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Sunday, October 03, 2010

The Syrian Private Sector: A Socioeconomic Farce

According to a recent publication by the Syrian Central Bureau of Statistics the average 2009 monthly salary was SYP11,000 (US$234). The same document listed the average household expenditure during the same year at SYP30,000 (US$638) per month. Equally disturbing is the fact that government jobs paid higher than those in the private sector. One last finding, which might be of interest to some, was that women were fairing slightly better than men as far as average wages are concerned.

Officially disclosed salaries in the Syrian private sector range from the minimum full-time wage of $125 to $42,000 a month. Although I am running the risk of being repetitive and for the sake of clarification, I need to rephrase the last statement. There are private companies and institutions in Syria where one employee is making (in salary) as much as 336 of his co-workers. I emphasized the word employee in order for the reader not to get the matter confused thinking that I meant the owner of the company or the institution.


This is our current state of affairs in a nutshell and 15 years after the government cut the leash and set loose a whimpering private sector in an attempt to help rebuild the dismal economy. What did the rising stars of the Syrian open market and trendy society, the Nouveau Riche and Old Money, the crooks and their offspring, the deserving self-made millionaires and the rarest of them all, the honest entrepreneurs contribute to this country besides sucking it dry of resources, potential and wealth and devastating its environment? If we neglect to mention the pious alms and free dinners (Iftar) they offer to the poor in Ramadan (with an outlandish public exposure); if we turn a blind eye toward the  human rights abuses inflicted on their employees, the miserable working conditions, the one-day only weekend, the total absence of medical coverage, the depressing pensions (still offered by the state and not by the private sector), the rampant corruption they are themselves feeding and institutionalizing; what else did they really do? How would a neutral yet informed observer, from the inside or out, rate the private sector in Syria?

Take a 15 minute ride with me through Damascus in an 8 million Syrian Pounds Beemer ($170,000) or a battered Micro-Bus with 9 other sweaty (and stinking) passengers. We will begin our tour near one of the most depressing monuments of the city, the Four Seasons Hotel, where a waitress in the nondescript cafeteria makes $170 a month, working 8 hours a day, 6 days a week and serves coffee for $15 a cup. This is where the Crème de la Crème of Syrian business meet for a quick $100 buffet lunch (per person) and discuss the unreliability of the Syrian laborer then burp without leaving a tip. Less than a hundred meters away, there is a quaint public park lying in the shadow of the oppressive building where a young engaged couple sit on a wooden bench for hours dreaming of, someday, being able to afford an apartment somewhere, anywhere in or outside the city. They buy two coffees from a peddler for 20 cents a cup and nurse them with care to make them last. Apartments in Damascus vary in price like every other modern city of course. In the Western Malki area a nice apartment can fetch $6 million but it's not for them and they accept that. The cheapest 70 square meter box they can ever imagine buying lies 30 minutes or more out of the city limits and sells for $50,000. If they were both average wage earners and if they can go on living in the streets without a bite to eat (or a cup of coffee to drink) and if they save every penny they make it will take them 9 years to buy their dream home. By then, and with the current rate of runaway inflation they will be disappointed to find out that the price has doubled. They could have registered at a cooperative housing project and paid half their salaries until the project is completed in 20 years, on average. But they were wild and careless. They were not smart enough to live on a budget. No wonder our illustrious businessmen were complaining earlier about our unreliable labor.

We are near Kafar Souseh on our Damascene ride where the new trend of consumerism blatantly hit the city in the face. Malls were erected in record times but don't expect a Walmart-like affordable department store here. Blue jeans sell for as much as $400 a pair and an average apartment near the mall will set you 2 million dollars back. A couple of kilometers down the road is the Yarmouk Camp where refugees have settled, awaiting their return to Palestine, since 1948. Families of five persons or more live in single rooms in the back alleys of the neighborhood, in Damascus, the oldest city in the world, where a hotel charges $450 for a single room, no breakfast included, and where a  janitor with a wife and kids have to live off the $200 his munificent boss is throwing at him every month. 

