labour markets policies and institutions, with a focus on inclusion, equal opportunity and the...

Labour Markets Policies and Institutions, with a Focus on Inclusion, equal Opportunity

and the Informal Economy

National Background Paper The case of: SYRIA

Samir Aita Economist, Editor in Chief Le Monde diplomatique editions arabes

© 2009. All rights reserved. No part of this paper may be distributed, quoted or reproduced in any form without permission from the author.

Labour Market Policies and Institutions in Syria – Samir AITA – V4.0

EXECUTIVE SUMMARY and ACKNOWLEDGEMENTS

Syria offers today a very peculiar perspective for the analysis of labour market policies and institutions in developing countries. It experiences since the turn of the millennium an accelerated path towards liberal economic policies after decades of state capitalism, with timid growth rates and major changes in the structures of the economy following the deterioration of its oil balance. This transition comes timely when the working age population has its highest historical growth rates, and while the country has received a significant flow of Iraqi immigrants because of the invasion and the social troubles in this country. Also, the large size circular migration with Lebanon is disturbed function of the troubles in this country, and outward migration is continuing at a sustained rhythm, mainly to the Gulf countries, which are currently hit by the financial and economic crisis.

When addressing labour market questions, one of the major issues is the reliability of statistics and the clear assessment of the significance of key indicators. And in fact, all key indicators for Syria, as expressed in the data published for labour force surveys (LFS), show large year to year variations, including the size of the labour force. This questions the validity (variance) of the survey techniques especially that no comprehensive census exists on labour conditions: most of the employment outside the public sector is informal, and no systematic registration for unemployment is made, as there is no unemployment compensation scheme. On another hand, it is legitimate to question how the major shocks that occurred since the early 2000’s have influenced these variations: mainly the arrival of Iraqi refugees, the events with Lebanon and the liberalization policies of the government, in particular the major privatisations and the elimination of subsidies in agriculture. This is in addition to the influence of weather conditions (rain or drought), the varying flows of trans-border rivers and oil prices, and to the fact that the country is under US sanctions since 2004 and has difficulties to invest in such basic infrastructures such as electricity power plants. The detailed discussion of LFS data is, particularly for the case of Syria, a significant component of any analysis on the labour market. The reported size of the population is to be considered carefully, as in addition to the 18.9 million Syrian citizens residing in the country, there is around 2.4% Palestinian refugees, 1.8% non-citizen Kurds, and an estimated 7.9% of newly emigrating Iraqi refugees, in addition to a now significant number of foreign workers (mostly domestic workers). Comparatively to the 19.4 million reported in the official statistics for end of 2007, Syria population could have been then at around 19.9 million without the Iraqi refugees, up to 21.4 million with the 1.5 estimated Iraqis. All this additional population profits from the public education and health system, and contributes to the labour force, but their status in the LFS is unclear.

The population growth rate is still at around 2.45% per year, the highest between Arab Mediterranean countries. The working age population is growing at a higher rate of 3.44%, expressing the arrival of the sons of the 1980’s “baby boom” at age of work. The demographic pressure is even higher in cities, as Syria is experiencing a renewed dynamic phase of rural-urban migration. This internal migration is posing critical issues on the usage of land and resources, on urban organization (informal zones in cities) and on the urban labour market. Also, a significant


circular migration (seasonal, short term) had always existed with the neighbouring Lebanon and continues. No consistent data are available, but this migration is estimated involving around 14% of the Syrian work force (and around the third of Lebanon work force). The status of this migration in the labour force surveys is also unclear.

The participation to the labour force is a controversial issue. One factor is the above mentioned impact of the additional population, especially Iraqi refugees. Another major factor is women participation, where a significant decrease on the already low average Arab countries values (around 20%) is registered by the surveys. Considerable losses in the labour force size were measured in 2003 and 2004, especially for women; it resulted from a massive privatisation of agriculture, leading to a significant rural-urban migration. Women were the most hit by these losses, as agriculture used to constitute an important share of their employment. Women are assessed discouraged from employment in the now crowded informal urban zones, as they are there in direct competition with men, citizens and non-citizens. Women participation and discouragement from work in the informal urban zones need further assessment by targeted sociological studies; this is while the recent 2008 LFS shows a sudden significant increase in this women participation.

However, all stakeholders agree that the number of jobs needing to be created yearly to stabilize the unemployment rate ranges between 250 and 350 thousands (1/3 for women), function of the evolution of women participation and of the integration of non-citizens and refugees in the labour force.

The major dynamics of employment in Syria in the recent years is characterized by

significant yearly losses of jobs in agriculture, mostly for women, at a much higher rate than what the aggregate data on the reactivated rural-urban migration would suggest. The job creation in urban areas, in particular in industry, services and tourism, are far from coping with the wave of new young comers to the labour market and with these job losses in agriculture, in addition to the incoming migration. The period 2001-2007 has been characterized by a net average creation of only 36,000 jobs yearly: men gaining 65,000 jobs per year, while women losing 29,000 jobs. Outside agriculture, 105,000 jobs were created yearly: 90,000 for men and 15,000 for women. Most of the urban women jobs created were by the public sector; but this was far from compensating the effect of women jobs losses in agriculture. The new data for 2008 LFS shows that, in net, 98,000 jobs have been lost in one year: men have lost 141,000 jobs while women have gained 43,000 jobs; the youngest being the major losers. The effects of the crisis and policies are at stake.

The LFS show also large yearly variations in the characteristics of employment. Complex dynamics are occurring in the Syrian society. In particular, women have lost in 6 years 57% of their jobs in agriculture, which constituted 65% of their employment. This, with the insufficient women employment creation in the private sector, tends to explain the discouragement of women and the “apparent” decrease of their participation rate. The public sector has absorbed part of this deficiency, making this sector contribution now to 57% of women employment. Decent work conditions are key issues for this outcome, as non-permanent employment concerns 29% of men employment, and as 32% of men are self-employed.

The informal economy (employment) is very large. The informal sector constitutes 34% of total employment. Outside agriculture, its share in total employment has increased from 24% in


2002 to 28% in 2007. Also, 64% of formal private sector employment is informal, with no registration at the, although mandatory, social insurance and with a large share constituted by the self-employed. The informal economy constitutes then 52% of non-agricultural employment and 79% of urban employment not related to state activities. The size of the informal sector has even increased further than what is depicted in the surveys since the installation of the Iraqi refugees.

There is no unemployment compensation scheme in Syria. The official unemployment rate at

ILO criteria shows a decrease from 11.7% in 2001 to 8.4% in 2007, and then a sudden jump to 10.9% in 2008 (influence of the crisis?). The evolution of the official rate between 2001 and 2007 seems irrelevant to explain facts on the ground, as the decrease is mainly due to the stagnation of the measured size of the labour force, and an insufficient number of jobs have been created to maintain stable the unemployment rate. Unemployment is estimated ranging currently between 22% and 30%. Unemployment hits most hardly the youngest, in particular young women. It is the highest in rural areas, in particular in the Eastern region, feeding rural-urban migration. For the age category 25-29, 78% of unemployed men “had never worked before” and 92% of women. This share of those who “had never worked before” remains high even for the age category 45-49 (39% for men and 82% for women), and show also irregular year to year variations.

There is also an issue of excess employment and aging of employees in public administration and state-owned enterprises, while double employment is widely experienced by a vast majority of these employees. A controversy also exists on the size of discouraged workers; this size is measured low, while the labour market experiences intense pressures, including in the informal sector and while the rate of underutilization is estimated as high as 31%. Child labour is still a problem in the country: 6.7% of those aged 12-15 are working and 4.0% of those 5-15. The average wage in Syria is around 178 € per month (1.8 times the legal minimum wage), higher for women than men, as they are more present in highly educated jobs. The highest average salaries are in the public sector, while the pressures on the labour market push private sector average salaries to be low; the lowest for women in the informal sector at only 97 € per month. The average number of weekly working hours for salary people is around 44, comparatively to a legal maximum of 48. Different issues in LFS need to be sustained and refined by ground sociological studies.

Syria is experiencing a transition phase in its economic policies, accelerating since 2005.

This is impacting labour market regulations and institutions. Present labour market regulations resulted from the socialist (state capitalism) period, while they are not enforced by the state (in particular for social insurance), and are circumvented by employers (in particular for contracts). The strict limitations on the rights of association, to form union and to strike have permitted such situation, and enabled the government to implement neo-liberal policies without a social bargain. The foreign pressures on Syria helped accelerating this liberalization, putting aside the social question. The current tentative to reform the labour law continues in the same perspective, with no drive to reduce informal employment and to improve social protection. Like in all neo-liberal reforms, labour rights are seen only through poverty alleviation and the action of welfare (although controlled) NGO’s.


The Syrian constitution and labour laws have been elaborated within the framework of a state driven economy, initiated during the Union with Egypt where the state is assumed to ensure the rights of work and the right to obtain work, as well as social protection. Some of its flexibilities (dismissal conditions) have been rigidified later; but more importantly the rights for unions, collective negotiations and strike have been annihilated, and the generalization of social protection never fully implemented. This has resulted in putting all improvements of labour rights subject to ministerial decisions. Also, the liberalization of the economy, started after 1986, has gradually resulted in the dissemination of practices annihilating its provisions, including the new investment laws which liberated the new ventures from conforming to it.

A new labour law project has been approved by the Council of Ministers in July 2009, after two years of controversy on its initial version. The new project is still kept confidential avoiding submitting it to public debate before its introduction to the Parliament.

However, the Ministry of Social Affairs and Labour (MoSAL) had always had little means to impose conformity to labour laws; and informal employment and illegal practices had widely developed, including in the formal private sector. Labour inspections are symbolic and gangrened by corruption; and MoSAL limitation on the freedom of association has helped the continuation of these practices. Also, even the essential social protection consisting on free health services is now jeopardized by the ramping liberalization of the public health sector.

Also, the wage policy results from administrative and presidential decisions, and is not linked with social bargaining or indexed to inflation. The minimum wage system is very complex and inefficient. And despite, major increases since the early 2000’s, this minimum wage is still half the poverty line for one employed person in an average family of 5.6 persons. Even the average wage of 2008 is 20% below such poverty line.

