Enab Baladi – Anas al-Khouli

After being displaced from Damascus to Idlib by the Syrian regime forces in 2018, Ahmad Sherbaji left his profession in producing electrical cables due to the economic infeasibility of his project with the rising production costs, transportation fees for raw materials, and the inability to export due to taxes, which pushed him to work in contracting.

Sherbaji owned a small factory for producing electrical cables in one of the suburbs of Damascus. With the onset of the Syrian revolution in 2011, his factory was bombed and then robbed by regime forces, leading to the halt of his project.

In Idlib, the young man tried to return to his profession and decided to establish a new factory. While studying the feasibility of the project, he collided with a bleak investment reality that he described as “bitter,” which would inevitably lead to losses due to his inability to compete with the prices of imported goods. He abandoned the idea and sought other safer projects.

Industrialists and some craftsmen in Idlib face numerous obstacles preventing them from investing or starting their projects, chief among them weak demand in local markets, their reliance on imported goods, high costs of importing raw materials, inability to export products, and the absence of government support for industrialists.

No Export.. Nonexistent sales markets

Hatim al-Assaf used to work in the outskirts of Damascus in the field of traditional Damascene furniture, renowned for its good reputation. However, after being displaced to Idlib, he and his colleagues in the profession sought to return to work and produced some pieces of bedroom and sitting furniture, but they were not permitted to export them.

Al-Assaf told Enab Baladi that the reason is the Turkish side’s prohibition on producers from exporting goods due to the lack of a certificate of origin issued by a recognized Ministry of Industry that protects importers from producer manipulation, noting that the solution to this problem lies with the authorities in Idlib.

Al-Assaf explained that local markets are insufficient for the industrialists because of the lack of demand and the consumers’ weak purchasing power, relying instead on cheap imported commercial goods.

The production of plastic mats in Idlib also suffers from a lack of basic production components, the most significant being the absence of sales markets, poor quality raw materials, and a lack of expertise. Furthermore, 90% of workers in this profession have abandoned it, and demand is insufficient to operate workshops.

Previously, the mats were exported to markets in Iraq and Lebanon, but today Turkish goods have replaced them, offering better quality at lower prices.

High production costs

Countries and governments usually work to reduce or eliminate tariffs on local manufactured goods to protect local products. They also provide industrialists with facilities concerning the import of raw materials, lowering energy costs like diesel and electricity fees, to reduce production costs for industrialists. This, in turn, reflects on product prices, making it difficult to compete with imported goods in local markets.

Industrialists in Idlib suffer from high import duties on raw materials, alongside low tariffs on imported goods, leading to increased production costs and consequently losing the ability to compete with imports.

Alaa al-Ahmad, who runs a plastic container manufacturing plant in Idlib, stated to Enab Baladi that no matter how much industrialists reduce prices, they will not be able to compete with imported goods’ prices, as they are also paying hefty bills for electricity and operating machines, mentioning his future plans to rely on solar energy.

Al-Ahmad added that there are no solutions to the energy problem; solar energy only provides partial solutions in the summer, emphasizing that the real solution lies in offering discounts to industrialists regarding production energy costs, such as electricity and diesel fees.

Despite the low wages of labor in the region, the production costs remain very high due to increased expenses for importing raw materials and their custom duties, according to the factory manager, considering that the equalization of tariffs for entering ready-made goods with raw materials duties “destroys local industry.”

Daily labor wages range from 70 to 100 Turkish lira (three US dollars) at best, while workers in factories and industrial workshops earn between 100 and 150 lira a day.

Salvation Govt: Facilities and a suitable investment environment

Several industrialists interviewed by Enab Baladi have called on the Syrian Salvation Government and responsible authorities to provide customs facilities for importing raw materials, which helps local products compete with imports.

Mudar al-Omar, the Director of Public Relations at the Ministry of Economy, stated to Enab Baladi that the ministry is working to secure an investment environment for industrialists and traders to uplift the economic reality, starting with regulations that protect the industrialist and facilitate his work within the legal conditions set forth.

This includes equipping a suitable infrastructure that encompasses all requirements, as the ministry has worked to create the Bab al-Hawa industrial city, which serves as a fertile investment environment. This environment includes electricity availability, import and export facilities, and administrative conveniences, including issuing industrial and commercial registrations, according to al-Omar.

Al-Omar added that the Salvation Government seeks to secure the protection of intellectual property for industrialists, and exchange expertise between traders and industrialists to develop the economic reality, noting that the ministry is working to ensure the entry of raw materials for all industries.

He explained that the ministry has plans to secure an investment environment with electricity supply and road networks to facilitate import, export, and transportation.

Al-Omar noted that the industry plays a significant role in providing job opportunities, including direct and indirect jobs, and has a substantial impact on moving the economic wheel.

Zero tariffs

The director general of the Ministry of Industry in the Salvation Government, Abdullah al-Masry, explained to Enab Baladi that the directorate adheres to a principle of supporting local industries, believing that tariffs on raw and semi-manufactured materials entering the manufacturing stage in Idlib are “almost zero”.

Al-Masry added that the general directorate aims to protect local products through a department called “Local Product Protection Department,” which conducts comprehensive studies on any product manufactured locally.

According to al-Masry, through this study, the directorate identifies the full range of internal and external risks and challenges faced by the product, from external flooding to unfair competition, and thus imposes tariffs on incoming products based on this study to ensure production continuity and avoid factory shutdowns.

The industrial sector in Idlib has witnessed slight progress compared to previous years and the emergence of some factories, especially pharmaceutical factories. However, this progress remains insufficient due to the absence of a secure investment environment, frequent bombing, and lack of financing institutions like banks and the inability to export products.