees work at 30% of capacity. Not a single concern makes money. They produce the worst products and services. Charge for them more than equivalent imports and ask the Syrian people to pay for them. The Syrian people do not want the government to protect them. The Syrian people want their government to set the stage for job creation to take hold. Joe M, t-desco, SimoHurtta, Zenobia and others may well be good meaning people who want the best for the poor and needy amongst us. But they are sadly misinformed about how to get there.

The only way forward is less government and more private enterprise. Every day that passes without a dramatic move in that direction, an “extra” 548 Syrian people join the ranks of the unemployed.

At 5/29/2006 11:03:00 AM, Blogger syrian said...


The Pakistan growth rate is accompanied by a 9% inflation rate. This level of inflation implies that the economy is operating above capacity. The growth rates your refer to are actually more along the lines of an output expansion spurred by increased government spending and the vast infusion of foreign aid (over 2 billion dollars). If the government chooses to maintain such a high inflation rate then the growth is really more of a monetary phenomena and relies heavily on money illusions.

This is not to say that the policies in Pakistan are not leading to real growth. I am sure that the government reform of thier banking sector and ecouragement of free enterprise, combined with investment in infrastructure are all factors contributing to Pakistan realizing its potential and pushing towards sustainable growth.

I realize that you attach numbers to existing rates of unemployment in the Syrian economy in order to try and illustrate a point. However, when you do that you are implicitly assuming that these numbers are static in nature. Now, as a free market thinker, you should realize that the labor market is no different from any other market. When there is excess labor, the wages will drop and unemployment (non-frictional) will be eliminated. The real question regarding the Syrian economy would then be to try and identify the forces that are creating the persistent surplus in labor.

For a more concrete discussion of the tradeoffs between unemployment and inflation follw this link.

At 5/29/2006 11:45:00 AM, Blogger SimoHurtta said...

Finally Ehsani2 I got the real answer. Welcome to Ehsani2’s military dictatorship. Well who is that engineer who has been studying in USA (Turgot Ozal clone) and who is the “secular” general? And most importantly how and who would put them in power? I wonder how you and guys with same ideology are going to sell your idea to Syrians in the name of democracy and getting rid of “bad dictators” by new dictators. It seems that it has been for you more than democracy in Syria (or other Arab countries) about creating “good” economical environment for big business. Well - that has been US foreign policy already for a long time. It is rather astonishing that the present rather mild dictatorship or halve democracy (what ever) would be replaced with a “secular” military dictator. How would that develop the country’s democracy? Naturally we can justify it by talking about a transition period. Well proconsul Bremmer was a “transitional solution” originally planned for five years. Well we all remember what happened.

Praising military dictatorship as a solver of political problems with neighbours and in economy is not only dangerous for the “arguer’s” own democratic mind, but it is also based on a completely unfounded claim if we watch back the history for the last 60 years.

Certainly a military dictator can rebuild economy to some extent, especially if he is a USA’s “friend”. Like General Marcos in Philippines, General Suharto in Indonesia and the South Korean military dictators. Not to mention the row of Latin American military dictators USA helped to power. These great USA’s gifts to world’s democratic development made certainly some people rich. The Generals’ own families and yes-men + naturally some US companies. And the people in those countries loved those leaders and remember them with love. But seriously speaking were these men good solutions?

Pakistan’s solution, naturally not done by Pakistani people, of a military dictator leading the country is a huge gamble. If Pervez Musharraf doesn’t very fast succeed to create a relative large middle class in Pakistan to act as a buffer who has much to loose, the growing political tensions in the country can boil over and badly. Pakistanis are already not very happy with their great leader and his policy in the War on Terror. Americans like the Pakistani president / general but is he a real democrat? Well Mussarraf has already earned his place in Florida, besides the other bright stars of democracy / free trade experiments.

Ehsani2 read with care Joe M’s comment which has very constructively points of many important factors to keep in mind. Joe M certainly doesn’t speak about communism and socialism as you suggest. Economy is not the only thing to keep in mind. Now in Syria children can enter their school without somebody checking them from weapons, in USA’s big cities not. As one example.

And the one who is badly misinformed is you. You have a dream of tough guy leading Syria to economical prosperity and repeat like a parrot all known “free trade medicines” without not having a clue how in reality how to build a prosperous democratic society. People like you are not only misinformed, they are simply naïve propagandists. Like proconsul Bremmer, prince of free trade and liberty, had to notice playing Monopoly game is easier than a real thing.

At 5/29/2006 11:53:00 AM, Blogger EHSANI2 said...

Weak economic growth is the reason for the persistent surplus of labor.

When you have such spare labor and industrial capacity, bringing up Phillips curve tradeoffs between growth and inflation is not really relevant.

. You are worrying about inflationary trade offs, which will result from excessive above potential growth. This will be a nice problem to have one day.

For the record Pakistan’s 8% growth rate is real and not nominal (i.e.: it is already deflated by the inflation rate)

At 5/29/2006 12:17:00 PM, Blogger Joe M said...

