Ehsani2, As a western (Irish) I took a four day trip to Aleppo, up from Beirut and was sadden by the rubbish strewn around, especially the touristic area of Jdedie but a taxi driver was telling me of $1 million apartments as the road spills out to damascus. The public services appear to be falling apart while people speculate on a property bubble. Some will inevitibly end up with egg on their face.

But that aside had a great time. Ate in the Sissi Restaurant 10 days after Bashar Assad and Emile Lahoud and their wives had dinner. The picture is in the front bar. Dead Cities and Symeon’s Church were great but the heat was a tad offensive for my milky Irish skin

Ehsani2,

Thank you for the overview. I know that people’s observations differ, depending on one’s perspective, but I believe all opinions and outlooks are valuable on this subject. Syria is definitely going to struggle a lot to come out of the whole it put itself in during 30 years of “socialist” rule. A whole generation was brought up and nurtured on a highly corrupt, ineffective system, that it’s going to take an entire new generation to see any meaningful change. That is if we are seriously applying this change today. We are going to have to be much more serious and aggressive about initiating and promoting industry and high level academics and research. Unfortunately, the atmosphere and attitudes created by the prior failed system are putting a hamper on any prospective advancement and development. That is, while we need to improve the economy to effectively fight corruption, it is corruption that is acting as a major obstacle to economic advancement and growth.

Syria needs a long long way before we can see palpable changes. And this is only if we are serious today. I hope that we are.

Ehsani

Thanks for your excellent commentary. Syria can only benefit from such honest and well-meaning criticism by its citizens. I hope that this is read widely and taken seriously.

Ihsani, I’m glad you finally reported from the field and lived the daily life of ordinary Syrian who has been suffering for long long time and others keep distorting the real picture with the one they dream of.

I have no dispute with what you wrote regarding public services, or government budget, unemployment, inflation or job opportunities the things I would add that this picture is interconnected between the people and the governing system and if you need to make fundamental changes in the governing system the people and system to do the real change.

The picture you drew is not for today it was always this way and becoming worse everyday. All this talk about investment is a scream in dark and full of hope but the fundamentals are not there.

Please refer to before previous post regarding investment, my comments and OTW comments. The report can be read on: http://www.doingbusiness.org/Documents/CountryProfiles/SYR.pdf

The previous post talked about Rami Makhloof companies and his continuous ride to dominating the whole economy, energy, airline, and telecommunication and so on. By having one man economy or family economy identified by sect economy, the populace, the immigrants, expats and outside world investments; are not going to come in to gamble in a place lacks of transparency or at least dangerous and carries a lot of unexpected events.

I have talked to you about this point before the unbalanced concentration of wealth which does not have no comparables and a family regime power is associated with, I mean, they do not have like 10 times, or 100 times more than existing entrepreneurs, industrialists or merchants in the country, this situation have created a big unbalance and all other political and social powers know that and they keep it under surface waiting to see how this card will be evolved in the future, no one expect good thing to come out of it, only trouble. Also, the drive for getting richer from this group is not for the love of money or love of becoming more rich ( off course not for the love of making investment in the country) it is for the love of having this humongous bulk to grantees the sect domination.

That what Dr. Dalila was alluded to at and was warning of. But, that should be for another discussion.

The only item I would disagree with you is the real estate decline. The failure of the system regarding planning, centralization of power and the lack of any social role drained the resources which caused to phenomena or rarity. There is no network of transportation to support any near future change in expanding horizontally and government can not afford to decentralize. For example, in Damascus, the price of real estate is based on scarcity of equal not scarcity of the same. Homes are available, but services are not available for the new homes for the lack or resources, this create unusual situation. For ages, the prices reflect the cost of real estate and inflation was the main factor for rise or prices. Materials though went down tremendously by reducing customs during the last 20 years but inflation and oil prices in addition to scarcity factor and the lack of government services across the landscape is the drive in keeping the prices going up. My take on your prediction is that you are applying the vision of the US free market with other not free economy which controlled and characterized by stiff liquidity market and no role yet to lending. In Syria still most people they do not by through mortgage, it is mainly a cash market. The 43 times its rental return is may applicable to Aleppo, but it is not the case in Damascus. Example: http://www.alakaria.com/magazine_view.php
The listed apartment for rent is 300k sp, and the price for such size is about 10 million sp, this makes the return about 3% instead of 6%, which mean price is 2 times its rental income. The decline will happen only when big monies, find the channel to go.
But anyway thanks and a very good report.

Dear Trustquest,

If an apartment is rented for SYP 300,000 per year (25,000 a month) and is listed for sale at 10 million, then the ratio is to 33.3.

In Aleppo, the rent is closer to 20,000 a month and hence the ratio is slightly higher at 42.

As to your other points, let me just add that the government’s tax policies with respect to gains from real estate is virtually non-existent. This has helped the sector attract massive capital at the expense of industry.

My calculation was like this:
10,000,000 price of a house. Considering a 6% interest rate, the return of investment is 600,000 per year.
Considering that the return from investment is only 300,000 a year, this mean the price is only 2 times the return from rent.
Please explain your 33.3?

The ratio is house price divided by annual rental income.

10 million divided by 300k = 33.33

When real estate prices are depressed, this ratio can fall to as low as 14. At that level, one must buy and not rent. During the US mania, parts of the country hit 26 as I explained. I believe we have gone back down to 18-20 since.

The other ratio is median house prices divided by median income. The U.S. historical average is 3. At the peak it rose to over 4 which again indicated price over-valuation.

You said: “Syrian house prices are currently close to 43 times their rental income.”
I thought that this statement might not be accurate, since the return on investment for my example is about 3% instead of 6%, which account almost as 2 times the return of rental income not 33.3 times. I understand what you mean now when you use the buy or rent formula.

Ehsani2

Great memo! its low on emotions which is what we desperately need in Syria. Again thank you.

I have a question if you don’t mind, do you believe that the French/European opening towards Syria will be translated into a substantial and direct major investments and economic cooperation, or will it be limited to a “regime-to-stay-in-place” extension?

Ehsani;

Well now we know where you have mysteriously been in the last month.
Welcome back. Your writings and posts always I find have a major degree of honesty and integrity associated with them.

