Counting on the People (Sustainable Development in Syria’s 11th 5 Year Plan)

What does an emphasis on human and sustainable development in the new Five-Year Plan mean for Syria’s future?

Charts by Dana Kassab

Mohammad Fathi, a young father who works for an industrial company, says that since Syria started its transition to a social-market economy in 2005, the prices he pays for food and fuel have skyrocketed.

While the 11th Five-Year Plan continues to emphasise a free-market focus – by removing subsidies and increasing the private sector’s role – Abdullah al-Dardari, deputy prime minister for economic affairs, says the plan will improve life for people like Fathi. It will do so by improving the services and opportunities open to them by emphasising the broadly-defined category of human development – the creation of jobs and improvement of services such as education.

The plan will also promote sustainable development by seeking to reduce population growth, develop people’s skills, realise equitable income distribution, provide social protection and reduce poverty. Despite significant changes since 2005, Syria’s economy remains characterised by a large public sector and a small private sphere. A population that is increasing at a rate of 2.5 percent annually is pushing up the costs of subsidies on necessary items such as bread and oil, straining Syria’s natural resources and placing pressure on the demand for new jobs.

The former socialist economy did many good things but it cannot generate the revenues needed for the next stages of development, Joshua Landis, a US professor and the author of Syria Comment blog, said. “Syria is having to reorient itself.”

New focus
The 11th plan reorients Syria by further reducing energy subsidies and allowing prices to rise to market levels, and by upgrading infrastructure and investing in core industries with the intention of creating jobs that lead to sustainable sources of income. Additionally, the plan aims to reduce disparities in social services and infrastructure among Syria’s governorates and to distribute economic investment projects more evenly.

Percentage of people-under-poverty line in Syria

The plan shifts away from industry subsidies, using the funds saved by this measure to introduce more comprehensive social-welfare programs. Many fuel subsidies were removed in 2008 under the 10th plan but by 2015 the government plans to remove the remaining energy subsidies – which cost 5 percent of GDP in 2009, according to the IMF – and phase out some blanket subsidies in other areas, such as in agriculture and water.

Populatioon-growth-rate in Syria

Unemployment-rate in Syria

“The energy deficit [the amount lost by the government through energy subsidies, which totalled some SYP 1.3trn (USD 27.8bn) during the previous five years] is greater than the total amount spent on investment during the 10th Five-Year Plan,” Dardari said. “If we raise prices to market levels, we can use the saved money for development and social services.”

A public unemployment insurance fund is in the works. It will provide unemployment benefits and training as well as monthly benefits for Syrians living below the poverty line. In the health sector, Syria is aiming to increase expenditures on health care to about SYP 4,678 (USD 100) per capita by 2015.

Additionally: “We will expand free education both in terms of quality and quantity, and do the same in health care,” Dardari said. He said that Syria will spend 30 percent of its public-investment expenditures – a total of SYP 2trn (USD 43bn) – to achieve its human-development goals.

The new plan also seeks to decrease the population growth rate from 2.45 percent annually to 2.1 percent by 2015. The plan said it will raise the legal marriage age – but did not specify to what age – to help achieve this goal. The Syrian Commission for Family Affairs is dedicating SYP 2.1m (USD 46,000) towards “population development”.

Having a balanced population is considered key to a higher standard of life for all, Amer Hosni Lutfi, head of the State Planning Commission, said.

Employment growth
Simultaneously, the plan aims to create new jobs to employ the growing population.

“We mean to create not just any job, but decent work opportunities,” Lutfi told Syria Today. “This will lead to high income and more spending, which will stimulate the economy.”

The plan aims to create new jobs within targeted industries, such as irrigation. The Ministry of Irrigation will invest SYP 202bn (USD 4.4bn) in projects, including building new dams and rehabilitating old dams and state irrigation networks. As oil revenues decline, Syria will also focus on industries that it considers more sustainable in the long-term, including agriculture, manufacturing, electricity and tourism.

Saadallah Agha al-Qala, minister of tourism, said tourist figures had almost doubled between 2009 and 2010, rising last year to some 8m. This, he said, provided SYP 330bn (USD 7bn) – or 12 percent of GDP – and employed 800,000 people by the end of 2010.

“Syria has amazing things to see, comparable to Turkey,” Landis said. “But it must do much more to attract people as its total visitor figures are still significantly lower than elsewhere.”

