Syria’s New Government – Analysis


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By EHSANI2 for Syria Comment

Since the new Syrian Government was announced, the public reaction has largely been subdued. Most people are mesmerized by the extraordinary events on the ground,  nevertheless, let me discuss the people of the new government and what it may mean for Syria’s domestic policy. CVs of all ministers..

The first notable change is the outright elimination of the office of the deputy Prime Minister for Economic affairs previously held by Mr. Dardari. In essence, no one replaced Mr. Dardari as his previous function was eliminated altogether. This is a significant change. As many readers of this forum recall, I was a fan of Mr. Dardari. For very understandable reasons, my view was not shared by a large segment of the Syrian population. Over time, Mr. Dardari’s name became synonymous with the two words: “economic reform”. When the public became disillusioned with the so-called reform process or the economy, Mr. Dardari took the brunt of the criticism. In the end, neither the wealthy industrialists nor the poor or the unemployed were happy with his performance. In truth, there were two reasons for Mr. Dardari’s downfall:

1-    He was too optimistic when it came to portraying the country’s economic prospects.

2-    He took on the hard task of removing key subsidies with minimum engagement with the public about the reasons why those steps were necessary.

For the past five years, discussions on the Syrian economy on this forum highlighted the enormous challenges ahead. While Mr. Dardari and others touted the imminent investments and out-sized growth prospects, many of us were highly skeptical. Regrettably, not much has changed. Indeed, if anything, the recent political events have made the task at hand enormously more challenging.

Suggestions for the New Government:

  • Engage the public.
  • Explain the economic challenges.
  • Set realistic expectations.
  • Don’t over promise and under deliver.
  • Be decisive and make bold decisions.

The new notable additions to the new government are Mr. Mohammed al-Jlelati (Finance) and Mr. Nedal Alchaar (Economy and Trade). Both are fine individuals and excellent choices in the current circumstances.

Mr. al-Jlelati is known to the public through the Damascus Securities Exchange (DSE) as its acting CEO. He is a hands-on Technocrat. He is decisive. All signs are that he is not corrupt. He has been in close contact with the business world. He understands accounting, auditing and corporate governance. Of course, one can argue that his knowledge of finance and markets are limited to the local rather than international arena but this is a rather immaterial shortcoming given the current state of Syria’s financial market development. In sum, it is a good bet that Mr. al-Jlelati will be a technically sound and rather apolitical Finance Minister.

Mr. Nedal Alchaar is a particularly interesting appointment. Originally from Aleppo, he has been based in Bahrain. He has been in charge of the Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI). The organization is an independent body established to regulate and standardize the Islamic banking and finance industry in the areas of accounting, auditing, governance, ethics and Sharia. Mr. Alchaar is a highly respected individual in the field of Islamic Banking. Here is a recent quote by him from a year ago:

“The goal is to promote sound practices, not to catch people, and the most important thing is credibility. If this is going to spread and really serve the world and the public, not only Muslims, then it has to be done right. It has to be honest, straight and transparent. In money you always have to be honest, because you cannot repeat your mistakes. People will shy away, leave you and drop out.”

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Mr. Alchaar is known to hundreds of institutions from over 40 countries. His numerous contacts will serve Syria well as he works to attract foreign investors (particularly gulf-based).

Suggestions to Mr. Alchaar:

  • Now, that there is no longer an office for a Deputy Prime Minister for Economic Affairs, the Ministry of Trade and the Economy should take the initiative to broaden its responsibilities and become the single go-to office for everything to do with economic policy matters. This will promote better accountability, focus and transparency when it comes to who is in charge and who is responsible for both the failure and success of the domestic policy agenda.

Mr. Omar Ibrahim GalawanjiMinister for Local Administration: The third notable change in the government was the removal of the powerful Mr. Tamer Hajje. Just 24 hours before the formation of the new government, the sitting Governor of Aleppo issued a stinging criticism of Mr. Hajje and Otri about their delayed response to his repeated calls to accelerate the Tanzeem plans for his city. Mr. Omar Ibrahim Galawanji is now the new Minister for Local Administration replacing Mr. Tamer Hajje. This will be a key Ministry to watch as it is in charge of setting policy for the entire real estate sector and city planning for the country. It is arguably one of the most important ministries in the government.

