It looks like the EU is moving on this plan by starting the cooperation agreement between the EU and Syria,
I just hope that the reform will take the shape of the American system of government and law not the European or the Iraqi and the Israeli one,

The American system is the best for Syria as starts with local elections .

EU, Syria to initial Association Agreement next month

BRUSSELS, Nov. 25 (Xinhua) — The European Commission and Syria announced here Tuesday that they are set to initial the Association Agreement in Damascus on Dec. 14 after they agreed on all issues regarding the update of the draft document, which was reached in 2004.

“Following thorough and constructive discussions, on November 25, the Syrian delegation and the Commission services agreed on all issues regarding the update of the Agreement, taking into consideration developments since its initialing in October 2004,” said a joint statement issued by the European Commission and the Syrian delegation led by Deputy Prime Minister for Economic Affairs Abdullah Al Dardari.

Both sides agreed to initial the updated agreement on Dec. 14 in the Syrian capital, and will submit it to their respective authorities for consideration and subsequent signature.

Both sides lauded the achievement, which “is based on the common will and mutual interests of both sides,” as “an important milestone” in EU-Syrian bilateral relations.

The European Commission — the executive arm of the European Union — and Syria concluded a far reaching draft Association Agreement in 2004. However, the EU Council could not reach a consensus on its signature. In order to re-launch the procedure for its signature, the agreement needs to be updated to take into account the latest EU enlargement and other developments in the EU and in Syria, such as the reform of the Syrian Customs Tariff. Association Agreements are in force with all the Euro-Mediterranean partners, expect with Syria and Libya.

The EU provides financial assistance to Syria to support its economic, social and political reform, with the EU budget allocated to this end for the period 2007 to 2010 amounting to 130million euros (some 102 million U.S. dollars). In addition, the European Commission has provided an amount of 24 million euros (19million dollars) to implement projects aiming at addressing the needs of the large population of Iraqi refugees in Syria.

First question is who is going to solve the US economic problem.

Seriously. If people our so smart they can solve other countries economic problems, why aren’t they looking inwards?

And since they can’t seem to fix our economic problems, why do we want them mucking around other nations economies while at the same time mucking with their social structures?

The real third way is realizing no one has a clue how to make an economy function when a society has limited resources or colonial control of other people’s resources. And the sooner this is realized, whether it is Appalachia in America or large swathes of Africa, the better. Syria will never be New York. Nor should it be.

I cannot agree more with Mick. His argument is the most obvious and most immediate that should first strike your mind. However, Mick is probably ignoring the fact or unaware that this blog is meant to be for academic purpose only. It just so happens that the author is an academic expert on Syria. Nevertheless, looking inward has its merits, especially at this point in time.

Should we take it that that Seth Kaplan has already sounded the Obama team and the Syrians on this matter before publishing his wish-list? I liked the “devided state” bit very much..

And I loved the advice on how Syria can overcome its Worsening Economic Situation..I thought addressing the problems of Ford, GM, Citi, and the rest of the “big tens” has a higher priority and merits more attention than fixing tiny Syria’s “worsening” economic problems!!

But a most enjoyable read anyway..

Dear Seth,

If I understand you correctly, you recommend that the West offer Syria money and trade if the leadership accepts “gradual” regime change through the establishment of a Syria National Security Council on which would be seated a number of non-loyalists.

The question this raises for me is why would your recommendation be more attractive to Syria’s leadership and the many Syrians that the state protects and sustains than George Bush’s speedier regime change? Will the addition of, let’s say, 10 years mitigate the hard landing you describe at the beginning of your essay?

A further quibble, I quarreled with an Economist Intelligence Unit report that argued that Bashar al-Assad had narrowed the social base of the regime in a post entitled: Has Assad’s Social Base Narrowed or Expanded?
https://joshualandis.com/blog/?p=1131

You write: “the West might well find potential allies among those who were previously powerful figures within the regime but whose personal authority has diminished in recent years as Bashar has narrowed his father’s power base, alienating many of the non- Alawite elite.”