ESHANI, I don't know why you continue to point to Pakistan as if it were a success story. The country is in chaos. Just last week the NGO “The Fund For Peace” ranked 146 countries, and ranked Pakistan to be the 9th most failed state in the world ( Right up there with the likes of Sudan and Afghanistan:
1 Sudan 112.3
2 DRC 110.1
3 Cote d'Ivoire 109.2
4 Iraq 109
5 Zimbabwe 108.9
6 Chad 105.9
7 Somalia 105.9
8 Haiti 104.6
9 Pakistan 103.1
10 Afghanistan 99.8
I personally have not followed the situation of Pakistan very closely, so i can't comment much on its economic development, but I do know that hatred for Musharraf is the only thing that unifies the country's people, whether left, right, secular, conservative... From what i know, he runs the Army and a kleptocracy that has enriched itself, and no one else listens to him (except Bush). I am sorry, but i do not consider Pakistan as a case for optimism. If anything, the thing i learn from Pakistan is that you have to work to include the people in the decisions you make. With every day that passes, it gets more and more likely that Musharraf will be killed or be overthrown. His country is becoming more and more unstable and less and less likely to succeed. Even if you look at the HDI, Pakistan is a basket case ( It is not even developing as fast as Uganda or other countries that are in wreckage. So i don't know where you are getting this optimism about Pakistan as a case in your favor. It must be that you think that making money is the only thing good in the world. But it is not.

Anyway, i am in favor of limited privatization as well. I am not a socialist. What bothers me about your analysis is that you put economic privatization above and beyond all other goods. And more so, you do it in a very haphazard way. And, even if, as george ajjan says, there was a consensus on privatization, i disagree with it. Actually, i was not disagreeing with privatization itself. I probably agree that it is needed to some extent. But i can't believe that you would suggest privatization at the expense of everything else. I tried to make points about the importance of building a useful banking sector because it is absolutely necessary to have one if you are going to have a fair privatization. Without first giving people access to capital and credit, privatization is just going to concentrate all the wealth in the hands of the same people who are already wealthy. They are the only ones who can afford to buy state owned enterprises as things are. It doesn't do much good to give people shares of state owned companies if they just have to sell them tomorrow to buy bread.

It just bothers me that privatization is always seen by people on the right as the only solution. To the exclusion of everything else. Other things are just as important, if not more. But even if you want to advocate privatization, i wish you would do it in a responsible manner. In a way that benefits as many people as possible, and not just builds an oligarchy.

At 5/29/2006 12:42:00 PM, Blogger EHSANI2 said...

SimoHurtta (our friend from Finland) must be very fond of proconsul Bremmmer. Hardly a post passes by without him having to mention the term. He is also so preoccupied by the U.S. that he feels the need to point out everything that is wrong with America. Even if we discuss the Syrian economy and its prospects, we have to first discuss proconsul Bremmer. Today’s enlightening remark is that American school children only enter school after checking them for weapons. At least he seems to think that this is exclusive to big cities. Syrian children on the other hands can attend their lovely schools immune from this American style carnage. Perhaps, the Baath party should run the American school system. Let us assume that the American Embassy in Damascus decides to open its doors tomorrow to all young Syrian families with children to immigrate to the U.S. I can assure you Sir that Syrian school classes will be empty of both its students as well as its teachers.

SimoHurtta cannot stand the fact that Turgot Ozal was educated in the U.S. The existence of Turkey’s military establishment indeed argues that this country is not exactly Finland. Call it what you want though. I happened to have lived there during the late 70’s and early 80’s and therefore have first hand knowledge of the transformation that the country experienced under the late Ozal. The army has kept a watchful eye to ensure that the country does not veer too far in the direction of Islamic fundamentalism. I could not care less what you want to call this system of governing. It has raised the country’s standards of living enormously. During the 1970’s Turkish consumers had to visit Aleppo and Damascus to satisfy their needs. The country’s economy was in shambles. It took one man with the vision and the strength and conviction of his ideas to reform the country. He first met a lot of resistance and lost. He did not give up and made a come back as a Prime Minister and the rest is history. The country is now on the cusp of entering the EU. Does it still have problems? Absolutely. It is not up to par with your Finland or Norway to be sure. But that ship is sailing in the right direction. This lovely country of ours, on the other hand, is still lost in the open waters. It has no compass. The passengers on its board have left their fate in the hands of their captain. In spite of signs to the contrary, they remain hopeful that he will somehow find the way and turn their ship around too.

Let us at least say Amen to that.

At 5/29/2006 12:57:00 PM, Blogger syrian said...

"Weak economic growth is the reason for the persistent surplus of labor"

Which demand and supply of labor model are you using that would lead the market to stay out of equilibrium???

