| Visitors Now: | |
| Total Visits: | |
| Total Stories: |
| Story Views | |
| Now: | |
| Last Hour: | |
| Last 24 Hours: | |
| Total: | |
Syria’s Sluggish Economy Adds to Regime’s Troubles
DAMASCUS—The Syrian government, stuck in a stalemate with protesters, also is facing the longer-term challenge of keeping the country’s already creaky economy from collapsing.
As in Egypt and Tunisia, economic woes played a part in the protests here. Syria doesn’t have the sprawling slums of Cairo, but years of mismanagement, corruption and a recent drought have brought hardship to its growing population.
Reforms aimed at opening the state-controlled economy— championed as a priority by President Bashar al-Assad since 2005—have become more cautious. And the liberalization thus far has opened opportunities more for the well-connected than for average Syrians.
The protests began in mid-March. Several weeks later, the government ousted Abdullah al-Dardari, the deputy prime minister for economic affairs, who had been seen in the West as the face of Syrian economic reform. The government’s crackdown on demonstrators also has strained relations with foreign governments, including neighboring Turkey, an important trade partner. As the economy ground to a halt, the IMF in April downgraded Syria’s 2011 growth forecast to 3% from 5.5%.
On Sunday, seven people were killed in continued military shelling on the town of Tel Kalakh, in the Homs region, as more people fleeing the violence crossed the border into Lebanon, rights activists said.
Residents reported that tanks were shelling two neighborhoods in what they claimed was retaliation for protests in the town. Gunfire in Tel Kalakh killed four Syrians on Saturday, raising the weekend death toll there to at least 11. The events cast doubt on government pledges Friday to open a “national dialogue.”
“How can we take government efforts seriously when the crackdown continues?” said one young woman activist in the capital, Damascus. The Local Coordination Committees, a group that claims to represent protesters across the country, said in a statement that dialogue was needed to find a political solution but only when the military and security clampdown ceased.
Also Sunday, veteran dissident Riad Seif was released on bail, the London-based Syrian Observatory for Human Rights said. Mr. Seif had been arrested in the Damascus neighborhood of Midan on May 6. But thousands more people remain incarcerated, according to the organization, with soccer stadiums and public buildings turned into temporary detention facilities.
The government says the army has been deployed to counter “armed terrorist groups,” backed by Islamists and foreign powers, that have sparked the violence in which more than 100 soldiers and police have been killed.
“China and Asian countries figured out how to have one-party states and prosper, but Syria never did,” said Joshua Landis, a Syria expert at the University of Oklahoma. The protests could “ruin the economy,” he said, if the continued unrest discourages tourism and foreign investment.
The spread of unrest across Syria from its spark in the southern city of Deraa on March 18 has hit the $8 billion tourism industry. Last year, the number of visitors to Syria grew 40% from 2009. Old courtyard houses were turned into boutique hotels and luxury brands made their debuts in Damascus.But now, hotels and restaurants sit almost empty. Foreign students who came to study Arabic have fled. Some shops and factories in Damascus and Aleppo, which have been mostly free of protests, have closed as trade suffers.
“A lack of professional opportunities means many of us rely on tourism and no one is here,” says one young college graduate. He closed his gift shop in Damascus’s old city three weeks ago.
Tourism may recover in the longer term, economists say. But their concerns focus on the apparent reversal of economic liberalization, on which there is little clarity from Mr. Assad’s new government.
The government is fighting a two-pronged battle. It aims to appease protesters with social spending; Mr. Assad pledged early in the protests to create more public-sector jobs and raise salaries, putting plans to pare back the public sector on the back burner.
The government also has said it will review free-trade agreements, a move that could help retain the loyalty of the large Sunni merchant class. The merchants of Damascus and Aleppo—still largely silent as other Syrian cities are roiled by protests—will welcome the review, analysts say, after trade liberalization in the past few years has shrunk the local textile industry.
Economists say the strategy is unsustainable and likely to stoke inflation. How it may affect the protest movement isn’t clear.
As Syria sought to make up for its dwindling oil reserves, the government had made attracting foreign investment a priority. A five-year plan announced earlier this year had targeted $11 billion in foreign investment over five years, an ambitious increase from the estimated $1.5 billion attracted in 2010.
But debt sales, which the government started at the end of 2010 to fund a modest 4.5% budget deficit, have been indefinitely postponed.
“Everybody was sort of long-term bullish that they were taking the slow but steady steps to open the economy,” said an international banker in Dubai. “The risk profile has changed dramatically. All bets are off.”
In the nearer term, the greater challenge will be to continue the spending on infrastructure and other projects that had been planned to stimulate the economy.
More likely, economists say, is a flight of capital and job-seekers to the Gulf and Europe, leaving Syria a more isolated country than before.
In March, France Telecom, the U.A.E.’s Etisalat and Turkcell withdrew from the bidding for Syria’s third mobile-phone license. Etisalat said at the time that the terms of the deal weren’t attractive.
Western diplomats say Mr. Assad has held talks with the country’s big business families, whose tourism assets and interests in the Syrian franchises of multinational companies, which need local partners to enter the market, have propped up the economy. Those families have expressed dissatisfaction, the diplomats said, but aren’t ready to split with a regime that looks to be regaining the upper hand.
One young man who recently lost his job says he has become politically active for the first time in the uprising because he has “less to lose”.
Another, a young activist in Aleppo, said he has given up his job to coordinate protests: “We have food. We don’t have freedom. We can’t be bought and sold.”
Read more at Reform Party of Syria
Source:
