16 May 2012
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Drawing the Poverty Line By Dalia Haidar
Five years ago, the government announced that it aimed to reduce the number of people living in poverty by between 20 and 30 percent by the end of this year. The goal was outlined in the country’s Tenth Five-Year Plan, which was also the first to contain a poverty mapping survey identifying the social groups and regions that are most in need of intensified poverty reduction efforts. The poverty alleviation assessment was largely based upon a national survey carried out in 2003 and 2004 to calculate household income and expenditure, as well as the country’s higher and lower poverty lines. Conducted by the State Planning Commission (SPC) and the UNDP, the six-year-old report, titled Poverty in Syria: 1996-2004, remains the most comprehensive and up-to-date data officially available on poverty in Syria. A new report, presently being finalised by the SPC and UNDP, is due to be released next month. It will track the government’s success at reducing poverty during a time when the country has moved from a centrally planned economy to a market model, encouraging individual initiative and investment. The report remains strictly confidential. Both the SPC and the UNDP, which once again provided technical assistance in compiling the report, refused to provide Syria Today with figures. Other NGOs working in the area of poverty alleviation such as the Aga Khan Development Network (AKDN) remain highly reluctant to discuss whether the country is winning the war against poverty, an indication of the topic’s sensitivity among decision makers. Limited data According to well-informed sources, Syria Today has learnt that the new report will state that the rate of people living in extreme poverty, defined as those unable to obtain their basic food and non-food needs, rose from 11.4 percent in 2004 to 12.3 percent in 2007. Based on results of a national survey conducted by the Central Bureau of Statistics in 2007, the report also shows that the number of people living in poverty, defined as those able to cover a reasonable amount of their basic needs, rose from 30.1 percent to 33 percent over the same period. The study measures poverty by per capita expenditure of the poor, rather than income, as Syrians often understate their income to the authorities. It identifies people living in extreme poverty as those who spend SYP 1,458 (USD 31.70) per month on basic needs. People living below the upper poverty line are those who spend SYP 2,250 (USD 48.91) per month on basic needs. The data obtained by Syria Today also only tracks poverty until the end of 2007. This means major impacts such as the ending of fuel subsidies in early 2008 which saw the price of diesel triple overnight, the global food crisis of the same year which saw the price of basic food items rise sharply, the three-year drought which affected 1.3 million people in the east of the country, and the global financial crisis, which has limited remittances coming into Syria, are not accounted for. All of which raises serious questions about the relevance of the new report, the effectiveness of poverty reduction strategies in Syria and the future of the country’s middle class. Clearly, the poverty targets of the Tenth Five-Year Plan have not been met. Despite this, the government maintains that poverty is under control. “Poverty did not decrease, but at the same time it did not increase,” Joma’a Hijazi, head of the economic technical team at the Syrian cabinet, said. “There should be more than a 2 to 3 percentage point rise for it to be considered a change.” Hijazi also points out that “poverty is not very deep” in Syria, with the majority of poor people clustered around the upper poverty line. This means, he says, that development programmes can quickly move a large group of people out of poverty and into the middle class. Dividing Syria into three zones – southern, north-eastern and coastal – Syria Today understands the new report shows that poverty has improved in the middle and coastal governorates but increased in the southern and north-eastern governorates. It also shows that the north-east of the country remains the poorest area in Syria. The 2004 study stated that around 16 percent of people live under the extreme poverty line in the Aleppo suburbs, Hassakeh and Deir ez-Zor. Contested figures A number of independent analysts from a range of economic backgrounds question the notion that poverty is not on the rise, adding that poverty rates in 2010 are sure to be higher than either the 2004 or 2007 data. Nabil Sukkar, a former World Bank economist and managing director of the Syrian Consulting Bureau for Development and Investment, is one of those. He says the quality and type of investment Syria has attracted in recent years has not been sufficient to generate the jobs needed by the poor who overwhelmingly tend to be uneducated or equipped