A strategy for economic reform in Syria

Dr Issam Zaim

The lecturer is the minister of industry. He was also the minister of plan during the previous government. Dr Zaim is well known as an economic expert who is introduced as “one amongst a few who have a strategic vision for the economic reform in Syria”.

The lecturer starts his presentation by displaying and analyzing the need for economic reform in Syria. This is done through an analysis of the sequence of historical events, which had a major influence on the Syrian economic policy. The lecturer states clearly that the state-controlled economic system is a direct consequence of the armed conflict with Israel; and that Syria is not getting foreign help to improve its economy because of the Syrian position against signing a peace treaty with Israel without the implementation of the UN resolutions concerning restitution of occupied land, in accordance with international laws and principles.

After this analysis of the historical events, the lecturer goes in depth into the description of the current economic situation in Syria. He describes the negative aspects of the Syrian economy, in particular the need for strategic planning, the state of recession, the drop in purchasing power, the lack of competitiveness of the industrial public sector, the very low investment rate, especially from the private sector, and the increasing pressure of the globalization. In addition to the tough economic situation, the demographic explosion and the inability of economic growth to match the population increase result in economic hardship for the majority of the inhabitants and require a national strategy for human development.

During his speech about “economic reform”, that he prefers to describe as “economic change”, the lecturer displays his critics against the “ready-made recipes” of the international bank and the IMF. The lecturer believes that these reforms are not best fit for countries that are economically under developed like Syria. His main argument against those reforms is that wherever they were applied, they had very negative social consequences (unemployment and increased poverty), without succeeding to produce a sustained development for the economy. He states also that this reform cannot be limited to the “financial and administrative” aspects, but should also cover the technological and organizational aspects, with a particular emphasis on the “compensation and accountability” as a major principle to be implemented.

Dr Zaim tries on several occasions to adopt a moderate approach for the economic change. For instance, he is not totally opposed to all the measures advocated by the IB and the IMF, such as the need to equilibrate the budget. But on the other hand side, he refuses to adopt other measures such as abandoning the role of the state and the privatization of the public sector. He argues in favor of a more gentle and smooth approach of economic reform, where the government would play the role of the major investor in order to compensate for the lack of investment from the private sector. The government hopes that this investment will generate a 3% growth during the first three years, and 4% during the fourth and fifth year. Dr Zaim estimates that this growth will allow the government to implement several measures to improve the productivity of the public sector without having recourse to massive layoffs. China is mentioned as one example of a successful experience where the government was able to remain in control of the economy while still providing enough room for economic activity and development. One question is raised about the future of the Chinese model that Dr Zaim believes to be transient. The eventuality of China providing a successful implementation of communism is not excluded, and the statements of Marx and Ingles about the possibility to implement communism in situations of economic prosperity are brought to mind.

Dr Zaim concludes his presentation by the reiteration of the principles of economic change as seen by the government. He affirms that there are no ready-made recipes, and that the main components of the economic change need to be analyzed and discussed thoroughly before being adopted, due to the sensitivity of the issue and its impacts, especially on the social side. He ends with a strong message about the importance of the economic diversity and that each economic sector, being private, public, or common, has its role to play in the improvement of the national economy.