The major aspect of recent labour market policies has consisted on the creation in 2001 of an “Agency for Combating Unemployment” (ACU), aiming at urgently circumventing the deterioration of the labour market situation. ACU developed infrastructure projects in urgently needing areas and distributed extensively small loans for business development. It has been most probably the main contributor to the significant increase of employment in 2005 and 2006. A conflict between this agency and the government erupted in 2006, which led to its dismantling and replacement by the “Public Corporation for Employment and Enterprise Development” (PCEED), mostly dedicated to training, with a much more limited impact.

The general framework of the current governmental policies was set in 2005 within the 10th Five Year Plan (FYP 2006-2010); the first to adopt liberalism, under the slogan of “social market economy”. This FYP only addressed labour within the context of poverty alleviation, with a main objective to reform the labour law to render it more flexible for the business environment, and no commitments on active or passive labour market policies. In particular, no clear reform path was set for the social security system, to solve present difficulties, face challenges of liberalization and generalize protection, and no clear path was set for establishing an unemployment compensation scheme.

The main focus of MoSAL and government policies consists presently on passing the new labour law, on the reform of employment offices, and on establishing a poverty census in Syria for the disbursement of assistance from a “Social Welfare Fund” (SWF) to circumvent the already applied liberalization and subsidies elimination policies. The fate of all three focus points is still unclear.


International organizations (UNDP, EU, etc.) and semi-official NGO’s have taken the lead on issues related to labour market policies after the dismantling of ACU, and have changed the focus towards only entrepreneurship development, training and microfinance. Some of the assistance projects were dedicated to assist MoSAL and other ministries in their labour market policies, but the outcome is mitigated. The (neo-) liberal welfare orientation of most of these projects, and their limited impact (despite their large funding) comparatively to the dimensions of the employment problems in Syria, may not lead to proper solutions and divert the social dialogue needed today more than ever. EU assistance to Syria in this field has been focused on a project for vocational training, with deceiving results. It also insisted on pointing the excess employment in the public sector.

The global financial and economic crisis, with also its implications on the Gulf countries, is now affecting the Syrian economy. FDI’s have slowed down, as well as exports, resulting in difficulties to the business sector; but the most important mechanism of transmission of the crisis is the slowing down of workers’ remittances, which act as the major “social safety network”. Also, the effects of the crisis come timely with those of the currently accelerating government policies; and no stimulus or social program has been initiated to circumvent these combined effects.

Also, the social dialogue is officially restricted in the country to the rare official NGO’s. Social claims take mainly the form of critics through internet blogs, despite their limitation. Cases of strikes have been registered lately, even if they are strictly forbidden by the still ongoing “emergency laws” and even if the international pressures on the country from 2004 to 2008 have slowed down social claims. These forms of protestations have shown effective to make large mobilizations leading the government to retreat per example on a new civil code project, judged Salafist by both secular and religious actors. This “victory” of the civil society may explain the confidentiality surrounding the new labour code being elaborated.

Employment offices provided since the 1959 labour law have been only activated since 2001. In 7 years, the total number of registered job seekers is equivalent to around 30% of the labour force. Only 15% of them seem to be actively seeking a job, in fact a public sector employment, as the employment offices have acted predominantly as offices for hiring to this sector. Around 40,000 public sector jobs are filled this way yearly, mostly for the educated.

MoSAL is improving the operations and procedures of the employment offices, and intends with the new labour law to extend their role, not only to private sector hiring, as a mandatory passage point, but to the employment of Syrians in foreign countries. This is while the employment offices place currently less than 500 job seekers in the private sector, and play a negligible role in the labour market. Private employment offices have started in the 2000’s for the importation of foreign domestic workers. Such activities were finally regulated end of 2006; but the number of foreign workers has reached a sizeable share of the work force: more than 200,000 currently. This, with other exemptions for foreign workers granted by the ministry, shall make it difficult to regulate private employment offices and the labour market especially that the new labour law is unclear on this point and leave all issues to ministerial decisions.


Informal economy is not evil. It has played a major role, through social networks and despite government policies, in economic and social “inclusion” facing shocks and exclusions, in an exceptional way rarely reproducible in other countries without major social troubles. This was especially the case for the Iraqi refugees. But on the other side, informalities and the informal economy constitute and lead to mechanisms of exclusions, which endanger the “social compromise”, and which have to be faced and analyzed, as well as addressed by proper policies.

A first mechanism of informality and exclusion consists on the deterioration in decency of the status of salary employment and the absence of social protection for the overwhelming development of self-employment. The private sector has contributed significantly to create salary employments, and the share of public sector in salary employment has declined from 70% for those aged 45-55 to less than 40% for those 20-29. The informal sector is contributing as much for salary employment creation. But, the formal private sector has contributed to create a similar amount of self-employment jobs, and current labour market policies tend to increase this tendency as well as self-employment in the informal sector. The new projected labour code and the current social security regulations do not address properly self-employment. Thus, not only most salary people have no social protections, but also the self-employed and the family workers are excluded categories. The family worker exclusion is gender marked, as it constitutes a major informality mechanism for women.

A second mechanism consists on the exclusion of rural workers. A counter-agrarian reform was initiated in Syria in the year 2000, by a decision of the Baath party, which started by the dismantling of state farms and was followed by liberal laws annihilating the former government policies to fix peasants on agricultural land. It led to a massive rural-urban migration, started in 2003-2004 and the development of extreme poverty, in particular in the North-Eastern agricultural rich region of Syria. The process is still continuing; and no substantial government policy was initiated to accompany and circumvent its effects. The tentative dealing with this problem with the Agency for Combating Unemployment was stopped in 2006, and it was left to NGO’s and international institutions, through training, micro-finance and entrepreneurship development. This massive exclusion mechanism has touched more than 10% of the labour force send to urban informal zones and poverty. The concerned workers were simply taken out from labour force surveys, all becoming “informal”.

The Syrian authorities are focusing on liberal policies aiming to increase productivity. Labour productivity in agriculture increased by 61% in few years; and this has lead to the deterioration of the employment situation of the rural population living from agricultural. The effects were stronger on the most vulnerable. This productivity only oriented policies has also lead to the deterioration of the “food security”, insured in Syria for more than 15 years.

A third mechanism of exclusion and informality concerns the Syrian workers in Lebanon. This circular migration has always constituted a significant share of the Lebanese and Syrian workforces. It is not covered by statistics, while it can completely change the perception of employment and informality, and explains part of the yearly variations. The 1994 labour agreement between Syria and Lebanon, and the presence of the Syrian troops until 2005, institutionalized its informal situation in Lebanon, leaving most of these workers as “menial labour” without rights. This situation has constituted a tremendous opportunity for Lebanese and Syrian economies and employers, but left these workers excluded from decent work and in a precarious situation, largely subject to the turbulent variations of the Syrian and Lebanese economies and relations.


Another mechanism of informality and exclusion result from the fact that Syrian regulations lack proper residency and labour legislations for the work of non-citizens, while the numbers have become significant for non-citizen Kurds, Iraqi refugees and Asiatic domestic workers. The things are left case by case subject to varying ministerial decisions. This situation has largely increased the size of the informal sector and put additional challenges on the Syrian labour market. The social networks and the relief organizations have helped an incomparable absorption of refugees and non citizens, but most of the concerned categories are in precarious conditions, subject to menial work, and even human rights abuses.

Finally, different mechanisms create exclusion and informalities for women, both in rural areas and the urban informal zones. There is a general lack of base sociological studies and a ban on civil society organizations which impede addressing properly these exclusions. Rural women are affected like men by the deterioration of conditions in agriculture, but also a significant share of them assume full household and farming responsibilities, while men having the status of head of family are migrating to cities or to Lebanon. Also, women in informal urban zones have no access to employment as it is dominated there by informality and self-employment. There is a necessity to address legal women empowerment in rural areas, as well as the access of urban women to salary employment.

Some of the recent measures adopted by the government could help an increased formalization of the economy, but their impact shall be slow. They are all on employers and companies side, with no major drive for the formalization of employment. The formalization of employment through social insurance, protecting base access to health services and retirement rights, appears to be of highest necessity, as informal employment is dominant.

This study does not pretend to cover sufficiently all the issues relevant to labour market policies and institutions in Syria, with the limited time allowed, especially as the collection of data had posed many difficulties and as the subject has only be addressed by few researchers, with insufficient sociological background studies and with often controversial outcomes. However, some essential recommendations are made. They concern the improvement of statistics, labour force surveys and household censuses. They primarily address social dialogue, legal status of workers, the social insurance system, the employment offices, government stimulus programs, the bilateral labour agreement with Lebanon and Gulf countries, the economic and social rights of non-citizens, and the civil status of women.

The author is thankful for Dr. Chafik ARBASH (General Manager), Dr. Ali RUSTOM, head of population censuses, and the teams of the Central Bureau of Statistics, Syria, for providing the labour Force Surveys data, and for the fruitful discussions. He also thanks her Excellency Dr. Diala HAJJ AREF, the Minister of Social Affairs and Labour (MoSAL), for its support and its permission to access information necessary to this study; as well as Mrs Mays Al ASSWAD, from the office of the Minister for its dedicated support and will to overcome difficulties, as well as Mr. Bassem BAKER, the director of the labour force directorate at MoSAL. Also, special thanks are addressed to Dr. Mujahed ABDALLAH, the general manager of Public Corporation for Employment and Enterprise Development (PCEED), Dr. Khalaf ABDALLAH, the general manager of General Institution of Social Insurance (GISI) and Mr. Kinan BAHNASSI director


of the UNDP National Information System for Labour and Employment Policy . The author is also grateful to Prof. Elizabeth LONGUENESSE, Dr. Jamal BAROUT, Mr. Rabi NASR, Dr. Nabil MARZOUK and Dr. Imaddedine AL MUSBEH for their assistance and advices.


1. DIAGNOSIS OF THE LABOUR MARKET SITUATION

1.1 Demographic Dynamics Syrian population and resident population in Syria

Like in most of the Arab countries, the size of the population in Syria need to be

examined carefully, as the country experiences large complex outward and inward migration flows.

At end of 2007, the number Syrian citizens (at home and abroad) have reached a number

of 22.263 millions according to Syria civil registry, and the size of the (resident) population (Syrians and non-Syrians) has been estimated by the Central Bureau of Statistics1 at 19.405 million.

The number of Syrian citizens has then been multiplied by 17.8 since 19222, while the country had experienced large outward (quasi-permanent) migrations, reaching yearly in some periods 3% of the population. The current pace of outward migration has been recently estimated at around 0.7% of resident citizens yearly3. Thus, 3.4 million Syrians are assumed to reside quasi-permanently outside the country4.

