Q&A Muhammad Zafer Muhabbek, Minister of Economy and Foreign Trade
Q&A Muhammad Zafer Muhabbek, Minister of Economy and Foreign Trade November 2012
Syria Today talks with the former head of Syria's Central Bank in Aleppo, professor and head of the Economic Sciences Association, about the government's solutions for the country's economic crisis.
PhotoAdel Samara After 19 months of crisis, how do you characterise the Syrian economy today?
It is undergoing a very exceptional phase caused by oppressively imposed foreign policies which have significantly restricted most commercial activities, hit citizens’ basic needs, and paralysed key economic sectors.
The government always talks about alternatives and solutions: what are they?
Unfortunately, due to past economic policies, most of our trade relations were in one direction only, ignoring other markets in various countries. That is why the sanctions’ impact was extensive. Now, we are working to find alternative markets and develop new economic relations with friendly, supportive countries. Syria is a rich country with various resources and we have to rethink the best way to use them.
This search for friendly markets is not new, but until now, citizens face increasing difficulties in meeting their basic daily needs. When will we really experience the effects of this solution?
This transformation process is not easy; it needs radical changes in policies, conventions, and even in the form and content of Syrian products. Also, any commercial deal certainly means financial transfers, which under sanctions become very difficult. Moreover, many private international companies from friendly countries are interested in dealing with the Syrian market but fear being subjected to international sanctions. However, the Syrian government is still providing for all citizens’ basic needs. We faced brief shortages but were quickly able to overcome them.
How do you comment on the many international and local reports on Syria suggesting a significant decline in various economic indicators?
Of course there is a kind of decline, but the Syrian economy is still surviving. In such a situation, the numbers could not show the reality since many trade activities cannot be officially counted or registered. The informal economy has a key role in the country’s economy today. For example, Syrian non-oil exports in 2011 were greater than in 2010. According to official figures, import volume declined, but no products were missing from the local market, which illuminates the important role of the shadow economy currently.
Official statements contradict each other concerning wage increases: while the minister of Internal Trade and Consumer Protection called for increasing the minimum wage to SYP 30,000 (USD 441), you declared such an increase impossible. Why this discrepancy in visions?
There is no discrepancy in visions; however, there is a difference between our wishes and the reality. We all wish we could increase wages, but we cannot adopt such a change now. This increase is mentioned in the ministerial statement as a strategic objective we have to work to achieve, but not in the short-term. The same goes for lowering prices: under such circumstances we cannot reduce them, but we are working hard to make sure all products are available.
The business sector has suffered greatly during the last year, mostly due to unstable governmental strategies. Do you have any strategies to support this sector?
Unfortunately, Syrian investments projects abroad are bigger than those inside the country. We have to figure out why and find solutions to facilitate business and investment procedures. Therefore, we have formed two working groups. One is a consultative council comprised of experts that will convene monthly to handle issues related to the current economic situation, particularly the real needs of Syrian businessmen, exporters and industrialists. The other is a committee tasked with receiving complaints from citizens and economic and trade figures, and submitting a weekly report suggesting means of handling them.
Is there any kind of governmental support for owners of small and medium projects?
Certainly, these projects top our current priorities. This sector has suffered greatly from negligence and lack of regulation. We are working to make these projects integrated production units capable of providing products that are marketable abroad.