In the current plan, Syria aims to increase the number of tourists at an annual average of 12.5 percent to reach 12m tourists by 2015. To achieve that, it is investing SYP 33bn (USD 717m) in tourism. This investment will provide jobs for 360,000 more Syrians, the plan projects.

Rough road ahead
Some analysts argue that the plan does not go far enough and continues to focus on unsustainable areas of the economy. The public sector will still remain larger than many economists say is viable, costing the government money that could be invested elsewhere. In addition, some traditional areas that are not sustainable – such as agriculture – will still be encouraged.

“The 11th FYP does not propose to cut jobs in the public sector, which is a huge cost to the state,” Landis said. “It should also be careful not to focus on unproductive and water-intensive areas such as agriculture and industry when the money could be better spent on retraining people to work in more productive areas.”

However, the plan allocates more than seven times the amount of money to human development such as health care and education (SYP 2trn) than to agriculture (SYP 275.5bn). Such a statistic gives hope that minimising poverty and boosting living standards may be achievable.

Ensuring that Syria’s poor benefit from development is key to the country’s future, according to Maamoun Fahham, a local economist who has advised the government on sustainable development. Anecdotal evidence suggests poverty has increased since a 2004 study by the United Nations found 11 percent of Syrians lived in extreme poverty.

“This is the main concern because sustainable development cannot be achieved without this group,” he said.

I wrote this article together with British journalist Sarah Birke for Syria Today magazine.

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Green Shoots, Pesticide Free

There is a growing global demand for organic products. So why are Syrian farmers who grow their food organically not bothering to register it as such?

Hundreds of olive trees dot the road to Ahmad al-Masalmeh’s organic farm in the Dera’a governorate south of Damascus, forming a thick, green barrier. With its beautiful swimming pool and friendly dogs, Masalmeh’s property looks more like a summer house than a farm producing organic olives and grapes. Masalmeh proudly shows off his estate to visitors and explains in detail how each of the different insect traps dangling from his prized olive trees work to keep the bugs away.

“I worked with expatriate engineers and investors and they introduced the concept of organic farming to me,” Masalmeh, an agriculture engineer who first learned about organic farming in 1985, said. “It seemed well worth it. No need for expensive chemical fertilizers and pesticides. It’s enough to make organic insect traps and raise farm animals to use their compost as fertilizers. Organic farming seemed a healthy, cheap and profitable endeavour.”

Masalmeh contacted an organic farming certification body located outside Syria – the country does not have such an institution – and applied for accreditation. The process was not as straightforward as he thought. Inspectors visited the farm to test the soil and water. Annual inspections, sometimes surprise ones, followed to ensure that Masalmeh’s produce was free of chemicals.

“Organic farming isn’t only about not using chemicals,” he said. “I had to prove that the area where my farm is located isn’t polluted, gather the crops manually, squeeze them on the same day and have all this documented.”

The accreditation process was far from cheap. With Syria lacking an organic certification body, farmers who wish to acquire the label have to obtain it through an international body. In addition to the high registration fees, they must pay the full cost of an inspector’s trip. While the price of accreditation varies according to the size of the farm, for Masalmeh’s 500-square-metre property, the entire process cost him around SYP 500,000 (USD 10,638).

Few Syrian farmers can afford such an outlay. As a result, most local farmers abiding by organic principles do not apply for accreditation. Rather, they sell their produce as regular, non-organic food.

“Although organic products are cheaper to produce and can be sold for higher prices than non-organic ones, the high cost of accreditation makes it more profitable to sell it as non-organic,” Masalmeh, who only applied for accreditation in 2002 after 17 years of organic farming, said.

Increases in the prices of diesel and natural fertilizer over the past two years have also taken a financial toll on Masalmeh, so much so that this year he could not afford to renew his accreditation.

“I grow organic grapes, but I didn’t apply for accreditation,” he said. “It’s only worth it if I can export my production. But with the intense competition in the Syrian market and with the small-scale production I have, this is close to impossible.”

Cotton is key

Syria’s chief organic crop is cotton. Indeed, Syria was the world’s third-largest producer of organic cotton last year, according to industry research house Organic Exchange. According to Souhel Makhoul, director of the Horticulture Research Administration at the General Commission for Scientific Agricultural Research (GCSAR), organic cotton was produced on only 373 hectares just five years ago, but that has increased to around 28,000 hectares.

