TV dramas a barometer for Syria's economy

The effect of the global recession is starting to hit Syria hard, and a fall in TV drama output is reflective of the increasing recession, say analysts.

Labourers wait for casual shifts at the airport road underpass in Damascus.

DAMASCUS // In a country where official statistics are generally regarded with a large dollop of scepticism, the effect of the global economic crisis on Syria has been hard to gauge. Government projections say the economy will grow by six per cent in 2009, bucking an almost worldwide trend of stagnation or, in most cases, recession. But if Syria's prized television drama industry is any barometer for the wider economy, the effect of the global meltdown has been heavy here. Last year Syrian production companies made 47 different TV serials, a record number and a sign of how buoyant the sector had become in an economy desperately trying to modernise. This year, however, just 22 dramas are being made, despite plans by Syrian state television to open a new channel dedicated to the genre this summer. With the onset of a worldwide economic free fall, sparked by the effective collapse of major western financial institutions, Syrian officials initially insisted the country's relative isolation would protect it. There has since been acceptance by the governmental economic team, led by Abdullah Dardari, a reformist, that Syria will be hit by falling export revenues and reduced foreign investments, and at a time when the country is desperately seeking billions of dollars of cash injections over the coming years. Officially at least, with the economy predicted to grow and relatively limited connections with the outside world, the outlook for Syria remains optimistic. Domestic critics of Syria's economic position are less certain though, and warn that the global recession undermines the current policies of slowly opening up the economy and transforming it from a socialist to a market-driven system. Among those critics are Elias Najmeh, a senior economist at Damascus University, and Muneer Homush, chairman of the Arab Society for Economic Research, two of Syria's most esteemed analysts. "There have been three main impacts of the global crisis for Syria," Mr Najmeh said in an interview. "Money coming in from the Gulf has stopped, the tourism sector is affected badly and Syrian exports are more expensive and so less competitive than in the past." Although he predicted that Syria would weather the storm because of its limited ties to the international financial system, he warned that most ordinary working people, many of whom were already desperately struggling to make ends meet in the face of rising inflation, would be hit by the downturn. "We don't have government statistics but I think in Syria there is a high rate of unemployment and it has increased recently," he said. "It's too early still to say if we are in a good position or a bad position, but we must take measures now to avoid the worst." The official rate of unemployment in Syria is 10 per cent but economists privately say the rate is probably 20 per cent or higher. Mr Homush, an opponent to the kind of free-market liberalisation Syria is undertaking, was far more outspoken, saying the crisis was evidence of the dangers in opening the country up and exposing it to world market pressures. "The slogan for years has been that foreign trade is the engine of economic development," he said. "On the contrary, I see the dangers in it. Government policy has been to try to reduce the effects of the crisis on the rich and push it onto the poor and the middle classes." He accused the ministry of finance of following a reform agenda that had been hamstringing the economy even before the international crisis hit. Debate about how best to manage what for decades has been a Soviet-style command-and-control economy is intense in Syria. There is disagreement about how to make changes but also widespread acceptance that fundamental problems cannot be avoided any longer; high government fuel subsidies have become impossibly expensive, revenues from failing oil production are dwindling, recent harvests have been bad and Syrian manufacturing is in dire need of modernisation. A key plank of the reform programme has been to sign an association agreement with the European Union. Long stalled, this was agreed in principle last year and is scheduled for ratification this year. It includes free-trade arrangements with the EU. Advocates of market reform remain supportive of the government's strategy. Many had criticised it as excessively cautious but, following the global crisis, now believe the authorities were right to tread carefully. "We were not isolated from the crisis because we are trying to open up. We have many businessmen who have cash in foreign banks and our exports have drastically decreased," said Mazen Mourtada, managing director of the Syrian Financial Group and one of a new generation of Syrian entrepreneurs. "In the first month we didn't feel the crisis, in the second month, the third and fourth people are realising it does affect us and that was my feeling from the beginning. "We started opening the economy in 2005 and the steps were very conservative. Our financial system is basically still strong and holding; it's secure, dependency on external banks is low. Many businesses still rely on the domestic market." Mr Mourtada, who has played a central role in establishing the recently opened Damascus Stock Exchange, insisted the future for Syria involved massively increasing the private sector's role in publicly owned firms. And he still wants to see freer, "drastically" altered financial regulations for the country to attract foreign investors.Yet he accepted that officials' caution to date was far from unjustified. "Syria still wants to open slowly. It has the fear of going through what happened to Russia when they went to a free market," he said. "We want it to be more controlled than that. "Foreign investments have a major role to play in building the economy but we have to be very careful to attract proper long-term investors, not speculators who want to make money and run." One of Syria's main symbolic steps towards a new economic system was the opening of the stock exchange in March, after the tidal wave of recession had already broken in the West. Rather than view the timing as inauspicious, those involved in the project are relieved it did not open before the problems emerged. "The timing wasn't by design, but we're happy with it," said Bassel Hamwi, deputy chairman and general manager of Bank Audi in Syria, the company behind the index tracking DSE market activity. "If the exchange had opened six months earlier, I think we'd be in a difficult situation; you'd have had share prices that took a fall with the market. But starting today there's more or less only one direction for share prices to go and that's up." Mr Hamwi admitted that opening the economy and setting up a stock exchange did involve risks, but said Syria was better placed than many countries to weather the financial storm. "This is not a leveraged country, it's not a heavily indebted economy by any means - it's one of the least indebted countries in the world," he said. "It's not a country that depends on lending or borrowing, it's not a country that has a single product, it has diversified resources. "There is nothing that should prevent Syria from succeeding if government regulations are right." [e-mail]