Syria’s War Economy: Who’s Profiting from the Conflict?

December 9th, 2012 - by admin

Al Jazeera – 2012-12-09 02:52:57

(December 8, 2012) — Trying to understand what is going on inside Syria is difficult to say the least. There is a devastating war raging, independent journalists are not allowed in, and for our purposes on this programme there is no official economic data.

But what information we do have points to a ‘war economy’ — money and food supplies are being kept aside for the government, the army and its supporters.

Before the crisis, the Syrian economy was worth about $60 billion. There used to be a budget deficit of between three and five percent of gross domestic product (GDP). But in 2013 the forecast is for a budget deficit of 745 billion Syrian pounds (around $10 billion) — which is more than one-sixth of its GDP.

According to the budget unveiled by Mohammad Juleilati, the Syrian finance minister, next year’s budget has been increased by four percent to almost $20 billion.

Public sector salaries will also go up by 13 percent, in an effort to keep things afloat and people happy and there will be a 25 percent boost in subsidies on food, energy and agriculture. The trouble is that none of this takes into account Syria’s plunging oil revenues.

What are the ins and outs of a war economy? What does it mean for the people in Syria suffering from the war, who really need the kind of money and support that the Syrian government appears to have? And who has been backing President Bashar al-Assad with cash, and how?

Counting the Cost is joined by Jihad Yazigi, the editor-in-chief of The Syria Report, which provides economic news and data on the country, to discuss the Syrian economy.

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