I am not sure that this is true today, if indeed it was several years ago.

Your premise that Syria may require an authoritarian regime in order to ensure stability and prevent civil strife or chaos, I cannot dispute.

The question is how do Syrians know when social “fragmentation” no longer stands in the way of non-violent democratic change?

Perhaps there is no easy solution to Syria’s “democracy deficit?” You already point out how little we understand about the region in our gross and seemingly criminal miscalculations in Iraq.

Why not simply push a “China model?” In other words, recommend that the West support Syrian economic and educational modernization and advancement without demanding regime change in the hope that development and globalization will be a more general tonic?

Perhaps this and crossed fingers is the best one can do?

Thanks for your stimulating article, Joshua

In reference to your “quarrel” with the EIU, we still maintain that the Assad regime is narrowly based, but our core political outlook section no longer offers a view as to whether his base has narrowed or expanded. It is an interesting argument, but not one that we feel necessary to pursue in that section of our regular reports at this time, although we may come back to it if we judge that it materially affects Syria’s medium-term political prospects. The basic purpose of our outlook section is to provide a broad assessment of the political and economic outlook over the coming two years.

As for the arguments presented by Seth Kaplan, I am not sure how effective US and European trade and financial incentives would be. The lifting of US sanctions would provide some, albeit limited, benefits, but the EU is already providing substantial technical and financial assistance, and the problem remains the capacity of the Syrian government system to respond. High oil prices, Gulf investment and robust non-oil exports — in particular to the detested Saudi Arabia (see Champress recent offerings) — have kept the economy on an even keel for the past few years, but things look much tougher in 2009-10 (Syria of course is by no means alone in this). The delays in introducing value-added tax and in developing new government debt instruments will limit the government’s options as it confronts a big increase in its fiscal deficit next year as a result of dwindling oil revenue. It has tended to respond by underspending its development budget, but such cuts this year are likely to be severe. Turning the two mobile phone contracts into licences and selling off a third licence will bring in some revenue, but the valuations are now likely to be well down on what they were.

As EIU has indirectly pointed out, Seth Kaplan does not pay enough attention to the economic element of reforms and the interplay between economics and politics. In Syria, politics are dirigiste because economics are dirigist and vice versa. Any serious economic reform would mean serious losses of revenue for important political figures. These people oppose reform because reform would directly threaten their wealth and this is one of the key challenges Syria faces. To assume that many of these figures are interested in any grand political strategy beyond their personal future is idealistic – and it will be very hard to convince them that absence of reform threatens their survival before the regime actually starts losing its grip.

The US and EU should try to gain Bashar’s trust (by using a talented intermediary from a more or less neutral country) and work out a strategy together with him about what to do with powerful figures who oppose (economic and judicial) reform. It could be a mix of paying them off and offering them a gilded exile abroad. This plus financial aid to soften the effects of gradual liberalisation on the working and middle class….but then all this depends on Bashar and his advisors actually having political talent PLUS them being able to attract well-educated Syrians from abroad to staff key economic and legal posts…sigh, seems all quite hopeless.

Josh – you can’t compare China and Syria. Without Western meddling, China, through very talented and well educated technocrats, implemented its own reforms that led to enduring very high growth rates. Syria has none of this.

Best

Here’s an excellent piece by Aaron David Miller in the Washington Post.

Start With Syria
A Middle East Deal Obama Could Build On

By Aaron David Miller
Wednesday, November 26, 2008; Page A13

President-elect Barack Obama will be bombarded with recommendations about how to approach Arab-Israeli peacemaking. One piece of advice he should not take is to make Israeli-Palestinian peace his top priority. There’s no deal there. But there is a real opportunity for an Israeli-Syrian agreement, and Obama should go for it.

There are, of course, strong arguments for making Israeli-Palestinian peacemaking a priority. The Palestinians deserve a state of their own, and an Israeli-Palestinian agreement is not just key to a comprehensive Arab-Israeli peace but to Israel’s long-term survival as a Jewish democratic state.

