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Kassioun Editorial 1178: Execution of Subsidies!
Over the past few days, there has been renewed talk about replacing “in-kind subsidies” or “consumer subsidies” with what is being called “cash compensation” or “cash support”.
This comes after the slogan “redistributing subsidies to those who deserve it” achieved its true goal over the past years, which is to reduce total government subsidies, perpetuate the prevailing brutal distribution of wealth, and make it even more brutal. According to figures of the Central Bureau of Statistics, the share of wages in national income in 2021 amounted to less than 15%, compared to 85% of profits. This was in 2021, that is, in days that were much less gloomy and bad than what Syrians are experiencing today, in terms of the value of their currency, the value of their wages, and the cost of living.
The essence of the idea of subsidies has all along been based on the fact that wages are insufficient for wage earners to be able to reach not the minimum standard of living, but the minimum needed to replenish themselves as a labor force. Therefore, the existence of the subsidy itself has always been an expression of the imbalance in the distribution between wages and profits on the one hand, and of the imbalance in the relationship between wages and prices on the other hand.
Any economic step related to wages in Syria should be built on three basic principles:
First: Minimum wage must provide the minimum cost of living, and wages must be linked to prices and move with the movement of prices, within a period of no more than three months.
Second: Moving wages with each new rise in prices so that the difference between the lowest wage and the highest wage is seven times.
Third: Every wage increase must be a real increase from real sources, and not inflationary. That is, not by printing papers and distributing them to people. The real increase comes from one of two sources or from both. The first is that it comes at the expense of profits, that is, by redistributing wealth to the benefit of its producers. The second is the presence of real economic growth that produces surpluses that can cover a real wage increase.
Back to the idea of “monetary support”; its ultimate goal is to eliminate subsidies once and for all. This is because the actual value of the monetary allowance that will be determined, regardless of how much it is, will quickly evaporate through inflation and price increases. Especially since this same allowance will often be covered, as usual, through inflationary sources. That is, simply by printing more currency.
Economists who define inflation as an organized plundering process carried out against those below and for the benefit of those above are quite right. A plundering process for the benefit of those with profits and against those with wages. The idea of changing direct subsidies on the prices of certain commodities to a “cash allowance” is a form of maximizing inflation, and thus a form of deepening the plundering applied to more than 90% of Syrians.
Securing real wage increases and securing real resources for government budgets at the same time, pass through one path, which is real growth, which no longer has an entry point other than the redistribution of wealth at the national level. The latter has no path except through a comprehensive political solution based on UNSC Resolution 2254, which places in the hands of the Syrian people the final decision in all their affairs, most importantly their livelihood and dignity.
