Building up a DFemocratic State for a Modern Syria

 the Blog Papers of Dr. Michael Sakbani; Economics, Finance and Politics

Michael Sakbani, Ph.D., is a former professor of Economics and Finance at the Geneva campus of Webster and Thunderbird. He is a senior iational consultant to the UN system, European Union and Swiss banks. His career began at the State university of NY at Stoney Brook, then the Federal Reserve Bank of New York followed by UNCTAD where he was Director of the divisions of Economic Cooperation, Poverty Alleviation, and Special Programs.  Michael Sakbani has published 150 professional papers and coauthored six books. The « Intelligent Economist » elected michael.sakbani.blogspot.com as one of the top 100 economics blogs in the world in 2020,.2022 and 2023.

Brill and Kodus disseminates Dr, Sakbani`s papers to all research institutions in the World.

Dr. Sakbani won numerous prizes and awards for his intellectual distinction.

 

                        Part two*

Building up a Democratic State for a             Modern Syria 

                      

                             By

                    Dr. Michael Sakbani

 

Where is Syria now

In 1955, Syria had a per capita income of $ 150; the level of literacy stood at 59 % (World Bank; Syrian Statistical Bulletin)^[i]. In the same year, the GDP per capita of South Korea was $70.54, and the level of literacy 20% (Trending Economics)^[ii]. In 2022, the per capita income of Syria was $537, which declined from $ 2806 in 2010 (Macrotrends.net; World Bank)^[iii]. That of South Korea occupied the 10^th highest rank in the world standing at $32,250(www. Statistitics.com, international)^[iv].  In south Korea the level of literacy was 100 per cent. In Syria, before the disruption of the revolution, the level of literacy in 2011, was at 79 percent. This comparison juxtaposes the drastic failure of Syria in economic development and the drastic success of South Korea. 

The new government faces a Syria with empty central bank coffers. In 2011, the foreign exchange reserves stood at $ 24 billion. At the end of 2024, they stood at $ 200 million. The GDP was $ 68 billion in 2010. Today it stands at $8 billion. The lira which was in 2011 exchanged at 70 Lira per US dollar is today at 12,000 per dollar (exchange rates.org)^[v]. And to add to this list of misery, inflation was running at 47.5 percent in October 2024 (Macrotrend.net)^[vi].

The economic system of Syria    

Syria has never had an economic system-identity. Its liberal system after independence was a bourgeoisie- feudal setup, which showed little concern in developing its poor rural part and had only 3 years before the military coups started. As a result, when the rural population came to power through military coup d`etate, it opted for socialism as an economic system and placed significant obstacles on the urban private sector and its national bourgeoisie. This was unfortunate, because Syria is a country acknowledged to have a dynamic entrepreneurial middle class. This resulted in the state running the economy with extremely limited space for the private sector.  Moreover, with the demographic boom witnessed in Syria, the public sector became a large employer of workers with no other opportunities. The result was a huge underemployment phenomenon and a clear economic inefficiency in the public sector.

*In this part, we explore the economic issues and how to jump-start the economy of Syria along with the Kurdish problem, political Islam, and critical evaluation of the received culture. 

The public sector policies in agriculture cut the prices of farm products to moderate the cost of living of the urban consumers while abandoning price support for farmers. The result was a decline in agriculture and a massive abandonment of farmland of young farmers. In the industrial sector, the state nationalised all the private sector companies and ran state enterprises, the majority of which, had deficits in most years. Their continuation was assured by state refinancing, i.e. printing money. 

 

The discovery and exploitation of oil and gas should have been a boon to the Syrian economy. However, its revenues did not go to the general budget but to President Assad personal control. Nobody knows how these funds were used, but the fabulous riches of the Assad family and its collaborators might be one unknown destiny. At any rate, in the decade of the nineties, oil and gas revenues declined by eleven folds, and given the poor performance of the economy, the average rate of GDP growth was only 1 per cent while the rate of population growth was 3 per cent (UN and CIA statistics)^[vii].

 

Syria has spent 60% of the public budget on the Army since 1949 and less than 6 % on education and technical training. This is the army that lost all its battles with Israel, suppressed civilian control, and used its arms to kill the Syrian population and destroy the country since the start of the revolution in 2011.