A new president eager to repair America’s image abroad may be tempted to try for an agreement, but he should avoid the sirens’ call. No conflict-ending agreement is possible now, nor is one likely to be anytime soon, and the stakes are too high for America to harbor illusions that would almost certainly lead to yet another failure. The gaps separating the two sides on the core issues (Jerusalem, borders, refugees and security) remain too wide, the current leaders are too weak to bridge them, and the environment on the ground is too complicated to allow for sustainable negotiations.
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In Palestine, dysfunction and confusion reign. The Palestinian national movement is riven with geographic and political divisions between Hamas (itself divided) and Fatah (even more divided). There is little chance of creating a united Palestinian house that can take control of the guns and offer up a viable and unified negotiating position that any Israeli government could accept. Weak leadership and unstable coalition politics prevail in Israel, too. And Israeli settlement activity, which continues unabated, rounds out a nightmarish picture that ought to scare away any smart mediator.

It would be folly to go for broke, given these conditions. The notion that trying and failing is better than not trying at all might be an appropriate rallying cry for a college football coach; it isn’t a suitable foreign policy principle for the world’s greatest power. The well-intentioned old college try, which was President Bill Clinton’s mantra at Camp David in July 2000, reinforced by his advisers, myself included, proved costly. And we had much better conditions in 2000 (if still not the right ones) than the new administration faces.

The more compelling argument is for a major push on another negotiation: between Israel and Syria. Here, there are two states at the table, rather than one state and a dysfunctional national movement. A quiet border, courtesy of Henry Kissinger’s 1974 disengagement diplomacy, prevails. And there are fewer settlers on the Golan Heights and no megaton issues such as the status of Jerusalem to blow up the talks. Indeed, the issues are straightforward — withdrawal, peace, security and water — and the gaps are clear and ready to be bridged.

For a president looking for a way to buck up America’s credibility, an Israeli-Syrian agreement offers a potential bonus. Such a deal would begin to realign the region’s architecture in a way that serves broader U.S. interests. The White House would have to be patient. Syria won’t walk away from a 30-year relationship with Iran; weaning the Syrians from Iran would have to occur gradually, requiring a major international effort to marshal economic and political support for Damascus. Still, an Israeli-Syrian peace treaty would confront Hamas, Hezbollah and Iran with tough choices and reduced options.

None of this will be easy. An Obama administration, and particularly the new president, would need to be in the middle of things. It would be excruciatingly hard, time-consuming and expensive to satisfy Israel and Syria’s economic and security needs, and a final agreement would most likely involve U.S. peacekeepers. More important, the United States would need to push the two sides further than they are now willing to go, on the extent of withdrawal from the Golan Heights in Israel’s case, on normalization and security in Syria’s. But with Israeli and Syrian leaders who are serious, and with a new administration ready to be tough, smart and fair in its diplomacy, a deal can be done.

So, Mr. President-elect, go ahead and try to buck up the Israeli-Palestinian cease-fire, train Palestinian security forces, pour economic aid into Gaza and the West Bank, and quietly nurture Israeli-Palestinian negotiations. But don’t go for the endgame — you won’t get there. Instead, invest in an Israeli-Syrian peace, and, afterward, you might find, with a historic success under your belt and America again admired for its competence, you will be better positioned to achieve the success you want in Israeli-Palestinian negotiations, as well.

Aaron David Miller, a public policy fellow at the Woodrow Wilson International Center for Scholars, has worked as a Middle East adviser for Democratic and Republican secretaries of state. His most recent book is “The Much Too Promised Land.” The Agenda is an occasional series on policy issues facing the Obama administration.

Seth, Josh,

What I am missing here and which may have been addressed elsewhere in the book is an articulation of the motivation of the U.S. for such an enterprise.

The US is an Empire with greater than 600 military bases around the world. It has taken an interventionist rather than a supportive approach in its foreign policy deals.

Oil, competition with Russia over zones of influence, the revived interest in NATO… How does all this fit into what is looking to us bystanders as a necessary salvage operation for the ME ?