A growing number of Syrian textile companies are also moving to make use of this local, green resource. These include Bawdiqji Company in Aleppo and the Cotton Spinning Company and Manaa Brothers Company in Hama. According to a recent report by Syria’s state-owned news agency SANA, the country will soon export its first batch of clothes manufactured from organic cotton. While the EU looms as the primary market, shipments will also go to China and Mexico.

Syria also produces organic olive oil, laurel soap, medical herbs and grapes which are generally exported to the EU. Compiling an accurate picture of these organic exports is all but an impossible task, however, as organic products have not been issued with a separate customs number and as such are simply recorded as agricultural exports.

Planting the seed

Interest in organic products is spiking throughout the world, particularly in industrialised economies. Globally, organic food sales have jumped from SYP 47bn (USD 1bn) in 1990 to SYP 2.44trn (USD 52bn) in 2008, according to figures from the international research house Datamonitor. Market research also shows that organic foods represent one of the fastest-growing food segments in the EU and US. Syria, however, still lacks a dedicated local market.

“When convincing local farmers to go organic, the first thing they ask is: “Where are we going to sell our products?'” Makhoul said. “Unfortunately, there’s no local market for organic products as few Syrians are aware of their importance.”

This is, however, slowly changing. Market research carried out in Damascus, Aleppo, Homs and Lattakia by the GCSAR, in collaboration with the UN’s Food and Agriculture Organization (FAO) in Damascus, found that growing numbers of Syrians are willing to pay more to eat organic. And while still few, foreign organic products can be found in some malls in major cities. Yet despite growing interest in ‘green food’, Makhoul said that, at the moment, the only profitable market for local organic products is a foreign one.

The Institutional Development of Organic Agriculture in Syria (IDOAS), a four-year initiative between the GCSAR, the Ministry of Agriculture and Agrarian Reform and FAO, was set up in 2006 to develop the organic sector. The initiative was tasked with developing legal, institutional and scientific platforms for organic agriculture in the country. Its main achievement to date has been drafting a law to govern and promote organic agriculture which is presently awaiting approval from Syria’s parliament.

“The law will regulate organic farming in Syria so that it adheres to international standards,” Mohammad al-Abdallah, director of agricultural counselling at the Ministry of Agriculture and Agrarian Reform, said. “It will also regulate the relationship between the farmer and the certification body. Today, farmers contact the companies individually, but after issuing the law, companies will have to get permission to work inside Syria.”

Early this year, the second part of the IDOAS initiative started. It aims to establish a dedicated organic department in the Ministry of Agriculture and Agrarian Reform. The initiative will also continue to carry out several capacity-building workshops to encourage farmers to go organic. Eggs, dairy, fruits, cereals, grains and vegetables are all potential areas of organic expansion. The IDOAS is also compiling market research on potential local, regional and international markets.

“Syria has potential for organic farming because of its weather and because Syrian farmers prefer natural insect traps to pesticides, many of which are available locally,” Makhoul said. “Furthermore, there are many virgin fields in Syria that could be easily converted to organic fields and many products, like olive oil for example, that don’t require pesticides. In fact, the ministry is already using chemical-free pesticides in citrus, cotton and vegetables.”

Masalmeh, the organic farmer from Dera’a, said that without serious government support, organic farming in Syria is doomed to remain an individual and costly endeavour. At present, local organic fruit and vegetable producers lack the economies of scale or experience to tap into lucrative foreign markets.

“It’s hard to make a profit out of organic farming,” Masalmeh said. “We need a non-profit organic farmers’ association and a fund for organic agriculture that would cover the accreditation costs or the establishment of a local certifying body.”

This article was  published in Syria Today magazine.Issue no. 64

A Woman’s Touch (Businesswomen in Syria)

Little by little, women are taking up leadership roles in Syrian family firms.

Sonia-Khandji-Cachecho

Photos Carole al-Farah

Back in the 1980s, when Sonia Khandji Cachecho was still a little girl, she loved to sneak into her father’s office and watch him work. A few years later Cachecho was managing the office when her father was away on business trips. Taking on a leading role in the family company was not welcomed by all, however, and some older Damascene traders were even unwilling to do business with her.

“In the eighties, women were largely marginalised in the world of business and only the sons took over the family business,” Cachecho said. “My father, however, never discriminated between me and my brothers. He believed in a woman’s ability and encouraged me to continue my studies and work in the family business.”