   

Economic development in Syria lies in jettisoning off the socialist model and replacing it with a regulated market system which opens the door for the nationalist bourgeoisie to invest and lead the economy. A free-market system is not one of unfettered capitalism, but one where there are laws against monopoly in the form of antitrust regulations and standards of competition, as well as commerce rules. It is also a system where the Syrian government must interfere in the economy fin a variety of domains,Viz. The followings: 

·      Setting up an industrial policy which provides state support to some key strategic industries, in particular, those of advanced technology, digital content, and export potential. In agriculture these policies aim at ensuring food security. In all cases, industrial policies should have clear sunset rules with specific dates of expiry.

·       On the capital account side, foreign direct investment, which has transfer of technology, should be facilitated, and encouraged by the state. 

·      Establishing a legal framework and an institutional set up for receiving, spending, and managing all funds for reconstruction from public and private sources. 

·      laying a social safety and health network for the society through programs of social security and medical- care solidarity.

 

·      Establishing a free banking framework and setting up an independent monetary authority and enacting the necessary laws for financial markets safety and resiliency, bank examination and supervision as well as bank deposit insurance.

·      Setting up effective legal mechanisms to stem corruption and public misuse of funds.     

        

. . Reorganizing and setting scientific standards for statistical collection and publication.

·      Updating professional training schools and examining high school curricula to prepare students for advanced learning.

·      Revising and modernizing University curricula to the standards of advanced countries.

 

Jump-starting the Syrian economy

One of the first things after establishing internal security is providing salaries for former government employees with necessary increases to keep up with the real cost of living.  At the same time, necessities of food, fuel, water, public- health and shelter aid provided by Arab States, World Food Program (WFP) and WHO must be distributed in an orderly manner.

The Government must seek the help of FAO to provide what is needed to starting planting for the 2025 season without delay.

 

The provision of electricity 24/24 and 7/7 is preliminary to all basic economic activities.

 

The next task is to contract international firms to rehabilitate up to date, all the roads, airports, and railways in Syria. This can be done by allowing a certain charge for users for a limited time. This will certainly be paid for by transit fees and airport`s, and ports taxes in a rather short time. Of particular importance are the M.4, the M5, the road from Daraa to Damascus to Beirut, the Baghdad – Damascus` road, and the Homs Dairululzor road as well as a Dairulzor- Haskah- Qamishly road.

 

Remittances in hard currency from millions of Syrians living abroad ought to be facilitated through banks as wamounted to $ 2.4 billion in 2024, and will certainly pass that with the change of the regime. Remittences are impeded in that Syrian banks lack correspondent relations and private exchange dealers can practice fee gouging. ,ell as exchange dealer s (Trading Economics)^[viii].

 

Exercising sovereignty over all of Syria, including the petrol and gas wells now controlled by Qasad in the Northeast Is critical for Syria. The infrastructure of these wells needs refurbishing and investment. International companies can be contracted to do that in return for limited exploitation period. To further look for oil and gas reserves, PSA contracts can be signed with companies active in this Domaine. Syria`s potential reserves are believed to be some three times the discovered ones. At present levels, Syria can earn $10 billion a year in a rather short period.

 

Tourism is an area which can be restarted with little investment, the funds can be borrowed from private sources. Syria is one of the richest countries in the world in archaeological sites.

 

Reconstruction and development

The experience of countries that graduated from underdevelopment in Asia: Singapore, Malaysia, and South Korea, is instructive. They all developed their workers’ skills and spent on technological education, they developed their export sector, they opened their economies and they carried out industrial policies in strategically promising sectors with sunset rules for stopping the support (Lee Kuan Yew)^[ix]. There is no reason for Syria to register growth rates below the median of developing countries except wrong economic policies.

Most of Syria`s infrastructure is now in ruins. The regime destroyed most cities and a great deal of housing units. The industry and agriculture are a shadow of what they used to be. And even the public sector is in ruins. Thus, the great challenge will be reconstruction at massive scale. It is obvious that Syria does not have the resources to do that by itself; there must be massive regional and international help.