Thanks for the candour, but this post has me a little perplexed, was observer’s travels only around Damascus? If it was then your observations around Allepo certainly provided a more different or sobering view.

Let me explain. You witnessed it through a rationalist, economic outlook. Your social observations were interesting. I particularly liked the junior skinny policemen vs fat senior police and the corruption analogy, if we can expand on this a little further and insinuate that FM Muallem’s expanding waistline and jawbone are no longer a mystery.

It saddens me to hear about the governments lack of services (sanitation especially),the lack of prospects for jobs and the vicious cycle associated with trying to make a living and the correlation for increased corruption.

I do not take issue with the way you saw things, it is a realistic and sober assesment of what is actually happening. It is always great to hear an alternative view. It is calling a spade a spade.

Ehsani,

Thanks for the post. I’m afraid most of it is true, and I’ve always had this sinking feeling when going to Syria when the close proximity hits you in the face.

However … this is not the entire picture, as there does seem to be a dual reality (at least) in the country.

First of all, there is a huge difference between Damascus and the rest of the country. Some cities are even worse than others, and Aleppo is actually among the worst despite the immense wealth of many of its businessmen and industrialists. The reasons are complex, but the bottom line is that the ‘every man for himself’ mentality prevails.

Even though Aleppo is the second largest city in the country, there are many cities that are better off on a number of fronts.

Second, the average citizen does not believe in the system. When I was doing a major purchase there, I told my relative helping me that I wanted to pay the full due tax. I can’t describe to you the look he gave me.

However, we can’t give up.

I think its a great post Ehsani.

Regarding real estate prices; i feel that all signs point to the trend of icreased prices continuing. At least in Damascus, where new and modenern project developments will only push prices higher. investors will be attracted to a Dubai-like investment frenzy (even if its on a much smaller scale).

I agree with you that the rental/buy ratio is way off normal, but without alternative outlets to invest in, i.e. stock market etc. Syrians will continue to play it “safe” in their real estate.

I am not saying it might not turn into a speculative bubble ;), all i am saying is that prices will probably continue to go up

Averroes,you are not obliged to suffer of inferiority complex and don’t fear to criticize bashar and his regime(of course if you are under cover),there is more poverty in Damascus than in Aleppo…all the Syrian cities are in bad condition.
And the most dangerous is that our people live inside heavy hydrocarbons dark cloud which explain the dramatic increase of cancers and other lethal diseases in Syria during the last decades.Ehsani how was the quality of air in Aleppo ?
These health problems need hospitals ,and if i’m not wrong the last modern public hospital in Aleppo had been built in the 50’s….(university hospital)…what a shame !This is Nawaristan al asad.

no, Ehsani, your account is the more authentic one of the ones we have read lately.
of course, as Averroes expressed, there is sort of a dual reality. and the picture can look better depending on what aspects are focused on.

Damascus is dirtier and has more traffic and more air pollution that Aleppo in my opinion and many have voiced this view as well.

and most important of all, thank you for talking about the garbage.
I am always saying that GARBAGE is a huge problem!!! It really is.

And the cats! What’s with the feral cats taking over the country. Doesn’t anyone have a plan for this??
I mentioned to my landlady while I was there, after she proudly announced that her semi pet cat (that lives in the hall and eats scraps)… was pregnant for the twenty fifth time… that maybe they should spay and neuter the cats.

First, she and her daughter looked at me blankly. what could I possibly mean.
And after I explained…

“Haram!” she said… how could we deprive the cat from having babies!..

oh dear dear dear… I guess it is in God’s plan to have cats cover the streets eating garbage.

* ??????? ??????? ????? ????? ??????? ???????? ??? ????? ?????? ????? ????? ?????? ?? ???? ????????

???? ????? ????? – ??????? 18 ??/ ????? 2008

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????? ??????? ?????? ?? ????? ???????? ??? ???? ??? ??? ????? 20 ????????? ??????? ???? ????? ??? ????? ????? ??????? ?????? ???? ??? ????? ??????? ??? ????????? ??? ?????? ??????? ???? ?????? ???. ??? ???? ??????? ?? ??? ?????? ??????? ?? ????? ????????? ??? ??? ???? ????? ??? ??? ??????? ?????.

?? ????? ??? ?? ????? ???? ?????? ???????? ???? ????? ?????? ????? ??????? ?? ????? ????? ???? ?? ????? ????? ????? ?????: “?? ???? ???? ?????? ?????? ?? ?????? ???????? ????? ??? ????? ?? ?? ????”. ????? ??????: “??? ??????? ??????? ?? ???? ????? ???? ????? ?????? ?? ?? ??? ????? ???? ??? ???????? ??????”.

???? ???? ??? ?????? – ??? ??? ??????? ??????? ??????? ?? ????? – ?? ??? ?? 31 ?????/???? ??????? ???? ?????? ?? ?????. ??? ???? ???? ????? ???????? ?? ????? ?????????? ????????? ????????. ???? ????? ???? ????? ???? ??? ?????? ???? ???????? ?? ?????. ????? ?????? ?? ???? ????????? ???? ??????? ??????? ?????? ?????? ??????? ?? ?????/????? 2004 ????? ????? ?????? ???? ????? ??? ?????? ??????? “??? ????? ????????? ?? ????? ?????????? ??????? ?? ??????? ?????? ?????”? ??? ??? ?????? ????? ????? ???? ??? ??????? ???????? ?? ????? “???? ?????? ???? ?????? ????????? ??????????” ?????? ????? ???????. ????? ????? ?????? ?? ??? ???????. ??? ????? ??? ?????? ?? ???? ?????? ???? ???????? ?????? ????? ???? ???? ???? ???? ?? ?????. ???? ??? ?????? ?? ????? ???? ?? ?????/?????? 2005. ??? ????? ?????? ?????? ??????? ?? ??? ???????? ????? ???????? ???? ????? ??? ?????? ?????? ???? ??? ??????? ???????? ?? ????? “???? ?????? ???? ?????? ????????? ??????????” ?????? ????? ??????? ????? “??? ????? ????? ?????? ??????? ???????? ?????????”.

