Syria Today | Failing the Poor

Failing the Poor

By Ayham Asad
Photo Carole al-Farah

The major finding of the country’s first national poverty report, prepared by the UNDP in 2004, was that about two million Syrians – 11.4 percent of the population – were living in extreme poverty, unable to meet their basic food and non-food needs. It also revealed that 30.1 percent of the population, some 5.3 million people, were living in poverty.

The government acknowledged and adopted the findings as soon as they were published. They were used as a starting point in socio-economic analysis, particularly in drawing up the Tenth Five-Year Plan which includes the overarching goal of halving the number of families living in extreme poverty by 2015. With this plan drawing to a close, the principal question at this point is: has the reform process which has been intensively underway since 2004 reduced poverty rates?

Syria’s economic reform has had a positive impact on a few – those based in the higher economic and social strata who have been able to take advantage of the economy’s transitional phase in various economic and legal ways to assume more power, economic hegemony and wealth. Simultaneously, the economic transformation has had a clear and negative impact on larger social populations, particularly the middle and poor classes, which have been subject to even more marginalisation and poverty. 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 any negative effects that might occur during the transition from one socio-economic model to another.

The negative consequences of the reform process on poverty can be witnessed via a complex group of indicators related to inflation and wage rates, as well as the distribution of national income. Official data reveals that real wage growth dropped from 9.9 percent in 2005 to 7.9 percent in 2006 and 3.2 percent in 2007. This implies a sharp decrease in the purchasing power of ordinary citizens and a severe fall in their living and welfare standards.

Moreover, the percentage of the population living below the general poverty line – those whose income is less than SYP 92 (USD 2) per day – rose from 30.1 percent in 2004 to 33 percent in 2007. At the same time, the distribution of national income shows a clear bias in favour of capital, with capital accounting for around 70 percent of national income in 2007, while wages only represented 30 percent. This indicates an absence of justice in the distribution of income, a factor which again reflects negatively on the poor.

High inflation also makes it likely that poverty has risen. The inflation rate rose by 35 percent from 2005 to 2009, according to the consumer price index. On top of this, the GDP deflator, a measure of the level of prices of all new, domestically produced, final goods and services, increased by 71 percent from 2000 to 2008. This means that there has been a sharp drop in society’s purchasing power, enough to increase poverty rates given the static growth in wages which were already low.

Price rises have also affected the breakdown of consumer spending, with food expenditure accounting for 42 percent, while rent expenses came in second at 16 percent. Real problems appear when we learn that Syrians only spend 0.97 percent of their monthly income on education and 1.7 percent on culture. Clearly, society no longer heeds knowledge or culture due to the erosion of its income.

The reform process in Syria has, to date, failed to improve the situation of the poor or middle classes alike. This is due to three reasons. Firstly, it has not succeeded in redistributing the national income among those who produce it. Secondly, it has failed to control inflation. Finally, it has been unable to increase productivity which would, in turn, increase real wages.

Ayham Asad is a lecturer at the National Institute of Public Administration in Damascus.