The international help from Europe and the USA will not be considerable at the initial phase. As to the international multilateral financial-institutions, their help will come with conditionality and restrictive supervision. Syria can only count on its gold and reserve tranches in the IMF, and limited help from the World Bank. The UN was offering a program of “early recovery” just before the events. It should be investigated what happened to this program. Similarly, there is an international program of “Syria`s Recovery” in which the President of the Eitilaf is seated. That should be referred to the new government to name its representative. More important there is a donators and friends of Syria planned meeting soon in Paris which is of great promise and Syria should be active in its regard.   

 

The biggest investors will be the Arab states and their investment institutions. and private investors, Syrians, and Arabs.

 

The estimated costs of reconstruction banded around at $300-$400 billion, are overstated because they add losses and actual reconstruction costs (Carnegie Endowment)^[x]. That largely exceeds what will be needed. Still, it would be running around the middle of the above figures. With the outstanding business and entrepreneurial talents of Syrians, the challenge can be met if Syria achieves stability, internal peace, and effective reliable legal system. But nothing will take place if the economic sanctions are not lifted.

  

Before the Syrian revolution, there were projects to establish gas and petrol pipelines through Syria to the Mediterranean. It now time to dust of these projects and negotiate with the interested states their implementation. Syria`s geographic centrality can bring-in billions of dollars in pipeline fees.  There are three projects that Bashar Assad stopped to accommodate Russian interests. The first one is the Qatar -Turkey pipeline to Turkey and Syria. The second is the Arab line from Egypt to Jordan to Syria and then Lebanon. The third is the Iran- Iraq- Syria -Lebanon project.

Similarly, the Syrian coast has oil and gas deposits that should be exploited by international firms.

While economic development and reconstruction are massive “chantiers” for Syria, other socio-cultural-poltical problems have to be faced to forge a modern society.  

 

The Problematique of the Political Islamists

After Mustafa Kemal abolished the “khilafah” of the Ottomans in 1924, the Muslim world had no longer a central Sovereign with spiritual authority. This institutionalisation of authority was essentially nominal in as much as it was limited to the shrinking Ottoman territories and the remoteness of Istanbul. However, many voices of Pan-Islamism lamented this event. Among those was Hassan al Banna who established in 1928 the Muslim Brothers (M.B.) in Egypt. The MB advocated the reestablishment of the “Khalifah” for the entire Muslim World. It also advocated that the state and politics should be brought under the umbrella of the Sharia. Finally, it founded a secret sub- organization, which was dedicated to waging arm struggle against the British occupation of Egypt at the time. However, it continued thereafter as a part of its mode of operation.

 

The M.B. therefore, created what is now called “Political Islam”, a complexion of thought whose followers believe that religion and politics are one and the same. Islamist parties spread throughout the Arab and in parts of the Islamic world. They appealed to a large segment of the conservative population for whom religion is central to their lives in the full glare of the failure of authoritarian nationalist regimes. However, the practical experience with the Islamists raises problems that must be faced in Syria as well as in other countries.     

 

The first aspect of this Problemtique is the concept of “khilafah”,i.e. one Pan Islamic spiritual and political authority for the 1.7 billion Sunni Muslims living on all the five continents of the world. This concept has no basis in Islam. There has not been one khalif who had such an authority over such a mass of people at any time in history. Only for the thirty years after the death of the Prophet, there were successor “khalifs” ruling a rather small territory. The word “Khalif”, i.e. successor, did not have any sense for the generations after the Prophet`s contemporaries passed away from the scene. Throughout Islamic history there were more than one khalif at the same time. There was one in Damasus and one in Hijaz during the fight between the Umayyads and Abdullah Ibinul Zubaire; one in Baghdad and another in Cairo and yet another in Cordoba during the Abbasids. The same was the case during the Ottoman period. History informs us that it is near impossible to have one spiritual authority over peoples with different cultures, different languages, and different experiences.

 

The second problematique of the Islamists is the mix between religion and politics. Religions are complexes of spiritual metaphysical beliefs and rules of behaviour, ethics, and social mores. While the spiritual beliefs are personal moral choices with validity for the individual, rules for societal governance are pragmatic and changeable over time and place. There is no jurisprudence in the world that does not give legal validity to customs, mores, and practices of various societies. To believe that such things can be ordained and fixed for ever is a dogma that has no practical validity. Mixing the two has led to wars and cruel strife in Europe and in other parts of the world. In recent times, such mixing has given rise to fundamentalism and terrorism. The reason is obvious: whenever a party thinks that God`s truth is his, the others become wrapped in falsehood and a target of intolerance.

