I have just returned from a three-week vacation to Syria. I must admit that I have struggled to think of something incisive to write about. What possible insight can I offer readers of this forum I thought? Given my personal interest in economic matters, it made sense for me to concentrate on this topic first. I will conclude my note with the inevitable discussion of non-economic issues as well. I warn the scores of regime supporters here: The truth is sometimes painful to hear.

One tends to often read statements like “Syrians” are behind Bashar and are keen to maintain the status quo. Others may offer a different picture by proclaiming that “Syrians” are very unhappy with the regime but are afraid to say so in public.

But which “Syrians” are we referring to here?

In the personal opinion of this writer, Syria is made up of two separate countries: Syria 1 which contains close to one million people and Syria 2 which contains the remaining 19 million.

Syria 1 is made up of the affluent, highly connected industrialists, merchants and very high Government officials. Given the high standard of living of this group, one would expect them to support the regime and the current status quo. While most may admit that that progress has been slow, they are quick to point that given the circumstances, the country is on the right track. They highlight their latest cell phones, home and office Internet connections as well as their brand new cars as irrefutable signs of the economic and social advances that the country has been experiencing as of late. My suspicion is that most readers of this forum fall in this group. My Syrian friends and I certainly do too. Seen from their prism, the Syrian economy seems prosperous judging by the superb outdoor dinners, number of servants, lovely homes, fancy cars, latest cell phones, rising land values, and monopolistic businesses.

Life could not be more different for the 19 million people of Syria 2. As I opined in the past, Syria’s Baath has caused enormous economic damage to this country. It is clear that this silent majority has suffered the brunt of this grave economic mismanagement. This is evident in this group’s salary levels. If they were lucky enough to have jobs, salaries of this group is likely to be around Syp 10,000 ($200) per month. Their average family size is 6-7 (four to five children). They all seem to feel that what they really needed was an extra $100 per month before things would be “fine”. Almost a year ago, the Government has stopped offering new jobs in its vast public sector. You now need a huge connection to land such a job. What was truly amazing to me was how valuable people considered a job with the Government. A stable income of $200 was the envy of those aspiring to find such positions. Taxi drivers were an interesting case to study. 90% of them do not own their vehicles but are hired to drive it for close to 8 hours a day. Asked how much they expected to make on a daily basis, the level of Syp 300 ($6.0) was often cited. When asked how many children they had to support with this salary, an average of five children always seemed to be the answer. This does not mean that members of Syria 2 do not move up the income ladder. Highly technical machine technicians cited to me figures approaching Syp 20,000 ($400). Private Bank employees (newly commissioned ones) expected closer to $500 a month. Our highly connected and very entrepreneurial area “Mukhtar” is able to draw in close to Syp 40,000 (he sells gas cylinders on the side). Though not statistically accurate, it is my observation that close to 19 million lives in this $200 to $400 per month world.

What can $200-$400 buy this group is the obvious next question. It is perhaps best to answer this by offering these anecdotes:

A close friend of mine has recently started a small chain of coffee shops (call it a Syrian Starbucks). I frequently visited it during the past 3 weeks. A double espresso was my usual order at a cost of Syp 150 ($3). Two such orders a day cost me what my taxi driver earned in 8 hours of driving in a boiling non-air-conditioned Iranian or Chinese-made vehicle. Remember that this had to cover his cost of shelter, food, medical bills, and school supplies for all 6-7 members of his family.

Eating out in Syria is relatively cheap. Before I left the country, my wife and I invited 10 of our best friends out for dinner. The food was amazing. The bill was Syp 8,000 ($160). Given what I would have paid for this overseas, I considered the outing an excellent value of money. For the record, my poor taxi driver will have to drive for 27 days to be able to afford this meal (his family can expect no money in the meantime).

I am sure that lots of readers are going to argue that every country has its haves and have-nots. So what is special about Syria they might ask?

What distinguishes Syria is how its middle class has been squashed by the horrific economic mismanagement by the country’s economic leadership. $6 a day for 6 people (average family size) is the unmistakable result of this catastrophic system.

Every time I asked how they could possibly get by with such low income, the answer was “We have gotten used to it”.

A note on politics:

Contrary to what many people on this forum think, most of the people that I spoke to seem to think that the Hariri investigation is a massive cloud that continues to hang over the regime’s leadership.

Another thing that struck me was the low confidence that most people have in the personality of their young President. Even his loyal supporters seem to admit that he lacks the charisma and purpose of his late foxy father.

As for the regime’s ability to hold on to power, I found absolutely no evidence to indicate a weakening in the regime’s grip. Internal dissent was nonexistent.

Why have the 19 million people decided to accept living in such conditions?

I think the following quote by Karl Marx can answer this question best:

“The great mass of the French nation is formed by the simple addition of homologous magnitudes, much as potatoes in a sack form a sack of potatoes.”

Conclusion:

This visit to Syria has convinced me that the country’s economy is in a far worse position than currently believed. When Syria becomes a net oil importer by 2010, the current economic challenges will multiply. A very small minority of Syrians will continue to benefit from the current system and hence get even richer in the meantime. My own close friends are some of the richest people in the country. A number of them made hundreds of millions following the recent climb in land values. Money laundering was thought to be the main explanation behind the incredible advance in real estate. While it is easy to assume that Syria 1 is the reality of the situation, the truth is otherwise.

The vast majority of the population is likely to suffer even further going forward. Though inconceivable, their children may fare even worse than their horrific $6 payday. The population explosion has resulted in scores of unemployed men walking its major cities. Those residing in the rural part of the country have fared even worse. Their decision to locate to the big cities has made things even worse. It is my conviction that this regime cannot reform fast enough to arrest the decline in its economy and the standards of living of its citizens. Bashar’s last interview with Dubai Television was striking. His admission of complete isolation from the other Arab leaders was rather shocking. It is my opinion that the Hariri investigation may unsettle this regime to the point where its survival beyond one more year could well be questioned. My friends in Syria 1 sure hope that I am wrong. The potatoes that make up Syria 2 are hopeless, powerless and confused. They have been squashed for 43 years now. They have learnt to accept their fate. They know no better. I have heard and read all the commentary that Syria has won the recent battle. Most Syrians on this forum and inside the country have rallied around their leader and the flag. This is to be expected in such times. This writer, on the other hand, sees things differently. He sees a country in decay. A majority that is deep in poverty. Soaring unemployment is unavoidable. Significantly falling standards of living is inevitable. This is the picture of Syria that most refuse to hear. Their nationalistic genes have blinded them to these obvious facts on the ground. Regrettably, our once proud nation is in a state of despair and decline.