By Jihad Yazigi

The geography of the current Syrian uprising is a reflection of the significant economic and social crisis that have been faced by large segments of the Syrian population since the early 1980s.
 
While the essence of the revolution is largely political, in the sense that those backing its objectives are overwhelmingly demanding “freedom and dignity,” there are also strong underlying economic factors that are determining its dynamics and that will weigh on the post-revolution period.
 
It is important to note that the Syrian protests have been strongest in those areas that have historically formed the core constituency of the Baath Party. This is particularly true of the southern city of Deraa, which sits at the heart of an agricultural plateau, the cities and rural areas of Homs and Hama, and the suburbs of Damascus.
 
The same people who remained solidly behind the regime against protesters led by the Muslim Brotherhood during the late 1970s and early 1980s are now in the streets calling for the demise of this very same regime. At the time, this constituency sided with the Assad leadership because the regime had spent two decades strongly investing in government and society. Their disillusionment since that time, however, has followed three decades of state divestment, liberalization of trade, neglect of agriculture and of rural areas, and government prioritization of the services sector.
 
Hence, the few years of strong GDP growth enjoyed by the Syrian economy during the early 1990s (spurred by a growth in the output of oil) and in the last decade (spurred by the oil boom in the Gulf region and the cash surpluses that this situation generated) concealed the fact that, since the early-1980s, Syria has not been generating enough economic growth to employ its rising population.
 
While, according to most economists, the Syrian economy needs to grow by an average of 8 percent per annum to generate enough jobs for new labor market entrants, it has not reached this level even once since 1980. In other words, unemployment has been increasing every single year in Syria for the past three decades.
 
These difficulties were compounded by poor policy-making on the part of the government. The free-trade agreements signed with Turkey and the Arab world in the middle of the last decade, for instance, as well as a general reduction in custom tariffs, led to an “invasion” of foreign products in the local Syrian market. This put countless industrial plants and workshops out of business and, consequently, pushed thousands of people out of their jobs.
 
Similarly, a reduction in agricultural input subsidies, accompanied by a severe drought forced tens of thousands of farmers from their lands. It also reduced the contribution of agriculture to GDP from around 25 percent to 19 percent, all in less than a decade.
 
In addition, in order to respond to its dwindling revenues, the Syrian government drastically reduced its investment and spending and applied what in practice was a copy of the structural adjustment programs imposed by the International Monetary Fund on emerging countries. This contraction of the government’s role in the economy was most obvious in the rural areas of Syria, where the core constituency of the Baath Party resided.
 
In the midst of all these difficulties and state divestment, there was one positive consequence: The government managed to accumulate billions of dollars in foreign currency reserves and save them for future generations, thanks to its short oil boom that lasted for most of the decade of the 1990s.
 
Yet this is exactly what Syria is set to lose through the international sanctions imposed on its crude oil exports. The loss of billions of dollars incurred by the government in the last few months because of the sanctions will render the reconstruction of the country and future investment requirements more difficult to fund.
 
The issues highlighted above point to the tremendous economic problems that are today faced by Syrian society. There must, indeed, be no illusions. A happy end to the current protest movement, and that included the establishment of a democratic political system, will not mean an end to Syria’s economic woes. Syrians must recognize the challenges ahead and adopt a new economic strategy that puts economic development and employment at its center.
 
Jihad Yazigi is editor of the Syria Report. This commentary first appeared at bitterlemons-international.org, an online newsletter that publishes commentaries on Arab and Muslim issues.