Syrian bonuses bring little change

By an IWPR-trained reporter

Wafaa Jannad, a 39-year-old civil servant, was thrilled when she heard that she and her colleagues were to receive a bonus from the government.

Jannad, who lives in the suburbs of Damascus, said she spends a large part of her monthly salary of not more than US$136 on treatment for her sick father, who is in his 80s.

She thought the $43 bonus would help her pay for his medication, but Jannad’s optimism was short-lived. She said she eventually realized that once the money was spent, she would be back to struggling to make ends meet.

"Most [public] employees are poor. Few can sustain a decent living standard without having second or third jobs," she said.

In September, Syrian President Bashar al-Assad issued a decree offering one-time subsidies for all public sector employees. The total to be distributed was around $200 million, according to government officials.

Finance Minister Mohamad al-Hussein said the grants would help increase the purchasing power of Syrians and so spur economic demand, according to a statement issued in mid-September by the state-run news agency SANA.

There are about two million public employees in Syria, mostly working in education and health and mostly suffering from low incomes and high living costs.

The proportion of public employees who earn less than $136 a month is 44%, according to figures from the official General Social Security Organization.

The subsidy was distributed just before September's religious commemoration of Eid al-Fitr, which is a time when Muslims hold banquets and donate to the poor.

In parallel with the government's decision, private employers were asked by the chamber of commerce to give their employees a bonus equivalent of 40% of their monthly salary, and most complied.

Shopowners and businessmen said that the grant had created activity in an otherwise stagnant retail market. Mohamad Barakat, the owner of a clothing shop in downtown Damascus, said sales increased following the distribution of the money.

The payments rescued his business after sales plunged in the summer despite drastic discounts, he said.

But economic experts criticized the decision, arguing that the government ought to devise more sustainable solutions to stagnation and poverty rather than the short-term policies being implemented.

The grant was important but far from sufficient to improve people's living conditions, said Ahmad Munir al-Hamash, a Damascus-based economist and the head of the Arab Association for Economic Research.

"They [the government] tossed [the money] into the market to silence hungry children and provide basic needs for people," he said.

According to local economists, there is a big gap between the average income in Syria and the cost of living, which has increased significantly recently.

The World Bank puts Syrian gross national income per capita at $2,090 in 2008 compared, for example, to $6,350 in neighboring Lebanon. In Syria, purchasing power is being eaten away by annual inflation of 20.5%.

United Nations figures show that 30% of Syrians live in poverty and 11% live under the extreme poverty line.

For Mounzir Khaddam, another economist and a professor at Tishreen University in Lattakia, the grant itself will exacerbate the economic problem.

"The grant ... will lead to rapid inflation. It will induce demand without increasing supply," he said.

Khaddam said Syria's economy was seriously sick, with a high fiscal deficit and rising unemployment. Government officials continue to blame economic difficulties on external factors, like the international financial crisis and drought that has severely affected the agricultural sector.

Some observers point the finger at the rapid shift from a state-run economy to a more market-oriented one, but say that remedies to these economic woes would not be difficult to implement.

Hamash believes that the unrestricted liberalization of trade in Syria has had a negative impact on the economy. He said many local factories that were employing thousands of workers could not withstand competition from cheaper products and were forced to cut production or sometimes close completely, leading to waves of unemployment.

He also put the blame on arbitrary taxation laws that have relieved capital owners of paying high taxes in order to encourage investment but placed the burden on common people.

The government had slowed its investments in the public sector, giving the deficit as an alibi, he said.

For Khaddam, the solution is to create a proper legal and political environment for investments to prosper in the country and that way to help in the creation of job opportunities.

He also urged the government to return to its role as a promoter of social and economic development by putting forward more effective plans to lessen the negative effects of the market economy.

After receiving the grant, many public employees said that it was not enough to improve their living conditions.

In addition to his job as a teacher in the public sector, Nabil Mohamad works as a taxi driver in the afternoons to be able to send his four children to school.

"My salary is not enough to feed them [my children] and pay the rent," he said. "It is expensive to send children to school. Then you have to pay for books and stationery."

Ibrahim Issa, a public employee, relies on the cultivation of a piece of land for extra income.

"I don't know how I will buy a house so my daughter or son can get married. Everything is expensive and getting more so," he said.

(This article originally appeared in Institute for War and Peace Reporting. Used with permission.)