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The Coming Economic Collapse of Syria*

Steve Plaut
Policy Paper No. 95 (Hebrew),
Translated and Published in Nativ, Volume 72/1, January 2000

Summary

Syria is one of the last surviving communist countries communist not formally but in its economic structure. The ruling Ba'th Party of Assad plays a role similar to that of the Communist Party in the Soviet Union and Syria's economy resembles that of Russia before perestroika and glasnost. Its economy is centrally planned, rigid, backward, impoverished, dilapidated and shrinking. An all-powerful central planning bureaucracy fixes prices and owns the bulk of industry in the country. As in the Soviet Union, Syria operates under five-year plans that are often formulated two or three years into the plan's five years. Also similar is the fact that the military-political elite ultimately operates the Syrian planning apparatus.

The International Monetary Fund (IMF) says that Syria has the worst array of harmful government controls over its economy in comparison to any other Mediterranean country. The central government controls resources, operates large governmental monopolies, prints oodles of money, serves as the main employer (40 percent of the labor force), controls all of the imports and exports of the country, owns all banks and insurance companies, regulates every financial and most commercial transaction, owns all big industry and much of the small industry, controls ordinary wholesale and retail trade, and controls agricultural markets.

It is a pariah country due to its extensive involvement in terrorism and drugs trading. It is on poor terms with all of its neighbors (except the one it occupies militarily Lebanon). Its Russian-supplied military equipment is rusting even as it becomes increasingly obsolete. It is backward technologically and has yet to introduce credit cards, cellular phones, or a stock market. It has yet to open its first business school. It has outlawed access to the internet except for the closest cronies of the regime.

Syria's economy produces a level of GDP per capita that lies somewhere between $600 (well below Egypt's) and $1200, depending on source. No one at least no one outside the CIA seems to believe the Syrian regime's own claims that its GDP is in excess of $6000 per capita. In any case, nearly 70% of Syrian workers earn less than $100 per month. At the same time, Syria's external debts are huge relative to its GDP and growing. Most of these are in arrears, and Syria has been cut out of the international financial markets altogether. The current debt level is equal to about 5 years worth of Syrian export earnings; just paying the interest service on this sum of money would take up perhaps a third of Syria's export earnings. Syria is finding it increasingly difficult to feed itself. Its agriculture sector is low-tech and primitive. Only 20% of its farmland is irrigated, this in a country with long rainless summers and frequent droughts. The World Health Organization estimates that 28% of Syrian children suffer from stunted growth, in large part due to malnutrition. Syrian forests are being systematically destroyed and an ecological disaster is in the making.

Any look at its internal living conditions shows Syria to be a brutish impoverished country, often near the bottom of the Third World. The proportion of babies who are born in any sort of health facility is only 37 percent, one of the lowest rates in the world outside sub-Saharan Africa. Only 33 percent of mothers have any medical care during pregnancy, and only 61 percent have care during delivery. The proportion of infants receiving ante-natal health care is only 13 percent, again one of the lowest outside Africa. The number of hospital beds is one bed per 832 Syrians; Botswana has twice as many. (The comparable number in Israel is one per 165.) The number of physicians is one per 1,221 Syrians, comparable to the lower ranges of the Third World. (In Israel the number is one per 206 people.) Syria has just 10 nurses, 3 pharmacists and 3 dentists per 10,000 people.

Syrian infrastructure is undeveloped and primitive. Much of the water is unsafe, many Syrians have no sewers, electricity supply is primitive and unreliable. Rates of ownership for cars and major appliances are at levels similar to the bottom of the Third World, as are rates for newspaper and magazine distribution. Of the 40,000 kilometers of highway in the country, 31,000 or about three-quarters are unpaved. Only 866 kilometers are expressways. Of the 104 airports in the country, 80 of them have unpaved runways. Rail passenger service in Syria has all but collapsed, dropping by 62 percent between 1991 and 1995. The civil aviation sector in Syria as measured by passenger miles is just slightly larger than in Namibia or Zimbabwe.

The level of Syrian education and scientific training resemble those in darkest sub-Sahara Africa. College attendance is extremely low. Illiteracy is still widespread in Syria. Half the women in the 20-24 age group nation-wide are illiterate. The Statistical, Economic and Social Research and Training Center for Islamic Countries (SESRTCIC), a database for Islamic countries, puts the overall illiteracy rate in Syria at 32 percent for the entire adult population (1992). The comparable illiteracy rate in Zimbabwe is estimated at 15 percent.

In science, Syria has yet to get started. Syrians applied for a total of 55 patents in 1995, about the same as Botswana. The comparable number in Israel was 4,425. Emigration of skilled Syrians and technicians is thought to be considerable, almost as common as the capital flight of Syrians stashing their savings abroad.

A Syria whose economy is contracting may be one that can be deterred by an Israel willing to engage it in an economic race, or more specifically an arms race. This means that Israel need not hurriedly accommodate Syria. If anything, it should sit back and await Syria's collapse to proceed, for the economic situation is getting worse with time.

The United States won the Cold War by letting the Soviet empire collapse under its economic dead weight, with no military confrontation. Why should not the same strategy work with Syria? A rush by Israel to reach agreement with Assad makes about as much sense as there would have been in the United States rushing in 1989 to reach agreements with the Soviet Union. With each passing year Syria will be less capable of feeding and arming itself, and more susceptible to outside economic threats and pressures from the West. Western states can help things along by imposing economic sanctions. With a bit of determination, this could lead to a collapse of the totalitarian regime in Syria and that, in turn, would redraw the strategic map of the Middle East, most likely in a direction that would benefit Syrians, Turks, Jordanians, Israelis, and everyone else.

*Reprinted with the permission of the Middle East Quarterly, September 1999.

For the complete text of the article (in Hebrew), click here.