Behind the Ambiguity of Lifting Subsidies; Reducing the Wages of Millions of Syrians
The repercussions of the government resolution to lift subsidies for specific strata of the Syrian people had not yet been stabilized, while indications began to increase about the whole process being nothing more than a first step towards completely lifting governmental subsidies. It happened very quickly in way that threatens the life of millions of Syrians with further deterioration and bad conditions.
Before we go into discussing the recent government resolution, and the “new” tone about lifting subsidies for all strata, it is necessary to take into account the idea of subsidies in general and to analyze it again in order to understand the imperatives that control the policies related to this issue.
Actual Wages and their Relation to Subsidies
First, it must be understood that the idea of governmental subsidies is mainly a confession of the insufficiency of worker’s wage, and that it is necessary to give support to cover the difference or part of the difference between this wage and the minimum of necessary living expenses.
As we pointed out previously, subsidies in Syria were an expression of the imbalance between wages and profits, as balance is decisively tilted in favor of profiteers. They are also an expression of the imbalance between actual wages and the minimum of necessary living expenses.
Although everyone is talking today about lifting subsidies or keeping them, the fundamental issue lies not in subsidies per se, but in the relationship between actual wages and living expenses. Hence, a question should be asked: what does lifting subsidies for Syrian citizens mean in essence? Simply, the answer is that unless actual wages are raised to balance living expenses, then lifting subsidies means further reduction of actual wages and the accumulation of further plundered wealth by profiteers.
In other words, what is happening practically behind the ambiguity of lifting subsidies is liberalizing the prices of commodities, and this price liberalization cannot be upright nor can it be fair without paralleling with:
First: liberalization of wages, i.e., for the worker’s wage to be sufficient to cover living expenses. Without this condition, price liberalization would be a pure expression of widespread plunder in favor of profiteers.
Second: connecting wages to changing market prices, which necessitates finding a variable index (monthly, quarterly...), where wages change periodically to balance with living expenses according to this index.
It is not a New Orientation
It should be noted that the profound desire to end governmental subsidies is no spur-of-the-moment, nor is it a result of the circumstances of the crisis in the country as those mandated to “justify” the process from analysts and writers are promoting. A quick return to the path of economic policies in the country reveals that this desire was always there. Furthermore, the outbreak of the crisis in 2011 was due in part to disastrous economic policies taken by an economic team that was standard-bearer of lifting subsidies for Syrian people.
Savings to fill Fiscal Deficit
Since the resolution of lifting subsidies for certain strata was taken, a number of Ministers and Officials have claimed that there are deficits in the State fiscal, and that this resolution will allow – according to their pretext – a reduction in the fiscal deficit. The obvious question here is who is responsible for this deficit in the first place? And who led the government to reach this level of revenue scarcity? In answering this question, apologists of lifting subsidies have turned a blind eye to the governmental policies that have eliminated various sectors of national production over the past years such as industry, agriculture and tourism, and contributed to the acceleration of the collapse of the national currency, in addition to abandoning one of the most important sources of State revenue, when it renewed the contracts of telecommunication companies, whose ownership should have returned to the government in 2015. They turn a blind eye to all that and present to Syrians a single pretext which is the economic sanctions imposed on Syria (from which huge corruption in Syria has benefited and achieved enormous wealth that can also be considered one of the sources of State revenue, if anyone had the interest to actually solve people’s problems).
According to government figures, the number of families from which subsidies have been lifted as a result of the “first phase” of lifting subsidies, have reached 596 thousand families. That is, nearly 3 million Syrian citizens have been excluded from subsidies, considering that the number of members of one family is 5 people on average. Subsidies have been lifted for those people based on criteria that have become very rare, such as the family owning a car with an engine capacity of more than 1500cc, with a date of manufacture in 2008 or after, or a family member owning an excellent, first, second-, third-, or fourth-class commercial registration, and other criteria that Syrians have worked hard to prove wrong in recent days by reviewing the many cases in which subsidies for families have been lifted despite their urgent need for them.
As for the amount of “deficit reduction” achieved by this process, the government has announced that the process “has reduced the deficit in oil derivatives” by about 1 trillion Syrian pounds. However, these figures remain questionable given the absence of a clear mechanism to measure the amount of actual subsidies offered by the government, hence, the absence of a similar mechanism to measure the deficit. So, most of the figures that are being discussed about the amount of governmental subsidies are based solely on estimates and on the figures that have been monitored for subsidies in the government budget (Subsidies have been estimated by 5.5 trillion Syrian pounds in the budget of 2022). It is also known that budget estimates are usually much higher than the actual subsidies that can only be known through the closing of budget accounts (the last closing of budget accounts occurred in 2013).
In addition, the proportion of families and individuals who have been “excluded from subsidies” in the “first phase” only, explicitly contradict the estimates of the United Nations that indicate in their report that the proportion of food-secure people does not exceed 6% of the total population. That is, 94% of Syrians are food-insecure, and more than 90% of Syrians are living below the poverty line.
Lifting Subsidies Completely in exchange for Recompense
It has recently been noted that there is an increase in discussion among the government and the People’s Assembly about lifting subsidies completely for Syrian people in exchange for a “recompense”, leaving citizens in the market to face goods at global prices or at prices more expensive than global prices (as a result of the profits earned by import brokers who are benefiting from economic sanctions). No matter how much the recompense that is being talked about will reach, its value will quickly drop due to the catastrophic increases in the prices of goods in the market. So, if we assume that the government will give a recompense of 200 thousand SP for each family per month (which is higher than the figure being talked about in the media!), then the minimum wage of the Syrian worker, which is now 92970 SP, will become 292970 SP, while the average of living expenses according to the calculations of the beginning of this year has reached 2,026,976 SP. That is, the minimum of wages – after calculating the recompense - will only cover 14.4% of the average of living expenses, assuming that the prices will remain constant. Thus, how would it be if we took into account the crazy increases in the prices of goods after the resolutions of lifting subsidies?
Finishing Off the State
Kassioun has recently explained in many places that the processes of lifting subsidies aimed in the first place at ending any social role for the state apparatus. That means, ending its regulatory role and maintaining its repressive role to keep a specific method for distributing wealth. This process will be quickly reflected on the increase of the severity of social tension, as the situation of millions of citizens have become worse, and many of them have paid a lot of money to find ways to leave the country; a social tension that no one can predict its outcomes currently.
In this sense, lifting subsidies is not an ordinary governmental procedure, but an expression of the State’s withdrawal from the role of social welfare. This withdrawal has started since before the crisis, and it is accelerating today to a point where it even ends investing in subsidies as a banner under which widespread plunder has been organized; plunder that has dispossessed Syrians of the gains they have snatched all over the years.