QN,

Excellent article. Miller says it all. He also speaks the language, I believe, that Israelis can hear. If he tried uttering the words “help bring in Iran…” (i.e. opposite of isolate her), few here in Israel, and indeed perhaps few in the U.S., could listen. There only so much the emotional-rational balance can shift in one direction or the other. But we’ll settle for this – it’s a good case. If the Obama administration is willing to get its hands dirty, and dive right in, that will have a significant effect here in Israel. Bush managed to brainwash not only Sharon and Olmert, but also the Israeli people. Now it’s time to undo the damage.

I hope Bibi reads Aaron Miller… 🙂

This entire discussion is beyond absurd. Some combination of residual notions of white man’s burden and complete blind academic arrogance. The ‘fragile states’ should join the ‘West’s’ lemming march to the sea?

What possible basis is there to argue that any form of modernity – leading now and inexorably to global economic collapse, soon to be followed by climate collapse and environmental devastation – the destruction of the planet as we have known it – is a model?

The Pashtun tribes will survive the next fifty years much better than anyone reading this blog.

This entire discussion is beyond absurd. Some combination of residual notions of white man’s burden and complete blind academic arrogance. The ‘fragile states’ should join the ‘West’s’ lemming march to the sea?

What possible basis is there to argue that any form of modernity – leading now and inexorably to global economic collapse, soon to be followed by climate collapse and the destruction of the planet as we have known it – is a model?

The Pashtun tribes will survive the next fifty years much better than anyone reading this blog.

Bush managed to brainwash not only Sharon and Olmert, but also the Israeli people. Now it’s time to undo the damage.

Shai,

Your comments are “Deja Vu”….oh well, here goes:

How did Bush “brainwash not only Sharon and Olmert, but also the Israeli people”?

It seems to me you’re giving Bush more power than many would ever give him credit for.

Lastly, Shai, how did all these people get brainwashed but you managed to escape such a terrible fate? Do you have a different genetic make-up?;)

My 2 cents: Israel needs to make peace with Syria, not Aaron Miller (whoever he is).

AIG –

Stop laughing.

Dear EIU,

You are perhaps right not to try to figure out how broad or narrow the President’s base is. Perhaps this question reveals the bias of those who engage in elections periodically, where maintaining a base of 51%, or at least a popularity base bigger than the opposition, is all important. Maybe this is the wrong question to ask about governments that are not elected? One is better served to look at other factors in order to judge how stable and enduring the regime may be?

Some of those criteria are:

Are there visible splits among the elites that could cause civil war, coups, or major disaffections. We saw this in Syria with “the old guard” around Khaddam. There were constant charges of corruption being leveled at them as they were slowly pushed aside. Some allowed themselves to be pushed aside without a struggle, others left the country – Shihabi, others committed suicide, Kanaan, and some went over to the opposition, Khaddam. Clearing aside the older generation was the biggest challenge the Bashar presidency faced.

Are there credible opposition leaders, who have popularity among important sections of the population?

Is there an underground and armed opposition or insurgency?

The response that most Syrians give when one asks questions about regime stability is: “What are the alternatives?”

So long as Syrians do not see alternatives, we must conclude that the regime is stable and has a broad base – even if that base is apathetic and de-politicized as is the case in Syria.

Coming economic contraction in Syria as oil runs out may cause pain and difficulty but there is no reason to believe that it will destabilize the regime, which has survived a number of very difficult economic contractions, periods of severe drought, the loss of protector states, and concerted efforts by the international community to starve and delegitimize it.

One of the main indicators of revolution – at least one of the very few that social scientists seem to agree on – is “rising expectations.” One can accuse Syrians of believing in many false gods but inflated expectations about their economic future may not be one of them.

The Syrian regime has demonstrated little ideological rigidity in its ability to maneuver and adapt to its changing environment. My hunch is that coming economic difficulties will force Syria’s leaders to reform more rapidly than they would otherwise. It is hard to think of other Arab states that have changed and adapted to new realities more than Syria has over the last decade.