Cachecho, backed unconditionally by her father, persevered in the family hair care and cosmetics business, eventually taking over the reins. Today, she also sits on the Damascus Chamber of Commerce and serves as president of the chamber’s businesswomen’s committee.

“Those business people who once frowned upon my work have changed their attitude,” she said. “I have even become an example they now ask their daughters to follow.”

Growing numbers of Syrian women are entering the world of business. Yasmina Azhari, deputy director of Maersk Line shipping services, said women have not only forced their way into leadership positions in many family businesses, but also in many employment fields traditionally dominated by men.

“The quality and quantity of women-led businesses has developed a lot during the past 10 years,” Azhari, who also set up the NGO Modernising and Activating Women’s Role in Economic Development (MAWRED) which helps female entrepreneurs launch business ventures, said.

Mariam Massouh, general manager of Massouh Trading Company, is part of a new breed of Syrian women who are now taking up senior leadership positions within their family company.

“Many people find it weird that I’m working in my family’s aluminium company,” she said. “They often tell me that aluminium is not feminine enough for women. But whether it is a small cosmetics shop or an aluminium company, at the end of the day business is business.”

Conservative social attitudes

It is not only in large family companies where women are playing a greater role. Leila Zayyat always wanted to become a fashion designer, going so far as to enroll in the Syrian branch of the ESMOD fashion institute. The sudden death of her father in 2004, however, forced Zayyat to switch careers and take over her father’s small snack shop in the Damascus suburb of Qassa. Her younger sister has also followed her into the small business. While it was not all that long ago that a young woman working as a food vendor would have been unimaginable, today the Zayyat sisters easily go about their work, supported by their customers and neighbouring business owners.

“People always hurry to help us because we are women,” Zayyat said.

Despite her success, Zayyat doubts her business would have been possible if she was living in a more conservative part of the country. Indeed, social attitudes loom as the biggest hurdle for women in business, family or otherwise.

“The law doesn’t discriminate between men and women in business, it is society that often hampers women when entering the world of business,” Azhari said. “I was encouraged in my business by the Lattakia Chamber of Commerce because they wanted to create an image of Lattakia as a civilised and open-minded governorate, but this is not the case everywhere in Syria.”

While supported by her local community, Zayyat believes her work reduces her marriage prospects. “Not all men will accept that their wife runs a snack bar,” she said.

Even if they do, creating a balance between family and business, though not impossible, is difficult to achieve. When she had children, Cachecho decided to put her career on hold.

“These days it is not that hard for women who do not want to stop working to continue because today women have servants to take care of the house while they are away,” Cachecho, who recently returned to the boardroom after a 12-year break, said. “But I didn’t want my children to grow up without me being there for them. If I wasn’t working in a family business, however, it would have been impossible for me to quit for 12 years and then come back.”

Leila Zayyat is running a snacks shop

Women and the law

While Syrian law does not discriminate between men and women in business – Article 45 of the Syrian constitution “guarantees women all the opportunities that enable them to participate fully and effectively in political, social, cultural, and economic life” – a number of legal issues confront women working in family businesses.

Inheritance is a case in point, with inheritance laws making it more difficult for women to take over a business.

Inheritance laws fall under the Personal Status Code which makes women legal dependents of their fathers or husbands. These laws are also based on religious laws. For Muslim women, this means they only inherit half of what their brothers do in accordance with Islamic teaching.

According to Cachecho, however, this problem can be solved by converting family businesses into joint-stock companies. “This solves a lot of problems for the next generations within the family and for women in particular,” she said.

The fact that children take their father’s family name, rather than their mother’s, also makes it more difficult for women to maintain their family business across generations.

“Children carry their father’s name and therefore they often establish their own family business rather than continuing the mother’s family business,” Cachecho said.

According to Cachecho, only 9 percent of Syrian companies are registered in a woman’s name. Of this total, only 15 percent are family-run firms.

Despite these obstacles, Cachecho remains optimistic for the country’s businesswomen.

“There are a lot of opportunities for women to start their own business with a small budget,” she said. “Women from different social classes are now starting their own companies. While family businesses led by women are limited in number, our hope is that many of the new businesses created by women independent from their families will develop into women-led family businesses in the future.”

This article was published in Syria Todaymagazine.

Putting Syrian Art on the Map

With dozens of contemporary Syrian artists producing top-quality work, Syrian art is pushing its way into the global art market.

