Syria 2000: a reform to end all reforms

This article was commissioned and published by Impressions, the inflight magazine distributed by British Airways.

What’s in store for Syria, now that Dr Bashar al-Asad is at the helm? What will it mean for the country’s economy, the banking sector and for potential outside investors? How will it open up in terms of information and the Internet? Ammar Abdulhamid examines the evidence.

Even before the rise of Dr Bashar al-Asad to power and as his campaign against corruption unfolded during the last few months of the life of his father, the late president Hafiz al-Asad, much popular hope hangs upon him. The first hundred days of his reign, however, were not as productive as people had hoped and anticipated, but to most rational observers that was not too surprising. For even in the staunchest democracies, the matter of transition of power is not a smooth or hasty process. It is only reasonable that such transition should take longer than people might like. Still, the last few weeks have witnessed many important decisions on the part of the young president and the old leadership surrounding him, signalling the beginning in earnest of the long-awaited reform.

The first major decision came at the conclusion of the regional command of the ruling Baath party on Saturday 2nd December. It allowed for the re-establishment of private banks, proscribed since the 1963 coup which brought the socialist Baath party to power, and for the establishment of a currency exchange market for the first time in the history of this young Arab republic. A law guaranteeing banking secrecy was also approved. These decisions represent a major breakthrough, considering the nature of the Syrian regime.

Meanwhile, those few Syrians who have the necessary licences can go to the Damascus free zone, where a private Lebanese bank (SGLEB) opened a branch in December. Moreover, the Syrian public banking system will reportedly witness a major overhaul in the next few months in order to prepare for future competition with private banks. Eleven international companies have reportedly submitted bids to the Syrian Savings Fund to gain the right to issue Syria’s first credit cards.

Other decisions include one to free 600 political prisoners, some of them Lebanese and Jordanian nationals, a move that was publicly announced through the Syrian press for the first time ever. The Syrian national daily ath-Thawrah heralded a development that ‘exceeds the bounds of “tradition” and represents the possibility of becoming a serious, quiet, responsible and effective review of political life in Syria’. Moreover, the infamous Mazzeh prison, in which many known Syrian novelists, poets and politicians were imprisoned at one time or another, has been shut down and is scheduled to be transformed into a center for historical research, according to one account. All this has led many observers in Syria to speculate on a potential announcement of the cancellation of the state of emergency and all related martial laws prevailing in the country since the 1963 coup, perhaps the longest such official state of affairs in recorded history and qualifying it for the Guinness Book of Records, though some wonder why this hasn’t already taken place.

Meanwhile, the Syrian press has become a bit more outspoken than usual and is publicly discussing issues pertaining to civil and economic reform. Furthermore, one of the more recent decisions of the Syrian leadership was to allow for the parties in the so-called National Progressive Front (an assortment of seven communist, nationalist and nasserist parties which have long lost their popular base but are theoretically in charge of running the country alongside the infamous Baath) to issue their own periodicals and otherwise reform themselves in an attempt to regain some of their erstwhile credibility. (Perhaps in order to drive the last nail into their respective coffins and prepare the way for their eventual dissolution, since none of them is expected to succeed in facing the seemingly simple challenge of issuing their own press.) The Baath Party, of course, does not have to worry about that, since it is practically in charge of all political press in the country.

On a different front, some analysts hinted at the idea of privatisation as a potential way out of the economic quagmire resulting from the long and decrepit rule of Asad the father. Most observers, however, including the executive editor of the Syrian national daily al-Baath, a known member of the old guard, rush to dismiss such speculations as ludicrous. ‘The decisions being made by the Baath leadership,’ went the old editor, do not represent “an economic coup d’état” or even “an economic revolution”, as some dared suggest, and definitely not “an abandonment of the socialist experiment and moving towards economic liberalism”.’ No. These moves have been ‘the subject of much thought, study and scrutiny of the leadership in Syria for years, the broad outline of which were crystallised in the inaugural speech delivered by president Bashar al-Asad’.