One can point to Iraq and the UAE, but they have mitigating circumstances or are the exceptions that prove the rule.

In short, most of the Western reform plans for Syria assume that Syria’s leadership is worried about its ability to survive giving the West leverage to demand serious change.

I argue that this Western believe that it has much leverage is misguided and based on false notions of “narrow” social bases and the like.

Ya Akbar,

I knew you’d react to something said about Bush, your Texas frat-boy superhero. Yes, why not give him some credit. Poor soul’s about to leave the White House, go back to the big ranch, with only fond memories to hold on to. Aside from bringing democracy to Iraq and Afghanistan, and in general making the world a far safer place than it was 8 years ago, I believe he also managed to brainwash (in a good sense, of course) Israeli leaders who began to also believe in the “Axis-of-Evil”, and then the majority of the Israeli people (not all, besides me, maybe another 1 or 2 didn’t.)

Don’t take it so personally when we mention Bush. I also bash Israeli leaders apart (Barak, Livni, Mofaz, etc.) It doesn’t say there’s nothing good about them. Don’t be so sensitive. Because your wife tells you you have bad breath in the morning, doesn’t mean she no longer loves you, right? 🙂

You know, the greatest thing about you avid conservatives, is that you never leave yourself room for error. You never say “maybe I’m wrong”, you never say “I’m not sure”. Instead, everything is definite. You KNOW the truth, and now it’s only a matter of spreading it to other naive souls like the liberals tend to be. Well, even Bibi didn’t go that far, and in his own website’s “Order of the Day” section, he wrote that Likud is ready for compromises “of the type Menachem Begin made…” What do you think he’s talking about? Gosh, I can’t possibly imagine…

But not to worry, AIG knows the truth. And he knows what Bibi WILL do, as opposed to what he says, or writes. Do you think your buddy AIG will be laughing also when Bibi returns the Golan? Will he come on SC, and say he was wrong? Of course not. He’s waiting for democracy in Syria first. And what are you, AP, waiting for? For the Axis-of-Evil to be destroyed? By Jedi knights, or by Jewish knights? 🙂

It is true that dictators can run their country to the ground and still remain in power, take Zimbabwe as an example. This could very well be the Syrian scenario. It is easy to say there is no alternative to the current regime, but demographics do not lie. The Syrian population is growing faster than Syria can create jobs or keep the standard of living from falling. In order to stop this process, serious population control is required as well as major reforms. Non of this is happening. Slowly but surely, this will lead to the Zimbabwe scenario. It may take 5, 10 or 15 years but the writing is on the wall.

Let’s not forget, at the BASIS of the Chinese model is the one child policy. It was CRITICAL for the economic advancement of China. Syria cannot adopt the chinese model because it is not willing to control population growth. (Why by the way?)

The Asads are excellent at staying in power and controlling their population. They are not good at creating economic growth. I think they do not understand the implications of an exponentially growing population and the consequences of that for the economy. Another point the Asad regime does not grasp is that ALL poor countries advanced by exporting to rich countries, mostly the West. So far, syria has exported oil, but that is about to end. That means that there is just zero chance for Asad to improve the economy without good ties with the West. That means no “resistance”. And that is why the Syrian regime is probably doomed either way. It cannot have both suficient economic growth and “resistance” at the same time.

Shai,

Your friends here on SC are telling you that Syria will only sign a comprehensive peace if at all. That makes a lot of sense because otherwise Asad will be viewed as selling out. You correctly say that there cannot be peace with the Palestinians in the near future. So we have here a deadlock. So, what exactly are you basing you optimism on? Furthermore, the consensus in the US and Israel is that Syria must flip. Again, not likely to happen.

Basically, your scenario is this. Syria sells out the Palestinians and agrees to a separate peace with Israel. Bibi, against all he has said, agrees to return the Golan. Also, the Israeli people will vote for it in the compulsory referundum. All this while the world is busy with its worst economic downturn in 50 years. Yes, you are a realist. The chances for peace with Syria in the next 4 years, are very, very, small. That is what I know and what AP knows. I also know that you are building false expectations that will just make things worse.

