In 1946, Syria’s anti-colonial war ended in victory. The post-colonial government’s task of building development through self-reliance or socialism during the 1950s and 1960s was followed by the easing of the socialist stance under Hafez al-Asad and ended with the introduction of fully fledged neoliberal reforms in the 2000s. These three periods—socialist developmentalism, its easing, and its termination—are the three main stages of Syria’s recent economic history, until the breakout of the conflict.
Since independence, Syria has struggled to fend off imperialist aggression. Throughout its age of progressive reforms, beginning with its first national parliament in 1954, and during its era of socialist dirigisme, Syria became a relatively prosperous and economically self-contained nation (Hemesh 2014; Chouman 2005). Starting from a colonially induced low developmental base in the post-independence era,1 it registered significant advances against illiteracy and in improving healthcare and other human development indicators. Most significant among its socialist policies were land reform and redistribution measures. These righted the wrongs of centuries of inequality and harmonised the pace of economic development for years to come.
Swept by the global momentum of neoliberalism after the fall of the Soviet Union, Syria loosened its socialist dirigisme and opted to enter the world of free markets. By late 2010, the economic model that had previously ensured the basic needs of society through local capacities and resources came apart. Inevitably, economic fragility slipped into political fragility.
Syria exists in a war zone. It has been and remains officially at war with Israel. Given its level of underdevelopment, its security is not only a matter of its national defences—it does not enjoy the high-tech military capabilities to ensure it a self-defence capacity through technological parity and instead must rely on peoples’ war. For that, Syria first depends on the unity of its people, their anti-imperialist forms of consciousness, and the security of the livelihoods of its working masses. Security for Syria is a holistic affair: it is the synergy between the primacy of national security and communal and individual securities. Such a security dynamic encompasses all the sub-components of security: security of health, education, shelter, and so on and the economic and social policies that cement industrial production and the public sector of the economy. Obviously, neoliberalism is an ideology that favours private over the public concerns. It quintessentially de-securitises Syria.
By embarking on the neoliberal road, Syria followed the mantra that the private sector is the true leader of development. It acceded to the delusion that a momentarily diluted sovereignty is a small price to pay for long-term economic success. However, just as every other state falling outside the cordon sanitaire of imperialism failed the task of development under the diktat of neoliberalism, Syria succumbed. By 2010, its social and economic indicators, the true gauges of value transfer to the working class, plummeted.
Development has its rules. No state can develop if it does not emplace the necessary institutional safeguards to subordinate economic to social goals. Syria’s old, new, and state bourgeoisie were in control of the levers of state power. They were eager to expand and dollarise their private concerns and/or to recapture the lost properties confiscated under the Arab socialism of the 1960s. The institutions tasked with development lacked a working-class component. As such, they aligned development with private, as opposed to social, ends. And above all, they compromised national security. The resultant disaster is strictly the responsibility of the neoliberal class, which is the cross-border class relationship that extends to but is not limited to Syria. This relationship takes institutional form and power in the political sphere and its accompanying policies of dollarised finance that continue to grab public wealth via Syrian holding companies and offer their services as border guards for the Israeli state. This layer of the Syrian bourgeoisie, the “holding company layer,” is the subordinate partner of financial imperialism. It assists in setting ablaze the Syrian social formation at the behest of its more senior partners abroad who, in turn, at the behest of capital incarnate in history, effect the accumulation side of growth by waste, setting aside excess capacity, or the destruction of underutilised capacity in a world of overproduction.
In Syria’s race for American-style “modernity”—the ostentatious consumption signifying status and the Veblenian emulation of the richer imperialist masters—much was lost. The state, the organ that organises the expansion of national capital, capitulated to the competing interests of comprador-merchants willing to dismantle the country and sell it as scrap metal. An international financial class devoured its Syrian offspring, growing as it does by the destruction of value.