The estimation of the population size is made by extrapolation of the data from the last general census in 2004, leading to an estimated number of 18.9 million Syrian nationals residing in the country at end of 2007. According to this census, additionally 1.72% “Palestinian Arabs”, 0.51% “Other Arabs”, 0.22% “Non Arabs” were accounted for in the resident population5.

In fact, the country has always welcomed inward migration6. In particular, Palestinian

refugees fled to the country after 1948 and 1967 wars. The number of those still residing in Syria is an unclear issue. In 2004, the general census accounted 300,000, while 439,103 were registered in UNRWA statistics7. In the official Syrian statistics, 460,194 are considered registered in Syria at end of 2007, consequently 2.4% of the Syrian resident population8.

Also, a census conducted in 1962, had considered a share of the Kurdish population historically residing in the North-Eastern part of the country as non-citizen “Turkish 1 Central Bureau of Statistics, Syria, Statistical Abstracts, 2008. The last available official statistics are those at end of 2007; they will be used predominantly for this study, in addition to some official data for end of 2008 made available during the specific investigations and interviews made during the preparation. 2 Jamal BAROUT 2008-1. 3 See Jamal BAROUT 2008-2 and Samir AITA 2009. Some periods of the early 20th century have experienced even higher rates of outward migration. 4 The number of descendants of the Syrian migrants is much higher. Also, large circular migration existed, in particular with Lebanon, in the 1990’s and early 2000’s; but the numbers have diminished significantly after 2005. 5 Central Bureau of Statistics, 2004 general census results. It is to be noted that only 12 persons were accounted for in the census as “No Nationality”, and the figures of the census on resident Palestinians is incompatible with the numbers on “registered” (resident?) Palestinians in Syria. 6 Between the 19th amd the middle of the 20th century, Syria has seen the arrivals of Circassians (Cherkess) refugees from Russia, Armenian refugees from the Ottoman Empire, Syriaques and Nestorians from Iraq; all have been granted since Syrian citizenship. Non-citizens had accounted for 21.8% of total resident population in 1948 (see Jamal Barout 2008-1). 7 10% of the total number of Palestinian refugees; see UNRWA: http://www.un.org/unrwa/refugees/pdf/reg-ref.pdf 8 According to the Central Bureau of Statistics; Another UNPP source puts their number in 2000 at 903,000 (4.6%), see esa.un.org/migration. On their working and social conditions, see Age TITLENS 2006 and 2007.


immigrants”9. Later, other Kurdish migrants flew to the country, especially during the ‘civil wars” in the Northern Iraq and South-East Turkey. The number of “non-citizen Kurds” in 1996 was officially recognized at around 250,00010; thus, if their growth rate is similar to the average of the Syrian population, they would currently account for around 338,000, another 1.8% of the Syrian resident population11.

The 88,901 of “Other Arabs” (of different nationalities) accounted for in the general census of 2004 did not consider the large flow of Iraqi migrants12, who fled to Syria after the invasion of their country by the US-led coalition. The flow has particularly accelerated in the following years with the deterioration of the security situation there, leading to an estimated number of 1.5 million Iraqi13 immigrants in Syria of different religious and communitarian backgrounds. A small share is believed to have returned to their country recently. Thus if Iraqi immigrants are accounted for, another 7.9% should be added to the Syrian resident population.

Finally, the 37,721 of “Non Arabs” accounted for in the general census of 2004 have also certainly increased, with no official statistical figures. In particular, a number of Bengali immigrants were granted work permits in the different real estate projects underway by Gulf based companies. A more significant number is that of Indonesian, Ethiopian, Somalian, etc. citizens who were granted work permits as “domestic workers”14. Their number is estimated to have surpassed 150,000 in 200615.

Then, the effective population of Syria at end of 2007 could have been higher than the 19.4 estimated in the official statistics. In addition to the 18.9 resident Syrian nationals, 2.4%, 1.8%, 0.51% and 0.22% should be added respectively for the Palestinian refugees, the (non-citizen) Kurds, the “Other Arabs” and the “Non Arabs”, leading to an estimated total population of 19.88 million, excluding the 1.5 million Iraqi refugees. Thus, 21.4 million in total.

The Syrian population at end of 2007 is estimated officially at 19.4 million. The actual population size is effectively higher, adding between 0.5 million (not including recent Iraqi refugees) and 2.0 million (including these refugees).

It is to be noted here, that the Palestinian refugees are classified in two categories: those

of 1948, who have same rights as citizens in matters of access to the labour market, including 9 For a detailed account of the events, see Jamal BAROUT: “How the problem of the “Turkish foreigners” had emerged in Syria?” Le Monde diplomatique Arabic edition; August 2009 (in Arabic); http://www.mondiploar.com/article2689.html . The author argues that the problem was more due to Agrarian reform than to nationalist practices. 10 Figure declared by the Syrian government to Human Rights Watch on September 1996. No official figures have been published since, and general census of 2004 reports only for 12 “No Nationality”. However, a small share (10,000?) is believed to have immigrated to Iraq (Kurdistan). See Rustom Mahmoud 2008. This issue of non-citizen Kurds is controversial in the country. Historical facts indicate that the problem was linked to struggles on land ownership during the implementation of the Agrarian reform. The authorities have promised to solve it in the near future. 11 It is worth noting that 4.8% of the births in Syria are not registered in the first five years after birth; see UNICEF 2008. 12 In 2003, UNHCR estimated the number of Iraqi migrants to Syria between 60 and 70 thousands; quoted by Géraldine CHATELARD and Mohamed Kamel DORAI, 2009. Some has returned back in 2004. Around 183 thousands Iraqi refugees were registered by UNHCR in April 2008, with an overrepresentation of religious communities. They were 224 thousands at end of 2008. But the real numbers are believed to be much higher; 1.3 millions had entered Syria in 2006 alone. See also Mohamed Kamel DORAI, 2009. 13 This figure of 1.5 million is consistently reported by the Syrian authorities, the IMF (see Article IV consultation reports) and UNHCR; for a discussion of such numbers, see ICG: Failed Responsibility; 2008. 14 In 2008, 28,296 work permits from domestic workers were granted according to MoSAL; interview with MoSAL officials. 15 http://thawra.alwehda.gov.sy/_print_veiw.asp?FileName=99169613820070819230235


‐2

‐1

0

1

2

3

4

1950

‐195

519

55‐196

019

60‐196

519

65‐197

019

70‐197

519

75‐198

019

80‐198

519

85‐199

019

90‐199

519

95‐200

020

00‐200

520

05‐201

020

10‐201

520

15‐202

0

Algerie

Egypte

Maroc

Syrie

Tunisie

Syrie new

Population Growth (%), UNPP data

public enterprises and administration16; and those of 1967, who have the same status as “Arab residents”, with limited access to public jobs. Non-citizen Kurds are in a similar situation, with additional limitations on access to property and public employment. However, all these largely participate to the labour force, dominated by informal employment, and they are accounted for in the official Labour Force Surveys (LFS’s).

In addition, the new Iraqi refugees have, like all above categories, full access to the

Syrian education and health system; and a significant share of them is now also participating to the labour force through the informal sector. They were initially granted de facto the full rights of “Arab residents” (i.e. access to the private labour market and to property rights); however, an agreement between the Syrian and the Iraqi authorities in 2007, aiming at promoting the return of the refugees, had imposed quarterly renewal of visas at borders points17. It is not fully applied; and few had effectively permanently returned to their homeland Iraq. It is not clear how the new Iraqi immigrants are accounted for in the LFS’s.

It is worth noting that the Syrian legislations concerning Palestinians refugees and

concerning Arab immigrates (visas, residency regulations) or refugees are considered the most open, not only comparatively to other Arab countries (including Jordan for Palestinian refugees), but also comparatively to industrialized nations, including Europe. In particular, residents and refugees have full access to the free education and health systems18.

Demographic trends

The assessment of the population size and

growth rates is made through general censuses, performed approximately every ten years (1960, 1970, 1981, 1994, and 2004). In the last census of 2004, the (resident) population growth rate has been confirmed declining from its high levels (above 3% per year) from the 1960’s to the mid 1990’s, towards 2.45% at the turning of the century. This still makes Syria the highest Arab Mediterranean country in terms of population growth (see figure19), which is experiencing these current years the arrival of the “baby boom”

16 Law no 260 of July 10, 1956 stated clearly and openly that “the Palestinians in Syria are equal to Syrians in everything related to employment, residence, trade, military service, education and health without jeopardizing their national identity and citizenship”; see Age TILTNES 2006. 17 The Syrian legislation does not impose visas to Arab countries’ citizen. 18 See Géraldine CHATELARD and Mohamed Kamel DORAI, 2009. 19 These data are derived from UNPP statistics (http://esa.un.org/unpp/), and take then partly into account the arrival of Iraqi immigrants through a jump in population growth rate for the 2000-2005 period. After 2010, the population growth rate is assumed to return to its pre-Iraqi immigrants' tendency; this means that the Iraqi immigrants are not assumed to return home in the perspective of 2020. Two curves are shown in the graph for Syria (syrie and Syrie new) extracted from UNPP database successively in 2005 and 2007.


children to the labour market (then working age population growth rates are still higher than 3% yearly).

Also, UNPP reports an increase in the Syrian population growth rate for the period 2000-

2010 (see figure) to account for the inflow of Iraqi refugees. The database has been updated recently (see Syrie new in the graph) to show an increase to a 3.25% average for the period 2005-2010, with a higher estimation for these refugees (!). The IMF reports also on these Iraqi refugees in their Article IV consultation20; but assumes their number fixed (at 1.5 million, without growth by birth).

Until the next general census, one should carefully consider the data on population

growth rates; as in fact, the trends are estimated in very different manners according to the source. If Iraqi refugees are not accounted for, the official figure of the Central Bureau of Statistics for the resident population (2.45%), close to those of the ILO (2.68%), reflect better the reality.

Base year 2007 UNPP OfficialResident

OfficialRegistry

ILO IMFSyrians

IMF withIraqis

Population (,000) 20,504 19,405 22,331 19,929 19,300 20,800 Population growth (%) 3.26% 2.45% 3.10% 2.68% 2.12% 1.96%

1‐Jul 31‐Dec 31‐Dec 31‐Dec 31‐Dec 31‐Dec The growth rate Syrian population (excluding Iraqi refugees) could currently be

considered at around 2.45%, declining smoothly.

