Bashar, Bureaucracy & Ba’athism: Was economic reform in Syria possible?
The question of reform within the edifice of the Syrian economy is a paradoxical notion. The strong ties between the state apparatus and the survival of the regime are co-dependent on one another. This is the result of decades of institutionalized corruption and nepotism under the 30-year reign of Hafez al-Assad. The hope for his son, Basher al-Assad (current President) to undertake any significant economic and social reform after his succession to presidency in 2000 ushered in a glimmer of optimism for the country. Basher was widely hailed as a reformer who sought to end the country’s economic woes by instituting reforms which, however, did not necessarily abide by Ba’athist philosophy.
The well-oiled system of political and economic crony-based patronage fostered under Hafez-al Assad proved a challenging obstacle in the face of any tangible reform. Kleptocratic institutions which had manifested under decades of corruption greatly benefitted the Alawite community within the country, which was reluctant to have its position diminished and threatened by the Sunni majority. This put Bashar in a precarious position between his aspirations and his visions for neoliberal economic reforms and his regimes steady grip on power.
Prior to his succession, efforts were undertaken by his father to open up the country to the West since the beginning of the Perestroika. Thus, Law 10 of 1991 which constituted the cornerstone of all liberalization steps was passed by the Assembly before 2001, approving the investing money in the Syrian Arabic Republic. All these cumulative measures attracted a wave of investments in the first half of the 1990s, in particular in the fields of industry and transport. In addition to the waves of internal reform, Syria’s participation in the second Gulf War was rewarded by the US, Saudi Arabia and other Gulf monarchies with an inflow of financial support, easy loans and facilitated the entry of Syrian labour to the Gulf countries.
Following the demise of Hafez al-Assad, a smooth transfer of power took place in a referendum in July 2000, where Bashar was elected president for a 7-year term. Economic reform assumed a was at the forefront and a key characteristics during his first presidential term. Bashar’s first inauguration speech stressed the need for “a comprehensive development strategy providing a specific framework for steps and measures to be taken to achieve this strategy.” The speech seemed to promise change, change which thousands of Syrians were hopeful for after decades of an authoritarian-run statist economy.
Needless to say, economic liberalization during his first few years in the Presidency did not live up to expectations. Over a hundred pieces of economic reform legislation had been passed, however were almost never implemented properly, with many being still-born or suspended. The technical aspects of the process had failed to materialize into tangible reform and did not specify any economic orientation or the nature of economic system that would result in. It only mentioned enhancing private investment while maintaining but reforming minimally the public sector.
This is indicative of the political obstacle towards economic liberalisation, which free market reforms clash against the socialist goals of the ruling Ba’ath party, severely threatening the regimes social support bases in the rural communities. Reform is a controversial issue governed by two sets of contradictions, with the first lying in difficult choices coupled with the difficulty and fear of change and the second in contentious political tendencies, emanating from conflicting interests within certain groups. Economic reform in Syria has been trapped between pressures exerted by two major different forces: one pushing towards reform and the other raising obstacles in front of it.
It can be argued that a major contributing factor towards the failures of Bashar al-Assad’s neoliberal reform implementation can be attributed more towards the Ba’ath Party structure, rather than the ideology itself.
The mounting demand from Syrian citizens to reform the economy posed a significant threat towards Bashar al-Assad’s presidency. Institutional incompetence and an inefficient command economy were the remnants of decades of authoritarian rule. When Bashar ascended to the presidency, many hailed him as a reformer who would champion economic liberalization. This however, required structural changes from its socialist setting. The perfunctory liberalization schemes carried out by his father which included growing the size of the public sector and increasing the flow of foreign capital into the country fell short of its expectations. With a growing disenfranchised youth, neo-economic liberal reforms were necessary, however Bashar faced several internal and external roadblocks in his path, mainly as a result of the old admiration and the conflict between neoliberal ideals and those of the Ba’athist school of thought.
The state played a hegemonic role in mostly all of the economic facets dismantling the corporate structure that had existed before in the traditional commercial hubs of Damascus and Aleppo. Land redistribution and subsidies were also major policies of the Ba’ath which went against the traditional feudalistic social structure in the region. This coupled with the nepotistic nature of the dynastic regime, family ties among the Alawite communities were strengthen through the appointment of prominent members as well as high ranking military officials in positions of commercial advantage. One prominent example is that of Rami Makhlouf who is a member of the Assad family and a prominent member of his inner circle. He commands a monopoly of business in the country ranging from textiles to telecommunications and amassed significant wealth from this institutionalized nepotism.
In accordance to the Washington Consensus, the policies of noneconomic liberalization revolve around trade liberalization, liberalization of inward foreign direct investment, privatization, and deregulation. These policies would open up the country for international trade and investment, allowing the easier flow of goods and ideas into the country. There were certain reservations to these ideas as liberalization would inevitably require reform of the current economic system, threatening the foundation of the Assad regime.
