Economics alone could destroy Syria - former minister

Economics alone could destroy Syria - former minister
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Published March 7th, 2013 - 12:06 GMT via

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Violence aside, economics alone can fragment Syria
Violence aside, economics alone can fragment Syria
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Economic devastation is tearing Syria apart, perhaps irreparably, if fighting rages for another two years, according to a former minister now working on a U.N.-backed reconstruction plan.

Abdullah al-Dardari said the damage wrought by the violence would already cost up to $80 billion, an impossible bill for a government which would soon be unable to pay state wages, let alone fund a nationwide program of rebuilding.

As millions of Syrians are driven deeper into poverty and the ability of President Bashar Assad’s regime to provide basic services erodes, the forces pushing Syria toward disintegration will grow stronger, he said.

“Economics alone can fragment Syria if we go on like this,” said Dardari, who served as Assad’s deputy premier for economic affairs for six years until shortly after the uprising against the president erupted in March 2011.

Now working as an economist at the United Nations in Beirut, he heads a team devising a post-conflict plan – trying to bring Syrians from all sides of the crisis together to chart an inclusive political, economic and social reconstruction agenda.

“If this conflict stops today, we can still save the country and its economy, its society, its unity and sovereignty,” Dardari told Reuters at his office in the United Nations Economic and Social Commission for Western Asia in the Lebanese capital.

Describing what he called a “very grim” economic picture, he said the economy shrank 35 to 40 percent in the last two years and unemployment soared to 33 percent from 8.3 percent.

Pre-conflict “strategic assets” including large foreign reserves, a positive balance of payments, low domestic and foreign debt, a budget deficit of just 1.7 percent of GDP and a healthy non-oil trade balance had “almost evaporated,” he said.

“The government will not be able to finance its recurrent expenditures in full if the conflict continues beyond 2013,” Dardari said. “I’m talking about salaries and wages mainly.”

If the war lasts into 2015, unemployment would reach 58 percent, probably with no jobs for young people, and the number of Syrians living in absolute poverty, on less than $1.25 a day, could rise to 44 percent from 12 percent before the crisis.

“Mali has a poverty line of 44 percent, so when [U.N. peace envoy Lakhdar] Brahimi talks about the Somalia-ization of Syria he is not exaggerating,” Dardari said. “This is fertile ground for fundamentalism, extremism and the splintering of society.”

The United Nations says 70,000 people have been killed in the increasingly sectarian fighting that has reduced entire districts of Syria's main cities to ruins.

“Despite the tremendous destruction, we are still at a crossroads,” Dardari said, adding that if the conflict stopped now it would be possible to rebuild the country with acceptable levels of foreign and domestic debt.

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