Enab Baladi – Yamen Moghrabi

On September 24, the head of the Syrian regime, Bashar al-Assad, held a “directive meeting” with his new government ministers, headed by Mohammad Ghazi al-Jalali.

During the meeting, which lasted over 20 minutes, al-Assad spoke to his ministers about what they should do in the coming phase.

Al-Assad did not present any new solutions to Syria’s ongoing economic crisis, and notably, he was not optimistic about any economic improvements in the near future. He indirectly referred to lifting subsidies again and urged ministers to avoid making unachievable promises.

Al-Assad’s speech wasn’t the only indicator of his intention not to backtrack on lifting subsidies. His choice of the new Minister of Economy, Muhammad Rabie Qalaji, also evidences this, as Qalaji is a strong advocate for al-Assad’s steps in this file within the People’s Assembly.

Al-Jalali, who is the first prime minister with origins in the occupied Syrian Golan, seems at first glance to be an economist with a Ph.D. in Engineering Economics from Ain Shams University in Egypt from 2002. However, his work is as connected to engineering as it is to economics and is not linked to economic development or solving living crises.

Nothing new for the coming phase

In Syria, 16.7 million people need humanitarian assistance, a 9% increase over 2023, according to estimates by the UN High Commissioner for Refugees (UNHCR).

According to statistics released on February 12 by the World Food Programme (WFP) on the number of people suffering from food insecurity in Syria, 80% of the Syrian population will need some form of humanitarian aid in 2024.

About 55% of the population in Syria, or 12.9 million people, suffer from food insecurity, with 3.1 million facing severe food insecurity.

These figures directly point to the severe economic crisis in Syria, particularly in areas under regime control, alongside declining purchasing power and the collapse of the Syrian pound against the US dollar.

According to the S-P Today website, the exchange rate of the Syrian pound nears 15,000 pounds per one US dollar.

In light of these figures and crises, al-Assad continues to talk repeatedly about lifting subsidies. During his meeting with the ministers, he said that Syria’s policies over the decades did not yield results and proved ineffective. He mentioned that all countries worldwide follow different paths and need to review these policies.

Economic researcher Zaki Mahshi notes two key points in al-Assad’s speech on economic matters. First, al-Assad doesn’t foresee any significant positive changes in the Syrian economy in the upcoming phase, especially with his request to keep economic goals realistic and within available resources.

The second point, according to Mahshi, relates to the economic policies al-Assad talked about, indicating the lifting of government support and liberalizing the economy.

Since 1936, Syria has adopted a socialist approach in managing its economic and political affairs, a system based on state ownership of production means and cooperative economics.

Since the Baath Party came to power through a military coup in 1963, it has followed socialist policies with varying intensities, depending on the ruling factions within the party. When Hafez al-Assad came to power in another coup against his comrades in 1971, he solidified socialist policies that primarily depended on an active role for the public sector but without fully implementing the principle.

Practically, upon taking office, Bashar al-Assad began heading towards more open economic policies under social market economy, allowing private banks and schools and lifting subsidies from essential materials like fuel and bread. Syria maintained a socialist approach, albeit not fully implemented.

However, the war economy imposed a new economic reality on the Syrian regime. The state’s resources were directed towards military efforts, leading to privatizations and sales of state-owned economic projects, including port leases, phosphate extraction, and investments in Damascus International Airport.

These moves were accompanied by continuous announcements about lifting government support from segments of citizens, covering fuel, bread, and domestic gas.

Since early February 2022, the regime’s government has started implementing the removal of government support for specific holders of the smart card based on particular criteria, including having a commercial record for a family member or owning a car with specific specifications, among other standards.

Lifting support affected large segments of Syrian society, including engineers, lawyers, and traders.

In December 2023, the Damascus Chamber of Commerce revealed that over 100,000 traders with commercial records had left the Syrian market, attributing the reason to the lack of government support for traders.

Economists without economic backgrounds

The new prime minister holds a Ph.D. in Engineering Economics, a specialty that combines economics and engineering, focusing on applying economic techniques to various projects from an engineering perspective, evaluating them, and reducing their costs as much as possible without compromising engineering design principles and quality standards, according to the economic website “Rouwwad.”

The concept is linked to traditional microeconomics, which describes economic behavior in face of changes related to price hikes and declining consumer purchasing power, highlighting its importance in finding alternative solutions when projects face resource shortages.

Engineering economics has a flexible and realistic nature, aiming to offer solutions that lower the cost of project execution and thus reduce the resources used.

Given al-Assad’s talk during the directive meeting and al-Jalali’s economic background, who previously served as Minister of Communications and Technology, the future direction of the Syrian economy can be understood, especially with the appointment of the new Minister of Economy, Muhammad Rabie Qalaji.

Qalaji served as Chairman of the Budget and Accounts Committee in the People’s Assembly and is a major supporter of lifting subsidies on goods and services.

According to Mahshi, appointing both individuals to the positions of prime minister and minister of economy shapes the forthcoming economy under the new government.

Qalaji holds a Ph.D. in accounting from Aleppo University in 2012, specializing in international accounting standards and financial and banking crises, and worked as an economic consultant at the Aleppo Chamber of Industry between 2011 and 2016.

Mahshi points out that the new Minister of Economy is not an expert in economic development, sustainable economy, or macroeconomic analysis. Instead, he focuses on balancing spending, revenues, taxation, and profit and loss, lacking a developmental vision. This accounting perspective will accelerate lifting subsidies, taking al-Assad’s directives into account.

Based on al-Assad’s choices for new figures and his speech during the directive meeting, significant changes in the Syrian economy are not expected soon.

Mahshi argues that appointing al-Jalali, a man of economic background, does not convey a clear message given the nature of his background and lack of an economic thought or affiliation with a clear school to make radical changes in the Syrian economy.

Moreover, no change can occur without directives from Bashar al-Assad or the leadership. Hence, appointing al-Jalali is a technical and routine move that sends messages to Syrians about the possibility of change in government performance due to the switching of ministers. However, this is limited, especially since the new names lack the ability to act on the ground, acting merely as executors of al-Assad’s directives, according to Mahshi.