?? ?????? ???? ?????? ??????? ????? ??????? ?? ??????? ??????? “???? ??? ???????? ???? ??????? ?? ????? ?????? ?? ????? ?????? ?? ?????? ?????? ?????? ????? ???? ???? ?????? ?? ?????? ?? ??????? ??? ????? ???????”? ????? ??? ????????? ?? ??????????? ????? ????? ????? ?????? 20 ????? ????? ??? ?????? ?? ?????? ?? ????????. ??? ??? ????????? ??? ????? ??? ??????? ?? ???? ???? ??????? ???? ????? ???????? ??? ???? ??????? ??????? ?? ?????? ???????? ???? ???? ?? ????? ?? ????? ???? ????????? ????? ???? ??? ?? ?? ?????? ??? ???? ??????? ????? ????? ?????? ???????”.

?????? ?????? ?? ???? ???? ????? ????? ???? ???: “???? ????? ????? ?????????? ??????? ??? ??????? ????? ????? ??????? ???? ????? ????? ???? ??? ????? ?????? ????? ??? ????????? ????? ??????? ???????? ????????? ???????? ?? ???? ???????? ??????? ??????? ??? ??????? ??????? ??????? ???? ????? ??? ????? ??????? ?????? ?????? ??????? ?? ????? ??? ?????? ???????? ?????? ?? ???? ?????? ??????? ????? ????????”.

????? ?????? ??????? ????? ??????? ??? ????? “????? ?? ???? ?????? ??????? ??????? ?????? ?????? ?????? ?????? ??? ????????? ??????? ??? ????? ????? ?? ??? ??????? ????? ????? ??????????? ??????? ??? ??????? ??????? ?????? ???? ???? ?? ?????? ??????? ????????? ??????? ??????”.

????? ????? ????? ??????? ?????? ??????? ???? ??????? ????????? ??????? ?? ??????? ?? ??????????. ??????? ?? ?????? ????????? ??????? ????? ????????? ???? ??????? ??? ???????? ?????? ??? ?????? ??????? ??? ??????? ?????????? ????????? ???????? ????? ??? ????? ????? ????? ????.

??? 5 ?????/???? 2008 ??? ????? ?? ??? ???????? ???? ?????? ??? ????? ?? ????? ???????? ??????? ????? ??? ???? ????? ?????? ?????? ?????? ?????? ?????? ???????? ??? ??? ?????? ???????? ???? ??????? ??? ????????? ?????? ?? ???? ??? ???? ???? ??? ??? ??? ??????? ??? 25 ?????? ?????? ??????. ???? ???? ?? ????? ?????? ????? ??????? ?? ????? ?? ??????? ?? ???????.

In light of your comments on taxation and the bad taste left by the reduction in fuel price subsidies, I’d be interested in your views on the schedule for bringing in VAT. This was supposed to happen on Jan 1 2008, but the government said that it wasn’t ready and pushed it back a year. Mohammed al-Hussein said in May that the draft VAT law was ready to go, and the tax would come in at 10% as of Jan 1 2009, excluding foodstuffs. I noticed that Abdallah al-Dardari was quoted the other day as saying that the VAT law would be ready by year-end, and that this would kick off a policy debate about how to introduce the tax. Those comments and your impressions suggest that there may be some more delays, which could spell trouble for the budget deficit.

BRAVO Gen Musharaf !

http://www.daylife.com/article/00gM7TEfjTaia?cover=0aC125SdYIcYZ&title=Musharraf+Out&date=Aug+18%2C+2008

Great post.

Question to all Syrians: what is your view of the social/economic conditions now compared to, for example 1988 or 1998? (Before the reforms of the 1990s, and after them but before Bashar.)

Is there a significant change in the level of corruption up/down — apart from that more and more of the money seems to filter up to the Al Makhlouf — and, to stick with your examples here, is garbage collection worse or better from a technical viewpoint?

And aren’t a lot of the most painful social issues partly caused by the absurdly high population growth — eg. housing shortages, traffic jams, pollution and garbage dumps, deterioration of infrastructure, extreme overcrowding in town centers, etc. I mean, these cities grew from a couple of hundred thousand to millions in no time.

Dear IC,

As prices in the main cities have risen, it is indeed the case that new projects are underway. I actually expect these projects to put downward pressure on prices as they seem to be built on the outskirts. What insiders are doing is buying land some 10 or 20 km’s away and lobbying for high rise projects (Aleppo restricts buildings inside the city to 6 floors). People will start to question paying millions for a city apartment when they can move out 10 km and buy cheaper units. I already sense this trend in Aleppo. The high prices in the main cities will drive this process. The lack of services (electricity and water) by the government has slowed the trend down.
Incidentally, prices have already stopped rising. The word you hear now is:

“We are going sideways for now. Prices will soon rise again. If you have bought something recently, just sit on it.”

Have we not heard this before?

Majhool,

I have no idea how the French intend to invest/help Syria economically.

Zubaida,

I think implementing the VAT tax will not be easy. This tax will hit the poor even further as they will be asked to pay 10% more. It is not regressive.

Why not tax cigarettes for start?

You can buy a pack for 90 cents. It is over US$ 8.0 in New York.

Why not tax real estate gains and tighten the rules on the reported prices of where people buy and sell?

It will help move capital to other parts of the economy rather than see it parked in empty land.

ALLE,

I was renovating my apartment during this trip. I had a person installing new marble on the floor. I asked him how many children he had. He said he had four. Since he looked hardly 30 in age, my wife asked how old his wife was. He said that she was 20. We were of course shocked. My wife followed:

“How old was your wife when you married her?”

Ahmad: “13-14 years old”

My wife: “14?”

Ahmad: “Where we come from, men are expected to marry as soon as they are back from military service. They either wed with their relative or their neighbor. In my case it was the latter”.

This may sound extreme but my sense is that it is more widespread than people think. It helps explain the way you correctly described the population explosion. Syria is set to double every 23 years at the current fertility rate.

Just think of where public services will be 23 years from now.

Zenobia,

Can you imagine the cat population by then?

Excellent realistic assessment of situation in Syria without the hype, propaganda, half truth,and ” MOZAUDA”

It is funny how accurate Ehsani’s 33.33 turns out to be…: In Damascus (Kafr Souseh), SL 60,000,000/ 1,800,000 per year = 33.33 !! Thus the ratio appears to hold even for the upper end of the maket and in Damascus…!! Not to mention the way-below-average “intrinsic value” of these residences… (bad construction, services, view, environment, …etc.)