If you believe in free markets then you have to believe in the market adjustment processes. You take a Macroeconomic phenomena and try to use it to justify a violation of a basic core microeconomic adjustment process that has to happen. The only things that can lead to persistent underemployment in a Micro sense is government policies that prevent the market from reaching equilibrium. These policies would have to be a direct control over the wage structure in the economy and have nothing to do with growth. If the economy does not grow to absorb the added workers then the wage has to drop. Anyway you look at it, a free market will lead to a wage that will clear the market. The Phillip curve tradeoffs between unemployment and inflation is always relevant and has to always be kept in mind of policy makers. The inflation tax is a real tax that reduces the value of wealth and income.

Pakistan is suffering from a 9% inflation rate; this means that anyone whose wages are not rising by at least 9% is left worse off and would be a disgruntled citizen.

With all the growth in the Pakistani economy their per capita GDP is still below that of Syria; This means they are starting from a much worse position and the only reference for how sustainable the 8% growth rate is comes from the Pakistani prime minister. I wonder what the Syrian prime minister projection of Syrian growth rates will be.

We agree that the government needs to get out of the business of trying to run a business. Even if I would agree that what we need is a strongman who would just sign a paper and shit will happen; I would not agree that the paper he signs should be wholesale handout of government enterprises and excessive spending. There are more prudent ways to transition an economy.

I believe the reforms Josh referred to in the previous post are a good start. I think that Syria needs to establish a stock market where government owned enterprises can be privitized by transferring ownership from the government to the public; one share at a time. Transfering ownership of the government enterprises to a coroporation who has access to financial capital will convert government monopolies to private monopolies and I am certain that even you would not want to see that.

At 5/29/2006 02:38:00 PM, Blogger SimoHurtta said...

Ehsani2 I use proconsul Bremmer as an ironic indirect “hint” to describe that even a superpower can’t do what it wants to do. Bremmer equipped with all the resources and knowledge of United States of America could not turn Iraq. Well he turned it – to the worse. What comes to your absurd comments of not tolerating US trained politicians and Turkey, you should understand that Kemal Ataturk’s legacy lives strong in Turkey, but it has never existed in other Muslim countries. Military dictatorship means dictatorship; even you obviously do not dare to call matters by their real names.

Turkish membership of EU is everything else but certain. Personally I would like to see Turkey as a member but the majority of EU citizens do not share my opinion. I have noticed that politicians in USA very easily say that Ukraine etc (some even suggests Israel) have to join EU. Well, we decide not USA.

Do the millions of children you suggest would instantly change country get a getter education in USA? Have you seen the results of the National Geography’s study examples of geographical knowledge of USA’s children?

To explain my opinion Ehsani2 I am not against USA as a country, but I do not like its present foreign policy neither I do consider USA as a perfect example to the world. However USA is presently so bound in Middle East problems, that avoiding discussing about USA is impossible, especially when Americans are suggesting American medicines. We in the Nordic countries have managed to create with rather few natural resources well balanced extremely wealthy societies, even it has meant high progressive taxes and many other tricks US “free trade” economists consider “socialist”. Maybe Syria and others Arab countries should turn their eyes to north when searching forms in developing their economy and society.

At 5/29/2006 03:01:00 PM, Blogger EHSANI2 said...

If you can prescribe a course that can make future Syria look like Finalnd rather than America, I would be a very happy camper.

At 5/29/2006 06:14:00 PM, Blogger Zenobia of the East and West said...

Yes! lets use Finland as the model rather than the USA. I will be a happier camper too.

At 5/29/2006 07:51:00 PM, Blogger EHSANI2 said...

Were EHSANI2 to go public with his identify, he could presumably serve a life sentence in Syria for writing this article urging privatization. According to Syria-News two Syrian reporters were indicted for their attempt to “undermine the socialist system” in the country. Having written about the corruption in one of the state owned enterprises, the indictment came down based on article 1/15 of the economic penalties section. The two reporters had 400 pages of documents that prove their corruption story. That did not help. The general manger of the state owned company was able to bring the indictment forward. Article 1/15 can give the judge the leeway to even order the execution of the suspect. The law punishes anyone who calls for “fighting against the socialist system”.

What kind of a country is this? How can a country that holds the world’s oldest inhabited capital in civilization be reduced to this?

The Baath party has a host of laws under its sleeves to draw from. Any citizen can be a suspect because he/she will have to break some law during their lifetime. As one of my astute Syrian friends told me once: “In this country no law gets abolished no matter how draconian on insane it is. It can be ignored for a while but never abolished. This way it can always be picked from the drawer should the need arise”.

My wife has been extremely nervous about my writings on this forum. Once she reads this Syria-news story tonight, she will most certainly ban me from writing here again. Indeed, I may have to follow her advice soon. I guess the Baath party has had it all figured out long ago. Their system works and 43 years at the helm prove it.

At 5/29/2006 07:55:00 PM, Blogger norman said...

If these people are found not guillty Syria would move to different level of legal justice and that will make Syria stronger than not bringing anybody to court.

At 5/29/2006 08:02:00 PM, Blogger norman said...

What is interesting is that when the economy is the subject many people participate ,that should make president Asad pay special attention to the economy


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