Institute for War and Peace Reporting | Giving Voice, Driving Change

Rising Prices Cause Alarm

(01-Apr-08)
By IWPR
Syrians are concerned that sharp price increases in basic foods like bread will have a major impact on an economy that is already in poor shape.



The economics ministry recently announced that 15 million Syrians – or about three-quarters of the population – have been affected by rising food prices. Experts blame rising oil prices and Syria’s increasing reliance on imported petroleum products for the spike in food costs.



Bread has reached 40 lira [80 US cents] for a kilogram sold on the open market, compared with 25 lira at the end of last year. The government also offers subsidised bread, of poorer quality.



The rising prices have been widely covered in the media, and many Syrians see the cost of bread in particular as the latest and most serious example of rising inflation. While the government has downplayed the issue, many people say they fear hungry days lie ahead.



"We have two choices left to us – either to fast, or to wait for the days of hunger,” said one civil servant. “Our incomes barely cover a quarter of our basic needs, and they ask us why we accept bribes."



Many government workers are forced to take second jobs to make ends meet. Speculation has been rife that the government will raise public sector wages. Finance Minister Muhammad al-Husain said in a statement that the government wants to raise salaries, but warned that the government is short of revenue and is also carrying a large amount of debt.



Some economists argue that pay rises would not solve the problem, predicting that they would be followed in short order by more price rises, so that people would see no net benefit.



Government critics maintain that the “social market economy” strategy adopted in 2005 in an attempt to liberalise the economy and encourage private-sector growth has largely failed.



"The government’s policy over the last three years has resulted in a disastrous situation,” said one economic expert.



He said government had adopted policies that promoted capitalism but also corruption. “The laws only help the rich and powerful,” he said. “In addition to the global economic crisis, all of these things have badly affected our economy.”



In an interview recently with Al-Hayat newspaper, Syrian deputy prime minister Abdullah al-Dardari acknowledged that there was a yawning gap between rich and poor, but denied that poverty was on the increase. He argued that the country needs to press on with liberalising the economy.



(Syria News Briefing, a weekly news analysis service, draws on information and opinion from a network of IWPR-trained Syrian journalists based in the country.)