Abstract

The public sector is considered as one of the state function, no matter what the socioeconomic system it has. The common ownership per se is not enough to realize the public sector goals, which can not be achieved without satisfying the needs of the society the state and its workers. For many decades, we have seen a kind of invariability of the supreme political administration in Syria. While various fashions have been implemented at the executive level. This means the prevailing of personal style of management over scientific and objective determinants and the weakness of constitutional and legal institutions. What have remained fixed in this variety were two things: the same economic management system and economic performance so weak that the economy growth has not even matched population growth. The following data present important characteristics of Syrian economy, the public sector, and the government economic policies:

¨ Between the 1970 and 1997, the GDP multiplied 120.6 times in current prices and 4.5 times in fixed prices of 1995.

¨ Low national economy productivity reflected in rising share of the intermediate consumption in total output from 38% in 1980 to 42% in the 1990s, meanwhile net domestic product ratio decreased from 61% to 56% which meant declining added value.

¨ Low investment rate and decrease of public sector share in investment from 67.5% in 1970 to 42.6% in 1990 compared with private investment increase from 32.5% to 57.4% at same period.

¨ Almost complete dependence on deficits in balance of trade.

¨ Annual growth rate was 1.5% in 1980-1990 and less than 1% through 1998-1999 according to some estimates, and may be negative according to others.

¨ There has been no development in Syrian economic sectorial structures over the last three decades except two sectors: transport (because of Law N10 investments) mining and industrial sector because of the high oil revenues in 1990s. This however has had no positive impact on investment or living standards.

¨ The public sector participation in GDP is 60% less than the private one, which explains in addition to other reasons its crisis.

¨ Actual investment spending being much less the estimated one deters the economic growth.

¨ The administrative pricing policy has caused 13 billion dollars loss in the public sector during the first half of the 1980s. On the other hand, interest rates that remained negative (10-15%) for a long time, pushed hundreds of billions of Syrian pounds out of the country or into the pockets of money collectors.

After Law N10, investment deviations cost the national economy too much. Moreover, the private sector imports (102.5 billion SP that is 14% of GDP in 1998) constituted an additional deficiency. Law N10 has created much disorganization and confusion in the socioeconomic structure.

World competition is based on a three-word slogan (faster, better, cheaper) and the Syrian public sector can’t avoid such a slogan even if it does not enter the world market which will penetrate through the private sector.

Moreover, the government fiscal and financial policies worsened the situation of the public sector striving to maintain its current production capacities. Judging the public sector need correcting the public policies and reforming its management.

In his comments, Dr. H.SALMAN said that decrees were issued to promote the management by objectives program, which is a serious step to reform the public sector. Using fixed and current prices does not reflect the reality. Therefor, it is better to use quantitative indicators. Concerning the competition, Dr. SALMAN propose to reverse the slogan into (cheaper, better, faster). He added that government procedures are effective in solving the public sector problems and the relationship between the public and the private sector is an integral one.