Population sex ratio

UNPP reports a sex population ratio21 for Syria of 102.0 presently, after it was as high as 108.0 in the 1950’s. The Syrian official statistics report this ratio in 2007 as 101.0 in the civil registries, and 104.5 for the (total resident) population22. The ILO reports the number at 102.0. Regionally, this ratio varies from 96.9 for the Suweida Governorate to 106.1 for the Governorate of Damascus countryside23. These data remains unexplained, as life expectancy is higher for women and as men has tendency to migrate abroad more than women. Also, even in the 1950’s, men tended not to be registered in the civil registry because of the fears of military service. Their then very high reported ratio seems exaggerated. The new UNFPA report on Syrian population confirms these data, without further investigations24.

20 see per example IMF Article IV consultation on Syria, 2008 at www.imf.org reproduced by the Central Bank of Syria http://www.banquecentrale.gov.sy/ 21 Defined as the number of males for 100 females. 22 Central Bureau of Statistics, 2004 Census report, and Statistical Abstracts 2008. 23 Syria is divided to 13 governorates (Mohafazat), among which Damascus is the only case where the governorate corresponds only to a city without its countryside. 24 See Jamal BAROUT 2008-1.


‐20% ‐15% ‐10% ‐5% 0% 5% 10% 15% 20%

Less thanyear

1 ‐ 4

5 ‐ 9

10 ‐ 14

15 ‐ 19

20 ‐ 24

25 ‐ 29

30 ‐ 34

35 ‐ 39

40 ‐ 44

45 ‐ 49

50 ‐ 54

55 ‐ 59

60 ‐ 64

65 +

Distribution of the Syrian Population function of Age and sex (general censuses 1981‐2004)

F 1981 M 1981 F 2004 M 2004

0%

5%

10%

15%

20%

25%

30%

35%

1970

1975

1980

1985

1990

1995

2000

2005

2010

2015

2020

2025

15-29 30-44 45-59 60+

Syria: Share of age categories in total population, UNPP

Working age population

People born during the period of high growth rates around the 1970’s (the Syrian “baby boom”) are now arriving at age of work. The share of those of age 15-29 is peaking these years, reaching more than 30% of the total population. Even on the perspective of 2025, the share of the over 65 years old shall remain relatively small

This makes the growth rate of the working age population (of age 15-64) still high, at around

4.2% in the early 2000’s, starting to decline, but continuing nowadays at around 3.44%. The country is then currently experiencing the strongest pressures for finding opportunities for the young’s.

The growth rate of the working age population is currently at 3.44%, expressing the

arrival of the sons of the Syrian “baby boom” at age of work.

Population density

A recent UNFPA report25 has also shed the light on the necessity to distinguish between apparent and effective population density, as most of the land in Syria is made of desert and with almost no inhabitants. Many governorates show then very high “effective population densities”, 3 times higher in average than apparent densities; in particular for “Damascus Country Side” and “Lattakia” governorates, pointing out the stress that the population growth is making on the availability of resources: water supplies, etc.

With the absence of proper urban planning at the scale of the country, the situation may even

deteriorate further, putting higher stress on particularly Damascus and its countryside and on the coastal governorates. Calls have been made for a better governance/management of resources, usable land and spatial planning/urbanization26. Two semi-official reports pointed that there no general master plan for spatial and urban planning in Syria, including the fixing of land usage, 25 See Jamal BAROUT 2008-1 and UNDP 2009. 26 In the French meaning of “Aménagement du Territoire”; see Jamal BAROUT 2008-1 and UNDP 2009.


Apparent EffectiveDamascus*Damascus Country side 129 991Aleppo 223 326Idleb 210 320Homs 38 277Hama 138 275Lattakia 387 742Tartous 376 492Deraa 231 294Suweida 58 152Deir Ez Zor 31 311Rakka 41 80Hassaka 58 79Kuneitra**Syria 98 273* Damascus is only city considered as a Governorate** Kuneitra Governorate is mostly constitued of occupied Golan Heights

Population Density (h/km2)

30

40

50

60

70

1950

1960

1970

1980

1990

2000

2010

2020

2030

%

Evolution of the Perecentage of Rural Population in Syria, UNPP

the management of the scarce resources (land, water) and the development of infrastructures for increasing population mobility (in comparison with the major effort made in that respect in Lebanon per example27).

Rural-Urban Migration The above mentioned phenomenon is aggravated by a new acceleration of the rural-urban

migration28. Large informal urban areas have developed around the major cities, and illegal constructions are common in “formal” urban zones. Thus the two major cities (Damascus and Aleppo) concentrates more than 20% of the total population; the other large and mid-size cities (100,000<12 cities<1,000,000) accounts for another 16%29. This rural-urban migration is expected to accelerate in the coming years, as it is evidenced below in the analysis of the labour force.

This rural-urban migration adds to the internal migration which has resulted from the occupation of the Golan Heights in 1967. Most of the population of the Kuneitra governorate has emigrated to Damascus and Damascus Countryside.

The demographic pressure is even higher in cities, as Syria is experiencing a new

dynamic phase of rural-urban migration. This internal migration is posing critical issues on the usage of land and resources, on urban organization (informal zones in cities) and on the labour market.

Circular Working Migration Lebanon has recovered in the early 1990’s from its civil war, while the country was

controlled by the Syrian army. It has experienced since a significant economic and construction 27 see http://charbelnahas.org/spip.php?article14 28 The Syrian official statistics defines “city” a population center with more than 20,000 inhabitants. The population growth rate of urban centers is measured higher than 2.8% in average, while the general population growth rate is at only 2.45%. The share of urban population is estimated in 2007 at 53.5%. 29 See Jamal BAROUT and UNFPA 2008-1.


growth, that had lead many Syrian workers to migrate there for work, as mostly circular-migrants (working there during the week or when work is available, in particular in construction, and returning home in week-ends or during inactivity). Such circular migration could hardly be measured, as many such workers did not register at border points; what has lead to a wide range of estimations on their numbers, varying between a minimum of 300,000 and an eccentric 1,500,000 (i.e. between around 8% and 40% of Syrian male labour force in the early 2000’s).

It is unclear how Syrian LFS accounted for such circular migration, in terms of participation to the work force or in term of employment and its characteristics. This is while this circular migration to Lebanon has experienced several phases: an active phase until the early 2000’s, then a slowdown following the financial crisis in this country, followed by massive return (and a rarefaction of illegal migration) following the crisis of 2005 and the withdrawal of the Syrian troops. Different observations indicate that such circular migration to Lebanon still continues, and that its size still constitutes a non-negligible share of Syrian work force.

Major demographic phenomena are not accounted for in the assessment of the labour

market, mainly: • The acceleration of rural-urban migration, leading to higher growth rates of

working age population in the cities than national average, and the additional pressures they make on urban labour market;

• The circular-migration of workers to the neighbouring Lebanon, which continues despite the Syrian-Lebanese crisis, and concerns a non-negligible share of the Syrian work force. Also, a new circular migration seems to appear with the neighbouring Iraq (especially for the North-Eastern region).

1.2 Labour force Participation

The levels of participation of the working age population and the size of the labour force

in Syria is also a controversial issue, needing further comprehensive assessment. While women participation rates in the Arab countries (28% in average in 2005) are the lowest in the world30, Syrian labour force surveys (LFS) show a significant decrease in women labour force between 2001 and 2007, and thus a decrease in their official participation rates from 21.3% to 14.4%. The table below shows the data on participation reported in different official statistics31. The “apparent” drop in women participation has been noticed in different references, but has not been analyzed thoroughly.

30 See Livani, World Bank, 2007 which reports Syrian women participation at around 40%, while World Bank database shows female participation rate in 2007 at 21.9%. 31 Official Syrian data are taken from LFS’s; ILO data from two extractions from laborsta.ilo.org; UNDP data from UNDP 2007.


ILO old ILO New Official ILO old ILO New Official UNDPMen 86.00% 83.3% 81.3% 88.30% 78.3% 74.00% 89%Women 36.0% 20.3% 21.3% 39.7% 20.9% 14.40% 40%Total 61.0% 51.9% 52.3% 64.0% 49.8% 44.90% 65%

2001 2007

In 2003, the Agency for Combating Unemployment (ACU) has conducted, with the

Central Bureau of Statistics (CBStat) a comprehensive labour force and household survey (LFS)32. One of the major issues targeted was that of participation. The survey concluded that total participation is of 31.5%: 77% for men and 19% for women.

It showed also that women participation declines drastically with marriage and age, and is strongly correlated with education, for both urban and rural women. Highly educated women tend to have the same participation rate as men. Rural females participate more than urban women (with total participation of respectively 23% and 15%) and join generally earlier the work force. Regional differences are significant; rural women participation reaches 35% in coastal areas, and as low as 10% in Rakka and Deraa governorates33. Comparatively, the 2007 LFS shows that rural women participation would have dropped to 16% and urban women participation to 13%; the regional differences became even more significant, as rural women participation increased in Lattakia governorate to 43%, while it has decreased to 4% in Rakka and to 5.7% in Deraa. The “apparent” drop in women participation seems then to be linked to the eviction of rural women from participating to the work force.

At ages 25 to 45 years, men participation reaches almost 100%; then it starts to decrease, quicker for urban males than for rural. The decrease is significant when men reach the 55-60 age category, while the official age of retirement from government sector is only 60 years. But, one third of men still participate to the workforce at age of 7034.

The drop in participation for the middle educated (preparatory, secondary) men is due to an “education effect” (for population above 15 years old). 40% of such men are at school, while less than 7% for lower education. Men above 15 with less than preparatory level tend to go to work and quit education. But this is not the case for women who work at home (married or unmarried).

Evolution of participation with age, sex, residency and education (FAFO 2003)

32 See OVENSEN & SLETTEN 2007. 33 The report notes however that this is maybe due to measurement difficulties. But, the LFS of 2007 confirms the high rural women participation in the coastal areas comparatively to other regions. 34 The significant drop in the 55-60 years old seem too early in a country where the retirement schemes are meagre, and where the 70 years old still significantly participate to the workforce.


The survey analyzed also unemployment. The highest unemployment ratio is reached for young urban women; correlating then the low participation with the lack of opportunities, and confirming that low women participation has little to do with cultural factors, contrary to other analyses35. Not only participation had been positively correlated with unemployment for the youngest population, but also underutilization. At age of 20 years, 15% of men and 40% of women are unemployed. The corresponding underutilization rates for the same age are 45 and 55% respectively. Also, women tend to stay unemployed, seeking a job, twice the time for men.