At the time of the Prophet in his state of al Madina, Yathrib as it was called, the Prophet issued the” Yathrib Proclamation” in which he promised the Jews and the other non- Muslims, equal treatment, and equal protection. This is the essence of modern secularism of equal treatment under the law for all. So, the religious state is an invention of al Banna in Egypt and Abualaa al Maudoudi under the British mandate in India (author`s note)^[xi].

 

Another aspect of this problematique is that the religiously mixed population of Syria, Egypt, Lebanon, Iraq, would face an implicit classification of first and second -class citizens. A current example is 

happening in Israel where religious parties advocate a Jewish state where only the Jews have self-determination.

 

 As a matter of historical record, in the cases where the Islamists ruled, they turned out to have no experience in running a state and no programs to follow. Moreover, in Iran, Afghanistan, Egypt, Tunisia, and Sudan, the minute they passed into power, they abandoned democracy and the peaceful alteration of governance (note)^[xii].

 

The Problem of Ethnic Nationalism; Qasad and the Kurds

Ethnic nationalism of the Baath in Syria produced Kurdish nationalism, and ethnic nationalism in Turkey has resulted in a civil war with the PKK in the Eastern provinces. Nationalism has a rich catalogue of atrocities and wars. In 19th century Europe, nationalism was the motive force behind the intra -German wars, the German -Danish war, the Franco-German war, the Intra- Italian wars. In the 20th century, it was the motive force behind world war I, and World War II. It broke up the Ottoman Empire after the Young Turks took over in 1907 and advocated a Touranic state. In the Balkan in recent years, it broke up Yugoslavia, and caused the war between Russia and Ukraine.

 

Kurdish Nationalism is a true 19th century ideology which seeks to unite a multi-tribal society that speaks different dialects and has different allegiances, in one land-locked state that will be at war with all its neighbours. Political sociology informs us that tribal societies cannot produce a modern state, for there would be insiders and outsiders.

 

In Syria the destructive pull of ethnic nationalism is now manifest in Kurdish separatism in Northeastern Syria. The rise of Iraqi Kurdistan has given hopes to Kurdish Nationalists in Syria, Iraq, Turkey, and Iran that their quest for one national state is realisable. However, there has been no Kurdish problem in Syria, because the repression that the Kurds suffered is identical to that suffered by the Sunni Arabs and other groups not looked upon with favour by the Baath regime.

 

 Syria`s Kurds, are two groups: the ones that came with the Ayubis 800 hundred years ago, and those who fled Turkey to Syria after the failure of the revolution of Sheikh Sait Peran in 1925. The previous Kurds are totally integrated; they speak Arabic and are a part of the Syrian social tissue. The newcomers live in the areas of the North and Northeast of country. They are a substantial minority in and around four provincial cities: al Hasakah, Qamishly, Efren, and Ainul-Arab (Kobani), which are physically separated from each other by hundreds of kilometres. In none of the provinces (Muhafazas) and cities, are the Kurds more than 36 % of the inhabitants; their modal size is less than 25 %. It should be recalled that the total Kurdish population in Syria in 2010 was about 1.7 million constituting 7.5% of the Syrian population of 21.6 million (UN Statistics and Syria Official Statistical Bulletin )<sup>[xiii]</sup>. This percentage might be lesser today in the larger population of 27 million, because of immigration to Iraq`s Kurdish areas.

 

After the eruption of the Syrian Revolution in 2011, many Kurds joined the revolution believing, as all Syrians did, that Democracy and the rule of law are the salvation from the Baath repression. Other Kurds, led by Saleh Muslem, were followers of the Turkish PKK of Abdullah Ocalan and constituted the YPG. These Kurdish nationalists stayed outside the revolution ranks. In 2013, the Assad government withdrew from the areas east of the Euphrates River and left arms and control to this Kurdish group to deny the arms to the opposition groups. This was an opportunity for these Kurds to start carrying out their program of separation or full autonomy within Syria, absent the resistance of the central state.