Although market reforms began in the late 1980s as soon as the USSR fell, it was not until the mid-2000s that the state started to seriously ration its public and welfare provisioning. By the late 2000s, it had laid most of its financial and real wealth at the feet of the private sector. Resource allocation mechanisms followed personal interests and whims. Peculiarly, the wide-ranging liberal economic reforms introduced by Bashar al-Asad eroded the income share of labour in the GDP (Matar 2016). In 2006–2007, his government introduced such a tremendous and rapid raft of liberal reforms that their impact resembled, to a certain degree, the “shock therapy” experienced by Russia after the fall of the Soviet Union. The government removed the price caps on necessities, withdrew subsidies that supported the basic consumption bundle, and retrenched the credit and trade facilitation that backed nationalist industrial production. Although the rate of new entrants into the labour market continued to rise at a diminishing rate, the neoliberally designed rate of “decent” job creation declined at a much faster rate. What could have been a boon amidst lower long-term fertility rates, which lowered the rate of new entrants into the job market, became a bane because of fiscal and monetary contraction, combined with the deregulation of the external channels of value flows—namely, the capital and trade accounts (Kadri 2016). In response to lower investment and consumption demand, labour demand plummeted. Yet in official figures, the unemployment rate declined. As occurred elsewhere, an immense pool of redundant labour, which eked out a living in informal poverty employment, was now counted as employed. However, the real unemployment rate, the one associated with “decent” living standards, rose.
Whether by repression or by ideologically alienating measures, liberal economic reforms crowd out the public or labour-related concerns. They exert downwards pressure on an otherwise well-deserved income share of the working class. Rising inflation dampening labour’s purchasing power, widening economic and social polarisation, neglect of rural areas, and increasing rural-urban migration contributed to the objective conditions of social unrest in Syria. The subjective conditions, the perception that there is a crisis of rule within the ruling class (Lenin 1917), arose as reactionary media fanned the flames of sectarianism and as other Arab regimes appeared vulnerable and easy to topple early in the Arab Spring.
A caveat may be called for here. These subjective and objective circumstances prevail in all societies, including the advanced ones. However, they interact to dis-equilibrate an order only under specific historical contingencies or when the organisational and ideological balances of the class struggle reach a threshold requiring realignment. For instance, one can think of the American two-party system, be it Trump’s or Hillary’s popular support during the 2017 election campaign, to appreciate that an indoctrinated and alienated working class can inflict upon itself significant harm without exhibiting the slightest signs of awareness. Working classes are internationalised social and historical relations whose dividedness is the manifestation of capital. And to be sure, for any working class to segment along identitarian and sectarian lines is a self-defeating course of action.
Leading Indicators of Syria’s Descent
Prior to the Arab Spring, there were several indications that reforms were headed in an anti-worker direction. Principally, investment moved away from industry into commercial types of activities to ensure quick returns to the reconstituted post-liberalisation comprador-merchant class. Our meetings with the Chambers of Commerce and Industry, prior to the Arab Spring, revealed the exuberance of the former group and the dismay of the latter. Naturally, no changes to the production base go unanswered by changes in production relations. The shift away from industry to commerce, declining productivity followed by falling wages and rising income inequality, was mirrored by an ideological shift away from nationalism, the Ba’ath party, and pan-Arab politics.
The downside risk of such a model came into evidence as the hegemony of the state over civil society shrunk and the hidden ferment of popular discontent with the declining standards of living escalated. Although the dichotomy internal-external is analytical, let us say for the sake of expository clarity that the poor interface of neoliberal policies with society impacting the working class is the internal component. Put differently, the Syrian working class is the internal or national side. Internal and external in terms of value relations cannot be associated with the construct of identity or nationality. After all, the dollar is the world’s currency and an international wealth-holding medium. As such, it unites ruling classes across national borders. Internal and external are defined according to class, not nation.
However, neoliberalism is a worldwide dominant ideology—the ideology of the global ruling class. It is an external ideological doctrine forced down the throats of the Third World. Just as it was imposed on weak states everywhere to usurp their surpluses, it was also forced upon Syria. In our conversation with Syrian official figures in different ministries, between 2007 and 2008, we were repeatedly informed that Syria wanted to satisfy the International Monetary Fund (IMF) and the World Bank (WB), institutions from which it took advice.
Syria even sought to join the World Trade Organization (WTO). With respect to this institution, we asked the official in charge of reforming trade: Why are you removing the trade barriers that protect your fragile industries, and abide by WTO rules when the US would veto your accession to the said organisation? He facetiously answered that we are turning economically to the right in the hope that in...