Unemployment by Age, Sex and residency (FAFP 2003)

Another survey was conducted in 2005 for an ILO study, to analyze school-to-work

transition for young persons36, which depicted the severe pressures on the labour market, but put the reasons of inactivity of women linked to “cultural issues” (see table below): family issues.

Current Inactive Young Persons (15-24): Reasons of Inactivity by Sex

Otherwise, we have shown, in an earlier report37, that the measurement of the labour force in Syria has varied significantly each year since 2001 (see figure). Large decreases in the labour force were observed in the years 2003, 2004 and 2006.

35 See SPEIRIENGS & SMITS, 2007; the increase of unemployment for women above age 45 remains unexplained. 36 Alissa 2007, young persons are defined as those aged 15-24 years. 37 See Samir AITA 2009.


0.00

500,000.00

1,000,000.00

1,500,000.00

2,000,000.00

2,500,000.00

3,000,000.00

3,500,000.00

4,000,000.00

4,500,000.00

M 2001 M 2007 F 2001 F 2007

Distribution of Labour Force with economic activity(working or worked before) LFS 2001‐2007

Services

Finance & Real Estate

Transportation and Telecom

Trade and Tourism

Construction

Industry

Agriculture

‐500,000

‐400,000

‐300,000

‐200,000

‐100,000

0

100,000

200,000

300,000

400,000

500,000

600,000

avg 20

01/199

4

2002

2003

2004

2005

2006

2007

Avg 200

7/20

01

Yearly increase in Labour Force Syriaaccording to labour Force Surveys

M F

‐

200,00

0

400,00

0

600,00

0

800,00

0

1,00

0,00

0

1,20

0,00

0

Agriculture

Industry

Construction

Tourism

Transportation

Finance

Services

unknown

Never worked before

Evolution of Syrian labor force 2001‐2007 by activity (LFS, >15 years)

F 2007

F 2001

M 2007

M 2001

The measurement methods could be questioned, but also and more importantly the major political developments that occurred in the region (invasion of Iraq and the significant flow of Iraqi refugees, the return of the Syrian troops from Lebanon in 2005 and the sudden decrease of circular (weekly) migration to Lebanon), as well as the economic liberalization policies of the government (which has started in the year 2000 and accelerated in 2005). As shall be detailed below, 2003 has been a year of negative growth in Syria (-2% in real terms), but the effects observed on the labour force are too large to be only due to general economic activity. Also, 2004 was on the contrary, the year of the last decade with the highest economic growth (+10%); while a large decrease is also observed on the size of the labour force.

The total labour force, as measured by the LFS (for the >15 years), had only increased by

2.5% in the 6 years separating 200138 and 2007; male labour force increasing by 7.5% (only) and female labour force diminishing by 18%. Most of the losses in participation would have occurred in agriculture. Around 460 thousands active persons were taken out of the agriculture labour force (57% of them females); then around 10% of the total labour force. But women lost also participation in industry and construction. Astonishingly, the LFS’s show that the numbers of whom who “have never worked before” have diminished in this six years period (for both men and women) while, as it shall be discussed below, jobs creations are far from reaching the yearly levels necessary to stabilize unemployment.

38 LFS 2001 included the 10-14 participating to the labour force. 2.6% of males and 6.2% of females of the total labour force in 2001 were children. The data presented hereby exclude children participation, to be discussed below.


‐

500,000

1,000,000

1,500,000

2,000,000

2,500,000

3,000,000

3,500,000

4,000,000

4,500,000

5,000,000

M 2001

M 2007

M 2008

F 2001 F 2007 F 2008

Distribution of labour Force by age and sex, LFS's 2001, 2007 and 2008

> 65

60 ‐ 64

55 ‐ 59

50 ‐ 54

45 ‐ 49

40 ‐ 44

35 ‐ 39

30 ‐ 34

25 ‐ 29

20 ‐ 24

15 ‐ 19

Finally, partial data were obtained for this project from the most recent (more comprehensive) LFS (end of 2008). This LFS 2008 shows a sudden increase in female labour force of 37.4%, while male labour force increased only (as would be expected) by 4.3%. The increase is measured for women for all age categories; but the most important increases occurred for the 15-19 and the 20-24 where women participation would have increased by 80% (in one year!). The reasons of such an increase are still unexplained. This LFS was one of the most comprehensively (questionnaire, etc) performed in the country, and its results have only been partially made available. The improvement of the measurement methods would have improved the assessment of women participation. But also, 2008 has been the year of high inflation and elimination of government subsidies (on oil derivatives, etc). It is then expected that part of the increased participation of women is due to the economic conditions.

One should also note that it is not clear how the labour force surveys account for the economic activity of non-citizens, in particular for the Iraqi refugees (mostly active in the informal sector). It is also unclear how the circular (some weekly or seasonal) Syrian migrants to Lebanon are accounted for. In both cases, the numbers are significant comparatively to the total size of the labour force.

The measurements of women participation and labour force are unresolved issues in

Syria. Unexplained significant variations are “measured” from year to year, with some of these measurements leading to an exceptionally low participation rate for women, even comparatively to the MENA countries average, which are the world lowest.

However, all stakeholders agree that the number of jobs needing to be created yearly to stabilize unemployment ranges between 250 and 350 thousands (1/3 for women), function of the evolution of women participation and of the integration of non-citizens and refugees in the labour force. However, the “measurements” of the labour force show that in the six years separating 2001 and 2007, the labour force would have only increased by 134 thousands (around 22 thousands yearly)!.

Employment

The measurement of employment (+15 years) by LFS’s should be a less subjective issue. But here also, large year to year variations are measured since 2001. In an earlier work39, it has been shown that a large number of jobs have been lost in 2003 and 2004, especially for women.

39 Samir AITA 2009.


‐400,000

‐300,000

‐200,000

‐100,000

0

100,000

200,000

300,000

400,000

Employment CreatedLFS 2001‐2007

F

M

‐

100,000

200,000

300,000

400,000

500,000

600,000

700,000

800,000

900,000

1,000,000

Evolution of employment in Syria, LFS 2001, 2007 and 2008 (>15 years), CBStat

M 2001

M 2007

M 2008

F 2001

F 2007

F2008

Between 2001 and 2007, 216,000 jobs have only been created (in net); in average 36,000 were only created yearly: men gained 65,000 jobs per year, while women lost 29,000 jobs.

In fact, much more non agricultural jobs have been created, as around 400,000 jobs have

been lost in that period in agriculture. 629,000 non-agricultural jobs have in total been created between 2001 and 2007: 540,000 for men (90,000 per year), and 89,000 for women (around 15,000 yearly). But these urban jobs creations (105,000 yearly) are still very low comparatively to the number of jobs necessary to stabilize unemployment.

Women had not only lost a large number of

jobs in agriculture, but this was also the case in industry. They gained jobs mainly in services, in particular half of the new jobs created for them were for the highly educated in public services.

The new data for 2008 LFS shows that another 98,000 jobs have been lost in the year 2008: men have lost 141,000 jobs while women have gained 43,000 jobs. Aleppo and Hassakeh governorates were the largest losers in men jobs (respectively 70 and 29 thousands); and Damascus countryside governorate was the main winner for women jobs (23 thousands). The employment situation shows to become critical in some governorates: Hassakeh and Rakka would have lost 10% of their jobs in one year, and Aleppo 7%.

As for the period 2001-2007, those of age 15-29 have been the largest losers of jobs (while

their participation increased in 2008, as mentioned above); but now the losses concerned mostly men (around 100,000 jobs lost for this age category in one year).

The new data confirms the continuous trend

for jobs losses in agriculture. Between 2001 and 2007, 33% of the jobs in agriculture were lost (while agriculture accounted 25% of total employment in 2001), mostly for women, who lost 62% (!) of their jobs in this economic sector. In the year 2008 alone, men would have lost another 135,000 jobs in this sector (-17% of jobs in one year), while women employment had stabilized with an additional 2,700 jobs.

Also, the year 2008 seem to have experienced a substantial gain in industrial jobs40 (+81,475 jobs, a 12% increase in employment in industry 40 Industrial jobs include those in oil and mineral resources; employment in these (sub) sectors could vary greatly according to the development projects of natural resources.


in one year). The average for the period 2001-2007 was of only of around 13,000 jobs yearly. Women have gained a substantial share of 2008 gains (+10,599 jobs, a 25% increase in one year), while they used to loose in average 1,600 industrial jobs yearly in 2001-2007.

Astonishingly, the services and finance sectors have lost jobs in 2008 (with respectively -7,951 and -9,544 jobs), while they were the most dynamic sectors for job creation in the period of 2001-2007 (in average +36,179 and 8,219 job creation yearly and respectively). Services and finance are the most dynamic sectors for employment after the liberalization of trade and the banking sectors41 in 2005; and an effect of economic crisis has hit Syria in 2008, the press has reported more difficulties in industry than in services, and especially in finance42. For these sectors, the jobs losses in 2008 concerned men; while women gained in jobs: +4% in services and 17% in finance.

But the jobs losses in the construction sector in 2008 were even larger (-48,571 jobs lost in 2008, 7% of the sector total, while the former period average was a gain of +27,598 jobs yearly). The construction sector has slowed down at the end of 2008 with the world and Gulf countries financial crisis. However, the correlation between 2008 LFS results and this slowdown needs to be substantiated.

The tourism and transportation sectors have gained jobs in 2008; +2% for both cases. Tourism has kept the pace of creation of the 2001-2007 period; but transportation has slowed significantly down. Women had profited most in these sectors: they gained in on year: +30% increase of their jobs in tourism and +35% in transportation.

The state-owned sector has created little new jobs: 5,47043 in comparison with 19,868

yearly average between 2001 and 2007. Women have gained 16,932 jobs in this sector, a little higher than earlier average, while men lost 11,462 jobs. However the 2008 LFS results on private formal and informal sectors44 need to be reviewed, as they show a sudden increase in private formal sector employment (+23% in one year), as well as a sudden decrease in private informal sector employment (-8%).

18,870 jobs would have been created in 2008 for university degrees. This is somehow an acceleration comparatively to the earlier period (13,746 yearly in average), mostly due to a sudden jump in women employment with a university degree: 15,780 jobs in 2008 comparatively with the earlier average of 6,969.