with only a basic education. “The structure of the demand for labour is not matching the structure of the supply of job opportunities in the labour market,” Sukkar said. “So we are ending up with increasing unemployment and increasing poverty.” Sukkar says a steep rise in the cost of living, particularly during 2007 and 2008, had also dramatically impacted the poor. “The reasons behind the increases in prices were a speculative real estate boom and the partial removal of common government subsidies,” he said. “Both factors contributed heavily to inflation which impacts the poor more than it impacts the rich.” Likewise, Ayham Asad, a lecturer at the National Institute of Public Administration, said poverty in Syria was on the rise, with the country’s economic reform programme negatively impacting the lower and middle classes. “The main reason for this lies in the basic structure of the reform process which is liberal par excellence, lacking the social dimension that would have enabled it to absorb the negative effects that could potentially occur due to the transition from one socio-economic model to another,” he said. A vanishing middle class? The upcoming poverty survey is also sure to raise questions about social justice and the wealth gap in contemporary Syria. The country’s economic liberalisation has seen restrictions on a wide variety of imports lifted. Global brands have become commonplace and a rapidly expanding luxury goods market, centred in Damascus, serves as one of the most high-profile signs of the changes underway within the Syrian economy. All of which begs the question: is the wealth gap growing? Limited data is publicly available to quantitatively answer the question. The 2004 poverty report found that while between 1996-1997 and 2003-2004 poverty declined, the wealth gap widened. “Growth was not pro-poor,” the report concluded. “Non-poor individuals… benefited proportionally more than the poor from economic growth. Between the years 1997-2004, inequality in Syria, as a whole, rose. In 2003-4, the bottom 20 percent of the population consumed only 7 percent of all expenditure in Syria, and the richest 20 percent consumed 45 percent.” An investor’s guide to Syria released in 2008 by The British Syrian Society contains information on income distribution by socio-economic group. Breaking the country’s population down into six groups, it found that 3 percent of the population have a monthly income of between SYP 50,000 and SYP 100,000 (USD 1,087 and USD 2,174) while 47 percent live on less than SYP 11,000 (USD 240) per month, including 20 percent who live on less than SYP 5,000 (USD 108.70). It is unclear if the upcoming poverty report will address the wealth gap. While up-to-date figures are not available, economists such as Sukkar say it is growing because the spending power of the middle class has been put under severe stress. “My feeling is that the wealth gap is increasing,” he said. “This is because we have not been able to generate or mobilise the middle class and create a small and medium enterprise sector that is dynamic enough. The powerful and the rich are having a greater share of the cake.” Hijazi takes an opposite view, arguing that income distribution has improved. “The expenditure rate of the poorest 10 percent of the Syrian population has increased by 40 percent, while the expenditure rate of the richest 10 percent increased by 15 percent,” he said. “So the wealth gap did not increase.” Yet such a conclusion cannot be drawn from expenditure rates alone. Income figures are needed for that. And while increased expenditure does indicate the poor have more money, their standard of living may not have risen. Social safety net needed As the government prepares the Eleventh Five-Year Plan, combating poverty and generating jobs will again be major goals. “We are committed to reducing the number of people living in poverty by half by 2015,” Hijazi said. “There is a chapter on poverty and employment in the plan the SPC is preparing, along with a strategy for microfinance.” Hijazi said poverty reduction initiatives in the next five-year plan would focus on extending microfinance throughout the country and rolling out major public infrastructure developments, providing much needed employment opportunities, via public-private partnerships (PPP). The AKDN is also taking a leading role in developing this form of investment. “We are working closely with the government to develop the legal framework for these projects,” Mohamed Seifo, resident representative of the AKDN in Syria, said. “By doing that, we opened the door for other organisations to start their own projects under the PPP strategy.” For the likes of Sukkar, however, direct government assistance is badly needed to help those battling to make ends meet. “The time has come to put the social safety nets in place in the market economy,” he said. |
16 May 2012
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