The Economic Origins of Syria's Uprising

Why have socioeconomic demands been largely absent from the agenda of the popular protest movement in Syria? Does this mean that the uprisings were not fuelled by tangible socioeconomic needs or were these secondary and non-essential concerns for Syrians?

The poet Ibrahim Qashoush captures the demands of the Syrian people with the phrase “Syria wants freedom,” the rallying cry of protests across the country. The suggestion that the absence of individual and collective freedoms is the common root of social and economic problems has become almost axiomatic and ingrained in the popular consciousness. Indeed, slogans demanding social justice and an end to corruption disappeared within a month of the uprising. This reflects the dialectic of development and freedom expressed in Indian economist Amartya Sen’s notion of development as freedom, where development is seen as the free choice of peoples and a tool for enhancing their freedom. However, protest slogans do not detract from the reality of the socioeconomic crisis that has unfolded in Syria over the past five years.

In the years preceding 2005, the Syrian regime – in efforts to justify restrictions on freedom and oppression – carefully nurtured a ‘social development’ rhetoric centred on the role of the state, the public sector, justice, and social programs. Although social programs have steadily decreased since the mid-1980s, what was left of them has been removed with the unequivocal adoption of free market mechanisms in 2005. These ‘trickle down’ economic policies and zealous liberalization efforts have only served to entrench the power and influence of a select group of politically influential nouveau riche.

This process was accompanied by the persistence of an authoritarian system that had become even fiercer. What would have been called ‘criticism’ in the 1990s had become a crime by the early 21st century, subjecting perpetrators to an array of public and private censorship measures. The government’s irresponsible dealings with thousands of Syrian families displaced by years of drought, mainly in the northeast, further sullied its image. With the start of the uprising, the rupture between protesters and the regime became apparent.

Syria’s social and economic crisis in recent years has also been laid bare, as economic growth has been sluggish, unstable, and unable to meet the needs of a growing population. Growth and investment has been increasingly concentrated in the trade, finance, real estate, and service sectors. Meanwhile, the agricultural sector continues to contract, with investments declining from 5 percent in 2005 to about 3 percent in 2009. Similarly, investments in industry have dwindled by half a percentage point and growth in the industrial and mining sector has been extremely weak due to decreasing oil production and the depletion of reserves. Moreover, the lack investment in technology and environmentally sustainable industry in line with international standards has led to major deficits and slowed productivity in these sectors.

Economic liberalization policies exacerbated the crisis of productivity, as well as the associated social problems of unemployment, poverty, and the lowering of living standards. The annual gross domestic product (GDP) growth rate between 2005 and 2009 reached 5.6 percent, which at first glance seems an acceptable figure. But fluctuations from one year to the next were considerable – 16.5 percent in 2006 compared to 1.2 percent in 2008 and 3.2 percent in 2009. This points to the economy’s reliance on the rapid expansion of the banking and insurance sectors, for which annual growth rates stood at 9 percent each, and trade, where growth neared 15 percent. Meanwhile, industrial growth did not surpass 1.7 percent and agriculture was contracting at an average 0.5 percentage points annually.

These resulted from the policies pursued by the government at the behest of international financial institutions and in preparation for the state’s entry into the World Trade Organization (WTO) and the signing of the EU Association Agreement. The state retreated from investments in productive sectors of the economy, failed to address the problems of public sector industries, and left productive investment to the local and foreign private sector. As a result, the level of investment in the national economy was insufficient to sustain required growth rates – the share of gross investment was 18 percent in 2008 and 21 percent in 2009.

These investment patterns resulted in skewed GDP growth and contributed to the rising demand for real estate and the ensuing price increases. Powerful figures in the regime seeking to cash in have purchased or commandeered lands, provoking the ire of small landowners who saw in the uprising an opportunity to express their rejection of these injustices. Years of drought were accompanied by economic liberalization policies, including IMF-recommended subsidy cuts to reduce the budget deficit, particularly for fuel, power, cement, and fertilizers (insecticide and other agricultural subsidies had already been scrapped). Producers were suddenly faced with exponential cost increases and lacked access to funding or credit facilities. Some were forced to farm less of their lands than before and others abandoned their crops altogether.

The agricultural sector in Syria is comprised of mainly small- to medium-sized farms and a handful of larger estates, which are usually divided over time among large families through inheritance. A mere 28.5 percent of farmlands are irrigated, with the rest farmed without the use of water. More than 50 percent of irrigated land is watered by wells, most of which are unlicensed. The government requires that well licenses be renewed annually to allow for the assessment of groundwater levels, which determines the renewal or termination of licenses. However, this has created opportunities for extortion, allowing security personnel or provincial officials – including some provincial governors – to levy royalties from farmers, rendering them impoverished and bitter. Such practices have been a direct factor for seething resentment in the countryside, but the crisis has more deep-seated causes.

People of the Syrian countryside face the effects of poverty, declining education standards, unemployment, inadequate public services and facilities, and a failing, inequitable development process. Emigration to urban areas and large cities provided an outlet between the 1970s and 1990s, but sluggish growth and the inability of cities to absorb the new arrivals spawned slums at the outskirts of these cities. These areas are packed with young people aspiring towards a better life and in search of decent work opportunities. These people can be put to many uses, including, more recently, as thugs to suppress protests. On the other hand, the countryside has accumulated swathes of depressed communities, where outward migration inside Syria is severely restricted and emigration abroad has become increasingly difficult. The sum of these factors has led to frustration and a sense of injustice in mostly rural marginalized areas.