The LFS 2008 confirms then the yearly variations in participation and employment, even if

one could expect a more accurate assessment due its comprehensiveness. These yearly variations are also certainly related to the socio-economic transformations in the country. Besides migration flows, other effects merit attention. In particular, the duration of the military service has been

41 These results of the survey are to be taken with precautions, as the new private banks continue to open new branches at a sustained rhythm 42 During 2008, the new private banks, which have started in 2004, have ambitiously continued their opening of new branches; and there are no reports on massive lay-offs in the public banks. 43 Note that the employment offices which are mostly dedicated in hiring for the public sector, speaks about 30 to 40 thousands hiring by the state-owned sector yearly. 44 In the LFS and other socioeconomic indicators delivered by the Central Bureau of Statistics, the economic sectors in Syria are divided between “State-Owned” (public administration and enterprises, including military service); “private formal sector” (including companies legally registered, but not necessarily all their employees); “private informal sector” (no registry for the companies, and thus for their employees; “family workers” (but this category/sector is often combined with the informal private); “cooperatives”; “mixed” (public-private); and finally “civil society”.


‐

500,000

1,000,000

1,500,000

2,000,000

2,500,000

3,000,000

3,500,000

4,000,000

4,500,000

5,000,000

M 2001M 2007M 2008 F 2001 F 2007 F 2008

Evolution of the Urban‐Rural Employment in Syria, LFS's

Rural urban

reduced from 30 months in 2001, to 24 months in 2005 and then to 21 months in 200745. Also, the government used to force graduating engineers to serve in public employment for more than two years; this has transformed in 1996 to an obligation of the State to find jobs for engineers, if they request; and in 2004 such commitment for public employment has been cancelled. More significantly, major “reforms” have concerned the agricultural sector since 2000. They have had a major impact on participation and employment in agriculture, as it shall be discussed below.

Thus the major dynamic of employment in Syria is characterized by significant yearly

losses of jobs in agriculture, at a much higher rate than what the aggregate data on the reactivated rural-urban migration could suggest. The job creation in urban areas, in particular in the services and tourism sectors, which need more educated people, are far from coping with the wave of new young comers to the labour market and with the job losses in agriculture (in addition to the incoming migration). The situation is becoming critical in some governorates: Hassakeh, Rakka and Aleppo.

The LFS’s show very large yearly variations in the levels and characteristics of

employment. This is mainly due to the fact that these LFS’s are not substantiated by comprehensive sociological studies on the complex dynamics occurring in the Syrian society (including influence of migrations) and on working activities. In particular, these variations have not been correlated with the effects of inward migrations, especially of the Iraqi refugees, of the significant circular migrations of Syrian workers to Lebanon (and to a lesser extent to Gulf countries), and of government policies (such as cancelling the periods of civil services and reducing the duration of the military service for the young’s in the early 2000’s).

Employment characteristics

The rural-urban migration has then had a significant impact on women employment. 65% of women employment was in 2001 in rural areas. But 57% of these rural jobs were lost between 2001 and 2007; and the 8% increase in urban women employment was far from compensating the loss of opportunities for women. Men lost also jobs in rural areas, but the losses have much smaller effect due to the large size of men employment.

78% of the men employed in 2007 have not achieved secondary education, while this percentage was only 43% for women. This difference is related to the fact that mostly educated women tend to obtain jobs, and thus tend to participate to the labour force. Lower educated women have lost most of their jobs in agriculture and are in direct competition in cities with the already heavily stressed labour market for 45 see http://www.aksalser.com/?page=view_news&id=65dcd517df9ebade6301be01f9ed63c6&ar=267162141


Illeterate7%

read & write12%

Primary44%

Preparatory15%

Secondary10%

Institute6%

University6%

unknown0%

Distribution of Employment with education, men, LFS 2007

Illeterate12%

read & write5%

Primary17%

Preparatory9%Secondary

11%

Institute29%

University17%

unknown0%

Distribution of Employment with education, women, LFS 2007

lower education. The share of employed women not having achieved secondary education was of 67% in 2001, and decreased even to 40% in 2008, while this share has almost not varied for men. Women with professional institute degree occupy 41% of the total of jobs for this category; and those with a university degree occupy 28% of the corresponding total jobs.

52% of the men employed in 2007 are as salary persons, while this percentage is 69% for women. 7% of the employed men are “family workers” and 19% for women. The comparison is inversed between men and women for “employers” and “self employed”. Women form then 28% of family workers, and 16% of salary persons; while they only constitute 3% of “employers”, and 4% of the “self employed”. This reflects the difficulties of entrepreneurship for women in Syria, but also the difficulties for men to find jobs46, resulting in a very large share of “self employed” (32% of men employment). “Family work” is a significant phenomenon in Syria for both men and women.

24% of the employed men work in the state-owned sector (public administration and

enterprises)47, while this percentage is 56% for women. Women have then a net preference to work with the state as employer, where they constitute 25% of total employment. During the preparation of this study, female employees of public administration were asked about this preference; and they explained: dignity in work, stability of employment, health protection and retirement scheme. This reflects the precarious working conditions in the private sector.

Thus the share of women working in the private formal and informal sector is much lower than for men. Also women share of familial employment (informal) reaches 11%; while it is only 6% of private formal and informal employment. However, it must be noted that a significant part of the men employed in the public sector has a second job in the private sector (double employment) due to the low public wages. Typically, a high educated public employee could have an informal consulting job (or even a functional job) in the private sector; a low educated public employee could be a taxi driver in the afternoon48. This seems to be less the case for women.

46 The “self employed” is crowded with men, leaving little opportunities apparently for women. 47 It should be noted that a large share of those are not permanently employed by the state-owned institutions, and that this share currently increases, as the government stopped ‘confirming” public employees. But no data are available. 48 Work hours in the public sector end at 3:00 pm for 5 days a week.


Employer9%

Self employed

32%

salary52%

Family7%

Others0%

Distribution of Employed by Status, Men, LFS 2007

Employer2%

Self employed

10%

salary69%

Family19%

Others0%

Distribution of Employed by Status, Women, LFS 2007

State‐owned24%

Private Formal34%

Private Informal36%

Mixed0%

Cooperative0%

Familial6%

Civil Society0%

Distribution of Employed by Type of Employer, Men, LFS 2007

State‐owned56%

Private Formal16%

Private Informal17%

Mixed0%

Cooperative0%

Familial11%

Civil Society0%

Distribution of Employed by Type of Employer, Women, LFS 2007

Also, the 2003 extensive LFS49 have shown very large regional differences in employment

by type of employer (state-owned, private formal, informal, etc.). The share of public sector employment for men is much higher in the coastal region (Lattakia and Tartous mohafazats) than average, and is much lower for the Northern region (Hassakeh). The case for women is different, as the highest share of public employment is experienced by Damascus (both Damascus and Damascus countryside mohafazats), where the capital and major administrations are located. The lowest shares in public employment are experienced in the Northern region, as well as the Eastern region (Hassakeh, Rakka and Deir-Ez-Zor).

On the contrary, the coastal region experiences the lowest share of private employment, for both men and women; and Damascus has the lowest share of “self employed or unpaid workers”. However, whatever the veracity of this measurement, it has changed drastically with the arrival of the Iraqi refugees, as they have mainly settled in the Damascus region.

49 See OVENSEN & SLETTEN 2007 which notes that “In the Coastal region, one in two households has at least one person in public employment”.


Permanent71%

Temporary6%

Seasonal10%

Occasional13%

Distribution of Employed by Work Condition, Men, LFS 2007

Permanent76%

Temporary6%

Seasonal12%

Occasional6%

Distribution of Employed by Work Condition, Women, LFS 2007

Male Public sector Private Sector Self employed or unpaidDamascus 28% 46% 26%Southern 31% 41% 28%Middle 30% 37% 33%Coastal 40% 25% 35%Nothern 14% 43% 43%Eastern 21% 35% 44%Female Public sector Private Sector Self employed or unpaid

Damascus 68% 24% 8%Southern 55% 21% 24%Middle 40% 18% 42%Coastal 58% 9% 33%Nothern 21% 13% 66%Eastern 24% 24% 52%

Sector of employment by region for men and women, LFS 2003

71% of men employed are for permanent jobs, while the percentage for women is of

76%. And it is worth noting that this share is larger for men than the shares of state-owned and private formal sector jobs combined; what means that a significant share of private informal sector jobs are permanent jobs.

Analyzing the detailed characteristics of employment shows that women have lost in 6 years 57% of their jobs in agriculture, which constituted 65% of their employment. This, with the insufficient women jobs creation in the private sector, tends to explain the discouragement of women for employment and the “apparent” decrease of their participation rate. The public sector has absorbed part of this deficiency, making that 57% of women are working there.

Non-permanent employment seems also to constitute an issue, especially for men, as it concerns 29% of employed men.

1.3 Informal sector and informal economy

As stated above, the Syrian LFS distinguishes 7 employment categories by type of employer: state-owned enterprises and administration; private formal sector enterprises; private informal


0

200,000

400,000

600,000

800,000

1,000,000

1,200,000

1,400,000

1,600,000

1,800,000

2,000,000

Employment in Syria by Type of profession and nature of employer, men LFS 2007

Family

Cooperative

Mixed

Private Informal

private formal

State‐owned 0

50,000

100,000

150,000

200,000

250,000

300,000

350,000

Employment in Syria by Type of profession and nature of employer, women LFS 2007

Family

Cooperative

Mixed

Private Informal

private formal

State‐owned

sector enterprises50; family enterprises; mixed (public-private) sector; cooperatives; and the civil society. Although, this does not allow measuring the “informal economy”51 as defined by the ILO, as a considerable share of “informal employment” can exist in the “formal private sector”. Also, it is not clear that the “family enterprises” category matches with the ILO definition of “households” (households producing goods for their own final use and households employing domestic workers), as it contains a share of salary workers and a considerable share of contributing family workers.

Also, the Syrian LFS also displays 4 categories of status of employment: employer, employee, self-employed (or own-account worker) and contributing family workers. However, it does not separate the “members of producer’s cooperatives” as a specific category of status of employment.

The LFS’s show that the share of those employed in the “informal sector” 52 has diminished from 39% of total employment in 2001, to 34% in 2007 and to 32% in 2008. But this measure reflects mainly the losses of jobs in agriculture, as in fact excluding agriculture, the share of employees in the informal sector has increased from 24.2% of total non agriculture employment in 200253, to 28.3% in 2007.

