Wednesday, March 01, 2006

Is Syria's Economy Improving? Not with Socialism. By EHSANI2

It is heartening to see the recent increased attention to matters relating to the Syrian economy. During the earlier post, Mr. Yazigi concluded his note by stating that “may be the picture of the Syrian economy I am giving is bleaker than what I intended to”. In general, there seems to be a tug of war between the optimists who sense a positive change in the economy’s direction, and the pessimists who continue to express the view that the recent reforms remain inadequate and that the economy’s prospects remain very negative. Let me state at the outset that I belong to the latter group.

What is very apparent is that the country lacks a reliable domestic statistic agency that can gather data and accurately measure economic variables such as GDP, Inflation or Unemployment. The country’s economic leadership team must immediately invest in this endeavor with help from International organizations. Without an accurate, systematic and consistent data gathering and reporting framework in place, it is next to impossible to identify the positive or negative trends in the economy and then design the appropriate policy response. Mr. Yazigi, in the previous post, states that GDP grew by 4.5% last year. What is the source of this information, and is it reliable? The independently produced “country risk survey” for example just published its report on Syria on Feb 18th, and the results are widely different. For 2005, the report stated that Syria’s real GDP grew by 2.0% while its consumer prices rose by 4.0%. What is more worrisome is that it expects economic growth to slip down to 1.5% and 1.3% over the next two years (2006 & 2007). On the issue of financing outlook, the report concluded that “the signing of a restructuring agreement with Russia on Soviet-era debt has cut the value of Syria’s debt stock, but boosted its servicing obligations. Despite this, Syria’s financing position will remain comfortable in 2006, but will deteriorate in 2007 as oil prices and production fall. Did many people know that the debt restructuring with Russia resulted in “higher” servicing obligations even though the debt stock itself is lower? The “Economist Intelligence Unit” published its own sister report on Syria too. Let me summarize it for you:

“Economic reformers will struggle to advance their agenda within tense political environment, and economic growth will be weak, slowed by declining oil output. The economy is expected to expand by an average of less than 1.5% a year in 20006-07. Declining oil production, which will curb industrial output and lead to a sustained contraction of exports in real terms, drives the forecast. The booming economies of the Gulf may provide a modest increase in regional investment and tourism demand. The large number of Iraqis that are now living and working in the country has also provided additional impetus to local demand. Nevertheless, the risks remain on the downside, particularly if sanctions are imposed that compromise Syria’s capacity to export oil. A bar on investment or access to key imported inputs would also push the country rapidly towards recession. On inflation, cuts to fuel price subsidies will create price pressures but low domestic demand will keep inflation at around 4.0% a year”.

As I have stated many times before, the GDP growth rate for Syria must exceed at least 5.0% before the country can “stop the rise” in its already high Unemployment rate. Regrettably, I do not have any confidence that we are even close to hitting those levels. Remember that the reports above think that it will be closer to 1.5% than 5.0%.

Let us move on to the subject of foreign investments. Let us be clear first that most of the numbers that have been cited thus far are merely “plans”. Why are they “planning” such investments while the country faces such a political crisis? The answer is simple risk reward calculation. Most of the land that is earmarked for investment by these projects is currently designated as agricultural land. The current zoning prohibits any building to take place on such properties. As a result, their prices are significantly below market. More specifically, the price of these properties is somewhere between $15-50 per sq meter, depending on location. On the Syrian coast for example, these “agriculturally designated” properties go for close to $50 per sq meter. Consider this now: A similar land on Lebanon’s coast around "Batroun" sells for close to $600. The difference of course is that in Lebanon you can start building immediately. In Syria, the current laws prohibit you from doing so. What these investors decided to do is to buy these properties and literally “sit on them” in the hope that the above laws will one-day change. This is not to say that all the planned investments are in this category but a substantial part is. What is not, is purely driven by the large price differential between Syria and the neighboring countries. In simple terms, Syrian assets are significantly cheaper than those in the Gulf, Jordan or Lebanon. Thus far, most investors shied away from investing their capital in socialist economy riddled with corruption and cronyism. After the recent political turmoil, they sense one of two possibilities; either the Baath party will be removed from power, or that the regime will start to accelerate its reforms. By buying on the cheap, they have concluded that they are being fairly compensated for taking the political risk. I think that it is important to remember this when you think about these investments. Capital is not oblivious to the risks involved or that it suddenly believes the Syrian economy is doing so wonderfully. Instead, investors know the risks and are fully aware that the economy continues to face significant challenges but at the right price, why not invest now when the prices everywhere else are at multiples of they are asked to pay here?