Painting by Syrian artist Abdullah Murad

Contemporary Syrian art had never made a strong showing on the international art scene, due largely to the popularity of Islamic pieces. Over the last year, however, prices of modern Syrian art have gone through the roof. A major force behind the boom is a new gallery in West Mezzeh dedicated to helping Syrian artists play to win at home and abroad.

“Syrians traditionally used the investment formula of placing a third of their money in real estate, a third in collectables and a third in working capital,” Khaled Samawi, founder of Ayyam Gallery says. “Collectables for Syria’s new generation has meant German cars, Swiss watches and haute couture. We aim to help Syrians appreciate and buy their country’s art as well.”

Combining excellent business knowledge with good artistic taste, Ayyam Gallery, directed by Myriam Jakiche, is helping Syrian artists get their act together. “The only way to know what a painting is worth is to place it on the market,” Samawi says. “As our number of potential clients rises, the price of the paintings goes up.”

Photograph by Syrian artist Ammar al-Beik

The result? A mere year after Ayyam opened its doors the price of Syrian art has almost tripled. Paintings by Safwan Dahoul, one of Syria’s most important contemporary artists, used to cost around USD 8,000. When Ayyam opened, the price rose to USD 13,000. Now Dahoul pieces fetch between USD 40,000 and USD 100,000 with demand still outpacing supply even at these price levels.

“The artists provide good quality works and we provide good marketing,” says Samawi, who has signed exclusive global contracts with 10 of Syria’s most important contemporary artists, such as Fadi Yazigi, Youssef Abdelkei, Safwan Dahoul, and Abdullah Murad. “We’ve started appraising Syrian art all over the world as well.”

Samawi attributes the growing popularity of Syrian art to a constellation of factors. “The state got involved in everything over the last 40 years, but they generally let art alone,” Samawi says. “Because the country was closed to the outside world, artists here were not influenced by the West or by the state and were not pushed into tourist or commercial art. This produced styles collectors couldn’t find elsewhere.”

Painting by Syrian artist Safwan Dahoul

Samawi came up with the idea of founding Ayyam Gallery in February 2006 after reading an advertisement for Christie’s inaugural auction the following May in Dubai, where the famous auction house had opened a representative office in 2005. The sale was a big success and included works of four deceased Syrian artists: Nasser Chaura (1920-1992), Louay Kayyali (1922-1978), Fateh al-Moudarres (1922-1999) and Mahmoud Hammad (1923-1988). Kayyali’s three paintings alone fetched an unexpectedly high price of USD 40,000 each in the sale. A year later, in the most recent sale, similar works by Kayyali were auctioned of for an average price of USD 100,000 each. The auction proved a watershed event for Syrian art, ushering in a need to help Syrian artists promote and price their work. “If we consider art as a luxury item, artists had to produce, promote and freight it; that makes the artist a company!” he says. “Ayyam Gallery is an employee in this company, who promotes its goods and shares the profits.”

For Samawi, promoting art is not just hot air; Ayyam Gallery has published numerous art books for its in-house artists, and launched a free quarterly catalogue about modern Syrian art and the activities of the gallery’s in-house artists.

By Syrian artist Nihad al-Turk

To catch the eye of international art lovers, Samawi has teamed up with the Four Seasons Hotel Damascus to showcase works by Ayyam Gallery artists in the hotel lobby. At any one time, more than a USD 1,000,000 worth of Syrian art is showcased. In addition, the gallery has invited major art auction in 2006 only featured work by four deceased Syrian artists’, the third sale on October 31 2007, featured works by no less than 14 Syrians.

Together with the Iranians, Syrian artists also proved the most popular at Sotheby’s first modern and contemporary Arab and Iranian art sale in October 2007, with the works of nine Syrian artists fetching USD 422,020.

By Syrian artist Walid al-Masri

In a bid to seek new talent, Samawi launched the Shabab Ayyam competition for Syrian artists under the age of 40 in May 2007, with USD 10,000 award for the best three. The competition lived up to Samawi’s expectations and as a result, 10 young artists joined the gallery.

As for the road ahead, Samawi is optimistic. “Middle Eastern art is on its way to a great future,” he says with a smile. “The Gulf is spending millions to catch up on art. If it keeps up this pace, the U.A.E. will soon become the third art centre in the world after London and New York. That’s when the real boom will happen!”

I published this article in Syria Today magazine. Issue no. 31. Download pdf verison here.