Another official to emphatically deny this potential trend was none other than Dr Khalid Ra’ad, the Syrian deputy PM, in an interview with al-Baath on 5th December. Dr Ra’ad asserted that ‘the matter has absolutely not occurred to the mind of the leadership or the government’. Rather, the Syrian government intends to follow ‘the example of China, which has been opening [its economy] quietly and has scores of private banks… all in the framework of certain economic constants that were not touched’.

The issue of privatisation came up again in a speech by the Syrian PM, Dr Muhammad Mustafa Miro, which he delivered to the people’s assembly on the same day and in which he noted that the current government’s aim is to ‘greatly reform the public sector’ but ‘not to privatise it’.

These denials notwithstanding, the Syrian minister of the economy and foreign trade, Dr Muhammad al’Imadi, in the economic supplement of al-Baath on 27th November, asserted that Syrian law does not preclude the possibility of establishing investment companies for water and electricity. ‘The public sector’s monopoly has overburdened the [local] administrations with ever-increasing expenses… while there is a growing need in the state to direct its resources towards more urgent production goals.’ The minister added that there is no sector where private investment cannot play a role. ‘We have previously reviewed offers for the establishment of electric stations run by the private sector. Experts agree that it would lighten the burden on the government’s shoulder by introducing an element of competition, improving operational capacity, decreasing fuel consumption and improving environmental conditions.’ Perhaps the issue of privatisation is the subject of a debate currently taking place in the dark hallways of Syrian politics, where all important decisions are usually made.

The settlement of Syria’s foreign debts is also considered as one of the important developments of the last few weeks, especially with regard to Germany, where continuing disagreement had led to the freezing of all aid to Syria by the European Union. The agreement with Germany, however, smoothed the way for Mr Francis Mayer, deputy governor of the European Bank for Investment, to sign an agreement by which the European Bank will finance electrical projects in Syria to the tune of 75 million euros. Mr Mayer said that another treaty will most likely be signed in 2001 to finance another electrical project to the tune of 115 million euros.

Also, the Italian government is to give Syria the sum of 163 billion lira, (US$75 million), 13 billion as a loan and 50 billion as a non-returnable grant, to be used to finance agriculture, health, environmental protection, culture and higher education projects.

Meanwhile, the Syrian European Business Centre has entered its second phase of operation and has recently issued a study of the state of the traditional leather industry in Syria, with the aim of modernising them and introducing new ones, while helping Syrian exporters find a niche for their products in the European market.

Indeed, Syria has finally resumed talks, frozen eight years ago over the German debt problem, on the issue of its partnership with Europe. Its team of negotiators, led by the Syrian minister of planning, Dr Isam al- Za’eem, met with a European team in Brussels last December. They discussed the amount of aid needed by Syria to rehabilitate its economy and the possibility of freeing the economic exchange between the two sides in the fields of industry and agriculture. These issues are expected to be quite tricky, especially considering the current state of Syrian economy. ‘Any agreement will include a freeing of exchange’, said the Syrian minister of planning in an interview with ath-Thawrah before he embarked on his trip. ‘But the question here is how we view this freeing of exchange, and what is the transition period which will allow the Syrian side to develop its capacity between one negotiative phase and the other.’ The minister pointed out that the situation would be different in regard to the entry of Syrian products into European markets. This has indeed been a one-sided affair so far, running in Syria’s favour as per a 1997 agreement.

But after a partnership agreement is signed things will go both ways, and European products will end up in Syrian markets. There is also the matter of agricultural products. ‘The European Union is holding firm to its protective policy,’ Dr al-Za’eem complained, ‘not even the US has managed to force it to give it up. For this reason, the head of the European negotiating team has told us that we should not think that we can remove customs barriers when it comes to agriculture’. So the Syrian team will need to detect parts of the market not covered by the protection policy, the minister pointed out. Another round of talks is expected to be held in late March.