Let us now go back to the Syrian economy itself. Mr. Dardari and his economic leadership team continue to talk about 7% GDP growth in the “future”. I am yet to see a single explanation of how they intend to achieve this goal. At a basic level, GDP is the total market value of all final goods and services produced in a given year. For the Syrian economy to genuinely turn around, the share of Government Spending and production in the economy has to be reduced dramatically in favor of the private sector. Most of the ambitious state sponsored mega projects have been a catastrophic failure. Socialism does not work because it goes against human nature. Humans are genetically programmed to value their own self-interest over that of society. Without maximizing profits as their objective, Syria’s state sponsored institutions have suffered slow death. They have under invested. They have been riddled with corruption as manager and workers stole and plundered from the national treasury. This will continue forever unless the Government does the courageous step of closing down these institutions, cutting its losses and letting the private sector fill the void by taking over the production and sale of the goods and services that it currently monopolizes. Do not believe that any half pregnant measures in this regard can work. A total repudiation of socialist economic ideology is the only solution to Syria’s negative economic prospects. The private sector has been decimated under the Baath leadership. Once state sponsored enterprises are sold or liquidated, the high taxation and red tape that the private sector has been subjected to has to be urgently addressed. Taxes near 63% for annual income of $20,000 push business owners to lie and cheat. It also pushes the tax collectors to corruption. When a tax collector making $200 pays a visit to an established business that is asked to pay such taxes, there is only one conceivable outcome. Unleashing the full potential of the private sector at the expense of the bloated state sector is the only solution to Syria’s economy. Without this, neither Dardari nor the best economic brains on earth can do anything to correct the wrong path that Syria’s economy has been on under the failed socialist policies of the Baath. Once the private sector unshackles itself from the excessive regulation and taxation, it will start to invest, hire and expend. With maximizing profits as their objective and market economics in full control, resources will start to be directed to where they can earn the highest return. The current misallocation of resources will stop. The efficiency and productivity will rise. So will real wages and consumption.

In summary, none of us know the true state of the country’s present economic performance. I hope that there is, however, consensus that it has been on the wrong path for close to 40 years. It is possible that things are “improving”. But improving from what? When you hit bottom in life, everything you do can look good. But is this the correct measuring yardstick? In economics, just like humans, it is best to measure actual performance against potential. When you child scores a D after having few F’s, is that reason to rejoice? Syria has been operating significantly below its potential for way too long. This has had a dramatic and devastating effect on the standards of living of its citizens. Having said this, one has to admit that Syria’s economic mismanagement is not unique. Democratic Nations such as India only broke from the failed ideas of socialism as recently as 1991. China decided to adopt a version of market based economics also only recently after having its economy suffer from a very long coma. In both countries, the results since the changes have been spectacular. Both joined the wave of economic prosperity that their citizens have been deprived of. Regardless of the positive spin or the sugar coating that you may hear, this wave is yet to lift the people of Syria. Planned investments in real estate or other investments may help but will not significantly change the final outcome by much. The only way things can change is when the government unequivocally repudiates socialism, cuts taxes, red tape, cronyism and monopolies and allows instead a competitive private sector to flourish and expand. Of course, a strong legal system that protects property rights is a prerequisite. This system ought to protect every domestic and foreign investor, including protection from the state and its institutions. Monopolies have to be fought and dismantled. Free and transparent competition that would allow the invisible hand to do its magic ought to take over. Till the above happens, this nation will always operate below its potential. All half measures and so-called mixed economic systems would only serve to delay and divert this process.

When it comes to assessing whether the Syrian economy is improving or not, one is left to ponder whether the present system in place is conducive to growth and prosperity. There is no question that it is a great system for a handful of the powerful elite. But when it comes to the vast majority, this socialist based system has not and will not work. Till the regime publicly repudiates socialism and then act like it means it, prosperity and higher standards of living will remain an unfulfilled dream for its people.

36 Comments:

At 3/01/2006 08:43:00 PM, Blogger majedkhaldoon said...

josh you are absolutely correct,welcome to the Jasmine Revolution.
also Syria with special geography,resources,and people characters,has great potentials for improvement.

