Incomplete attempts to revive northern Syria’s economy
Enab Baladi – Sakina Mahdi
Attempts to revive the Syrian north’s economic and investment situation are resurfacing on the daily events scene amid a crisis linked to the absence of financial stability and stable and effective institutional management.
The minister of the Syrian Interim Government’s (SIG) economy held a meeting in Aleppo’s northern countryside with the region’s industry and trade chambers’ heads. During the meeting, the assembled parties discussed the economic and investment situation in the northern regions.
The meeting aimed to encourage investment, improve the region’s economic situation, and address the obstacles facing traders and investors to overcome the difficulties discussed in the meeting, the SIG’s economy minister, Abdul Hakim al-Masri, stated to Enab Baladi on 4 December.
The SIG will establish a federation of commerce chambers that includes representatives of all commerce and industry chambers, al-Masri added.
The assistant director-general of customs affairs in the SIG, Mohammed al-Qad, told Enab Baladi that the directorate of customs affairs is working on lowering tariffs on raw materials, thus exempting traders from certain materials’ duties, to encourage exports of goods produced in northern Syria, in line with the region’s economic situation.
Areas of northern Syria import commodities and goods from Turkey through official border crossings, such as Bab al-Hawa, Bab al-Salama, and Jarablus crossings. The imports primarily include foodstuffs and building materials.
Goods imported from other countries to opposition-held areas enter the region through the border crossings with Turkey.
Al-Masri noted in a previous statement to Enab Baladi that there are no joint committees to coordinate cross-border movement and customs duties between the two countries.
The SIG and the general directorate of customs oversee all commercial activity operations in coordination with the Turkish side.
The economy minister of the Syrian Salvation Government (SSG)_ an administrative body that governs Idlib and part of the western countryside of Aleppo_ discussed the state of the directorates and their work with the ministry’s general directors, according to what the ministry published on its Facebook page on 18 November.
At that time, the minister of economy and resources, Basil Abdul Aziz, met with the director-general of the general organization for grain trade and industry, Ahmed Abdul Malik, the director-general for trade and supply, Khaled al-Khader, and the director of industry, Mudar al-Omar, to discuss plans for the development of these directorates and their performance to serve the economic sector in Idlib.
Abdul Aziz asked the officials he met to make intensive efforts to develop “strategic” plans, to promote economic activity in the SSG’s areas.
Meetings and plans with no thorough studies
Such meetings with chambers of commerce and other entities are held in stable governments that conclude thorough studies on living conditions and mechanism of economic affairs in the region; therefore, the outcomes of the meetings in northern Syria to revive the economic situation cannot meet the expected results within the current situation, the economic analyst Younes al-Karim said to Enab Baladi.
According to al-Karim, commerce and investment chambers are established based on the presence of plants and factories in the region; however, in northern Syria, there are no factories or plants except for some workshops that cover the region’s needs. These workshops do not need commercial, industrial and agricultural chambers. Besides, the region suffers an apparent weakness in production and export.
Al-Karim added, the lack of institutional role, except for the local councils of the military factions, the absence of security, and the ineffective role of civil society which is limited to relief work and some calls to support living conditions also undermine the effectiveness of any attempts to improve the economic situation.
The northern Syrian region lacks political and security stability to make effective economic decisions, according to al-Karim. The lack of coordination between the SIG institutions, the military factions, and the Turkish side indicates that there is no real communication between the key actors in the region.
People in northern Syria face difficult living conditions that resulted from repeated displacement, military operations, security risks, and ongoing conflict, according to the United Nations Office for the Coordination of Humanitarian Affairs (OCHA).
2.8 million people in northern Syria depend on humanitarian aids to secure their essential needs of food, water, shelter, health care, and education.
The dire economic situation affects people’s ability to endure their living conditions. This impact is likely to extend to all 4.1 million people in the region, 76 percent of whom are women and children, while 2.7 million are internally displaced, according to OCHA‘s report of 13 July.
How to achieve economic stability in Syria’s north
The government should restructure its decisions to make them more effective. It should lay down clear laws founded on studies based on communicating with influential forces on the ground and with the Turkish side.
As for industrial chambers, al-Karim believes that it is too early to establish them in this region, stressing that they cannot be formed in the light of political, economic, and monetary instability. He pointed out the importance of communication between civil society, the government, and the institutions to harness the local and Turkish possibilities to establish such chambers.
According to al-Karim, the process of improving the economy should be based on well-studied researches that proceed from northwestern Syria, not from international economic projects or the ones that focus on Syria as a whole. Each region should be studied separately to save the livelihoods of people in northern Syria.
Last June, the head of the SIG, Abdul Rahman Mustafa, confirmed meetings with Turkish officials to help remedy the Syrian pound’s deterioration and infuse the Turkish currency of small denominations into the northern Aleppo countryside.
Mustafa stated that dealing with the Turkish lira in northern Syria is “temporary until reaching a political solution.” The move aims at protecting citizens’ savings due to the deterioration of the Syrian pound and has no political considerations.
Economic dependency on Turkey and its effects
Apart from the Autonomous Administration of North and East Syria (AANES) regions, the northern Syrian regions are almost entirely dependent on imports from the Turkish side, as Turkey has created a kind of economic activity to ensure that the internally displaced people will remain in Syria.
Last March, Russia and Turkey signed a cease-fire agreement in Idlib, following a military campaign launched by the Syrian regime forces to regain control over northwest Syrian regions. The agreement enabled Turkey to maintain a foothold in Syria’s north.
According to al-Karim, the Syrian north’s economic dependency on Turkey in terms of imports is not new and should not impede it from achieving internal economic development projects. However, the problem is that this dependency has become absolute, obliterating any independent economic decision for the benefit of the region. Besides, the military leaders have been exploiting the economic relationship with Turkey to self-finance the local councils and military movements within the absence of socio-economic development and investment projects. All of this has left a negative impact that made the relationship with Turkey unhelpful to the Syrian people in the northwestern regions.
As a powerful, organized, and institutionalized country, Turkey must stop Turkish merchants from making illegal gains by taking advantage of turkey’s influence in Syria. Only then, the economic benefit will be reflected on Turkish and Syrian people alike, al-Karim said. According to the analyst, the Syrian north can have a positive impact on the Turkish product market by trading Turkish-made commodities.
Unplanned decisions made out of dependency on Turkey, such as replacing the Turkish currency with the Syrian pound, contribute to Turkish currency’s inflation as its citizens’ purchasing power is declining. Thus, Turkey must take moves economically and politically to balance the situation in Turkey’s southern regions and northern Syrian regions, for the benefit of both countries, al-Karim said.
He added agricultural products of northern Syria, such as olive oil, vegetables, citrus, and others, can be invested by establishing official selling channels at the Turkish border to Turkey or exported abroad. Al-Karim also pointed out the importance of coordination between the Turkish and Syrian sides to establish real industries in both countries.
In contrast, the selling of Syrian products in Turkey should be regulated and legal so that it does not affect Turkish products’ selling; otherwise, both countries would be adversely affected by the commercial relationship, al-Karim said.
Northwestern Syrian regions should coordinate with the Turkish side to provide food products to both parties at low prices, thereby improving citizens’ purchasing power. This, in turn, would encourage investors to invest in the region, as the availability of labor force and food security would attract capital and businessmen to set factories and start projects, thus benefiting both parties.
However, the continuation of the current situation of high prices, poverty, and people’s inability to withstand the dire living conditions, will lead to adverse results for investors. According to the economic analyst al-Karim, the region will not witness new projects and suffer from higher prices and poor living conditions.
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