Meanwhile, half of the budget allocated for the year 2001 (approximately $ 3.25 billion) will reportedly go to investment projects, especially in the tourism sector. This is in addition to launching a $1 billion program for fighting unemployment, a sum that still falls far short of what is needed yet is viewed by observers as a realistic attempt by the government to tackle an ominous problem. The Syrian government might do well to adopt the recommendations made recently by the International Bank. They include: unifying exchange rates for foreign currency (Syria currently uses several official rates, none of which are consonant with real market price); replacing the list of permitted imports with a list of prohibited imports, making the requirements for import licences agree with those of the WTO; rationalising the customs system; establishing a sales tax to decrease dependence on import tax; decreasing measures of protection for local producers; refunding customs tax to exporters and supporting and improving tax management.

Nevertheless, promises of economic reform alone are not sufficient to satisfy a great many of Syria’s intellectuals and emerging opposition leaders, 99 of whom recently signed a declaration calling for the cancellation of the state of emergency in the country. Economic reform alone will not suffice for the majority of Syrians unless it is accompanied by honest and drastic political reform. Some are even calling for a new constitution to replace the existing one, which still declares socialism as the official credo of the state, with one free of doctrines and ideological assertions and more accommodating of political and economic pluralism. Not even the most optimistic of observers, however, expects such a development soon.

Still, attempts to stir the debate recently reached the halls of the people’s assembly when a well-known Syrian industrialist and parliamentarian began circulating a leaflet calling for political reforms. ‘Breaking of the political monopoly,’ our parliamentarian reportedly said, ‘is a necessary condition for transparency, equal opportunity and putting the right person in the right position and the law above all.’

More important, however, were the frank discussions that took place during a parliamentary session that was recently broadcast live on Syrian national TV. Several Syrian parliamentarians spoke critically of the government and its various security ‘apparatus’. ‘Some security apparatus,’ said one parliamentarian, ‘has misbehaved so much that the [average] citizen feels terrified [of them].’ He then demanded that the role of the security apparatus be ‘limited’. Another called for an end to the political monopoly as a precondition for the application of the principle of transparency.

Now, what would the young Syrian president have to say about that? Only time will tell. Whatever his choice, though, it is obvious that he will face some stiff opposition either from the ranks of his own power base or the people and some of their earnest political and intellectual representatives.

Syria and the Internet:

Perhaps one of the best ways to get an idea as to how things are currently progressing in Syria is to examine the Internet issue. The current Syrian president has long been known for his love of electronic media and the Internet. So much so that he long founded the Syrian Society for Information Technology, and is currently celebrated as the one who has introduced the Internet to Syria and Syria to the Internet. Now for the catch, and there is always a catch, as we all must have realised by now: in a country of over 17 million inhabitants, there are only 9,000 users so far (all of them businessmen, members of the Information Technology Society or well-connected people). And the lines are often so jammed that access can take hours.

Moreover, spurred by the fear of the national phone company over potential loss of service, access to voicemail is denied, but so is access to most free e-mail services such as Hotmail and Yahoo. But if most of the users seem to have Hotmail and Yahoo addresses, it’s all thanks to the ingenuous invention known as silent surfing, which, though it might not solve the problem with speed, does help get access to most denied URLs. These include such interesting sites as the online Israeli newspapers, including Ha’aretz and the Jerusalem Post, as well as some known pornographic sites. Not that these sites are all the rage in Syria. Most people simply want access to the Arabic chat lines, most of which are also denied. As for the political stuff, it requires two things that the Syrians do not normally have: a bilingual education and money. For the service is quite expensive by local standards: over a hundred dollars a month in a country where the average income is a little less than that.

Private Internet centres only started popping up in the major cities a year ago and they suffer from all the major drawbacks of their public sector counterparts, except for having Big Brother hovering over your shoulder to watch what you are doing every moment you’re sitting at your computer. Yes, believe it, this literally happens – a security officer will sit by you and watch what you are doing until you leave.

As such, the Internet is now available in Syria, but not quite. There will be private banks in Syria, but not yet. Corruption will be fought in Syria, at some later date. Change is coming to Syria, but is not… really.

This is how Syria is choosing to reform itself. This is indeed the only way Syria could choose to reform itself, as long as the whole impetus for reform seems to come from the top and mostly seeks to maintain those who are on top, on top.

This feature was written by Damascus-based writer Ammar Abdulhamid. The views he expresses are entirely his and not those of the publisher or airline.