 
At 3/01/2006 09:31:00 PM, Blogger norman said...

Yes Syria had and has bad socialist economy but Syria has learned it,s leason and moving toward free market economy ,the difference between India and China and what Syria is trying to do is that Syria has sanction implemented by the US while India and China have most vavorite status.if the US wants Syria to improve it should be more helpfull.

 
At 3/01/2006 09:45:00 PM, Blogger norman said...

A German company is planing to build a factory for telecomunication equipment in Syria ,that is another forign owned factory indicating the faith in the Syrian economy and the planed reform.

 
At 3/01/2006 10:20:00 PM, Blogger abu youssef said...

norman,

"A German company is planing to build a factory for telecomunication equipment in Syria" ... links please?


Thanks...

 
At 3/02/2006 02:54:00 AM, Blogger I Want to Break Free said...

The fact that a German company is "planning" to build a factory does not change the fact there are only a handful of investments in Syria. They say their investment is 6 Million USD only. What kind of help to the economy will this be IF ACTUALIZED in the first place??!!

 
At 3/02/2006 06:01:00 AM, Blogger t_desco said...

Ehsani,

what is your view on the transition process in Russia/the former Soviet Union (the so-called "shock therapy")?

Syria seems to have taken some measures to attract more investment:

Syria witnesses substantial inflow of funds

DAMASCUS, March 2 (KUNA) -- Chairman of the Syrian Chamber of Commerce Rateb Al-Shallah on Thursday described as normal siphoning of Syrian funds deposited in banks abroad to local banks.

Speaking at a news conference, Al-Shallah commented on comeback of Syrian funds from banks in Lebanon saying, "This is a normal matter and this constitutes normalisation of the financial conditions in Syria." Justifications for Syrians to deposit their money abroad no longer exist, he said, indicating at the opening of more private banks in the country.

Syria is currently witnessing noticeable inflow of funds and remittances from the immigrants and Arabs, he added, indicating at several new incentives such as the increase of the interest rate on the deposited funds in the Syrian banks and free movement of the deposits.

Shareholding companies that have begun floating their stocks for public subscription at a rate of 49 percent are being accorded with diverse incentives namely low taxes reaching 15 percent, Al-Shallah said, affirming that private companies can join shareholding companies listed in the local stock market.
KUNA

In another interesting article, Jean-Pierre Perrin quotes the testimony of a Lebanese Islamist who went to Iraq to fight alongside Abu Musab al-Zarqawi:

«Quand Al-Zarqaoui égorge, on est fiers»
...

A 31 ans, Saïd a quitté le Liban pour aller se battre en Irak et y mourir. ...

Il vit à Majdel Anjar, une ville sunnite libanaise très laide à côté de la frontière syrienne. La localité est connue comme un fief salafiste (branche radicale de l'islam qui prône un retour au califat) depuis les émeutes violentes de 2003, qui avaient éclaté après la mort en prison, probablement sous la torture, d'un jeune islamiste. «Tout avait été préparé pour notre départ mais j'ai dû patienter six mois. Celui qui est patient, c'est celui qui gagne. C'est la pensée du prophète Mahomet. [Les responsables du réseau] ne prennent pas n'importe qui. Ils préfèrent la qualité à la quantité. Ils choisissent uniquement ceux qui pensent comme eux. Participer à la résistance, c'est réservé à ceux qui sont forts mentalement.» Des quatre habitants d'Anjar revenus d'Irak, il est le seul à avoir accepté de relater son voyage ce qu'il fera par le menu. Mais il refuse de dévoiler l'itinéraire qui l'a conduit d'abord à Tripoli, Damas, enfin à Alep, en Syrie, la ville où, précise-t-il, transitent tous les volontaires étrangers en partance pour l'Irak. «Les moukhabarat (services secrets, ndlr) syriens ne sont pas impliqués. Au contraire, nous devions sans cesse faire attention à ce qu'ils ne nous repèrent pas. A Alep, j'ai dû marcher pendant deux heures dans la ville pour ne pas risquer de me faire arrêter.» C'est dans cette ville qu'on lui fait rencontrer le passeur irakien. Il lui remet 500 dollars : «Un bon guide, vraiment. Il aurait pu t'emmener jusqu'en Europe. Il est cher mais si tu ne donnes pas assez d'argent aux passeurs, ils peuvent te livrer aux moukhabarat.»
Libération

(my emphasis)

And, yes, the young Islamist who died in prison and who also hailed from Majdal Anjar is none other than Ismail al-Khatib, the leader of the Mikati-Khatib network mentioned in the Mehlis report.