A Syrian street vendor displays women's shoes for sale in a street in Damascus, two days ahead of Eid al-Fitr that marks the end of the Muslim holy month of Ramadan. (Photo: AP - Muzaffar Salman)

The Syrian social and economic crisis has slowly escalated since the new millennium. Increasing poverty and unemployment and large population increases in recent decades are partly to blame. The average population growth surpassed 3.3 percent annually even in the mid-1990s. These averages have steadily declined since, resulting in significant demographic shifts; in the last decade, the proportion of children under 15 years constituted 37.9 percent of the population in 2009 down from 44.8 percent in 1998. Similarly, the working age population (15 to 65 years) now represents 58.3 percent of the population compared to 52.3 percent in 1998.

These shifts were accompanied by advances in educational standards, especially for those between the ages of 15 and 25 (many areas claim universal literacy for this group). Meanwhile, the average population growth increase in the 1990s reached 476,000 people per year – the majority of whom began to join the workforce towards the end of the current decade. The labor market has been unable to absorb this bulging workforce at the current pace of economic growth, so many have entered the informal economy or remain unemployed. The official Labor Market Survey estimated unemployment as between 8 and 8.5 percent, while independent estimates surpass 14 percent. According to the Syrian Central Bureau for Statistics, more than 900,000 Syrian nationals have permanently left their country over the past five years, amounting to an estimated 200,000 emigrants per year.

A severe development crisis became apparent at the start of the 2000s. Syrian society neared demographic maturity and people became more educated and knowledgeable. Institutional structures stagnated and the economy sputtered under the leadership of the leading party. Their archaic mindset and leadership relied on exclusion, enslavement, dependency, and sycophancy. This bred an unjust and corrupt culture that was unacceptable to a generation exposed to satellite television and the Internet, a generation aware of its rights. This crisis stirred society’s latent sense of oppression and persecution.

When Syrians look around them, they are deeply disappointed. Having once surpassed Arab and non-Arab neighbors in living standards and development, their country is now in near ruin. According to the 2010 Human Development Report, Syria now ranks 111 out of 169 countries on the Human Development Index, lower than most Arab countries, with the exception of Morocco, Yemen, Mauritania, and Sudan. The average Jordanian’s share of the GDP in Jordan is 1.5 times greater than a Syrian’s share of his national GDP. In Lebanon it is double and in Turkey it is four times. These figures are even more distressing in view of Syria’s abundant and diverse resources, their higher education standards, and other achievements.

So why are we Syrians regressing and becoming poorer while others get richer? This question was not addressed by public and economic administrators of the country, who drove forward economic liberalization policies and entered into unfavorable free trade agreements with Turkey, Arab states, and other countries. These agreements mean the ruin of small enterprise, the transition of former industrialists to traders, and an exposure of the lack of competitiveness of the Syrian economy.

Middle- and lower-class citizens have bore the brunt of these economic failures and the skewing of economic policies towards the rich. The budget deficit and depletion of resources were addressed by gutting subsidies to the minimum and reducing spending on health care and education. These cuts come in the absence of adequate universal health care and follow the privatization of the health sector. The government has also begun referring public sector employees to a health insurance scheme run by recently created insurance companies. This process has effectively raised the costs of treatment and health care for citizens. Meanwhile, direct taxes on profits and income have dramatically decreased, to the lowest rates compared to neighboring Arab countries, and the government has been unable limit substantial tax evasion over the past five years. The grossly uneven distribution of wealth has concentrated incomes and capital into the hands of a limited few. The share of wages from the national income was less than 33 percent in 2008-2009, compared to nearly 40.5 percent in 2004, meaning that profits and rents command more than 67 percent of the GDP. This measure does not exceed 50 percent in the most liberal capitalist states.

Despite grave concerns expressed by several Syrian economists and local groups regarding these economic policies, the government’s callous and careless posture towards these demands has fostered despair among youth. Young people have transformed their personal agony into collective anger and rejection of the present situation and future prospects that offer them no hope of decent living standards. They have made the conscious connection between the regime’s repressive governance mechanism, corruption, and the difficult living conditions they endure.

Nabil Marzouq is a Syrian economist and researcher

Low Income

According to the latest Syrian household income and expenditure survey conducted by the Central Bureau for Statistics (2009-2010), the average household expenditure is approximately SYP 31,000 per month (approximately US$653), more than SYP 14,000 (US$295) of which is spent on food. The survey indicates that 63 percent of household expenditure falls below this threshold, but the average expenditure is not commensurate with the average wage. The 2009 labor market survey indicates that nearly 48 percent of the workforce earns less than SYP 9000 (US$189) per month. The percentage of Syrians earning more than SYP 30,000 (US$632) per month remains unclear. Despite gaps in the data, these figures are representative because they cover nearly 61 percent of the workforce. The evidence suggests that many social groups suffer difficult socioeconomic conditions, including wage earners and young entrants into the labor market. This situation is exacerbated by the marginalization of women and their exclusion from the labor market, despite the fact that they are more educated and qualified than ever.

This article is an edited translation from the Arabic Edition.