Mrs. Lamia Asi: The fourth important change involved the Tourism Ministry. Mrs. Lamia Asi is now in charge. She had briefly run the Ministry of the Economy. She of course used to be the country’s Ambassador to Malaysia and is known to be a big fan of that Asian country’s development performance. She is also known to be practical and not dogmatic.

Suggestions to Mrs. Asi:

  • A team of Syrian lawyers and Business men have recently made a trip to Turkey and met with that country’s Tourism Ministry. Turkey of course has done an outstanding job in attracting international chains to develop its coast by building as many as 490 five star resorts all over the country. How did they achieve this? By offering investors free land and an attractive 2% subsidized financing for 50% of the total cost of the project. Syria must start thinking along these lines. The country’s tourism industry needs a massive shot in the arm. The Turkish model must be studied in great detail. Reputable International investors must be given extremely attractive terms to help entice them to come and ensure the growth of this critical sector. The tourism ministry must stop becoming a profit center that squeezes investors for extra income and unattractive terms.

A final word:

Contrary to the criticism that the new government may have received from some corners, I believe that the mix struck the right tone. Almost all the Ministers have an excellent reputation when it comes to corruption and reputation. Most are technocrats and professionally sound. None seem to have extreme political orientations or leaning.

Having said this, we should not be fooled into thinking that this or any other government can turn Syria’s economic prospects around anytime soon. The challenges will be enormous. There is no magic formula. Years of economic mismanagement cannot be undone without pain or sacrifice. The recent population explosion is a tremendous burden. Moreover, the current political climate will make it very hard to relieve the pressures on the fiscal front when it comes to the expensive subsidies and the bleeding in the public sector. Finding the revenues to finance these prohibitive programs will be very hard. No one wants to pay taxes because the government does not provide enough services. The government cannot provide the services because it cannot (or is unwilling to) collect enough taxes from the wealthy. No one wants to lose the subsidies. No one has the stomach to privatize the vast inefficient public sector and save the treasury the yearly red ink. As revenues from natural resources dwindle, the country cannot keep paying out more than it takes forever. The time will soon come when the country either has to borrow or print money to pay its bills. The above vicious circle has to be broken. A new virtuous circle has to start taking hold. In the meantime, the new government must level with the Syrian people and explain the enormous challenges and policy dilemmas that it faces. Again, the following principals ought to be a good place to start:

  • Engage the public.
  • Explain the economic challenges.
  • Set realistic expectations.
  • Don’t over promise and under deliver.
  • Be decisive and make bold decisions.
  • Cut red tape and streamline the government bureaucracy (New Ministry?).
  • Cut interest rates sharply and slowly weaken the exchange rate of the Syrian Pound.
  • Cut taxes to 10% and make sure you collect taxes from the rich.
  • Institute a real estate tax on high end properties that will fund local infrastructure.
  • Tackle the public sector and start a national dialogue on the pros and cons of privatization.
  • Give the Prime Minister and his cabinet the room to make policy outside of the dictate of the regional command of the party.
  • Use already established best practices when formulating new laws by working with international organizations like the WTO and the IFC.
  • Make the rule of law priority number one. Increase the compensation of the judiciary by at least 300%.

About the author:

Syria Comment - Joshua Landis

Joshua Landis maintains Syria Comment and teaches modern Middle Eastern history and politics and writes on Syria and its surrounding countries. He writes “Syria Comment,” a daily newsletter on Syrian politics that attracts some 3,000 readers a day. It is widely read by officials in Washington, Europe and Syria. Dr. Landis regularly travels to Washington DC to consult with the State Department and other government agencies. He is a frequent analyst on TV and radio.

Visit Syria Comment - Joshua Landis's website

One thought on “Syria’s New Government – Analysis”

  1. This is what happens when demented people are not taken in to treatment…

    This is all a big joke! But its all kept a secret to continue to sustain the “market economy”.So these “gentlemen” better stop with lies to try to manipulate as all.The truth is that Syria leaders are demented people and need psychiatric and psychological treatments.Is unbelievable to see people trying to take advantage of other human beings in the 21st century society , as these creeps, making humans suffer and even be subjected to death for the benefit of the bastards.IF THEY WERE POOR THEY WOULD BE ALREADY LOCKED.. AS THEY ARE RICH THEY ARE “ECCENTRICS”…

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