 
At 3/02/2006 08:11:00 AM, Blogger norman said...

I do not know how to create link yet here is the article






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Al-Thawra: Factory for wireless communication equipment in Syria
Syria-Germany, Business, 3/1/2006

German GTC CO. for Communications has selected Syria to launch the first communications project of its kind in the Middle East. The project includes building a factory for the production of wireless communication equipment.

GTC representative and director of the project, Khaled Homsi said in a statement to al-Thawra daily and published on Tuesday that the project aims at meeting the needs of Syria and the region of wireless communication equipment and units of subscribers. The factory will be operated under the supervision of GTC and by local manpower and expertise.

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At 3/02/2006 08:43:00 AM, Blogger ugarit said...

EHSANI2:

you said "There is no question that it is a great system for a handful of the powerful elite. But when it comes to the vast majority, this socialist based system has not and will not work."

This is a contradiction. A system controlled by a handful of powerful elite cannot be socialism. That sounds more like centralized capitalism.

 
At 3/02/2006 09:17:00 AM, Blogger Atassi said...

A road map to a national unity

Open letter to the Syrian president and Syria’s national opposition groups:
Syria, our beloved country is in uncharted territory now, You as the president, the free people of Syria, the true national opposition groups and the Baath party, MUST work together immediately to implementation a Road map to a national unity for a democratic Syria. The Syrian people inside the country and all expatriates will rally behind a collation form current the regime and a national figures form the internal democratic elements and external opposition groups, they must agree to work together in good faith with the help of NGO’s and other trusted unbiased democracy groups as a mediators with a goal to get the county back on it’s right tracks, stair the country out of harm way as a result of external forces and personal agendas, otherwise mayhem will be forced upon the county with any forced changes.

A draft of a road map to a national unity for a democratic and prosperous Syria

- The current regime and governments will be declared and treated as a transitional custodian until an elected democratic and able government takes power in a peaceful transition, this transitional government will act forcefully and in good faith to remove any elements opposing the needs for all aspect of the civil institutional reform. And insure and grantee the security of the country and all groups during this period
- The current regime must Abolish Decree No. 51 "state of emergency", and admitted that mistake and abuse were made with Decree No.51. It must reinforce the independence of the judiciary system from the ruling executive presidential branch.
- a new project “free and democratic party law” must be put in place, that includes the item that the dominant role of the Baath party needs to be reduced to allow the real oppositions groups to participate in a program of transition to a democratic and free society to facilitate a free and fair election at all national levels. Panel of local and international and expert can help with this project
- Fighting corruptions and enforcing transparency in the state public entities must be placed high on the agendas of the transitional governments. A public progresses report must be made public every three months
- The presidency itself will be part of the 2007 fair election strategy; it must be stressed that the current president will not be running for next 2007 presidential term. He can run on any proceeding presidential election if he opts to do so in the future. This item will insure a fair and unbiased presidential election and avoid any misconceptions.
- The power of the executive branch must be reduced and additional legal power to be added to the (parliaments),

 
At 3/02/2006 11:05:00 AM, Blogger majedkhaldoon said...

Atassi;
Assad will not listen to you,I do not think digitalis will strengthen his heart, nor he has tetosterone in his blood, he may have estrogen.

 
At 3/02/2006 11:53:00 AM, Blogger Atassi said...

Majed,
Thank you for your reply. This is a humorless matter for sure. Trust me on this, the regime has been extremely late in trying to mend it’s relation with the internal and external mass. But they still have a powerful “timed” card, they must play it now. Otherwise it will expire soon
I am not trying to sound philosophical, but it’s an extremely critical time now.

 
At 3/02/2006 12:07:00 PM, Blogger Atassi said...

This post has been removed by a blog administrator.

 
At 3/02/2006 12:14:00 PM, Blogger Atassi said...

I am sorry for veering off the main syrian economical topic, and highjack it to push an agenda but
We need the help of national faithful grassroots Advocacy groups, dependable democratic advisory Committees and possibly a trustworthy NGO’s ready to participate fully in the Syrian affairs.