Needless to say, I am renting in Damascus and buying in Europe…

(Actually, the original asking price for what I am estimating to be currently an SL60million appartment, is SL75million… bringing us up to Ehsani’s 42 multiple…, but the markets have cooled in the last few months…!!)

Ehsani,

It is an awaking piece ,

Do you think that having real estate property taxes and taxes on capital gain on real estate can increase the local revenue and improve local services like trash collection .

EHSANI

Excellent post and it is sad to hear that Aleppo has deteriorated that much. If the tax system is broken, and it has been broken for a while, then all economic development and investment will not lead to any real progress. In any state, tax collection is a fundamental duty of the state, which relies on the state’s ability to enforce taxation. With much of the state’s enforcement infrastructure being security oriented, civic-type enforcement become marginal, at best. Couple that with the “everyone for her/him self mentality”, those who contend themselves with not criticizing to avoid clash with the law, are actually committing the much more serious offense of tax evasion. But again, when security is the name of the game, civic crimes are overlooked, if not encouraged. The situation is grim, and I am afraid to argue as TRUSTQUEST and others have said, fixing it is much more fundamental than issuing decrees and making laws.

A while ago, on a sideline discussion between you and QN about property values in Lebanon, i asked if over-investment in real estate particularly by expatriates and by those who already own homes is counterproductive. Then, I did not notice an answer, but your post this time had an answer as to both the causes and the effects of such segment going on over-drive. The only concern i would have with taxing real-estate based on valuation is for those aging 60+, who purchased their homes at a time when a teacher could buy a house in some of the better areas of town. They may now sit on 20 million SP homes, but that value means nothing to them as it is the only house they can live in and they will never be able to pay the taxes based on the current value of their homes. So if taxes are to be re-assessed, and I am all for that, such issues must be considered.

If any venture is to be privatized first, it should be waste management and similar services. But the question is, if such sector is to be privatized, what is the likelihood that residents who shy from paying their taxes would even subscribe to such service, and how would contracts be drawn, would they be mandatory and if so, would that result in another monopoly for insiders in each city or municipality. I have no idea.

It seems to me that the only people paying income taxes are those working for the government. The rest of the government’s income comes from fees and tariffs, but that would not be enough. How can the government get tough on tax collection without making life harder than it is for the poor? and without clashing with entrenched interest who probably owe the biggest amount of taxes and without converting tax evasion cases into yet another political (security) tool, again, I do not know, but I hope someone does.

Your post raises as many questions as it provides answers. True it has given us one answer we were looking for as to the lives of the average citizens, and provided a contrast that completes the picture to include even the most critical environmental challenges. But the question of how can these things be addressed will linger and I hope that we car argue these questions. I for one, believe that breaking the vicious “Tax-Service” cycle is very problematic and believe that such problem has its fundamental roots in the type of “social contract” that does or does not exist in Syria and in many other countries who tried for a while to follow the socialist model but now lack the will and resources to shake it off for a variety of reasons.

OTW,

Syria can avoid taxing the 60 something with a house by exempting the first house ,
the problem in Syria is not the people who have houses to live in, it is the people who buy houses as investments , these should be taxed and should be tax on transfer of money from parents to children so they can not hide their investments , investing in real estate is probably driving the cost of housing higher and making difficult for young people to marry and move out.

The tax system is broken is not enough, the system is broken is more in line of what is going on. I will explain, if you look at any decree or law issued in the last eight years, you will notice something will jump at you right away. The laws are not made for the benefit of the populace or the government; it is made to the benefit of the bureaucracy and the System. The System which is supposes to be changed and overcome according to the government is resisting, solid and wining in the battle of change.
Example: decree 51,
http://syrianrealestate.net/top/arabic/pdf/51.pdf
issued in the end of 2006 regarding taxation is a piece of art, complication and amendments which make your brain go nuts. But the main thing jump at you is the preferential set for the Finance Minister. If you do not file at the end of the required period, you can not file for extension, but if you big the minister you might get it.
Read backward please. (BTW how to make the Arabic text look normal?)
????? ????? ??????? ?? ????? ????????? ???? ??????? ???? ?? ???? ???? ?????? ?? ?????? ???? ????? .
So, the system is complicated solid and entrenched.

You continuo on reading the decree which has a lot of reference to other laws and decrees, actually some laws are changed inside the same law. The decree amend laws 24, 28, and decree 43, 61 and change not only the laws but also its amendment. The 2000 decrees I mentioned issued since the president took office, most of it are amendments to existing laws and exemption and immunity to the powerful.

Another example of the state of the State, is the recent post on Syrianews regarding the canceling of the water treatment system in suburb of Damascus, Tkia, for the reason that they found that there is no sewer net network in the area so they canceled the project. This stupid V minister did he know that before choose a location and start design system we should have a sewer net work in that area.
Read the joke on:
http://www.syria-news.com/readnews.php?sy_seq=81166

Now, don’t you agree that the system is missing the main important thing, the voice of the people and their feed back through free expression and through civil society, can they do it without?
Actually in theTkia example, the people protested, never asked and have no say, but their pressure exposed the ministry as a stupid insititution does not know what they doing.
I would love to have your opinion Ehsani, and thanks

Trustquest,

I agree with you , It is ridiculous to have a law with lope hole that is dependent on the personality of the minster of finance , It looks like he is having a way to get bribes for giving extensions , I think there is a problem with the way they make laws.

i wish they would listen more to people who know.

Ehsani2, It is very difficult to make subjective observations that illustrate fairly and accurately generalized observations. That is why I am so impressed with your posting because you have done just that in a very direct way. Looking at the previous comments, I am not the first to recognize this.
Two difficulties with trying to effect social and economic change at the government level is the problem of political stalemate and the necessity of government officials to protect ones constituancy. Many western countries have side stepped these problems by commissioning panels of independent non governmental experts. In this country panels that start with no government initiative have been as influential. Is there room here for a committee of economists to develop proposals for Syria’s problems? I think so and it would be a tremendous step forward. Including economists from the international scene will make a report even more persuasive. There are some excellent economists in Europe, UK, and Canada as well as the U.S (and let’s not forget the academics in Australia and Japan as well). Working with middle east economists inside and outside Syria would be very powerful group. My sense is the time is ripe.

