Tag Archives: syria

Repairing a Shattered Syrian Economy in the Midst of War

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The common thread that unites all of CIPE’s partners around the world is their dedication to the principles of democracy rooted in private enterprise and free market economics. In all other respects, their diversity is remarkable and represents one of CIPE’s greatest sources of strength.

Ranging from the smallest of local business associations and youth groups to large chambers of commerce and some of the world’s most respected think tanks, our partners all work hard to advance freedom and secure new opportunity for their fellow citizens. They also operate under circumstances as varied and complex as the global geo-political landscape itself. Some of our partners work in conflict environments that require a particular blend of courage and creativity in order to advance their democratic objectives.

The current catastrophe in Syria certainly presents unique challenges to CIPE’s partner the Syrian Economic Forum (SEF), an independent think tank formed in 2012 by business people from across Syria to inform the public policies that will be needed for the country to emerge from conflict and transition to democracy. It may sound starry-eyed to speak of peace and democracy with the war now in its fourth year, at a cost of more than 160,000 lives, over 2.8 million refugees, $143.8 billion in economic losses (as of the end of 2013), three-quarters of the population living in poverty, and incalculable social trauma.

However, SEF and the moderate business community it represents see no other alternative. Independent small and medium business people from across the country, representing the mosaic of religions and ethnicities for which Syria has long been renowned, are a unifying force with the potential to repair and rebuild a now shattered society.

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The Need for Constitutional Protection of Private Enterprise

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Constitutions can play an important role in protecting economic liberties, in addition to political liberties. As the state’s foundational legal document, the constitution can provide the essential framework for establishing commercial freedom and promoting the development of the private sector. For example, CIPE partner the Syrian Economic Forum (SEF) is developing proposals for the constitutional protection of private enterprise during a future transition period in Syria.

Different countries have taken a variety of approaches in tailoring their constitutions accordingly, which should be examined in determining how Syria’s next constitution will promote and protect private enterprise.

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Beyond Cronyism, Beyond Violence: Reconstructing the Syrian Economy

This image from Aleppo Media Center, authenticated by the Associated Press, shows damaged buildings in Syria's former economic heartland.

This image from Aleppo Media Center, authenticated by the Associated Press, shows damaged buildings in Syria’s former economic heartland.

The stories coming out of Syria nowadays paint a picture of an economy taken over by violence, in which legitimate private-sector business activity has nearly ground to a halt. Rival groups raid a textile factory, promising protection in return for money; the factory is burned down when the two groups start fighting. The owner of a brake-lining plant does not know what happened to his machinery after it was looted—he only knows that his “entire wealth and life” have been dismantled. No longer able to rely on legal remedies, some businesspeople flee with their capital to countries such as Egypt, where they may remain even after the war has ended.

The statistics reported by the Syrian Center for Policy Research confirm this grim picture. Economic loss totals $103.1 billion. Almost half the population is unemployed, with 2.33 million job opportunities lost since the beginning of the conflict. The price of consumer goods has tripled. Energy prices continue to rise while private consumption and investment continue to fall. Sanctions have chopped oil exports in half, and the decreasing value of the Syrian pound has not led to an increase in non-oil exports. Manufacturing and mining barely contribute to GDP (just 4 percent), and textile factories—located largely in areas that have witnessed the most fighting—have closed by the hundreds, or possibly even thousands. A Byblos bank report estimates that 75 percent of production facilities in Aleppo are no longer operable.

It can be easy to lose sight of the importance of economic recovery amidst the urgent need to stop the fighting. But rebuilding the Syrian economy will be crucial to any long-term peace and reconstruction efforts, as will the manner in which it is rebuilt.

Before 2011, economic benefits mainly accrued to a small group of well-connected elites. Smaller enterprises could hardly expand, thwarted by contradictory laws, a weak financial system, corruption, and limited export capacity. Future reconstruction efforts should focus on rebuilding Syria’s economy in a way that replaces crony capitalism with a private sector in which all citizens have the opportunity to participate and thrive. Reforms that increase competition and bolster small- and medium-sized enterprises will stimulate economic growth and give more citizens a stake in the country’s economy and future.

The private sector should play an active role in reforming the Syrian economy once the conflict ends. To this end, the Syrian Economic Forum (SEF), a CIPE partner, has already begun taking steps to organize the private sector to advocate for necessary economic reforms.