The results are not all in yet, but it looks like March 8 is doing much better than it did last year in the student elections around town tonight. For those who do not know, university elections in Lebanon are typically seen to be a fairly good reflection of popular sentiment. While they are not allowed to use the same names as the political parties/alliances, they are virtually the same thing. Last year, March 14 cleaned up at AUB. This year, the opposition looks very strong indeed. If they do not win, they will be as close to a tie as possible.

Two interesting caveats: (1) The numbers of “independents” winning positions in the various faculties is extremely high, sometimes higher than the aligned parties. (2) While the M8 has done well at AUB, rumor has it that they did not do as well in the universities with majority Christian populations, which is really the main issue for the Aounists… they need to have a strong showing in the Christian districts in the 2009 elections, if the opposition is going to become the majority.

More updates soon. Ain’t democracy grand?

Shai,

Yes, I like Bush. And no, I don’t think he’s the smartest president we’ve ever had. Certainly not smart enough to brainwash “the Israel people”. Just smart enough to know how to deal with the intolerant forces of the jihadist movements around the world.

As you can see Shai, I didn’t expect you to answer my rhetorical questions. I just find your role here amusing: self-anointed liberal and enlightened Jew and Israeli here to help explain the “brainwashed” Zionists to a group of Ba’athist excuse makers.

Shai, can I give you a nickname? How about “Josephus Mispar Shtayim”?;)

http://en.wikipedia.org/wiki/Josephus

Anyway, now that the President-Elect has his plate full, I am beginning to get on the “Hope” and “Change” bandwagon now that Obama has thrown the hard-Left wackos firmly under the bus and he becomes the first Black, Republican president…

These results from LAU (Lebanese American University) show a big win by M14. Hard to know what’s what…

????? ???????? ????????? ????????? ?????: 4 ???????? – 4 ??? ????? ??????? – 2 ???? ??????? – 1 ???? ???? ?? – 1 ??? ????????

????? ???????? ????????? ????????? ????: 8 ????? ???? ???????? ? 4 ????? ?????? ?????? ???? ? ??????

Beirut campus: 10-2 (for M14)
Jbeil campus: 8-4 (for M14)

Thank you everyone for your comments. They are all welcome.

Here are some preliminary thoughts. I will add more in the coming hours and tomorrow. Please feel free to debate any point here or in the essay itself.

Many of my proposals are based on a fear of what dramatic change might bring to Syria. Introducing an institutional structure that ensures some kind of unity across major ethnic/religious groups (the SNSC); introducing accountability first to companies, bureaucrats, and judges, and only slowly to the political elite; offering cash in return for a set of incremental changes; all of these are meant to change Syria in a gradual fashion, in the hope that the achievements of the Assad regime (stability, unity, and interdependence of various peoples, etc.) may be preserved going forward.

I fear rapid regime change will lead to the kind of instability that would not benefit most Syrians (see Iraq since 2003). Ten or twenty years of effective incremental change could bring about significant reform of the state administration, the system of local governance, the economy, businesses, and more—even if it did not lead to a turnover of the elite. I seek first and foremost for a way forward that would benefit the great mass of people while promoting development and healthy state building, even if it requires some compromise in the methodology from that typically advocated by the West. It is not a perfect or even a satisfactory solution, but it may be the most practical one.

Syria’s leadership should be interested because it offers a way forward, out of the financial and political malaise of today, while also preserving many of the perks of rule, at least in the short to medium term. There would be a need for being more inclusive and for reducing their role in the economy.

There is no easy answer to when a regime has established strong enough governing institutions such that these can allow completely competitive politics. But a further strengthening of the Syrian identity and significant reform of the government apparatus over time should allow more and more openness politically. Turkey, which is much more homogenous than Syria, has obviously reached a point when its NSC is mostly redundant. This was not the case even a generation ago.