A friend of mine builds luxury homes in the North East. He had listed a newly built house on the market for $3.4 million. It did not sell. He then decided to rent it out. He quickly found two people willing to rent the property for $15,750 a month (two-year contract). Using my formula, this means that the multiple is in the 17-18 range. If prices continue to fall, the multiple may get to as low as 15.

Just to put it in perspective:

Were the Syrian real estate price/rent multiple of 33.33 to apply here, this property would sell for $6.3 million. At those crazy 42 multiples that some cited in Aleppo, this house would be worth $7.9 million.

I had said before that my observations are relative to my previous visit more than two years ago. At that time, I thought that the country was slowly moving towards a status similar to that of Haiti.
I also said that corruption and nepotism are a major source of discontent and remain ever more so.
In RELATIVE terms to three years ago there seems to me at least in Damascus and its environs a substantial improvement in the idea of maintenance, some discipline, a desire to make bureaucracy smoother, and an opening of the society to outside ideas.
I need to emphasize that the comparison I made was not to any modern state but to Syria itself from three years ago.

I think that anyone who is comparing the current situation to what they are used to in the US or in Europe will be certainly disapointed and would fully agree with Ehsani

My Dear Friend Ehsani,

While I fully agree with many points you raised, I think that you also agree that what you described is just part of the picture.. a considerable part nonetheless. The economic lens you use is solid, however, one would need to apply a social one at the same time to get the full picture.

I would argue that the grim picture you color is not the complete one neither of Aleppo nor Syria in general. During our three hours chat in the “packed” fancy cafe in Aleppo (which charges $4.5 for a cup of chilled coffee, similar to what Starbucks charges in places like Dubai) we discussed positive and negative changes in the city compared to a year ago. It might be indicative to note that the number of those fancy cafes and restaurants in Aleppo and Damascus has tripled comparedd to a year ago (all of them are always packed despite the fact that they charge outrageous prices compared to the average Syrian income).

This year I managed to get a long good vacation in Syria (around 30 days). In a less romantic –and less socialist- take on ‘The Motorcycle Diaries’, I managed to break my earlier record and drove close to 2500 KM in less than 10 days around 7 of the country’s 13 muhafazat (governorates). I avoided “autostrads” (highways) and opted instead for the curvy and mostly mountainous village routes. I can confidently claim that I formed a semi-comprehensive picture of the developmental status through observation and talking to people in the western side of the country (which holds the majority of the country’s population). Those I talked to included remote villagers who were Sunnis, Christians, Alawis and Ismailis as well as urban Syrians in cities including Damascus, Aleppo, Homs, Hama, Idlib, Lattakia and Tartous. This mini-research can complement the indicative anecdotal experiences posted here by Ehsani and other commentators.

To say that the changes occurring in Syria are only positive ones is ludicrous. Similarly, to portray the situation in only negative terms is equally misleading. As expected in any country going through dramatic changes on the economic and social levels, reality is a mixed picture of the good, the bad and the ugly as Averroes wisely suggests. For example, the most impressive developments I noticed were on the infrastructural level. They included hundreds of miles of modern highways under construction all around the country that are almost ready to be put in service (mostly done by mega Kuwaiti companies). A similar modern transportation infrastructure is also being laid in the eastern parts of Syria including bridges over the Euphrates. In addition, urban planning is becoming more systematic. For example, traffic within the cities has improved noticeably (especially in the most crowded roads in Aleppo, as Ehsani can confirm). There is now a new ruthless traffic law and a policeman or two literally on every corner. Taxi drivers will now refuse to drive you if your refused to put your seatbelt on (otherwise they would have to pay a fine of 2000 lira on the next corner, or pay triple the bribe they can afford). Brand new fuel-efficient and less-polluting public busses are running around the large cities instead of the old fuel-guzzling and carbon-spitting dinosaurs. The Damascus airport is one huge round-the-clock expansion workshop. A brand new train system is now connecting the major cities and even expanding to Turkey. Based on my first-hand experience, the new train carriages are similar to those in Europe (however, the railway is not as quit). Just 50 KMs outside Aleppo in Idlib governorate, Turkish businessmen are trying hard to purchase every piece of land they can get their hands on as there’s a new Syrian-Turkish Free Trade Zone about to be built in the area. The smart landowners are refusing to sell so far until the new highway is finished. In Tartous, the brand new shiny corniche is packed with fancy cafes and families on picnics. The Dubai-like cafes and night spots on Latakia’s corniche could easily be confused with those in Beirut sea-side. Driving around the mountains, one could not but notice the large number of brand new 4 and 3 stars hotels mushrooming in addition to the smell of the new asphalt connecting the remote villages. Damascus has defiantly had the lion’s share of the development and investments. I insist that I’m pleasantly surprised with the cleanliness of the touristic neighborhoods in Damascus (including the old city). The city received a comprehensive make-over in preparations of the Arab League Summit earlier this year and in preparation for the “Arab Capital of Culture” year-long festival. Cultural events are packed (Ziad el-Rahbani’s series of concerts with his 50 man orchestra inside the ancient Damascus castle was simply out of this world). The earlier remarks by Observer and those of Ford Prefect are largely representative of the scene in Damascus. As for mega real estate projects, they are mainly taking shape around Damascus and along the coast (as promised Ehsani, I’ll email you some information on the new mega projects on the coast of Tartous).

My point from the above text is the following: Stating that infrastructure is not improving all around Syria is misleading. The whole country feels like an enormous development project. It will take years to transform it from a 1960s socialist Greece, repressive Spain or under-developed Turkey into a clean modern EU tourist heaven. Meanwhile, many painful social changes will take place, including the fluctuation of corruption levels and the economic injustice for those segments of society who will slip between the government safety nets. One notable example is an example based on the removal of oil subsidiaries noted by Ehsani. The government announced the removal of heating oil subsidiaries and instead introduced a 2 level support system: A coupon system where the poorest segment of families will get the oil virtually for free. The second is that each family in Syria (rich or poor) will get one ton (1000 litters) of heating oil per year in old subsidized prices (similar to prices in the last 40 years). This virtually includes every family with a family certificate (daftar ‘a’ilah), which includes almost every single person in the country. A ton of heating oil (which costs around a 600 dollars in new market prices in Syria) a year is enough. Every family will pay only $180 instead. You want more you can buy in market prices. This was also coupled with the introduction of a sever punishment for smugglers (up 10 years in prison and huge fines). I drove along the villages on the Lebanon border in Tartous and Homs and noticed unprecedented number of boarder patrols (“hajjaneh”) on back of trucks fully armed in camouflage. However, some segments in society were still overlooked in the subsidiaries and the government is adjusting accordingly. Of course, businesses who used to get the fuel virtually for free are adapting accordingly which will lead to inflation and increase in prices. In turn this should lead to more increases in salaries until things get close to regional or global average.

