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Syria: A Promising Economy Rocked By Turmoil

Updated on August 4, 2015
AlexTomczuk profile image

Undergraduate student with a varying degree of interests; however, I carry a focus on US foreign policy/international affairs.

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Syria is a country in the Middle East that has an extensive history of instability. The last one hundred years of the country’s existence have been solely defined by a struggle to overcome domination by colonial powers. Furthermore, colonial powers and internal actors have fought for control to restructure the country’s framework in an attempt to make it an “player” in world affairs. Syria is a country that contains vast resources that can be utilized towards producing a global contender; however, population diversity has created tension that has only hindered progress within the nation. A regime incompatible with the ideals of the majority has brought with it violence that has erupted into an ongoing civil war as the people struggle to overthrow an oppressive regime. Widespread abuse against the people has taken a toll on the economy and an examination of the economic transformation emphasizes the pains of a population silenced by an overbearing government.

It is vital to have a basic understanding of the contemporary history of Syria because it allows individuals to grasp the current conditions that the country now faces. After World War I, the colonial powers divided and occupied the Middle East for the sake of their own economic gains. The Mandate System of 1920 delegated control of Syria to fall under French occupation; thus, the French military swept the country and expelled King Faisal. Immediately, the French began to set up local governments and develop the country, which laid the groundwork for Syria to gain independence from the French over twenty years later. The Franc became the national currency, construction projects created roads and buildings to be used by government officials, agriculture was encouraged among all Syrians, and the University of Damascus was founded. The French developed took the initial steps of developing Syria, which would later allow Syrians to advance their own interests when it became clear that the French were misrepresenting a nation so different from their own. The prolonged French occupation created turmoil and opposition grew in numbers; therefore, causing the French to maintain sporadic control over various regions in Syria. Revolts became a norm and were conducted over the twenty-six years of occupation, but World War II brought the promise of a brighter future for Syria. The French were facing pressure from the Axis powers during World War II and attention to the country was scaled back as the fate of France became unclear. Fortunately, the defeat of the Axis powers caused a dramatic visitation towards the Middle East and the French withdrew in April of 1946 after free elections were finished.[1]

The newly independent country was faced with the hardships of religious and social heterogeneity that exists in present-day Syria. The new leaders of the country were wealthy landowners and peasants that worked the land in a feudal economic system. The elite ruled a country dominated by widespread poverty and the failure of leaders to address such problems fueled support for the Ba’ath party, a party composed of students and military officers. The Ba’ath party rose to power as Nasser led Egypt to become a powerhouse in the Middle East and Nasser’s alignment with Syria (United Arab Republic) caused the Ba’ath party to be a major political force representing the masses in Syria. The Ba’ath party initially embraced socialism and agricultural reform that brought intensive cotton production, but internal problems divided the party and an Alawite military officers rose to power. General Hafiz al-Assad became the leading political figure by appealing to nationalists, peasants, and the middle-class with his economic policies and suppression of his opposition. In 1970, General Assad seized power and would rule for the next thirty years until his son would later follow in his footsteps by assuming control of the country in 2001.[2]

The Assad family’s stranglehold on the country has led to a civil war beginning in the spring of 2011; however, the Assads have greatly contributed to the development of the nation over the years with its socialist policies. This economic system industrialized the nation and steered it away from its focus on agricultural production to a country utilizing its resources for economic gains. The industrialization of the nation has exploited the natural resources of the country and produced new industries, but agriculture does continue to be the prominent career among the poor.

Approximately 25% of the population is engaged in farming activities, which largely includes cotton and wheat production. In fact, Syria was responsible for about 7% of the world’s cotton production and cotton remains the most reliable export.[3] The cotton industry has contributed to increased employment and it has negated losses in other crop yields that are the result of harsh droughts. Although cotton is an industry that has the greatest influence in the agricultural sector, Syrians are not hesitant to grow tomatoes, citrus, corn, and tobacco.[4] The fertile land of Syria largely defines the country’s economic activity, but additional resources have been tapped in an effort to propel the country beginning in the late 1950s.

