DAMASCUS: Syria’s new leaders are undertaking a radical overhaul of the country’s broken economy, including plans to fire a third of all public sector workers and privatising state-run companies dominant during half a century of Assad family rule.
The pace of the declared crackdown on waste and corruption, which has already seen the first layoffs just weeks after rebels toppled Assad on Dec 8, has triggered protests from government workers, including over fears of a sectarian jobs purge.
Reuters interviewed five ministers in the interim government formed by former rebel group the Hayat Tahrir al-Sham (HTS). All described the wide scope of plans to shrink the state, including removing numerous “ghost employees” – people who got paid for doing little or nothing during Assad’s rule.
Under Assad and his father, Syria was organised as a militarised, state-led economy that favoured an inner circle of allies and family members, with members of the family’s Alawite sect heavily represented in the public sector.
There is now a major shift to “a competitive free-market economy,” Syria’s new economy minister, 40-year-old former energy engineer Basil Abdel Hanan, told Reuters.
Under transitional president Ahmed al-Sharaa, the government will work on privatising state-run industrial companies, which Hanan said totalled 107 and were mostly loss making. However, he vowed to keep “strategic” energy and transport assets in public hands. He did not provide names of companies to be sold off. Syria’s main industries include oil, cement and steel.
Some state companies appeared to exist solely to embezzle resources and would be closed, Finance Minister Mohammad Abazeed said in an interview.
“We expected corruption, but not to this extent,” Abazeed said.
Only 900,000 of 1.3 million people on the government payroll actually come to work, Abazeed said, citing a preliminary review.
“This means there are 400,000 ghost names,” Abazeed, an energetic 38-year-old, said in his office. “Removing these will save significant resources.”
Mohammad Alskaf, the minister for Administrative Development who oversees public sector headcount, went further, telling Reuters the state would need between 550,000 and 600,000 workers – less than half the current number.
The goal of the reforms, which also aim to simplify the tax system with an amnesty on penalties, was to remove obstacles and encourage investors to return to Syria, Abazeed said.
“So that their factories within the country can serve as a launchpad” for global exports, said Abazeed, previously an economist at the Al-Shamal private university before serving as a treasury official in the rebel stronghold of Idlib in 2023.
IDLIB MODEL
Until sweeping into Damascus in the lightening offensive that ousted Assad, HTS had ruled Idlib as an opposition breakaway province since 2017, attracting investment and the private sector with less red tape and by clamping down on hard-line religious factions.
The new government hopes for a nationwide increase in foreign and domestic investment to generate new jobs as Syria rebuilds from 14 years of conflict, three ministers told Reuters.
However, to replicate the Idlib model, HTS will have to overcome widespread challenges, not least international sanctions that severely impinge on foreign trade.
Maha Katta, a Senior Resilience and Crisis Response Specialist for Arab States at the International Labour Organization, said the economy was currently in no condition to create enough private jobs.
Restructuring the public sector “makes sense,” Katta said, but she questioned whether it should be a top priority for a government that needs first to revive the economy.
“I’m not sure if this is really a wise decision,” she said.