 
At 3/02/2006 04:28:00 PM, Blogger EHSANI2 said...

Ugarit,

In theory, it may sound like there is a contradiction. In practice, however, I always thought that socialism mostly hurts the people it was supposed to protect and conversely it ends up benefiting the elites. With socialism, come barriers on trade and competition. Local producers fill the void and demand “national protection” from imports. This allows them to charge high prices for low quality goods. The elites are usually the ones who have the capital and the connections to guarantee these “protection” licenses. The vast majority on the other hand works for the state earning low salaries while being forced to pay the high priced low quality domestic goods. “Centralized capitalism” as you called is an extension of Socialism the way I see it.

 
At 3/03/2006 12:39:00 AM, Blogger Vox Populi - Agent Provocateur said...

I somewhat agree wtih Ugarit; although I deeply dislike socialism, Syria's system is not socialism like we know it in Germany or Swede, but a degenerated socialism instrumentalized by a small elite.

 
At 3/03/2006 04:56:00 AM, Blogger t_desco said...

This post has been removed by a blog administrator.

 
At 3/03/2006 05:12:00 AM, Blogger t_desco said...

"China decided to adopt a version of market based economics also only recently after having its economy suffer from a very long coma."

Actually, China began its transition in the late 70s. It adopted a very careful, gradual approach and was rewarded with the fastest rate of growth of any major economy in the world over the past 25 years.

In contrast, textbook economics based on market fundamentalism (like belief in the "invisible hand") led to the failure of Russia's transition process.

Un plan quinquennal pour attirer 34 milliards de dollars d’investissements
Par Jihad Yazigi

L’économie syrienne aura besoin de 1 800 milliards de livres syriennes (34 milliards de dollars) d’investissements, sur les cinq ans à venir, pour atteindre un PIB de 7 % en 2010, un chiffre fixé dans le cadre du plan quinquennal pour le pays, selon Abdallah Dardari.
M. Dardari, vice-Premier ministre pour les Affaires économiques, est chargé de l’élaboration de ce plan quinquennal (2006-2010), dont le commencement était prévu pour le début de l’année, mais qui n’a pas encore reçu l’aval du Parlement.
M. Dardari a affirmé, au cours d’un séminaire organisé début février à Damas par la Société économique syrienne, que le gouvernement avait assuré la moitié de ce montant, soit 850 milliards, et que le reste proviendrait du secteur privé.
Selon M. Dardari, le plan vise quatre objectifs principaux : l’établissement d’une économie de marché efficace, la mise en place d’un filet social, la réforme des secteurs de l’éducation et de la santé, et le développement de l’infrastructure physique du pays.
Dans le cadre du plan, le gouvernement prévoit d’investir 105 milliards de livres dans l’industrie manufacturière publique, a expliqué M. Dardari. Une intention qui semble contredire la politique adoptée ces cinq dernières années par le gouvernement visant à limiter les investissements dans le secteur industriel public, pour favoriser le leasing de l’équipement ou la sous-traitance de la gestion.
Concernant la santé et l’éducation, le gouvernement va doubler les dépenses allouées à ces secteurs, à condition qu’ils soient réformés, leur structure actuelle étant un obstacle au développement, a ajouté M. Dardari.
Les autorités vont également tenter de contrôler la croissance démographique, visant 2 % de croissance annuelle à la fin du plan, contre 2,45 % actuellement.
Aussi, les provinces de l’Est et du Nord, où les taux de pauvreté sont les plus élevés de Syrie, feront l’objet d’une attention particulière de la part des autorités.
À part ces deux régions, les endroits les plus pauvres du pays se situent dans les régions rurales au nord d’Alep, sur la côte, dans la région du Sud autour de Souweida, ainsi que dans la banlieue de Damas. Dans une précédente allocution, M. Dardari avait annoncé 523 millions de dollars d’investissements dans les provinces de Raqqa et Hassaké.
Pour la première fois depuis que les autorités syriennes ont recours au plan quinquennal pour mener les politiques économiques du pays, ce plan sera basé sur des stratégies globales et non sur la microgestion de l’économie. Et pour la première fois, les représentants du secteur privé ainsi que divers consultants et experts participeront à son élaboration.
L'Orient-Le Jour

 
At 3/03/2006 06:05:00 AM, Blogger t_desco said...