To some extent, this is the Chinese model, except that Syria needs (as China increasingly needs) better government in order for economic change to genuinely help the country and its people. (Even China—where I lived for seven years—is having problems competently regulating things such as food, product quality, and the environment—all of which will be important for its continued progress). Although it is hard to compare, I guess Syria’s government has much greater problems than China’s in some important areas. Syria also needs to deal with its multiple political identities and social fragmentation—problems that China does not really have (I am ignoring its minorities because they are so few in number). Therefore, Syria needs a broader agenda if it is truly to make progress. The West should have its own reasons for demanding more from Syria than from China, but Syria itself must think on broader terms.

Akbar,

Ok, let’s try to be a little serious. How do you see Aaron Miller’s ideas for Obama vis-a-vis Syria? And for Israel, would you suggest for Bibi to go down the Syrian path (continue from where Olmert left off), or down the hopeless Palestinian one, or neither one?

If anybody is interested in showing their support of a group of Israeli recruits who are refusing to serve the occupation, please sign the petition here:

http://december18th.org/

Thank you.

Rumyal,

Thank you for bringing this to our attention. I was of course aware of young men and women who refuse to serve in the army (while it is occupying the territories), but I hadn’t seen a website and a call to free them from prison.

It’s a tough issue for Israel, for Israelis, and for the leadership. How do you handle it correctly? Do you allow anyone that doesn’t want to serve in the army simply not to, in our system of mandatory service? Do you imprison them, hoping to deter others? Neither one work, if you ask me. I guess I would recommend sending kids who are conscientious objectors to do a national-service program, much like some of the religious do, whereby they don’t serve as soldiers, but do serve their community.

The one main “good thing” that is happening with movements like these, is that it brings up the issue, and forces us to consider our own beliefs. After all, it is these young men and women who tomorrow will be in charge of our country. If they’re old enough to bear arms, they’re old enough for us to consider what they have to say.

In response to some of the later posts…

I agree that 1) Syria is hurting financially and things may get worse in the years ahead; and 2) the elite need the right incentive to introduce change.

I have attempted to craft a model that would hopefully offer enough economic and political incentive for change. It is less than perfect, but possibly the best model possible.

Slow political change, cash, some economic return from greater growth, and maybe greater opportunities from increased engagement may be just enough to convince some or many elements within the regime that change is a better risk to take than the fragile status quo.

Therefore, while I agree with Milli Schmidt that those most benefiting from the current situation will be the most reluctant to change, it is not impossible to imagine some combination of factors that shift some of the players. The financial crisis actually offers an opportunity for the right package if it is presented—and implemented—properly. The right package should reduce the risk for some of these players in return for their agreement to draw back from some of their positions within the economy.

The EIU is right on with the problems of governance in Syria. This holds back all attempts at reform, and prevents investment and growth from genuinely benefiting more than a small minority of people within the country.

Dear EIU, JOSH, MILLI SCHMIDT and Seth Kaplan:

As a person who has been critical of Syria’s economic policy on this forum for sometime, allow me to join your interesting debate:

The EIU observation that the regime has a narrow support base is neither supported by the facts nor is it particularly relevant. One cannot but detect an element of sectarian hint in such a statement. Had Mr. Assad been a Sunni, would we be discussing this issue is the question that begs to be answered. The Syrian leadership has, if anything, consolidated power over the recent past. Its grip on power is as firm as it has ever been.

One of the Syrian leadership’s main priorities is to be a major regional player. The history of the 1950’s when Cairo and Baghdad played the region’s leading roles, fighting over preeminence in the Middle East while Damascus was a pawn is something that the current country’s leadership will not allow to be repeated. This is precisely what Riyadh wants to achieve. With Saddam gone and the White House keen on taking on the region’s Baathists, the opportunity was opened in front of Saudi Arabia to come the region’s leading power broker. The Bush White House has looked to Riyadh as its main ally in the region; the Saudi King saw no opposition as he pushed to consolidate his power base over Lebanon and the region at large. In one of the most remarkable comebacks in the region’s modern history, the young Syrian leader refused to yield to the immense pressure that he was subjected to and by all accounts seems to have halted the Saudi plan to dominate the region. While on this subject, it is interesting to refer to Bob Woodward’s latest account of the Bush White House as he describes its commitment to Riyadh. According to the book, when the Iraq Study Group urged the Bush Administration to engage the Syrians, Secretary Rice resisted such advice on the basis that it would harm her country’s relationship with Saudi Arabia. Riyadh was urging Washington not to talk to the Syrians. The White House obliged. It didn’t want to upset its “major ally”.