They started by killing or expelling the Kurds who do not agree with their goals. Then, they followed a policy of ethnic cleansing against other ethnic population, in particular their Arab neighbours who were the majority everywhere (Amnesty International)^[xiv]. They changed the name of the Syrian al Jazeera to Rohgova and brought the PKK Kurds from the Qandeel mountains to join and lead them^[xv] They kidnapped teenagers and forced them into their ranks, changed the children’s educational system, and took over the oil and gas areas to finance their operations. They achieved a “FaitAcomplis” control of some 30 percent of Syria`s territory and about two thirds of its agricultural and water resources. To camouflage their designs, they recruited non-Kurds into the lower ranks. This outfit never fought Assad and was skilful in garnering up European, Russian, Iranian, and Israeli support. 

 

In 2014, ISIS appeared on the scene and the US completely failed in recruiting Syrians to fighting ISIS under the condition that they pledge not to fight Assad. Thus, the US found in these separatists a pool of mercenaries that can be hired to do the fighting. This was a mutually beneficial deal: Qasad gets arms and equipment plus US political support while the US carries out the fighting without boots on the ground. Fighting Qasad did, and it defeated the ISIS terrorists and raised the PKK flag and Ocalan pictures in Raqqa, the capital of ISIS.

 

Kurdish independence or geographic or national autonomy within Syria stands on no historical basis and will bring no economic benefits to the ordinary Kurd. The Syrian state can guarantee the national, cultural, and human rights of the Kurds, but it cannot function with a geographic federation at the level of provinces, because they are not large and economically viable enough like the states of the USA. 

It is rather sad that the historical mistake of the nationalist Kurds of seeking foreign help against their own states repeats itself in Syria. Ms. Ilham Ahmed the responsible for foreign affairs in Qasad, revealed on 9 /1/2025 that she has been in contact with France and Israel about forming military buffer-zones in the Haskah province to foil possible Turkish invasion. That is treasonous and would be a harbinger of wars and endless contentions. The Kurds are better off in a Democratic Syria living in social peace and in equality of all citizens than living under the PKK terror.

Mr. Alsharä representatives held a meeting with Qasad representatives in Dhumaire airport. According to leeks about the meeting, nothing was agreed to except to continue talking (Alarabia, General Rahal)^[xvi]. Qasad wants to join the Syrian Army as an independent unit commanded by a Kurd outside the command of the Syrian forces. It wants 50 percent of Syrian oil revenues and self- governance where it controls. Furthermore, it does not want to relinquish control of the prison camps of ISIS detainees in order to keep up the claim of fighting terrorism. None of these demands is justified or should be accepted. If the negotiations yield no results, the central Government will unfortunately have to use force to solve this problem.  

 

The Received Cultural Heritage

The Islamic culture received in Syria (and other countries) is a medieval heritage passed over 800 years of petrification of Islam. The attempts to critically review and revamp this heritage in the second half of the 19th century by Jamaludeen al Afaghani, Mohammad Abduh, Taher al Jazaeeri, Mustafa Abdulrazek and others, were aborted with the advent of European Colonialism into the region. The nationalist leadership that came up in the 20th century had national liberation and not Islamic reform as its focus. The armed and cultural struggles that ensued brought national independence to Syria in 1946 but no critical evaluation of the received heritage. Indeed, the educational system that was put in place failed to educate a modern generation of the European Enlightenment and of the rational-scientific revolution of the modern world. (Sakbani, 2008)^[xvii]. This generation sombered either in the empty slogans of the nationalists or in the equally empty believes of the Islamists.

 

The repressive dictatorships of the nationalists were defeated in the 1967 war. Their political claims were vitiated by the defeat and their social and developmental domains turned out to be negligible. This opened the door in the 1970s to a period of “Islamic Awakening”, that is, the rise of Islamist traditionalists who argued that Islam is the solution and cited as a proof the great achievements and successes of the old states of the Islamo-Arab empires (idem, 2008)^[xviii]. Several Islamist intellectuals were leading figures like the M.B.`s Sayed Qutb, A.R. Yasin and A. al Zwahiri and other M.B. leaders. A fellow traveller, Hassan al Turabi of Sudan, can be included. These Islamists referenced the Fuqh, i.e. the jurisprudence and the religious thought of predecessors who lived and produced their thought eleven to twelve centuries ago. The past, in their thought, primed over the future !!! 