Oil was discovered in 1956 and it became a leading export in the following decades as production peaked in the 1990s; however, the oil reserves were exhausted quite rapidly and production has declined over the years. As a result of overconsumption of oil, natural gas production expanded and a conversion towards natural gas power stations began replacing the oil power stations. The country does make minor use of rivers, such as the Euphrates River, which has dams enabling hydroelectric power; but, unpredictable weather patterns combined with irregular maintenance have caused the dams to be largely unsuccessful in serving their purpose.[5] Additionally, mining has played a major role in the economy with large limestone quarries in the north and salt lakes providing table salt. The core export of excavation efforts has been phosphate, which was traditionally carried-out by the government until 2001. Three-fourths of the phosphate reserves are exported with the majority of the exports going to Europe. Syria is among the top five exporters of phosphate and the small amount that is not exported is generally used for fertilizers.[6] Despite the significance of the oil and mining industries, the textile industry has been vital to the growth in the economy during the Assad regime.

The textile industry is responsible for nearly 12% of the total industrial output and employs around 30% of the population.[7] The success and importance of the textile industry has been the result of the government’s regulation of foreign trade. High tariffs on international products, some of which are as high as 75%, have discouraged foreign competition from entering the Syrian market and tax credits to plant owners have emphasized that government’s commitment to the industry. Wool, cotton, and nylon are the essential fabrics used in the textiles and the finished products have been sold worldwide. Syria was once known for its handmade rugs; however, the textiles have outsourced hand-making because of its toll on productivity. In the end, the industry has dramatically improved with industrialization and policies that protect domestic interests, but the inability of the state to address income inequality has brought with it unrest and economic instability on a grand scale.

Similar to many of the problems that people face worldwide, there is an inequality gap in Syria that the Assad regime fails to take action on this pressing issue. The population is characterized to be a “lower middle class” and 2011 statistics indicate that 47% of the population is employed in agriculture or industry.[8] Business owners and government employees have long supported the Assad regime and reap the benefits of a fair wage/salary when compared to the majority of Syrians that live on less than one hundred dollars a month.[9] A 2012 report puts the unemployment rate at 8.3%, but the United Nations Economic and Social Commission for Western Asia (ESCWA) estimates the unemployment rate to reach 60% as the severity of the civil war increases.[10] The current dictator, Bashar al-Assad has done little to allow private companies to enter the markets and the few investors that were allowed have fled. Bashar al-Assad has inflicted damage upon his own country and lost foreign investors by “punishing the people by stopping main services like water and electricity.”[11] The eleven private banks that exist in Syria have varied degrees of suffering, but most have shut down or dramatically reduced operations. The government faces a heavy burden from its actions as revenue decreases and spending remains constant because Assad continues to fund the military which in turn, upholds his legitimacy. The Damascus Stock Market that opened in 2009 once served as a monetary resource for the government has seen losses amounting to 86 billion liras ($1=174 liras). In addition, the government-owned banks lack the reserves to fund their operations because investors fear Syria’s future: a 38% decline in deposits by the end of 2012.[12] Syria has seen industries disappear as reports indicate a 90% reduction in the silk industry and a 95% drop in the tourism sector.[13] All of these figures are subject to change, but it is evident that Bashar al-Assad desperately continues to hold onto power through brute force alone. Assad demonstrates disregard for his people and the economic sanctions (sanctions instituted by the United Nations and a number of countries for his violations of human rights) in place serve a moral purpose, but the people of Syria are suffering and hope is diminishing as world powers fail to act.

The economy is in shambles. The people are no longer concerned with the poor working conditions of the textiles or their miniscule wage because survival is the only concern. Food, water, and basic medical care are the expectations of any society and these resources are now extremely rare. Aleppo contained five thousand doctors prior to the outbreak of war and now only thirty-six remain. Additionally, drug production has tremendously fallen and 36% of the Syrian hospitals have shut down, while 20% have been damaged.[14] People no longer live in their homes, but have been moved to refugee camps as Assad disgustingly targets his own people with endless bombing campaigns. The future of Syria is uncertain as this war drags on and this proposes the question: When will this war end? The war has dragged on for over three years and the only powers that have provided meaningful support for Syria have been Russia and Iran—two countries that are assisting the regime and not the Free Syrian Army (those looking to overthrow Assad). The fall of Bashar al-Assad will be a blessing, but when the dust settles, a country that is in ruins will be revealed. The Syrian Center for Policy Research estimates that it will take at least twenty-five years to reconstruct the country, based upon economic analysis. Industries have been destroyed, the middle class has been made nonexistent, inflation has run rampant, and numerous lives have been lost. The fight against Assad is necessary and the consequences of international involvement are severe, but hope can conquer any evil. As the violence rages on and discussions brew about how to handle Syria, Bashar al-Assad opens his arms to “time” and smirks as events continue to unfold.

