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Drought exacerbates economic woes

Many workers in the textile industry do not have employment, meaning they can be laid-off easily, and sometimes without receiving due payment
(Hugh Macleod/IRIN)

A record three-year drought which has decimated the agriculture sector, which accounts for 23 percent of Syria’s gross domestic product (GDP), is compounding the country’s economic woes, including thousands of job losses.



“If the Syrian economy slows down while the drought of the past few years continues, then the situation will be difficult,” said Finance Minister Mohammed al-Hussein in January.



Nabil Sukkar, managing director of the Syrian Consulting Bureau for Development and Investment, said the drought could pose a bigger threat than the global financial crisis. “The drought adds to the misery of less income and less spending, and this affects economic growth.”



Hani Tarabishi, a business consultant and professor of marketing and entrepreneurship at Kalamoun University just outside Damascus, said he expected the price of meat to “sky-rocket” this year as a consequence of the drought.







''It is very bad. People are afraid to buy goods. It’s the worst economic time in the 15 years I have had this shop. Trade is down 50 percent on last year.''



The recent opening up to international markets of Syria’s centrally planned economy has left it badly exposed to the global economic downturn.



“It is very bad”, said Mahmoud Ashi, a wholesale textile producer in Damascus’s ancient Souq al-Hamadiya. “People are afraid to buy goods. It’s the worst economic time in the 15 years I have had this shop. Trade is down 50 percent on last year [2008].”



Many of the country’s leading industries are haemorrhaging jobs as orders from key marketplaces in Europe dry up, leaving families struggling to meet the rising cost of living. Syria last experienced severe economic turbulence in the 1980s when inflation led to bread queues.



Industries struggle



The textile industry, one of the country’s leading exporters, has been particularly hard hit. Jamal al-Omar, director of the Public Institute for Textiles, recently told a closed meeting of industrialists that exports for the last quarter of 2008 had seen a year on year decrease of 75 percent. Industry accounts for some 28 percent of the gross domestic product (GDP).



Reports in some Arab newspapers said 80 textile factories had closed down in recent months, though this was not reported locally.



For textile workers the effect is twofold: “The number of shifts are down for the workers, and there is no overtime,” said Kinan Bahnassi, head of the Labour Market Database Project at the UN Development Project (UNDP) in Damascus.



The electronic and electrical goods industry is also suffering. Representatives have reported exports decreasing by 55 percent since the start of 2009 and expect a further decrease of 25 percent in the coming months as orders from Europe are cancelled.



Cham Holdings, an investment company; Syriatel, the mobile phone telecommunications company; and Katakit, a food and beverages company, are all downsizing.













Syria's textiles industry, one of the country’s leading export industries, has been hard hit by the global economic crisis, with reports of dozens of factory closures

Hugh Macleod/IRIN
Syria's textiles industry, one of the country’s leading export industries, has been hard hit by the global economic crisis, with reports of dozens of factory closures...
Wednesday, March 4, 2009
Drought exacerbates economic woes
Syria's textiles industry, one of the country’s leading export industries, has been hard hit by the global economic crisis, with reports of dozens of factory closures...


Photo: Hugh Macleod/IRIN
Syria's textiles industry, one of the country’s leading export industries, has been hard hit by the global economic crisis, with reports of dozens of factory closures

Rising inflation, low earnings




Inflation tripled from 5 to 15 percent between 2007 and 2008 according to the International Monetary Fund (IMF).



“Everything increased in price recently - water, diesel, electricity,” said Kalamoun University’s Tarabishi.



Earnings, however, have largely stagnated, with average wages in the public sector (32 percent of the economy) standing at 12,000 Syrian Pounds (SYP) or US$254 per month, according to economist Sukkar.



Most Syrian men do two or more jobs to make ends meet. It is a common experience in Damascus to meet taxi drivers lamenting their wasted university degree who, after haggling over the fare, will try and sell a customer make-up or perfume.



Officially unemployment is around 8 percent, though most economists put it at nearer 20 percent. With half of Syria’s population under 18, Deputy Prime Minister for Economic Affairs Abdullah Dardari said Syria will need $14 billion of investment over the next two years to meet the 6-7 percent economic growth targets required to create enough jobs for the growing workforce.



Remittances down



Further pressure will be brought to bear on the labour market by the return of tens of thousands of Syrian workers who are losing their jobs in the Gulf.



In Saudi Arabia, for example, where around 700,000 Syrians are currently employed, a new nationalisation programme for middle level jobs is set to put many Syrians out of work. Remittances, estimated to be in the region of $850 million in 2008 are drying up, straining families who relied on the extra money.



Oil production, once a mainstay of the economy, has declined to the point where Syria has now become a net importer, and the budget deficit of $5.3 billion, or roughly 10 percent of GDP, is 168 percent higher than in 2007.



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This article was produced by IRIN News while it was part of the United Nations Office for the Coordination of Humanitarian Affairs. Please send queries on copyright or liability to the UN. For more information: https://shop.un.org/rights-permissions

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