The position of women in the received heritage reflects the Bedawan nature of the Arab society at the time of the Prophet. Women were objects of coveted male sexual desire. To ensure access to them, a tribal kind of a system of protected property of males was in practice. This system pervaded the works of the Imams of the Fuqh who converted the de facto tradition to a de Jure provisions where women were given half the male inheritance, half the witness status, domesticated under Hijab and robbed of their free agency in so many affairs. 

In all the Islamic history, paternal masculinity was the character of the society, women were defined in reference to a male (father, husband, brother). This created a roll of servitude, of a condition of economic dependence, and of subordination to male suzerainty. Even though mothers, sisters, wives, and female relatives were honoured and protected, it was strictly a domesticated hidden reverence. For the society, this means suppression of half of the society, loss of so much genius, neglect of women education and a morality largely tinged by sexual prudence enforced via the separation of the sexes. 

At the beginning of the twenty first century, the UNDP Report on the Arab Countries revealed 50 % female illiteracy and less than 20 percent participation in the labour-force (UNDP Report, 2002)^[xix]. This is not only unfair and undesirable, but fundamentally incompatible with modern conditions. To wrap women with Hijab and confine them to the artificial social separation of the sexes, does not fit with modern economic and technological conditions. Compared to other developing countries where women participation rate in the labour-force is 40 %, a Muslim society with women participation in the labour force around 20 percent, means a comparative growth retard of one fifth. Thus, at the modal rate of growth of the GDP of 5 % for developing countries, the average non- Muslim country doubles it GDP in 14 years whereas the Muslim country does so in 17.5 years.

 Obviously, a drastic revision in this matter is in order.  

 

Geneva 17 /1/2025.   

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       Notes

1.  World Bank. org.pdf., A 59.

 2.Trading economic.com, 2023.

 

3. Macrotrend .net 1960-2023; World Bank historical data.

 

4. www. Statistics International. Com

 

 5. UN official Statistics and CIA statistics.

 

6. Macro trends.net, countries information, 2025. 

 

7. UN official Statistics and CIA statistics.

 

 

 8.Trading Economics.com , Syria. Remittences in 2024 reached more the $2.1 billion. It is certain to exceed that in 2025.  

9. UN official Statistics and CIA statistics.

10. Lee Kuan Yew, ^{From Third World To First} , Harper Collins  Publishers, New York 2000.

 

11.  On the intellectual side, the Salafist intellectual base rests on the political Islamist thinking  of the Pakistani Abualaa al Maududi, who rejects democracy and the concept of a civil state and advocates a Sharia-based state, where the sovereignty “hakimyah”, is for God , These thoughts of al Maudoudi were held at the time of struggle in British India to establish Pakistan. Later, after Pakistan was founded, he changed some of his old advocacies. But ironically, his Egyptian followers: Sayed Qutb and AR Yasin, advocated Maudoudi`s old ideas in the Arab context where the societies were essentially Muslim societies.

12. The MB of Egypt were not among the planners of the Arab Spring. In fact, they joined the demonstration on the third day. After the elections that brought them to power, President Mursi tried to have governing by decree for a short period. His government made other revolutionaries not partners in power.

The same pattern showed up in the Iranian revolution. The coalition that speared the Iranian revolution was gradually pushed off and the Mullas took over completely. Again, the same pattern showed up in Sudan where the military Islamists shoved off Hasan al Tourabi and all others.

 

 13.  Carnegie Endowment  for International Peace, 2024. 

14. Syria Statistical Bulletin, 2010, UN official statistics, 2010. 

15. The YPG in Syria is a branch of the Turkish PKK. It follows the teachings of Abdullah Ocalan, the Turkish guide of the PKK. His followers from the Qandil mountains are the actual effective leaders of the Syrian Qasad. It is estimated that the number of these Turkish fighters is about 3000.

 

16. Alarabia TV station of Saudi Arabia and General Ahmed Rahal on his YouTube, reported the contents of this meeting on 3/1/2025. 

 

17. Michael Sakbani, “Islamic militancy and The Failure of Reform and Development”, in ^{michaelsakbani. blogspot.com,} December, 2008.

 

18. Idem. 

 

19. ^{Arab Human Development report,} UNDP Bureau for Arab States and the Arab Fund for Economic and Social Development, 2002.

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