I know you want me to stop both the depressing tour and post. I just want to provide an answer to a nagging question some of you might have by now. Who in the hell gets paid a salary of $42,000 a month in Syria? While the average accountant's monthly salary is $400 in the private sector, some accountants are making $20,000 and up. They have mastered a highly sought after skill, that of proving to the Ministry of Finance that their employer is breaking even while he's actually making billions in profits; or to a Qatari investor that a company is making billions in profits while it is barely breaking even; or to a Western Principal that a firm is spending millions of dollars on human resources and employees' satisfaction. These hard-to-find and honest accountants along with some private banks' presidents are being paid up to $42,000 a month by legitimate businessmen and businesswomen for their invaluable services, not only to their benevolent masters but to their thankless country as a whole and to all the despicably cantankerous, capricious and unreliable Syrian laborers out there.


"Kess Ekht Hal Zaman Yalli Khalla Al-Manayek Terkab Flayek" Tartoussi Proverb

27 comments:

Gabriela said...

New template for the blog... new kind of issues.
Some parts of your post made me think about Peru. It's amaaing to find out we are not that different in spite of lots of factors.

BIL said...

First I want to say “Good Post” ….. When I hear of or read about “Free Private Sector Business” in the Mid-East, I can only shake my head. A free open market business model needs to have local and regional “powers to be” to keep their hands at bay. Not to become too involved in the operations of them. But there is a place and role for them to play and that is to create a climate of a fair tax system, and that human rights are upheld for all. That everyone has the same opportunity to succeed. When favoritisms and unrealistic programs are developed for the favored, while leaving the rest, the common laborers are left to fend for themselves. When the disparity of wages exceeds a 20 to 1 ratio (Executive level to laborer) you create a situation whereby a total middle class is non-existent. I must say that this situation is happening all too often in the western societies and that is resulting in a decreased standard living for all. The industrial motor which makes the things for one to buy become unaffordable. Thus the whole system starts to shut down and jobs get exported to lesser developed countries where those workers, albeit and I say “Happy” to have a job, it starts a cycle where they too can not afford the living standards one would want for family. Unrest and discontent arise when these “commoners” see the disparity. The powers to be cannot understand why all the unrest. Instead of dealing with the problem in an honest way for all the quick answer is to lay more undue regulations and constraints. The old saying is that you give an honest day’s wage, for an honest day’s work. But like your fat cats at the $100 buffet griping over their unreliable workers, they would rather skimp on the wages and keep the money for themselves. Thus the disparity as you describes goes on. Somewhat sad isn’t it?

Omar said...

yislam timmak Abufares, and mabrook on the new look!
I know quite a few people who have just returned from their summer vacation in Damascus. Their stories echo what you have presented. It really surprises me that an apartment in Damascus could rival, in price, an apartment in Paris with a view of the Eiffel tower.

Isobel said...

Ya! Great new look, Abufares! :)

As for the post. Wow! An eye opener for me. What disparity between salaries! And how disheartening for the young couple. I'm sure there are many countries where this sort of situation or something similar is the case. Here, many live below the poverty line while others are mortgaged to the hilt to live in their 3000 sq ft homes, while still others afford and live comfortably in their lavish homes. The disproportion, though, seems much less obvious to me. Or perhaps I just haven't ridden long enough on a city bus...

abufares said...

@Gabriela
You never told me whether you like the new look :-)

I have enough knowledge about South America to believe that we share several social and economic ills and lots of the good stuff as well.

abufares said...

@BIL
Thank you for the excellent comment which deserves to be posted on its own.
I agree with you that disparity in incomes is affecting all countries, First, Second and Third Worlds.
The effect is somehow amplified in a country like Syria where for decades the economy was controlled and rationed. Then all of a sudden a pack of wolves was set loose on a herd of sheep. You can certainly guess the sad outcome.
I am not one who proposes solutions but I do hope that someday this grotesque injustice is brought to a halt then reversed.

abufares said...

@Omar
What I wrote about is so obvious it really takes a "mentally blind" person not to see it.
However, while most point their fingers at the government and the public sector I chose to call things by their names. The private sector is as guilty, if not more, of exploiting, manipulating and robbing the people of their well-being and DIGNITY.

abufares said...

@Isobel
I'm so glad you like the new look.
You're right I'm describing a universal problem. The degree and peculiarities may vary but the corporate world is exploiting everyone and everywhere.
The situation is not unique to Syria but we should at least be aware that these "persons" should not be in anyway idolized and emulated. If a few of them are honest, hardworking and legitimate the majority are nothing but crooks.
A saddle full of gold does not make a horse out of a donkey (no offense meant to the donkey) :-)

Karin said...

