In Syria, Follow the Money To Find the Roots of the Revolt

Economic liberalization without political reform to spread that wealth triggered the civil war, writes Majid Rafizadeh.

Hussein Malla/AP

The media have paid a considerable amount of attention to political analyses that focus on the authoritarian, totalitarian, and corruptible character of Bashar al-Assad’s government. However, scarce attention has been given to one of the crucial factors that have contributed to the ongoing revolt against the police-state of Syria and other Arab states. Assad’s neoliberal policies and economic liberalization—without the political reforms to redistribute the wealth—severely exacerbated the inequality between the poor and the rich. In middle-class areas and cities, the separation was especially felt. While a small portion of the crony capitalists, business class, and loyalists to Assad were able to benefit from these policies, the vast majority of the population was disenfranchised. The regime attacked the worker and peasant unions in the country, viewing them as obstacles to the neoliberal policies, by not providing them with funds that they needed to continue to function.

When Assad, a Western-educated ophthalmologist, came to power, it was inevitable that internal clashes and tensions between him and the old guard, who were the founders of the Alawite-Baathist and socialist regime of Assad, were to occur. Men such as Ali Duba (the former head of the Syrian military intelligence and a close adviser to the Syrian president Hafez al-Assad), as well as hardliners such as Maher al-Assad (commander of the Republican Guard and the Army's elite Fourth Armored Division, and also Bashar al-Assad’s brother), held opposing views of their new leader. Bashar al-Assad favored the adoption of Western-promoted neoliberalism and economic liberalization. In order to pursue the capitalist and neoliberal agenda, he realized that political readjustments, development, and reforms were necessary to foster more popular support of economic liberalization and privatization.

After the death of his father, Bashar al-Assad implemented the so-called Damascus Spring and the Committees of Civil Society, intended to introduce a limited amount of political reform so that the neoliberal policies of the state and accumulation of wealth would prosper. However, these changes were heavily criticized by the old guard.

Syria under Bashar al-Assad’s rule tried very hard to join the World Trade Organization. When the U.S. lifted its opposition, the World Trade Organization’s 153 members granted the Syrian government an observer status. Although the state was still the main economic generator, privatization was encouraged; foreign entities such as private banks, joint Saudi-French bank of Bimo, Fransabank, Bank of Jordan-Syria, and the Saudi Islamic bank, joined the Syrian market. The road also began opening for other credible international banks such as Citibank and HSBC to come to Syria and lend money at higher interest rates.

The Syrian government attempted to satisfy the demands of the international banks, which urged Syria to raise the cap and limit on non-Syrian ownership of local banks from 49 percent to 60 percent. In 2006, the Syrian regime of Assad and the new guard became the fourth-largest recipient of foreign direct investment, as well as of Arab Gulf states’ investments. The foreign and Arab investments ratcheted up from $115 million in 2001 to $1.6 billion in 2006. Assad replaced one of the old guards, the minister of economy, with a new economy and trade minister, Lamia Assi, who did not object to the new neoliberal policies.

At this time, Assad’s policies were indistinguishable from Western neoliberalism. But he resisted parallel political liberations, and his main goal was capital accumulation while equality and distribution were neglected. While the regime used its power to benefit the few on top, the villages and medium-sized cities such as Daraa and Hama were abandoned. The gap between the state and these areas, which were left disenfranchised, was filled by the hand of lower level and underpaid secret and security police, or Mukhabarat, who relied on coercion and corrupt behavior. Islamic charities and schools stepped in to fill in the vacuum that the state created by shrinking the welfare facilities in these neglected areas.

These policies of Bashar al-Assad were directly intended to transfer the “public asset” into the hands of crony capitalists, privileged networks, and corporations in order to increase the wealth of his inner circle. Unlike his father, Hafez, Bashar also sought to decrease the reliance of the Syrian regime on Russia and Iran by expanding the scope of the sweetening deals that the regime would receive from foreign and other Arab corporations. At this time, the regime’s policies and politico-economic and sociopolitical agenda departed heavily from the original Baath Party’s slogans voicing socialist and Arab nationalistic sentiments and aspirations. These sweeping changes left the Syrian people in a dire state of need and neglect.

When the uprising erupted, the regime responded with a mixed reaction, on one hand offering promises and on the other enforcing mass repression. The uprising empowered and brought back the old guard and hardliners who were marginalized by Bashar al-Assad. For people such as Maher al-Assad and Ali Duba, who was one of the orchestrators of the battle of Hama, tolerance for dissidents and compromise meant encouragement of further revolt. Therefore, they believe that if enough force and repression is used—as in Hama in 1980 and the battle with the Muslim Brotherhood, which was viewed as a success for the state—then the opposition will be defeated. However what the old guard did not consider was technology; videos, cellphones, satellite TV, and other social-media platforms such as Facebook, Twitter, and instant messaging that were readily available in 2011. This disconnect from popular culture caused the regime to lose its legitimacy and credibility inside Syria as well as outside. There was an increase of pressure on the regime.

The regime and the gilded circle of al-Assad, like those of Hosni Mubarak of Egypt, Zein Al-Abedin Ben Ali of Tunisia, and Ali Abdullah Saleh of Yemen, did gain short-term benefits in terms of wealth and capital accumulation from their privatizations and neoliberal policies—all without any of this wealth ever reaching the vast majority of the population. The flaw was that they neglected equality and distribution, political liberalization, without the foresight to realize what the eventual consequence of this imbalance of riches would be. As their leaders celebrated their profits, the people of Syria were left with nothing. This vast separation between the wealthy and the poor inevitably led to the revolt of the impoverished, not just in Syria but also in Egypt, Tunisia, and Yemen as well as in other Arab countries. Although Bashar al-Assad appeared to be successful, in that moment, with his method of gradual liberalization, authoritarian upgrading, and readjustment of the economy to the advantage of the few privileged, the neoliberal change failed to correspond and did not go hand in hand with redistribution and political liberalization.