Informal sector employment is dominant in agriculture; it is also very important in all

production jobs, and (astonishingly) low for jobs in sales and services. The LFS 2007 shows also that it is almost absent for administrative and professional/technician jobs54. These characteristics are present for both male and female employment. Thus, half of the base producers in Syria outside agriculture are working in the informal sector. 50 Scanning the details available for the Syrian LFS’s, some before 2006 display only data for “private sector”, mixing formal and informal private sectors; some others mix “private informal sector” with “family enterprises”, and the last surveys display “private formal sector”, “private informal sector” and “family enterprises” 51 See ILO 2002-2: the matrix of glossary and terms. 52 Note that the “informal sector” includes normally the “criminal economy”, illegal not only for non respect of taxation and labour laws, but also in respect to the nature of the activities. 53 The data for 2001 cannot be extracted as the LFS includes working children 10-14 years old. 54 This quasi-absence for professional jobs is arguable in light of ground observation. Also, the low share in services and sales could be arguable.


‐

100,000

200,000

300,000

400,000

500,000

600,000

700,000

800,000

900,000

1,000,000

Distribution of Employment in informal economy by economic sectors, LFS 2007

Family F

Informal F

Family M

Informal M

0

100,000

200,000

300,000

400,000

500,000

600,000

700,000

800,000

900,000

1,000,000

Employer Self employed

Salary men Family worker

Others

Distribution of Employment in the informal sector by type of employment, LFS 2007

Private Informal M Famil M Private Informal W Family W

The LFS 2007 makes the distinction between the two types of employment in the informal sectors: “private informal sector” and “family enterprises”55. The measurement (see figure) shows the large informal sector in Agriculture, is comparable in size of employment with that in Construction and Transportation. The informal sector employment is measured low in Services; and this astonishing owing the size of “services” in the labour force. Also, the share of women working in the informal sector seems exceptionally low, in all activities including agriculture. Between 2002 and 2007, the share of non-agriculture employment of women in the informal sectors comparatively to total female employment would have remained low, respectively only of 4.4% and 5.9%. Also, the size of female employment in informal industrial activities would be in 2007 only of 9,642 and in informal services (even as employees of family enterprises) of 7,522!.

The informal sector employment is measured

mostly constituted of “self-employed” and “salary people”, but also with a significant number of “employers” (around 200,000). Private informal sector is much more a concern than family enterprises.

More importantly, the measurement of the number of employees in the informal sector does not give an assessment of the total “informal economy”56 (i.e. the total “informal employment”) as a significant share of formal private sector employment is also informal. And this additional informal employment cannot be deduced directly from the LFS’s data. Only some indications are given by the facts that: 5.8% of private formal sector employment is constituted by contributing family workers (8.2% for the case of women) and 36% of this sector employment by the self-employed (29% for women). But, this does not indicate the status of formal employment or not for the salary persons in the formal private sector.

The assessment of informal employment in the formal sector can be approached comparing

the data given by the LFS for the employees in the non-agriculture formal sector57 and those for the registered in the social security (the General Institution of Social Insurance (GISI)58) as workers in non-agriculture; noting that the registration of workers at GISI is mandatory for all 55 The second category has not been distinguished as such in 2001 LFS. 56 See the discussion of this concept in Samir AITA 2008-1. 57 Even some state-owned enterprises could use informal employees, especially in agriculture. 58 In some references, this institution is named in English: General Social Security Organization (GSSO), see its own web site http://www.taminat.gov.sy/en/ and in others the Social Security Establishment (SCE).


employees (with permanent or limited time contracts) since the creation of the social security in Syria in 1959.

GISI had estimated recently the size of “evasion” from registration at social insurance by 30%: 90% for some enterprises and null for others59. But a more precise estimation can be made.

In fact, the LFS 2007 reports 1,379,976 employees in the state-owned sector; while GISI reports: 1,199,094 workers registered in stage 3 (more than 5 workers in the public sector); 2,166 workers registered in stage 4 (less than 5 workers in public sector)60. In total, 87% of the state-owned enterprises employees are registered at GISI. Normally, all state-owned employees are registered at GISI, except those hired before 1985 that are registered61 in the other governmental social security establishment.

The LFS 2007 reports also in the formal private sector: 232,892 employers, 552,641 self employed, 664,077 salary men and 89,895 working (formally) with the family; 1,543,262 in total (31% of the totally employed). Only few (53,692) are working in agriculture (3%). One could note that the share of salary men is low. For this private sector, GISI reports62: 260,379 workers registered in stage 3 (more than 5 workers in private enterprise); 268,809 workers registered in stage 4 (less than 5 workers in private enterprise)63. Thus 529,188 are registered in total in the social insurance out of the non-agriculture total of 1,489,570: 36% of the employees of the formal private sector are protected by social insurance64. The size of “evasion” would then be of 64% and even higher65.

64% of formal private sector employment outside agriculture could be then considered “informally employed” in 2007 in respect to registration in social insurance. A large share of those is made of “self employed”66.

Thus the total size of “informal employment” in 2007 may be estimated adding employment in the informal sector and informal employment in the private formal sector. The informal employment (or informal sector) constitutes then 52% of total non agriculture employment and 79% of the employment not related to public sector or agriculture67. It is to be noted that this method of estimation does not distinguish between permanent and limited time work contracts, and assume that in all cases registration to social security is made. But on another hand, the size of the informal private sector employment, as measured by LFS, is questionable.

59 See GISI Bulletin, July 2009, article of Mohammad OMAR: “Social Insurance is not a tax on employers”, pp 24-25 (in Arabic). 60 GISI reports 3240 stage 3 employers in the public sector, and 1058 stage 4. 61 With permanent or limited time contracts. 62 Excluding agriculture. 63 In addition, 100,714 insurances are registered for “agricultural work”; 572,277 for “contractors”; 40,075 for “seasonal works”; and 296,442 for “construction”. The status of the latter registrations and the duration of work days they cover are unclear. 64 21,376 employers declare their employees in stage 3; and 165,760 employers in stage 4. Thus, only 24% of employers in the formal private sector make proper declarations to the social insurance. 65 Maha KATTA & Sattouf al CHEiKH HASSAN (2008) reports, based on the household survey of 2003-2004, that only 9.5% of formal private sector employees are covered by social insurance (10.1% of men and 6.7% of women). Also, our analysis considers all insured, whatever category of insurance, as fully insured, what is far from being the case. 66 And also “employers”. 67 GISI reports 100,714 insurance contracts for agriculture works; to be compared with the 964,549 LFS 2007 figure on employment in agriculture. It also mention 40,075 insurance contracts for seasonal works and 572,277 for contractors; to be compared respectively with the 490,682 seasonal employees and 922,296 other non permanent employees reported in LFS 2007.


5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

2001 2002 2003 2004 2005 2006 2007 2008

Official Unemployment Rate in Syria, LFS's 2001‐2008

Men Women Total

Also, it is worth noting that the informal employment is ill covered by ILO conventions68.

The informal sector constitutes 34% of total employment; with a large share in agriculture and for men. Outside agriculture, the share of employment in the informal sector is increasing since 2002; mostly base producers in the construction and transportation sectors are concerned; and mostly self-employed or salary persons.

The Informal economy (informal employment) has even a much larger size, as it concerns also employees of the formal private sector. Taking the registration at the –although mandatory - social insurance as a criteria, the informal employment constitutes then 52% of total non-agriculture employment, and 79% of employment not related to state or agriculture.

It is also probable that the Iraqi refugees have even increased further the size of the employment in the informal sector and the informal employment and economy.

1.4 Unemployment and Inactivity Official unemployment data The LFS’s report the official

unemployment rate in Syria as for the ILO definition (did not work one hour last week). From 11.7% in 200269, this official unemployment rate increased to 12.3% in 2004, and then dropped to 8.4% in 200770. The newly collected data for 2008 LFS shows that it jumped again in one year to 10.9%. The variations of the global rate follows the variations of men unemployment rate, and as discussed above the strong variations of the labour force from year to year (!). However, these variations are somehow contrary in tendency to the variations of women unemployment rate. In particular, the sudden jump of global unemployment in 2008 is associated with a reduction of women unemployment!.

In any way, the variations of the official unemployment rate seem to be in contradiction with

common sense: the arrival of Iraqi emigrates after 2004 and the return of Syrian workers from Lebanon after 2005 would have resulted in a decrease of unemployment!!!!. Also, as discussed 68 See convention 122 of 1964 (inviting to social consultation the representatives of the informal sector, and not ratified by Syria), recommendation R169 of 1984 and convention 182 of 1999 (children work in the informal sector, ratified by Syria in 2003). 69 The 2001 unemployment rate considers work force and employment for the above 10 years (including children work). It is only in 2002 that the data has systematically considered the above 15 years in labour force and employment. 70 ILO laborsta statistics report the same data as the Syrian official in 2001 (including the 10-14 years) and 2002 (>15 years); but slightly lower values for 2003: 10.3% in total (LFS 12.1%), 7.6% for men (LFS 9.6%) and 20.9% for women (LFS 12.1%).


M F TIlleterate 10% 12% 11%Read & Write 8% 18% 9%Primary 9% 35% 11%Preparatory 8% 31% 10%Secondary 11% 43% 19%Institute 8% 17% 12%University 4% 12% 7%

Official Unemployment Rate by education,LFS 2008

above, the country is far from creating the minimal 250,000 jobs yearly to stabilize the unemployment rate71, while the official unemployment rate diminishes!!!

In an earlier study72, an estimation of the ILO unemployment rate has been made assuming that participation to the labour force had not varied since the early 2000’s (81.3% for men and 21.3% for women). It has lead to an ILO unemployment rate in 2007 of 22.6% (14.5% for men and 53.0% for women); and accounting for Palestinians, non-citizen Kurds and Iraqi refugees, this unemployment rate would have stand at 30.3% in 2007 (23.0% for men and 57.7% for women).

Also, it is worth noting that the 2003 extensive LFS had shown that if another definition is

used for unemployment (have worked 3 days in the last month) the rate stands at 22.6%, and that regional variations (at the level of “nahias”, a subdivision of “mohafazat”) are very significant, as ILO unemployment rates ranges between 2% and 36%73.

The official unemployment rate at ILO criteria shows a decrease from 11.7% in 2001 to

8.4% in 2007, and then a sudden jump to 10.9% in 2008. The evolution between 2002 and 2007 seem irrelevant to explain facts on the ground, such as the significant losses in agricultural jobs and the effects of Lebanon and Iraq events. With others methods, unemployment can be estimated ranging between 22% and 30%.