Now back to pollution, corruption and development in Aleppo. Based on my observation, I’d say that large cities like Damascus and Aleppo have been divided into areas of urban development for prioritization. The more attractive the neighborhoods to business and tourists, the cleaner you’ll find it and the faster its infrastructure is developed. For example, by the end of my vacation, a new sewage system was being installed in the higherend residential neighborhoods in Aleppo, the streets have been widened and redesigned in those areas. A hole in the street would get fixed in 2 days in these neighborhoods compared to maybe 2 weeks in the less touristy ones. However, I drove in the less advantaged Jalloum and Farafrah neighborhoods in Aleppo and I can say that they are much much cleaner than they were in the end of the nineties. The standard of the roads is of course less than that in the richer parts of the city. But creative solutions are being put in place. During the last 25 years, has anyone dreamed that the old Quweiq river of Aleppo would be revived after Turkey blocked it in the 60s? The river is now gushing with a relatively good level of water derived from the Euphrates dams. With regards to corruption and tax, one indicative example in Aleppo this year is the closure of the largest restaurant compound in the highend part of the city which was usually packed day and night since 15 years. The rumors go that the mega businessman who owned it refused to pay the huge taxes he owes the governorate of Aleppo. Other rumors say that he did not give the appropriate bribe of one of the big guys this year to overlook the taxes. I believe the truth is in both rumors. The businessman probably wanted to continue not paying taxes and thought he was powerful enough to not pay that senior official the new increased annual bribe. This is probably the case for most businesses in the country. The culture of paying taxes is lacking. One would bribe a senior official a similar “fee” to gain his loyalty rather than pay the government taxes he owes. The tax system is indeed broken and fixing it is no walk in the park. The disgruntled businessmen in Aleppo you talked to Ehsani in the prestigious “Nadi Halab”, will only get further disgruntled while this system is fixed. I still think that the solution would require a major cultural shift and massive awareness campaigns. If everyone in the country was to know that Rami Makhloof is paying X millions in taxes (even if he wasn’t) then most people would find it easier to adjust. Ehsani, you might want to expand on this?

The bottom line is that Ehsani’s well-thought analysis and observations paint a large part of the picture. Others’ observations complement it. The full picture is not as grim and not as rosy as many of us would like to think. It’s a mixed one, similar to social and economic development everywhere else in the world.

Habibi IDAF,

We now have a two-way market.

Before I forget, you said the following:

“each family in Syria (rich or poor) will get one ton (1000 litters) of heating oil per year in old subsidized prices (similar to prices in the last 40 years).

The key word here is “PER YEAR”. I pressed a number of key people on this and came away with the impression that it is a “one time” deal only rather than a yearly one. When I informed the official that the perception out there is different, he indicated that most people are “mistaken”. You may need to confirm this again since it is pretty important.

Now to the rest of your fine comment (as usual).

The cafe we visited was fancy indeed. I think that there are at least 5 others which are similar. Let us assume that each one seats around 50 people. This means that close to 300 people have the money to pay what you and I paid at the time (you treated yourself the more expensive $6.73 option). Let us make that 500 people. Some live abroad like you and I. But, the majority are local residents to be sure. Since the city is populated with at least 3 million people, the 500 make up 0.000167 of its residents. Even if you doubled my number to 1000, you still have 0.00033 of the residents.

For the close to 3,000,000-5,000 (99.833%) people or so that can and do visit the Nadi and those coffee shops, seeing us drink that $6.73 coffee on a daily basis will make their heads spin. The policeman that told me that he was making SYP 9,000 a month will be left with exactly zero if he drank one cup a day from that place.

I will reiterate again that the vast vast majority of the Syrian public is underpaid and suffers from dim job prospects. The economy has failed to grow at potential for years. This has had a big impact on every walk of life in Syrian society. Of course, things are “improving”. But, are they improving fast enough to absorb over 200,000 new job seekers a year? is the Government and the country’s infrastructure capable of meeting the demands of a population that almost doubles every 23 years? Is corruption at the very top and all the way down on the decline? Does anyone care?

IDAF,

I’m glad you mentioned Greece. I lived there during ’80s. The short decade I lived there was not long enough to get a phone installed. We had rolling brownouts. Trash and Water departments would frequently go on strike.

Policemen making the equivalent of $3-400 a month were living in apartments renting for $500 a month.

Many of the same of problems mentioned above were blatant in Greece. The ‘Nefos’ (cloud) over Athens was terrible. Everyone bribed, everyone was for themselves. My landlord’s kid was assigned to the navy for his mandatory military duty. Four cartons of American Cigarettes and some Folgers was all it took for my landlord to get his son stationed at Patreus (the port in Athens) than a remote port.

And the number of apartments that had metal rods sticking out of the top of them, demonstrating they were not ‘done’, thus not required to pay taxes on, was astronomical.

Habibi Ehsani,

I salute you for your relentless focus on the alarming population growth and it’s potentially dire consequences.

I still think Syria will manage to cope, but it will be challenging.

But in general I want to ask all of you to always remember how different the two pictures we got from Ehsani and IDAF … It shows how wrong it is for those who only read and trust reports and analysis by people in one political camp or the other.

Imagine how much they are missing.

Ehsani,

People indeed think that this is an annual subsidiary. It seems that the government is keeping this “one time” vs. “annual” vague on purpose to keep its options open. One would hope that if it is indeed a one time subsidiary things would not backfire when people realize this.

