Syria burns while Assad fiddles: An economy that cries out for help

In a tempest of protests, killings, international condemnations and a stubborn government dictatorship (a classic Arab Spring motif) Syria is more than a tad worse for wear on all its national fronts. The crisis-swept country has faced an economic battering during the gory crackdown of Bashar Al Assad on unarmed civilian protestors, which peaked to massacre-level at the start of this week; the death toll rose to nearly 200 throughout this country by early Tuesday.

Alas, this was just one of the massacre peaks during the uprising since March. And as the all-guns-blazing political games continue to divulge an unremitting story of woe, the economy has stood still. It’s morbid stuff: The economy mirrors the sentiment of a nation that either stands still or moves melancholically swift, depending on whether a civilian is still out there protesting, or grieving over their nearest and dearest. Or both.

Impoverished areas in Syria, mostly Deraa, Hama, Homs and Deir Ezzour have been hotspots to the nationwide protests and, in turn, have been the worst hit by government backlashes. And these backlashes have sparked internal and external fears. Tourism: driven away. Small businesses: shuttered. Agriculture, energy industries: operating at a dawdling pace. Meanwhile, the death toll keeps rising. And the rich keep hiding.

The country’s upper-middle and middle classes in Syria’s economic hubs Damascus and Aleppo (on the Turkish border) have been hailed by the media as “the silent majority” as they exude a “conspicuous quiet,” during the uprisings. This is down to their failure to be directly associated with opposition groups and their protest. Aleppo, for instance, home to business elites and community leaders, is the Syrian capital of commerce and is one of the oldest centers of commerce in the world (as it sits also on an ancient network of trade routes between Asia and the Mediterranean, also known as Silk Road).

“[In Aleppo], no one is making money anymore,” says an on-the-ground report by a pan-Arab news Website. “Talk to shopkeepers, hotel managers and traders in Aleppo’s famous covered souk and one soon finds grumblings of dissent.”

The World Bank classifies Syria, alongside Egypt, Jordan, Algeria and Tunisia amongst others, as low-middle income countries. Yes, the obvious pattern seeps to the surface amongst nations that have plunged their governments into a political quagmire through their sequential revolts. And just as these countries have faced poor economic forecasts for this year and the next, Syria has not been exempt. Estimates suggest that economic growth, which was about 3.5 percent in fiscal 2010 is contracting by 3 percent in fiscal 2011.

Syria, with a population of 22.5 million, has an annual gross domestic product of $107.4 billion and a GDP per capita of $4,800. In 2010, its public debt stood at about 30 percent of its GDP. The government had attempted economic liberalization in recent years with a surge in credit growth, private banking and trendier retail and food businesses, the Washington Times reports, but this failed to cushion the economy. It also seemed to be an insignificant reform plan, providing that the start of the unrest was instigated from economic discontent at the prospects of a looming famine.
Just who would encourage the spread of trendy coffee shops then? Or would they have been part of the answer to the country’s 8.3 percent unemployment rate?

And what about the wide disparity in income distribution? The soaring cost of living (inflation rose to 5.9 percent in 2010 from 2.6 percent the previous year)?

The country’s agriculture industry, which once made up 18 percent of Syria’s annual GDP, has been messy for the fourth consecutive year, largely because of drought. Meanwhile, the country’s tourism sector – about 12 percent of Syria’s economy – was not thriving per se before the revolt and now has ground to halt as the country increasingly resembles a war-zone with every passing hour. Crushed investor confidence is a no-brainer conclusion here, particularly when another major earner takes a beating: Oil. And all that comes with it.

Syria produces 400,000 barrels of oil a day, and consumes 300,000, which in theory makes the country a self-sustaining “taking care of itself” producer. But sanctions (imposed against Syrian government earlier this year) have allowed Syria the capacity to refine only 240,000 barrels a day. Not only does Syria’s domestic market have shortages, but export sales have also declined.

And so, the aftershocks to the revolt just keep on coming. One can also question whether they are actually “aftershocks,” providing that the unrest is ongoing and that it would be considered too idealistic to seriously contemplate Mr. Assad’s resignation. When we enter “the after,” and Syria begins to look ahead to its fiscal future, that’s when the raw economic ache will naturally begin to unravel itself. For now, both government and opposition are busy with the politics.

(Eman El-Shenawi, a writer at Al Arabiya English, can be reached at: [e-mail].)