Market Economy for Syria


DAMASCUS/BERLIN (Own report) - Berlin is preparing for Syria's transformation to a liberal market economy. Under German leadership, a multinational "Working Group" began its work late last week. Immediately following the overthrow of the Assad regime, this "Working Group" is planning to launch urgent economic measures, including the coordination of aid projects and the implementation of economic reforms. Together with the United Arab Emirates, the German government is establishing a "secretariat," under the leadership of a German with Afghanistan experience. In cooperation with the Assad regime, Berlin had already promoted the Syrian economy's privatization. However, the nascent liberalization drove sectors of the population into bankruptcy, thereby contributing to insurgence against the regime. Berlin has already received first drafts for Syria's new economic order. They were written by an activist of the Syrian National Council (SNC), which is under strong criticism by a large part of the opposition because of the pre-eminence of the Muslim Brotherhood. Washington-based Syrian exile politicians hold leading positions in the SNC. They are demanding a Kosovo-style western intervention and consider Kosovo's KLA to be a model for the Syrian opposition.


Late last week, a multinational "Working Group," co-chaired by Germany, met for the first time in Abu Dhabi, with the aim of launching urgent economic measures for immediately following the overthrow of the Assad regime. The "Working Group on Economic Recovery and Development of the Friends of the Syrian People" was established April 1 in Istanbul by the "Group of Friends of the Syrian People," an alliance of western and pro-western countries, which support the Syrian opposition in the civil war and are cooperating mainly with the exiled Syrian National Council (SNC). The UN Security Council has neither legitimized the "Group of Friends of the Syrian People" nor this "Working Group on Economic Recovery and Development of the Friends of the Syrian People," which has empowered itself to serve as a "central forum" for launching necessary economic measures.[1]

Germany in Charge

According to German diplomat, Clemens von Goetze, who, along with a colleague from the United Arab Emirates, had co-chaired the meeting last week, the "Working Group" not only has plans for emergency aid for the immediate aftermath of the regime change, but he finds "it is a good time already to start now for a long-term perspective of the country once change comes in Syria."[2] The Marshall Plan, implemented by the United States after World War II, to provide the material foundation for the establishment of the Western alliance, serves as a model. The "Working Group" set up several sub-committees along the lines of special issues. The member countries have officially agreed on an international division of labor, with Germany in charge of "economic policy and reform." According to reports, the explicit goal is a "long term strategy" [3] for the transition "from a centralized economy to a market economy." The "Working Group" will set up a secretariat, with Germany and the United Arab Emirates each providing 600,000 Euros. It will be headed by Gunnar Wälzholz, of Germany, who had been the director of the Afghanistan branch of the German Development Bank (KFW).

Carrot and Stick

According to a participant at last week's meeting, the measures to be taken under German management will also include short-term goals. The economic projects are aimed at "attracting the silent sectors in Syria which did not completely join or which are still hesitant in supporting the revolt."[4] These projects are therefore a sort of counterpart to the economic sanctions, which are also aimed at inciting entrepreneurs, loyal to the regime, to change sides - under pressure rather than through incentive. Thus, the "Working Group" has declared that the sanctions can be lifted "as soon as their objectives have been achieved" - i.e. after Assad's overthrow, which would be facilitated if interested business circles would change sides.[5]

Consequences of Liberalization

For years, Berlin has been promoting the privatization of the Syrian economy, now being conferred to the "Working Group" - for an extended period in close cooperation with Assad's regime. In 2006, the German development organization GTZ (today GIZ) had initiated a special program entitled "Supporting economic reform in Syria." According to its description, "in 2000, the Syrian Government decided to switch to a social market economy," but "the institutions involved do not have sufficient knowledge," which is why the GTZ has to aid the government.[6] The reform's "expected impact on income and employment will improve the lives of the Syrian population," continues the GTZ - an prognosis that simply did not materialize. Quite to the contrary: the liberalization of the Syrian economy had "harmful effects" on the local manufacturing trade, as the International Crisis Group confirmed last year. For example in Duma, a suburb of Damascus, the residence or numerous artisans, who, facing ruin by the liberalization, renounced their loyalty to the regime.[7] In fact, today Duma is considered a hotbed of protest. Last January, the insurgents briefly took complete control of the town.


The SNC's "National Economic Vision" was presented in Abu Dhabi to the German led "Working Group" by Osama Kadi, executive director of SNC's Finance and Economic Affairs Bureau. This vision indicates that the liberalization would provide a higher living standard only "in the long run." A reliable framework for foreign investments must first be established, the productivity of Syrian workers must be increased, the establishment of industries, accelerated, the bank sector, reformed and new foreign business deals, sought. The "Marshall Syrian Recovery Plan," which should be implemented as soon as possible, could attract more direct investments from the West. The "Working Group's" German led "secretariat" will assist in the implementation of the plan, following Assad's overthrow and a regime change in Damascus.

As in Kosovo

The SNC, which is working in close cooperation with the West within the framework of the "Working Group" and whose staff members are willful candidates for future leadership positions, is heavily contested within the opposition. Secular oriented opponents of the regime are resolutely protesting the predominance of the Muslim Brotherhood in the SNC. Large sectors of the Syrian opposition are resenting the fact that leading SNC members are openly calling for western military intervention. For example, the National Coordination Committee (NCC), an alliance of oppositional forces inside Syria strictly opposes western military operations. The West hardly takes notice of the NCC. Radwan Ziadeh, the SNC's "Director of Foreign Relations," who, like SNC's economic specialist Osama Kadi, works for the Washington based Syrian Center for Political and Strategic Studies, has repeatedly pronounced himself in favor of Kosovo-style operations. "Kosovo shows how the west can intervene in Syria," declared Ziadeh, who had already visited Berlin's foreign ministry in July 2011, in the Financial Times last February.[8] Soon afterwards he explained that the Free Syrian Army militia plays the same role, as the KLA had in Kosovo.[9] Syrian oppositional forces recently visited Kosovo for instructions on KLA operations in 1999. ( reported [10]). The "Houla massacre," to extend the metaphor, could take on the significance of the "Racak massacre" in early 1999. Soon after the "Racak massacre," evidence was uncovered pointing toward it having been a provocation to furnish a casus belli. It has never been credibly invalidated, but this did not hamper NATO's military intervention.

Further information and background to German policy toward Syria can be found here: War Threats against Syria, Iran's Achilles Heel, War Scenarios for Syria, War Scenarios for Syria (II) and With the UN toward Escalation.

[1] Chairman's Conclusions. Second Conference of The Group of Friends of the Syrian People, Istanbul, 1 April 2012
[2] Donors Mull Marshall Plan for Post-Conflict Syria; 25.05.2012
[3] Assad verbreitet Zuversicht; 24.05.2012
[4] Donors Mull Marshall Plan for Post-Conflict Syria; 25.05.2012
[5] Chairmen's Conclusions of the International Meeting of the Working Group on Economic Recovery and Development of the Group of Friends of the Syrian People, Abu Dhabi, 24 May 2012
[6] Unterstützung der syrischen Wirtschaftsreform;
[7] Popular Protest in North Africa and the Middle East (VI): The Syrian People's Slow Motion Revolution; International Crisis Group Middle East/North Africa Report No 108, 6 Juli 2011
[8] Kosovo shows how the West can intervene in Syria; 14.02.2012
[9] Radwan Ziadeh: Have We Learned Nothing From the Nineties? Syria is the Balkans All Over Again; 22.03.2012
[10] see also With the UN toward Escalation