Great new look Abufares ... I love it! :-)
The article you wrote is making me shake my head in disbelieve ... how in the world is that possible? I wasn't born yesterday nor did I drop in from outer space just a few hours ago and am absolutely and painfully aware of the social injustice which exists worldwide (I saw it at a most apalling degree in India) but that it is THAT extreme in Syria, I didn't know. The gap is wide in Germany as well (increasingly since 1989), here in the US (considering a populus of 300miliion+) probably even wider ... it's depressing! Call me weird but if everyone who has the capability, would assist in one way or another someone who struggles (NOT necessarily with money but i.e. food, ... ANYTHING), this world would be a wee-bit-a-better-place. The core though, is greed (a pest), and crooks, bastards - as long as they exist, thigs won't (CAN'T) change.

Gosh .. I wrote a depressing response ... sorry - but it is an issue which bugs me already for a LOOOONG time and you just happened to have hit the nail on the head!

abufares said...

@Karin
Thank you dear friend. I'm so excited about the new look cause it really expresses a mystical dream of mine.
I would daresay that most people in Syria who are employed today and who are not poor rely on a second source of income. It usually is a family piece of land that this 3rd or 4th generation is partially dependent on. But how long will that last?
I believe for most the end of the road is looming closer and this form of (partial) self-sufficiency is coming to a close. If the rampant economic disparity is not handled, quickly, efficiently and authoritatively (yes I'm for intervention when things run out of control like this) the schism will be wider and the bitterness harder to assuage.

Karim said...

Abu Fares,

I run a market research agency. One of the most interesting/depressing findings of all our surveys shows that while the Syrian population is predominantly young (approx 35% below the age of 15), household composition is skewed in the opposite direction. This means that the vast majority of households are what we call life-stage 3 (a relatively old head of household with a relatively old eldest child). In plain English, more and more people continue living with their parents well into their 30s, even if they are married. The main cause in my opinion is the unjustifiably high price of housing in this country. The main consequence is the increased entrenchment of patriarchal culture that can only lead to a bigger social mess. The middle class is being obliterated.

While I agree that government intervention is necessary when things 'run out of control like this', the prerequisite for such intervention, in my opinion, is for government to be accountable and efficient. Wouldn't you agree?

abufares said...

@Karim
Thank you for the insightful and interesting bit of statistics. It does reveal a lot about the core socioeconomic problem in Syria. While I agree that Lack of Affordable Housing is the culprit it is more a result of several root causes. Perhaps the most significant of all is the extremely high fertility rate.
The government is certainly accountable and has not done its fair share of work to alleviate most of our problems. However, I chose to blame the Private Sector for being a freeloader rather than a contributor in sharing its social responsibility. The simple fact that the government is paying, on the average, higher salaries is very disturbing. An employee in a private company is paying more in taxes proportionally(all of his income is taxable) than the owner of the business. While it's true for instance that importers pay taxes on their imports they add it again and collect it from the consumer. Their real profits are rarely taxed, and if so, at a ridiculously low rate.
The private sector, and I mainly mean the BIG FISH is not only getting a free ride but is hindering the chance of improvement for the majority of society.

Karim said...

@abufares

Abufares, I'm no fan of the BIG FISH either! You need to take one issue into consideration, however, when you compare wages in the public and private sectors. While the public sector declares the wages it pays to the penny, the private sector does not. This is a form of tax evasion (employer is required to pay a share of social security), which I am certainly not defending, but it's a fact.

In the previous post, the crux of my argument was that the government is not worthy of intervening because of the collusion that exists between it and the BIG FISH you refer to...

abufares said...

@Karim
Oh but I have to agree with you on this one. You left me no choice :-)

What you said about salaries not being declared by the private companies is also true I have to admit.

Joseph said...

I hear you, Abufares, only 3 weeks ago I was in Lebanon. I have one thing to say "Kess Ekht Hal Zaman Yalli Khalla Al-Manayek Terkab Flayek" Tartoussi Proverb. lol

Have a nice evening.

abufares said...

@Joseph
I'm so glad you approve of the proverb, lolll. Remember ours "Tartoussi" and your dialect are very similar.
I hope you've had a good time in Lebanon and I hope we get a chance to meet one of these days.

Anas Qtiesh said...