Brammertz Expected to Issue Arrest Warrants for Syrian Officials

A top U.N. investigator leading an inquiry into former Prime Minister Rafik Hariri's assassination is expected to issue arrest warrants for Syrian officials suspected of involvement in the murder.
An Nahar newspaper reported Friday that Serge Brammertz is likely to issue warrants for the arrest of Rustom Ghazaleh, who headed Syria's intelligence operations in Lebanon and his deputy Jameh Jameh. The two have been interviewed at least twice by U.N. investigators in Vienna.

The newspaper, quoting a Western diplomatic source in Damascus, said there may be two other alternative developments in the investigation.

"He (Brammertz) may insist on meeting President Bashar Assad, or he may at least announce the expected method for cooperation between the two parties and the legal framework according to which cooperation will take place," the source said.
...

The source said there are concerns about the report that Brammertz is scheduled to submit to the U.N. Security Council in mid-March. He expressed doubt that "the report would come out with positive results in the interest of Syria."
Naharnet

It will be interesting to see if Brammertz has found any links between Ghazaleh and Khaled Taha. It is also possible, of course, that Taha, although he knew Abu Adas, had nothing to do with the crime.

 
At 3/03/2006 06:07:00 AM, Blogger Pål Sletten said...

I have seen very little discussion of the GDP figures, but in my opinion it is quite possible that they understate GDP growth over the past 7-8 years, perhaps by as much as 15-20% (cumulated).

The results from the household income and expenditure survey (published in the UNDP report on poverty at http://www.undp.org.sy/publications_national.php#Poverty) show private consumption growth of 2.0% from 1996 to 2002 while the GDP figures show private consumption growth of only 0.3% over the same period. In principle these two should be the same, but they are calculated differently: The survey figure (2.0%) comes directly from asking households about their consumption (detailed data collection throughout the year) while the GDP figure (0.3%) is a residual after calculating overall production, investment and government consumption.

I tend to believe the household income and expenditure survey more (better sample frame, less risk of underreporting for tax reasons), and if the true figure is indeed 2.0%, GDP should be at least 18% higher in 2002. Hence, GDP growth has been underestimated.

 
At 3/03/2006 06:12:00 AM, Blogger ugarit said...

Ehsani2:

The elements of socialism in western europe is beneficial to the majority of the people. The problem is when we live in the US nothing good is stated about anything socialist. Let's not sugar coat capitalism nor discard everything socialist. One should take the virtues of both and use them.

The system in Syria is bad for the majority and best for elites. That's not socialism. It really is not. They may be using socialist slogans but it does'nt make it so. It is a tool. There are many forms of socialisms. The Scandanavian form and as Vox said the German are excellent examples of the positive side of socialism. Yes it is has its negative side and so does capitalism.

It would be a disaster for the majority of Syrians if everything socialist (national health care, national education, etc) were dropped.

 
At 3/03/2006 07:27:00 AM, Blogger ugarit said...

Attasi:

How should we help Advocay groups, NGO's? How and What should be done as expats?

 
At 3/03/2006 08:40:00 AM, Blogger ugarit said...

The US economy and most economies are run by elites. The US government subsidises and protects corporate growth. This is often done not to help most people. The portioning out of how much is given to corporations vs. the people is where the political parties differ, in the US.

The issue at hand is: is the government there to help most people or a group of elites? If the subsidy of elites improves the lives of the majority of people then it's probably not a bad idea to do so.

There has to be a systematic approach to growth and there must be plans to encourage the growth. Unchecked capitalism is dangerous. This is true of any -ism.

 
At 3/03/2006 09:13:00 AM, Blogger Atassi said...

ugarite,
We as an expat can help by lobbing for an international pressure relief for the regime if progress in the national road map felt. We can be an independent entity and seek expertise form an internationally true democracy groups, possibly request help in establishing a workshop to teach the engaged parties about the difficult road to democracy, and the personal sacrifices needed to achieve it. There are so many things we can do, but we need to feel a real progress in the internal political arena as an incentive to for everyone move along.
Note: All for Syria published the appeal. Today.. Good news

 
At 3/03/2006 09:34:00 AM, Blogger syrian said...

Don't feel like typing so here are a couple of references to discussions of growth and reform. Good reading.