In 2004, at the Tenth Party Congress, Bashar announced that the country would adopt a social market economy and shift away from the command system with the objective of introducing reforms with wide ranging political and ideological implications. Overtime, these gradual changes in market policies led to the deinstitutionalization of Ba’athism as an economic model, as well as a belief system supportive of its institutions.
In order to understand the role in which the remnants of the party structure along with its ideology play in the obstruction of reform, the fundamental theories of Ba’athism must be explored. During the latter years of the Ottoman Empire and subsequently the creation of todays nation states under the Sykes-Picot agreement, the region was hit with waves of Arab political nationalism, which challenged the nature of the imperially imposed borders under French and British Mandates. Needless to say, Arab nationalists expressed no nostalgia for the Ottoman Empire, but languished at their new Western colonizers. This phenomenon created an environment which fostered the growth and manifestation of many ideological facets of pan-Arab nationalism, such as Ba’athism. Ba’athism as an ideology arose from an intellectual movement, lead by Michel Aflaq which gained significant traction during the 1940’s and 50’s.
From independence in 1946, country has experienced an array of socio-economic experiments, combining elements of Nasserism and socialist economic thought. Michel Aflaq embraced an economic philosophy which was more concerned with social justice as opposed to social equity of factors of production, Solidarism. Solidarism was an idea which counters liberal economic models in which the state would play an active role in guiding personal interests along with the invisible hand of market forces, ultimately putting the welfare of the state over the individual dictated the Ba’athist economic theory. The nationalization of natural resources was aimed at preventing the future possibility of Arab citizens being exploited for foreign gain. The role of the state was to ensure that the large-scale endeavors and means of production would not fall into foreign ownership and prevent the free reign of capitalists to exploit workers. Unlike mainstream Marxism, the abolition of the class system was not the driving ideal behind the Ba’ath movement, however Michel was opposed to the adaptation of Marxism in its entirety but chose to combine only certain elements of socialism into the Ba’athist philosophy.
In essence a highly centralized and authoritarian system in nature, the Ba’ath represents one of many facets of Pan-Arab nationalism which encompasses socialist, anti-imperialistic values. Like other similar ideologies, economic principles that it entailed overlapped with those of socialism — the promotion of an egalitarian society with the removal of class division. Economic development was a motivating factor for much of the middle east, especially with post-mandate Syria.
Between 1963 and 1970, key political developments took place after the first Ba’ath coup. Socialist reform was initiated through the nationalization of major economic sectors such as the oil industry, agrarian reforms and redistribution initiatives were launched as well as the suppression of political freedoms crackdown of dissidents. This laid the ground for the consolidation of a single party state which would go on to span for decades to come. Initially, the Ba’ath capitalized on their large rural-based support, which played a pivotal role in their rise in popularity. By promising to raise agricultural productivity and increase social protection, the party had to gain its support in order to secure legitimacy.
A significant transition that occurred within Syria after the ascendance of the Ba’ath was the new rural-based elite which challenged and replaced the traditional business communities in the urban centers of Aleppo and Damascus. This usher in a period of upward mobility for minorities which saw the rise of the Druze and Alawite communities within the social classes, often at the expense of the country’s Sunni majority.
By breaking the power of the old elite, the initiatives introduced by the Ba’athist regime sought to replace with feudal and capitalist dynamic of the country with a socialist and egalitarian transformation. However, the planned course for social transformation was disrupted with Syria’s defeat in the Arab-Israeli War in 1967 with the loss of the Golan heights to Israel. This perpetuated the factionalism within the nationalists and the reformists, ultimately fostering the conditions for the 1970 coup. Dubbed the Corrective Movement, the coup essentially removed those aligned with the radical movement. By aligning himself with the moderate, less ideological faction, Hafez al-Assad essentially was able to consolidate power and implement new regional and economic shifts. This marked the beginning of Assad regime, which grips on to power till this day.
Certain political and individual freedoms had to be foregone in order for Hafez to remain in power, governing a stable Syria for 30-years before his demise in 2000. However, the country remained in a state of emergency for the duration of his reign, allowing him to extend autocratic control over facets of the country especially the economy. The patronage networks built between loyal members of the Alawite community and the key Sunni military family helped maintain his grip on power, and especially on the military.
As aforementioned, Ba’athist economic theory heavily relied on the idea of state welfare above the needs of the individual as well as the abolition of the old feudal class system which had been rooted by traditional business communities in the old cities of Aleppo and Damascus, propagated during the French Mandate in Syria. However, during the reign of Hafez al-Assad the country’s socio-economic landscape was riddled with endemic corruption and the manifestation of a new tightly knit political and business elite which were allowed monopolies over key sectors of the economy. This is a direct result of focuses solely on the states survival at the expense of the economy, along with geopolitical complications within the region namely the threat of Israel.