Great post in general, I just have to comment on the shoutout you gave to Walmart.

Walmart is in no way a good thing despite the seemingly cheap prices they offer. Their ethical code and business practices are extremely shady. They drive local small business out of business and they treat their workers like garbage: Low wages, bad working conditions, dismal healthcare, etc.

Heck, there's even a wikipedia article on it: http://en.wikipedia.org/wiki/Criticism_of_Wal-Mart

The best thing to do to keep prices low is to support local business instead of mega projects of any sort.

We're better

abufares said...

@Anas
Glad to see you here.
I have to agree that from one particular perspective Walmart might've been a poor choice for my analogy. My intention was to illustrate that the malls in Damascus are not for everyone, unlike Walmart in N. America where they offer an affordable shopping experience to the average consumer. I'm well aware of Walmart's exploits and in particular driving smaller grocery and convenience stores out of business.
The only point I don't agree with is that "We're better." If the sharks and whales we have over here ever get a chance to grow as big as Sam Walton I'm certain they would be a 100 times worse.
The way they are already influencing society and the economy is more devastating than the worst capitalist scenario in any Western democracy.

Somar said...

mmm,yes Syria is changing dramatically to what I wished to be more competitive system. These changes you are talking about was easily expectable for a period of time. but the real question.. where are we going after..?? is it the right or wrong way..??

actually,everybody seems to wait these answers.. but in my opinion change was important and even late.. Now government must watch the steps carefully these days or there is big chance that every things goes horribly wrong...

abufares said...

@Somar
Change by itself is not to be feared nor avoided.
My main point of argument is that although the government is to blame for years of economic mismanagement the leading Private Sector (the top "couple of hundreds" that emerged in the last 15 years) did not make real positive contributions to the country's struggling economy.
Instead of providing any significant added value they've been exploiting, manipulating, racketeering and bribing their way into filling their own pockets only. Thanks to their vagrant abuses (in the decision making process) the middle class suffered a nearly knockout blow.
It's not all the private sector's fault but they are hugely responsible for matters becoming worse rather than better off.

Anonymous said...

Egypt is a good example of a political system that moved from social to market economy and failing miserably due to lack of reform in political system. They have similar ruling party with same ideology more or less.
Economic reforms without political one is destined to fail since the party will be assuming same roles as now: executive, legislative and judicial.

Anonymous said...

It is the crappy policy of the socialist baath that led to this disastrous and miserable state. From 1963 until 1990 we haven't seen a decent growth nor respect for human rights or civil liberties. What are you whining about exactly? The $42k/mo salary? The guy is probably running the biggest bank or company. A normal soccer player in the UK playing for the premiere league would make more than that. Give me a break

Sting

abufares said...

@Sting
Thank you for your comment.
It is my opinion that the leading private sector in Syria (today) has as little respect for human rights as the worst totalitarian system in existence. That I consider a soccer player in England's Premiere League more deserving than any CEO in Syria or in the UK itself is of course my personal opinion.
I don't whine but I'm rather aggrieved when 2 employees working for the same private organization earn respectively $42,000 and $125 a month, a ratio of 336 to 1.
A good friend of mine, reading the article that probably brought you here from Syria Comment recommended this link:

http://www.nytimes.com/2010/10/17/business/17view.html?_r=3&partner=rss&emc=rss

Again, I must thank you for taking the time to comment on my blog. Not agreeing with each other is something we can both handle very well I guess.

Zenobia said...

Depressing but excellent post. thanks for writing about the realities so articulately...
Zenobia

abufares said...

@Zenobia
I just found out that I never replied to you're comment. Damn! What a jerk! I'm sorry. I really never saw it till today. You'll excuse me, won't you?
Thank you for being here :-)

Zenobia said...

i don't knowwwww. you are almost two years too late, although i probably wrote this one year after the original post, so maybe we are even....
don't be silly... i think i forgot by now...
but i love looking back at writing... unfortunately most of mine looks stupid and naive now, whereas - i am happy to report- yours is as relevant and more so with the test of time... and still always with the glow of humor on the sad reality to wash the bad news down with.
: )

abufares said...

@Zenobia
You should get back to writing, so should I, I think.
As for my post being relevant, well the writings were all over the wall and it is this Private Sector that had so far delayed the inevitable. Their fall will be heard loud and clear.
Thank you :-)