Russian .v. Chinese


Whats Wrong with Growth

 
At 3/03/2006 01:49:00 PM, Blogger souria said...

Rania Tlass, president of the National Association for Promoting Women's Role, said "our aim is to develop and support the role of women in the economy and boost their intellectual abilities in order to pave the way for their contribution in decision-making on an equal footing with men."

She said the Association held lectures for women in various Syrian provinces to inform them of their rights and encourage them to confront abuse and violence they suffer from.

She said Law 548 on honor crimes is unfair to women because it gives men the right to kill female relatives if they suspect them of adultery, while women have no right to object or do the same.

"Our Association is demanding that criminal law be applied in such cases away from emotions and blind anger," Tlass told UPI.

She cited a study into the manipulation of Law 548 by a female lawyer, which found a number of cases where the law was used for personal gain, including one case where a brother killed his sister under the pretext of saving the family honor when he really sought her part of their inheritance.

Tlass pointed out that her association "is seeking to establish a shelter for abused women where they can be treated and rehabilitated in order to reintegrate in the society."

 
At 3/03/2006 04:22:00 PM, Blogger EHSANI2 said...

Syrian30,

Thank you for the two links. They are both very interesting.

t-desco,

The long coma that I was referring to in the case of China indeed ended in 1978 when Deng Xiaoping began to remake the economy around market principles. This took place after a nearly 500-year sleep during which China shunned progress and closed its doors to the outside world. It was able to achieve this by rapidly transforming itself from a largely agricultural and isolated nation into an industrial nation. It has recently also developed its knowledge and service base which will help it progress further towards the other modern nations.

P. Sletten,

Were Syria’s GDP to be so underestimated, one would expect the nation’s unemployment rate to be lower than it is as actual growth would presumably be closer to its potential. Private consumption underestimation do not preclude overestimation of government spending, investment or a larger than reported net trade deficit. In other words, the mix of GDP could be different but the aggregate level of income and production could be measured accurately or even overestimated?

Ugarit,

The U.S. government subsidizes and protects corporate growth and the elites and not most people? Please give us examples.

The U.S. Government has its three branches. They collectively aim to provide an atmosphere of low taxation ad regulation to ensure maximum sustainable growth with little inflation. In their world, it is the health of the corporate sector and business that allows it to expand, invest and hire. This is why the country enjoys a 4.69% unemployment rate. In Germany’s case it is more than double (10.9%). Have you talked to business owners in Germany? They refuse to hire people because of the socialist ideals that you love. What is the result? Jobs are heading to Eastern Europe at an alarming rate. Ask all European policy makers who look across the Atlantic in envy as they see a vibrant economy consistently growing at double their rate. Is the U.S. system perfect? There is no such thing as a perfect system. Has the U.S. system proved to generate the biggest cake for its people? Undoubtedly. Is the cake cut in perfect pieces for each? This is what socialism has tried to do and failed miserably as its cake shrinks so small that it is not worth cutting any longer.

 
At 3/03/2006 08:14:00 PM, Blogger ugarit said...

EHSANI2:

you said: "The U.S. government subsidizes and protects corporate growth and the elites and not most people? Please give us examples."

One major one is the subsidy the government gives to the military industrial complex.

Another one is having contractors perform major functions in government facilities at 3 times what government employees would have been paid. In other words, a 50k government employee would be equivelant to a 150k contractor. That's a 100k subsidy to a corporation. This is the norm. The corporation does'nt normally perform better than the government employee.

Another example is a city funding the building of a private stadium for a private company assuming that this would encourage growth. Many a city have been duped into this.

Another one is hiring private security agents (actually mercenaries) to assist in Iraqi security at about ten times what a US soldier would get paid.

As per your second paragraph, yes the business climate in the US is more favorable than Germany to *business people*. However, the climate for the non-business people is more positive in Germany. The majority of people are not business people. One should not use only one lens to a view a country. Germany counts the prison population as unemployed while the US does not. If we took that approach one would have to add over one to two million US prisoners to the unemployment rolls. BTW, the US has the larget prison population in the world.

Another thing, not all growth is a good thing. Growth in private prisons is not, as an example. Growth in manufacturing of arms to enlarge the US empire is not positive. Growth in the police force is usually a bad sign.

One should look beyond the needs of business people. They are a very small minority.