However, after years of economic stagnation restricted social mobility, the country experienced brief periods of economic liberalization under the behest of President Hafez al-Assad. The late 1980’s and 1990’s were the country’s first steps towards economic liberalization after the oil shock in 1986 revealed the lack of productivity in the state-controlled economy. Oil revenues were not substantial to support the massively employed public sector economy. Coupled with miscalculated decisions to halt the imports of foreign luxury goods as well as the restriction of foreign currency resulted in shortages of basic goods and agricultural goods as well as the drastic rise in black market activity. A starting point for Syria’s experiment with liberalization begins in 1986 where the 5-year plans were abandoned, and the country shifted from a labor to business-oriented economy. In 1991, the strategy of economic pluralism was introduced which complemented the public sector, with gradualism being the guiding principle behind economic reform.
These measures resulted in some success with the country experiencing peak economic growth with the country’s experiencing its highest GDP growth of 13.3% during the early 1990’s with the mining and manufacturing sectors accounting for a large share of total output. However, along with the economic growth, this newfound wealth bred unprecedented levels of corruption and misallocation of public good.
At the time of Bashar al-Assad’s ascendance to the presidency, he inherited a deeply problematic and mismanaged economy, including a low growth rate, increasing inflation, poverty and unemployment. His appointment as the President was filled with mixed sentiments, being seen as a symbol for new reform and modernization, as well as just a means of continuing the tested domestic and foreign policies of the past.
However, that was not entirely the case, in his first few years in office he replaced 60 per cent of the ministers in influential posts to those who would be more sympathetic to his reform ideas. His inaugural speeches were filled will embolden ideas of reform and a need to tackle corruption. The country also witnessed a proliferation of social organizations and discourse on issues of human rights and pluralism increasing the demand for openness within the administration. Over 600 political prisoners were released and the establishment of the country’s first independent newspaper. This was known as the Damascus Spring and ushered in optimism for the future. These reforms ultimately came to an end 6 months later, supposedly under duress from senior party leaders and internal conflicts. Soon he was dismissed as being a serious contender to bring about substantial reform.
Apart from a growing discontentment with his presidency Bashar al-Assad, the droughts of 2007 severely highlighted Bashar al-Assad’s neo-economic reform failures. The 3 dry years from 2007 to 2009 affected the livelihood and food supplies of nearly 1 million citizens in the north eastern region of the country. The countries emergency grain reserves could not cope with the demand and the country had to rely on international aid, with thousands migrating to urban centers such as Homs and Damascus in search of food and employment. The drought coincided at a time when the government had started to cut back on its farming subsidy programs during the midst of its agrarian transformation initiative. The government introduced diesel and cash subsidies to help mitigate the impact but even this was not sufficient. The issue lay in the structural shortfalls within the government; unemployment within agricultural sector had dropped during the decade whereby Syria had lost almost 40 per cent of its agricultural workforce, dropping from 1.4 million to 800,000 workers between 2002 and 2008. Furthermore, the implementation of new laws such as Law 56 allowed landowners to have full discrepancy over workers’ rights and employment, highly capitalistic and antisocialist in nature as well as the abolition of all state-owned farms in 2001 proved to be major political miscalculations. The decrees which banned the sale of produce to turkey negatively impacted the rural Kurdish population in the northern regions, this was part of the governments Arabization of the agricultural sector. This severely impacted the rural population of Syria, impacting the proletariat which had been the foundation of the Ba’ath party.
Reform in Syria also faces resistance from elements of the military establishment. Since the 1930’s the Alawite communities gained influence within the military, becoming a dominant player in the establishment. After the coup in 1970 where Hafez al-Assad gained power, it proved a pivotal point for members of minority communities which rose up in the ranks of the military and command high mistrial positions today. The Military establishment was a means of legitimizing power and securing stability, thus proving to be a key player in Syrian politics. The military-mercantile complex stands to lose the most if substantial economic reforms come into fruition. The government’s reluctance to completely eliminate foreign currency exchange is largely due to the fact that political and military elites have been profiting off the country’s skewed exchange rate since the ban of foreign currency decades ago and the overvaluation of the Syrian Pound. This highlights the irrevocable evidence of the corrupt and nepotistic relationship between the state and its elites.
Substantial neo-economic liberalization of the Syrian economy threatens to fracture the elite cohesion within the regime and party structure. Seeing as there is a slow shift away from orthodox socialist economic politics and a clearly evident social class structure predicated upon sectarian lines it can be argued that the current regime of Basher al-Assad only operates under the guise of Ba’athism and not its philosophy nor principles incorporated into it. Therefore, it can be concluded that Bashar al-Assad’s failure to implement successful neo-economic policy reforms can be attributed towards the current Ba’athist party structure in its amoral nature and not the fault of Ba’athism as an ideological philosophy.