Moving back to Economics, Syria’s main challenge is the size of its public sector. Red ink, an extensive subsidies program, and a weak tax base are a combination that has put constant pressure on the Government’s fiscal situation.

It is too simplistic to argue that economic reforms have been slow to materialize because important political figures stand in the way for fear of losing out. The reasons are more complicated and nuanced than what MILLI SCHMIDT or Seth Kaplan believes.

Syria’s constitution still states that Socialism is the basis of its economic policy. While the Baath party has embraced social market economic principals, socialism is still in the constitution and 5-year planning still organizes the way Syria’s bureaucrats approach the country’s economy.

The Syrian leadership is finding it hard to move away from socialism to reform the economy on a faster schedule. Economic reforms and the death of socialism means that the subsidies program will need to slowly disappear while the public sector is sold. While this makes perfect sense from an economic and fiscal point of view, domestic considerations and the need for political stability predominate. They invariably slow down the reform process.

Having said this, a Group of industrialists were recently visiting the city of Aleppo looking for a business opportunity in light manufacturing. Although they were braced for the worst, they turned out to be pleasantly surprised to find out that it takes as little as one week to gain access to a site in the city’s new industrial zone. The land came with all the necessary electric needs at fairly reasonable rates. Finding sufficient electric power at such plants was always a challenge in the past. Thanks to a Japanese supplier, the city’s industrial zone was able to secure sufficient supply of generators for this relatively large facility.

On other quality of life matters, both Damascus and Aleppo have recently seen the introduction of parking meters on its clogged streets. By all accounts the initiative has been widely successful in reducing traffic in the country’s main two largest two cities. Privately-operated new bus service has also been approved. Prepaid cards for the service have also followed. Road maintenance and basic infrastructure is always underway.

This is not say that Syria is an oasis of prosperity. Instead it is to highlight how Syria and other countries in the region always find a way to improvise and survive attempts to pressure their economies through the use of economic sanctions. While there is no doubt that economic sanctions do hurt, it is not credible to suggest that the policy of imposing sanctions will somehow break the leadership down and force it to make it political concessions of any type.

Syria’s economic challenges can be addressed largely through domestic initiatives. One of the most critical decisions in that respect will be the speed with which the country can dispose of its vast public sector. This will reduce the pressures on the fiscal front and allow the private sector to thrive after decades of public sector domination of the economy.

Shai,

Exactly… They bring the issue of the occupation to the forefront, so that these issues are not ignored. In a way, it helps their cause that the government is not soft-balling with them, otherwise few would have paid much attention to the issues they are raising. Similarly, when people sign the petition in support of the refuseniks it doesn’t necessary mean that they know exactly what the defense minister should do about it, but rather that they identify with the issues raised and would like to see the status quo changed.

An 18 year old girl has the power to rattle the system, simply by disobeying. This may be the only chance she’ll have in her life to have such a level of impact…

I heartily and unequivocally endorse “MICK” succinct commentary above and add the following link to world renowned Dr. William Buiter’s take on the complete collapse of the “western” economic system..

Regards and best wishes to the Landis family as well as others on Thanksgiving Day.

http://blogs.ft.com/maverecon/2008/11/tits-on-a-bull/

I want to ask the people on this forum weather the Syrian government does not improve the economy because they do not want to or because they do not know how and they need help more than punishment , and weather they fear politecal reform because they are afraid of losing power or could be fear of forign interference in Syria’s stand on the Mideast conflict , I believe it is the later.