 
At 3/03/2006 08:58:00 PM, Blogger majedkhaldoon said...

Human right center, opened in Damascus on 21st of February, in less than two weeks, the order came to close it and the door sealed with red wax seal.
this is not a regime who will make reform ,no one can trust it, working with it is futile.

 
At 3/03/2006 09:39:00 PM, Blogger norman said...

To all ,few points 1-health care is available in the US to all rich and poor the rich have health insurence or can pay for it the poor get free health care in comunity non for profit hospitas clinic and as in patients ,2- education in the US is pricy but it is the best in the wourld in New jersey top 20% in any high school can go to state junier college for free and most children get financial aid or can get low interest student lawns , paying for college makes student appreciat their college and education and force them to be very productive after graduation to pay their debt .

 
At 3/03/2006 09:41:00 PM, Blogger EHSANI2 said...

Ugarit,

It is good to see you agree that the business climate in the U.S. is more favorable than Germany to “business people” and that Germany has a better climate for non-business people. You seem to prefer the generous handouts that the German government offers versus that in the U.S. Where does the German government get the extra cash from? By simply taxing the working people by more of course. Businesses and harder working Germans end up subsidizing their own so-called non-business people. You seem to think that this is the strength of their system. I see it a failing system as their own businesses and successful people relocate elsewhere in an effort to keep more of the money they made before their friendly government grabs it and hands it over to the other group. More profitable businesses lead to more hiring and investment. More taxation under the pretext of fairer income distribution leads to the opposite.

 
At 3/03/2006 10:39:00 PM, Blogger norman said...

A freind of my brother came to visit the US from Germany,he explained the poor economy in Germany and the burden of the social programs on buisness and the economy and how unemployment of 18 months makes it unrealestic so unemployment is high and the taxes they have to collect make it stupid to invest and increase productivety as most of the money will go to taxes and people will be working fo nothing,so why should they.

 
At 3/04/2006 06:22:00 AM, Blogger Pål Sletten said...

EHSANI2,

Yes, it is indeed possible that other components of GDP also suffer from measurement error. However, in my opinion it would normally be easier to get the public sector right, as the data are based on the accounts of all ministries and state-owned enterprises rather than on a sample survey.

The shortcomings of Syria's statistical system were pointed out by the IMF in the 2005 Article IV consultation with Syria (which, by the way, is very interesting reading: http://www.imf.org/external/np/sec/pn/2005/pn05138.htm).

I think it is important to be aware of these shortcomings, and to remember that it is also possible that there are errors of under-estimation. I don't think a 2.0% growth rate of private consumption reflects a remarkably good economic performance, but it does indicate that the economic situation of Syrian households on average is improving.

 
At 3/04/2006 10:07:00 AM, Blogger ugarit said...

EHSANI2:

How about the subsidy issue? :-) I know first hand how some companies are not efficient, on purpose.

I've been to germany many a time. In fact, I'm part German. Once one lands in the country one realizes how much more sound the infrastructure is compared to the US.

Most cities in the US are neglected. You can't drive for a few miles without noticing economic segregation and neglect. That occurs fall less often in Germany. Poverty rate is higher in the US. It's hard to fathom what's happening with all the growth that's claimed.

However, I know first hand that entrepreneurship is less common in Germany. It's caused by the culture and the politics.

I would like Syria to achieve something between the US' and Germans' system.

 
At 3/04/2006 11:17:00 AM, Blogger EHSANI2 said...

Ugarit,

Syria between the US and Germany.

On that postitive note, let us all say Amen

 
At 3/04/2006 12:54:00 PM, Blogger ugarit said...

EHSANI2:

Amen.

One should always look at more data than growth and unemployment rate. If one looks at other stats comparing Germany and the US, the US would not look too good. The picture is more complicated than what business lobbies propagate.

 
At 3/04/2006 01:06:00 PM, Blogger ugarit said...

By the way Chavez' Venezuala is the the fastest growing economy in that region. Per capita growth was 17.9% in 2004 and continues to grow at 9%. Let's not fall for Washington's propoganda. Chavez is empowering far more people than the US' and Venezuala's elites would want to even contemplate. Also the US elite want a Venezuala which is subservient to Wall Street. We should not worship markets and elites.

I encourage people to look beyond the mainstream thought process.

Checkout: http://www.venezuelanalysis.com/

 

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