In its First Annual Conference in Gaziantep, Turkey, SEF gathered Syrian businesspeople from inside the country and abroad to discuss recommendations for rehabilitating factories, amending investment laws, and improving educational opportunities for Syria’s youth. While it will certainly take a long time before the dire economic situation in Syria can even begin to improve, efforts such as SEF’s will help to ensure a future democratic Syria with an economy that offers all Syrian citizens the opportunity to achieve welfare and prosperity.

Peako Jenkins is a Public Service Initiative Fellow for the Middle East & North Africa at CIPE.

The Role of Information in Planning for Syria’s Post-War Economic Future

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As the world celebrates World Press Freedom Day, it is important to remember that access to information and free and unbiased reporting are vital elements for developing a democracy. According to the 2013 Press Freedom Index published by Reporters Without Borders, Syria is ranked 176th out of 179 countries. Since the beginning of the uprising in March 2011, Syrian authorities have restricted coverage of the unrest and continue to misreport the civil war on state-run TV stations.

My colleague Stephen Rosenlund wrote in his blog post A Bright Light on Syria’s Horizon about CIPE’s work with the Syrian Economic Forum (SEF), a think tank dedicated to building a free, pluralistic, and independent Syrian homeland that rests on a strong economy and ensures a life of freedom and dignity for all citizens. Despite the ongoing civil war and inability to establish a home office inside Syria, SEF has established a robust online presence through its website and social media pages allowing for the exchange of ideas and knowledge.

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A Global Voice for the Private Sector

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In 2013, the world faces many challenges, ranging from youth unemployment to the destruction of the environment to armed conflicts that continue to take lives and devastate countries. This week, more than 2,000 representatives of Chambers of Commerce from around the world gathered  to discuss these issues — and the role of the private sector in addressing them — at the 8th World Chambers Congress in Doha, Qatar.

The themes were as diverse as the participants, but one common thread emerged: the business community needs to be involved in helping to solve these pressing problems. And private sector voices are most effective in a democratic context.

Indeed, many of these issues are linked, often to issues of economic exclusion, which can incite violence and perpetuate cycles of conflict and poverty. “Enemy number one to economic development is armed conflict,” said Joost Hintermann of the International Crisis Group, quoting IMF Managing Director Christine Lagarde.

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The Role of the Private Sector in Syria’s Future

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In a previous blog post, I presented some of the harsh economic realities of today’s Syria and highlighted the work that the Syrian Economic Forum (SEF) is doing to create a better future. On April 18, CIPE hosted a panel discussion on the “Role of the Private Sector in Syria’s Future” at its Washington headquarters to explore the challenges of reconstructing and rehabilitating the country and the solutions the business community is uniquely placed to provide.

The event featured Ayman Tabbaa, Chairman of the Syrian Economic Forum (SEF); Dr. Samer Abboud, Assistant Professor of History and International Studies at Arcadia University; and Faysal Itani, Fellow at the Rafik Hariri Center for the Middle East at the Atlantic Council. CIPE Regional Director for the Middle East and North Africa Abdulwahab Alkebsi moderated the discussion.

Ayman Tabbaa, a businessman himself, emphasized that Syria’s economic woes are a product not only of the ongoing war which has ravaged the country over the last two years, but of failed social market policies over the last decade. Future economic policies must be grounded in the rule of law and encourage the growth of small and medium sized enterprises in order to bring prosperity to the country.

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A Bright Light on Syria’s Horizons

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Since 2011, CIPE has been working with a courageous group of Syrian business people to advance an economic vision for the future of their country. With CIPE’s support, these private sector leaders established a think tank in 2012 called the Syrian Economic Forum (SEF), which is helping formulate the economic policies for the country’s future.

Few countries in the world have as great a need for CIPE’s assistance as Syria. For the past two years, Syria has been wracked by civil war. Tragically, 70,000 people have lost their lives to the violence. The economy has imploded, contracting by 7.8% in 2012 and estimated to contract by another 3.4% this year.  Inflation is spectacular, with the Syrian pound’s value against the U.S. dollar falling by half since before the war began.  Bank profits fell by anywhere from 40 to 95 percent last year alone.

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