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Footnotes


[1] Hourani, Albert. "History: The French Mandate." Encyclopedia Britannica Online. September 24, 2014. Accessed December 1, 2014.


[2] See previous note: "Ba’athist Syria."


[3] Web Internet Service Ltd. "Cotton." Made in Syria. 2014. Accessed December 1, 2014.


[4] Hourani, Albert. “Economy: Agriculture, Forestry, and Fishing." Encyclopedia Britannica Online. September 24, 2014. Accessed December 1, 2014.


[5] See previous note: “Resources and Power.”


[6] Web Internet Service Ltd. "Phosphate." Made in Syria. 2014. Accessed December 1, 2014.


[7] See previous note: "Importance of the Textile Industry in Syria.”


[8] Michigan State University. "Syria: Economy." GlobalEDGE. 2014. Accessed December 1, 2014.


[9] Web Internet Service Ltd. "Economy in Syria." Made in Syria. 2014. Accessed December 1, 2014.


[10] Mahamid, Jamal. "Syria's Frail Economy, before and after the Revolution." Al Arabiya, April 2, 2013. Accessed December 1, 2014.


[11] See previous note.


[12] See footnote 9.


[13] See footnote 9.


[14] Ghabra, Omar. "In Syria, the Assault on Healthcare Is a Weapon of War." The Nation, November 7, 2013. Accessed December 1, 2014.


Bibliography

Ghabra, Omar. "In Syria, the Assault on Healthcare Is a Weapon of War." The Nation, November 7, 2013. Accessed December 1, 2014. http://www.thenation.com/article/177065/syria-assault-healthcare-weapon-war.

Hourani, Albert. "Economy: Agriculture, Forestry, and Fishing." Encyclopedia Britannica Online. September 24, 2014. Accessed December 1, 2014. http://www.britannica.com/EBchecked/topic/578856/Syria/29956/Economy

―. “Resources and Power.”

Hourani, Albert. “History: The French Mandate." Encyclopedia Britannica Online. September 24, 2014. Accessed December 1, 2014. http://www.britannica.com/EBchecked/topic/578856/Syria/29921/The-French-mandate.

―. "World War II and Independence." http://www.britannica.com/EBchecked/topic/578856/Syria/29922/World-War-II-and-independence

―. "Ba’athist Syria." http://www.britannica.com/EBchecked/topic/578856/Syria/29925/The-union-with-Egypt-1958-61#toc29927

Mahamid, Jamal. "Syria's Frail Economy, before and after the Revolution." Al Arabiya, April 2, 2013. Accessed December 1, 2014. http://english.alarabiya.net/en/perspective/alarabiya-studies/2013/04/01/Syria-s-frail-economy-before-and-after-the-revolution.html.

Michigan State University. "Syria: Economy." GlobalEDGE. 2014. Accessed December 1, 2014. http://globaledge.msu.edu/countries/syria/economy.

Web Internet Service Ltd. "Economy in Syria." Made in Syria. 2014. Accessed December 1, 2014. http://www.made-in-syria.com/economy-in-syria.html

―. “Cotton.” http://www.made-in-syria.com/cotton.html

―. “Phosphate.” http://www.made-in-syria.com/phosphate.html

―. “Importance of the Textile Industry in Syria.” http://www.made-in-syria.com/importance-of-the-textile-industry-in-syria.html

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© 2015 Alex Tomczuk

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      Kevin Goodwin 2 years ago

      It is without question if you know anything about Syria you automatically think of the Assad and how his propaganda campaign and his actions have left Syria in a deep hole to climb out of. Lisa Weeden wrote a great book about Syria and I would recommend everyone to read it.

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