I agree with the rest of your comment. I fully support that the pace is not fast enough. Given that the external pressures are gradually fading out, this should make people more willing to pressure for more and faster improvements. It should also make the government more willing to take greater risks. Bashar has already a large reservoir of credit to use among the younger generation, which make the majority of the population. I’m afraid that the older generations of public servants will be left to fade away in the bureaucratic system, instead of being replaced. This should slow improvements down but would reduce the possibility of social unrest. This is something that took place in eastern Europe in the last 2 decades. If you are a 50 years old government employee, you should get your self ready to accept that your children will get paid 5 to 10 times your monthly salary. This might trigger shifts in family structures and values for a while. Hopefully, many of the older generation will upgrade their capacity in reaction. One would hope that those who won’t will find it sensible to leave their government jobs voluntarily.

Mick,

Greece and Turkey were like that until the 80s. Even Spain was not far from that scenario a few decades ago. I agree that Syria is in the same transformation stage. I’m optimistic that the pace of improvements will pick up. There’s no reason for it not to.

Ehsani & Idaf

The pictures that you paint converge on at least one thing: the disparity between investments inside and outside of Damascus. And so I would ask you both: is there not a lesson or two to be learned from the example of Lebanon? Many have faulted the economic strategies of Hariri and co. for focusing too heavily on Beirut while neglecting the rest of the country. Is this a potential danger in Syria as well?

On the other hand, Hariri’s policies did reinvigorate a decimated tourist industry and attract major investments to the country. Here are a couple relevant news items from the past two days:

Lebanon is second biggest recipient of net Arab investment in 2007, largest recipient relative to GDP

Lebanon’s travel and tourism economy expected to generate $4.43 billion in 2008

Which model is Syria shooting for?

Idaf my friend,

Ehsani said: “I will spare the readers any mention of geopolitics, Lebanon, Iran, Israel or the U.S.A…”

Would you be willing NOT to spare us any mention of these things? 🙂

Did you have any conversations with people about the peace talks, Israel, Iran, etc. while you were on your amazing journey?

Ehsani, please revise your figure regarding the police man. Because he will be ending short of 1095.00 sp, if he decide to drinks that cup of coffee, just one cup of coffee a day.
I think Mr. Policeman might have to compete with the Cats for his other resource of nutrition to keep alive.

Idaf, Please explain the “ Brand new fuel-efficient and less-polluting public busses are running”
You said “this should make people more willing to pressure for more and faster improvements”
Could you tell us what has change on the level of public participation that makes you think this way?
I wish all the listings you mentioned from highways to investments, I wish you specified these facts in number and data.
I do wish better for the country and I believe the better things will never happen without the social contract and without the involvement of the civil society and free speech to be the critical voice to correct the path. Without it, it is just not the real thing.
Also, I find it ironic to compare Syria with other dictatorship and other countries like Greece and Spain. I have at least visited Greece in the 80 and there is nothing to compare from social setting to richness to people to history or environment.

I’m glad you mentioned this Alex, because this encourage me to ask Ehsani, have you seen the Syrian public TV, does it still cover the one man show, he interview this and said good by to that and that ugly stuff, did they start to make use of the TV to send a social message regarding society problems and especially population growth. May be they started to do that, do you think it is now too late since the multi channels are creating different human-beings, not to the taste of the regime. Glad to hear you feed back.

“I will spare the readers any mention of geopolitics, Lebanon, Iran, Israel or the U.S.A…”

yes please… at least once a month, there should be a designated thread on Syria Comment where it is strictly forbidden to mention any of the above, and all discussion must be concerned with … syria. all other days, the usual holy wars.

Karim, Inferiority whaa?? Why this language ya Karim?

It is quite well known that Damascus gets the most attention and the most budget. It’s the capital, and I’m proud of it although it is not the city I was raised in.

And, I have mentioned to Ehsani that what he says is true, and I will add that the regime has the most responsibility towards all of the wrong out there. I acknowledge that.

However, there are two points that I hope you would be brave and honest enough to acknowledge:

1. Thins wrong in the country are not exclusively the regime’s responsibility. The bad social habits and the culture also play a role. Have you seen how your average Joe wastes water for instance? Have you seen how they throw trash out the balconies and car windows? Have you seen how school kids trash their government-issued books at year end? Have you seen how on Eid mornings, people pull up to public parks to clip off flowers and roses for the cemetery visit? The list is long, and it is not inspired by the regime.

2. The regime is not totally bad. It is taking some actions that can only be described as good and constructive. Read IDAF above, for instance.

Finally, I remember daring you twice to making a statement about the bombings and killings of the humans you label as ‘rafida.’ Is it a criminal act, or is it a OK in your book? I hope you will use your conscious for a change, and not open Ibn Taymiyya’s scriptures.

I still dare you to make a statement on that if you can. If you cannot, then you should not be too upset about garbage in the streets. Dirt washes easier than blood.

IDAF,

2,500 km in 10 dedicated days around the country? 33% of your yearly vacation driving up dirt roads and talking to villagers? Man, you must be either very brave or very single!!

Either way, I salute you for taking the trip. It is one that I have been hoping to make for a long time, but I’m not single anymore. (I’m not too brave either.)

I think we can explain the different views people have of large issues by describing the perspective of the observation: Is it strategic or tactical? Is it bird view or ant view? (terms used in Architecture). Is it differential or integral?

In steady-state countries like Norway (or Rawanda for that matter,) both perspectives will probably give you a similar result. It is in countries in transition that you do (and should expect to) see a difference. The larger the difference, the more pronounced the state of transition.

The bird’s eye or strategic perspective typically gives you the “big picture;” the integration of all those little stories and images. However, the tactical perspective is also necessary and no big picture is complete without all those little details. Each of Ehsani and IDAF tells the story from a different perspective. Both are true, and both have their uses.

If you wanted to buy a house or start a business, then you absolutely must look from the ant’s eye perspective. You can’t afford not to. However, if you were planning the country’s economy and discussing its future and trends, then you need to focus more on the strategic perspective.

Large systems in transition have huge capacitances. In mechanical engineering it is called inertia, and it describes how heavy the system is, how fast it has been moving, accelerating, and changing its acceleration. All of these forces play out at drawing the big picture. Things happening today are influenced by events that took place years, even decades and centuries ago. There is no escaping their gravity and momentum.

Overall, I think that Syria is a country in transition, and I think the evidence points that the big picture in the country is changing toward the better.

Averroes,if you had a rafidi neighbour who use bad words(like ahira) against your wife and your honour ,how would you react ?so what if the target is the wife of the prophet herself and al sahaba ?(and plz Averroes ,this is not criticism this is insult and takfirism ,btw all the important shia scholars are takfiris ,takfirism is very very marginal in Sunnism.
I’m sure that you are aware that what they say in front of their followers is different of what they say in front of you …but if you can visit any husayniyeh in the world and you will see the religion purified from any takiye ,it’s 99 % based on takfirism ,revenge ,resentment…no need to be Ibn Taymiyya to response against verbal aggression.
Btw Averroes ,i’m not Wahhabi ,not Salafi ,and i have many critics on many of Ibn Taymiyya views and those must be contextualized knowing the difficult era in which he lived(Mongolian invasions)…but i have found in Ibn Taymiyya one of the most powerful philosopher inspite of him ,he was anti philosophy and was against the use of Aristotelian logic in theology(his methodical criticism of Aristotle and Avicenna ) .You can compare him with the andalusian zahiri theologian and philosopher Ibn Hazm.
As for Syria ,i don’t believe that Syria will dramatically improve under a minority paranoid sectarian regime and it’s in urgent need of radical change…if not the best we can hope is a non end stagnation and some cosmetic changes and the replay of the same asadian movie.And the comparison with Greece(the regime of the generals in the 70’s) and Turkey is not valid …because in both countries the economic improvement has followed the democratization process.These countries have been completely transformed in less than one decade but Bashar keeps repeating from 2000 to 2008 that syria need time and that his minority regime is ensuring safety for the world (and Israel)by terrorizing the syrian people and its intelligentsia .Got the message well !

You still did not answer my question. I dare you to answer it out loud and clear.

What’s your question dear Averroes ?

Here it is again, bright and alert Karim, sir:

What is your opinion about the sectarian inspired and driven bombings that is being done against civilians you call Rafidah. Do you approve of it? Is it Kosher in your book? is it OK? What is your position on that??

Averroes ,i’m 100% against suicidal operations even those that targets zionist soldiers.

Karim,

I can’t believe what I’m receiving from you, man. You are UN-ABLE to condemn in clear terms organized killings against civilians that you label as Rafidah. I think you are a good man that is steadfast at what he believes but you are unable to cross that line.

I urge you to reconsider, my brother.

If you are unable to cross it, then you should expect that those who you so clearly label for death have the right to fear you. When they fear you for their lives and for the lives of their children, then you can expect anything from them. Quite simple logic, really.

If you can’t cross that line then there is no meaning whatsoever to delve into anything else. Even if it is elections that brings killers to power then it is not accepted.

Ehsani,

Thank you for your post. I’m learning tremendous amounts about Syria through SC, and especially via comments like yours.

You said: “The feel-good attitude that has resulted from the sharply higher values of real estate has masked a deteriorating economic outlook for Syria.”

How can this be? That is, given the super-sharp rise in heating oil, the poor basic services received by the average citizen, the constant need to bribe, how can a “feel-good” attitude be created? Or at least, by the average citizen, that can barely afford rent? I understand there are other opinions of course, but if you’re even 50% on target, that’s a very grim outlook on the present and near future life for most Syrians. Creative solutions need to be found quickly (not in a prolonged fashion), so that the young, educated, talented, and still devoted, won’t escape. Because if they do, it’ll take much longer to bring them back, as many expats on this blog have experienced. Patriotism can only go so far, when it comes to your children’s future (and to theirs).

Washington Post editorial today:

http://www.washingtonpost.com/wp-dyn/content/article/2008/08/19/AR2008081902628_pf.html

Olympic Embarrassment
Saudi Arabia’s Olympic team has no women.

Wednesday, August 20, 2008; A14

“THE PRACTICE of sport is a human right.” So proudly affirms the International Olympic Committee in Principle 4 of the “Fundamental Principles of Olympism.” “Every individual must have the possibility of practising sport, without discrimination of any kind and in the Olympic spirit.” And Principle 5 makes explicit that discrimination based on gender “is incompatible with belonging to the Olympic Movement.” So what is an all-male Saudi team doing in Beijing?

” It’s not as if there are no women from majority-Muslim countries competing in the Beijing Games. As Mona Eltahawy pointed out in an opinion piece last week, Algeria, Bahrain and the United Arab Emirates have women on their teams. In fact, Bahrain and the UAE even allowed women to carry their national flags. So the problem is not Islam but clerics and weak-willed potentates who would twist the Koran to stunt the skills and abilities of women who would love to compete against the world’s best athletes. Brunei is the other Muslim country that does not allow women to play sports.

The IOC talks a good game about wanting women to participate in sports and compete in the Olympics. Its Web site has multiple tabs championing women in sports. But Ms. Eltahawy was right about how the IOC could show that it means what it says. “If Saudi Arabia won’t put women on the team,” she wrote, “then tell them not to bother showing up at the London Olympics in 2012.” We agree. If the IOC develops a backbone and puts some power behind its lofty words, it will do just that.

Trustquest, Syrian TV is still dire, except, perhaps, for the soap-operas. Regarding the SC rubbish debate, I recently met two young Syrian journalists who had trained to work in TV but couldn’t bear to work at state television. One of them gave the example of how if they went out with a TV crew to film news footage, they had to edit out all shots of garbage on their return. Gave the wrong impression, apparently.

Population growth and rapid urbanisation definitely a factor here, and, by the way, the presence of so many Iraqi refugees, said to have increased the rubbish collection ten-fold in some areas.

You are UN-ABLE to condemn in clear terms organized killings against civilians that you label as Rafidah

Dear Ibn Rushd, i’m clear ,i absolutely condemn attacks against any civilian ,rafidi or not rafidi.

Karim,

Finally. Thank you. That’s much better. Although you still use the labeling and profiling, but at least we’re moving.

[…] More observations from a trip to Syria were made in August 2008. “Some readers will take issue with my memo. Many will see it as “too dramatic” and “biased”. I had a lengthy telephone conversation with Dr. Landis before I wrote this note. He is privy to a lot more details than I have written here. My dear friends Ford Prefect and Observer have recently written their own observations of Syria after visiting the country. I realize that they offered a much rosier picture than the one I portray. I hope that I am wrong and that they are both right. My friend Idaf is also sure to take issue with many of my observations as we were both in Aleppo at the same time. Again, I hope that the future proves him correct.” […]