Characteristics of Unemployment Knowing the problems related to the official

unemployment rates, some of its detailed characteristics are worth describing. In fact, it shows that unemployment is the worse for the youngest and young women in particular. For the 20-24 years women, the unemployment rate is of 49%, and it is higher than the country average for all women age classes until 40 years. Also, men unemployment rate seems very low for the university educated, while university women are on national average. The highest unemployment rate is for the secondary educated women at 43%.

71 Samir AITA 2009. 72 Samir AITA 2009, op. cit. 73 The highest ILO unemployment rate was given for the nahia of Kurdaha, from where the President family has originated. This has raised questions on the significance of the ILO unemployment rate in the social context of the country.


M F TDamascus 6% 16% 7%Aleppo 8% 15% 8%Damascus Countryside 4% 14% 5%Homs 8% 24% 11%Hama 7% 24% 11%Latakia 9% 32% 16%Idleb 7% 17% 8%Haasakeh 19% 59% 24%Deir Ez Zor 12% 14% 13%Tartous 10% 28% 16%Rakka 16% 38% 18%Deraa 8% 25% 10%Suweida 13% 29% 18%Kuneitra 9% 18% 10%

Official Unemployment Rate by region, LFS 2008

M F T15 - 19 18% 44% 21%20 - 24 17% 49% 23%25 - 29 12% 33% 15%30 - 34 7% 22% 10%35 - 39 5% 12% 6%40 - 44 4% 7% 5%45 - 49 3% 4% 3%50 - 54 2% 5% 3%55 - 59 2% 2% 2%60 - 64 2% 3% 2% 65 + 2% 1% 2%

Official Unemployment Rate by age class, LFS2008

Regionally, the highest unemployment rate is measured at 28% for the mohafazat of

Hassakeh, which has been declared by the government “victim of a disaster”74. Rakka, Suweida, Lattakia and Tartous are also high above national average. Astonishingly, Damascus Countryside, where a large share of Iraqi immigrants has settled, has a very low 5% unemployment rate!.

In general, unemployment is measured higher in rural areas than in urban zones. Also, it is worth noting that the highest unemployment rates are for the “Never Married”,

especially women, for which the rate is 39%, while only17% for men. Divorced women have also high unemployment at 24%.

In an earlier study75, it has been shown (LFS 2007) that the largest share of unemployed men

is made by those with only primary education; illiterate and university educated get then more easily employed. For women, the largest share extends to the whole range of education until university. Also, 2007 LFS data had shown that most of the unemployed “had never worked before” (78% of 25-29 years old unemployed men, and 92% of women in same age category). This share of the “had never worked before” reduces to 39% for the 45-49 old unemployed men, while it remains at 82% for women of same age category. This tend tends to mean that women are discouraged from seeking work.

74 The government blames officially the drought for this disaster. However, the economic policies have a large share of responsibility: several crops not received by government in a region where types of crops were administratively fixed, and prices were subsidized; 3 folds increase of the prices of diesel (necessary for pumping) and liberalization of the prices of fertilizers. In any way, this region is the essential source of rural migration to cities. 75 Samir AITA 2009, op. cit.


0

50,000

100,000

150,000

200,000

250,000

300,000

350,000

2001

M

2002

M

2003

M

2004

M

2005

M

2006

M

2007

M

2008

M

2001

F

2002

F

2003

F

2004

F

2005

F

2006

F

2007

F

2008

F

Evolution of the youngs (15‐24) unemployed in Syria, LFS 2001‐2007

Worked before Never worked before

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Ditsribution of men Labor force function of employment situation and age, LFS 2007

Unemployed worked before Unemployed never worked before

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Ditsribution of women Labor force function of employment situation and age, LFS 2007

Unemployed worked before Unemployed never worked before

However, the size of those who “had never worked before” also experiences large year to year (unexplained) irregular variations, for both men and women; when one expects their numbers to increase yearly with the new comers to the labour market who cannot find jobs for insufficient jobs creation. Young people unemployment shows such large year to year variations. The LFS data do not help much to catch the relations between this youth unemployment and the recent migration and policies effects. In particular, the numbers of those who never “worked before” amongst the young unemployed tend to decrease from year to year76, especially in the years of arrival of Iraqi refugees, and while insufficient number of jobs are created for the newcomers. The “worked before” category shows even a stranger behaviour. It increases in 2003 for men, while no effect is seen for women; 2003 was the year when major losses of jobs occurred in the agriculture sector. Except for men in 2007, the figures concerning the “worked before” are very small. Unemployment hits most hardly the youngest, in particular young women. It is the highest in rural areas, in particular in the Eastern region, feeding rural-urban migration. Most of the young (15-24) unemployed had “never worked before”; but the details of the LFS show irregular year to year variations and do not help to analyze the effects of migration and policies. For the age category 25-29 years, 78% of unemployed men “had never worked before”, and 92% of women. This share for who “had never worked before” remains high for age category 45-49 (39% for men and 82% for women).

76 Except in the last years for women. The data obtained from LFS 2008 does not indicate which unemployment category is given (“worked before” and “never worked before”, or both).


‐

500,000

1,000,000

1,500,000

2,000,000

2,500,000

3,000,000

3,500,000

4,000,000

2002 2003 2004 2005 2006 2007

Never Worked Before, Households and Students in active population, LFS's 2002‐2007

NWB M

NWB W

HousH M

HouseH W

Student M

Students F

Inactivity and underemployment The Syrian LFS’s distinguishes different types of active and inactive working age population.

For the active population (Labour force), the distinction is made between employed outside home, employed at home, unemployed who has already worked, unemployed who has never worked, and (for some years) unemployed temporarily. Also, the inactive population is decomposed in different categories: dedicated to house work, student, retired, with incapacity, and live from means. This enables to assess some of the aspects of inactivity, in particular discouraged workers, those who do not seek jobs for lack of opportunities.

On the other hand, even those who are employed could work for less than their full capacity. The ILO unemployment criterion considers employed those who worked “one hour at least last week”. Thus many could be considered employed without having a full time job. Intuitively, the more there is such underemployed in a country, the more you have discouraged workers. Other references77 add even other categorizations to the employed: visibly underemployed and invisibly underemployed. This is while multiple employments are common in Syria, in particular for state-owned sector employees. All these are phenomena that have received much statistical and sociological attention.

Thus, three categories of inactive population

merit some attention: • Households: The women dedicated

to house activity represented in 2002 three times (296%) the women work force. This ratio increase until reaching more than 4.5 times (464%) the women work force in 2007. This evolution experienced a sudden jump in 2004; but in anyway the growth ratio of women dedicated to house activity is much higher in average the working age population growth rate (almost the double). Besides the year to year variations, a growing share of women dedicated to house activity could correspond to a sociological phenomenon correlated with the decrease of women participation. But it needs to be substantiated in a context where in one hand, poverty has significantly increased in the country78 (which may necessitate a larger involvement of women for household subsistence) and another hand, a significant share of the circular migrants to Lebanon has returned to the country in the 2000’s79. Also, it is worth noting that for some years, men dedicated to house activity

77 see OVENSEN & SLETTEN 2007 78 See UNDP 2005-1, UNDP 2007 and UNDP 2009. 79 Lebanon has experienced a financial crisis since the end of the 1990’s because of its large public debts. Also, the crisis following the assassination of Prime Minister Rafiq HARIRI and the withdrawal of the Syrian army from Lebanon has lead to a large diminution of the circular migration of Syrian workers to Lebanon.


‐

200,000

400,000

600,000

800,000

1,000,000

1,200,000

2002 2003 2004 2005 2006 2007

Students in active population, LFS's 2002‐2007

Student M

Students F

have reached up to 2% of men work force; but here the year to year variations in the statistics are much bigger.

• Students: Another reason of inactivity is the prolongation of studies. But here also, the year to year variations are irregular and unexplained. Their numbers (in active population) diminished until 2005, and then increased steadily (less for women). Their size in 2007 reached for men 22.3% of the male work force, and for women 103.5% of female work force (after being of only 47.6% in 2002). Besides the unexplained year to year variations and its influence on the measurement of the active population, this questions the whole issue of work discouragement and transition from education to employment.

Does Syria experience underemployment? According to 2007 LFS, average number of

hours for salary people per week is 45.7 for men and 35.8 for men. In both cases, this average number of work hours is higher for the young’s (respectively 48.2 and 38.2 for the 20-24 aged men and women). Also in both cases, average number of working hours decreases generally with education. It is also higher than average in all economic activities (per example, it is respectively of 48.3 and 42.9 for men and women in industry, and 51.6 and 45.0 in tourism), except for services, reflecting the fact that working hours are limited in the public administration (but many in the public administration has second job!). Thus it is the highest in private formal sector (respectively 52.2 and 42.2 for men and women). In the wake of the extensive 2003 LFS, FAFO team estimated the rate of underutilization80 of the employed as high as 30.9% (and even 35.0% for urban women). The team argues that 60% of underutilized men are invisibly under-employed (low wages, low productivity81, etc…) reflecting the fact that many men work in the informal sector. The argument is different for women, were the under-employed (visible or invisible) are around 20% of underutilized for urban areas, and 38% for rural zones. Women tend to be more unemployed than working informally. However, the analysis estimates that that in all cases the discouraged does not constitute 10% of the total of the underutilized. 80 See OVENSEN & SLETTEN 2007, who define the underutilized as the sum of the unemployed, the discouraged workers, the visibly underemployed (working but less than normal duration/full time, and wanting to work more) and the invisibly underemployed (working in a job characterized by low productivity and underutilization of skills). The labour force, as denominator of the underutilization rate, rate is extended to include the discouraged. 81 There is no comprehensive analysis on productivity in Syria. It is generally admitted that productivity is low in the informal sector; but it could vary according to different factors (availability of infrastructure and credits, type of activity, etc.); see for India Dipa MUKHERJEE: Productivity in the Informal Manufacturing Sector: Regional Patterns and Policy Issues; MPRA paper 4859, Nov 2007. But also, lower wages in the informal segment act as a disincentive to go for productivity improvement efforts on the part of formal sector entrepreneurs; see Sugata MARJIT & Dibyendu MAITI: Informal Wage and Formal Sector Productivity; Center for Studies on Social Sciences, Calcutta, India; August 17, 2008.


It is commonly admitted that productivity is generally low in Syria, and even decreasing, owing to the growth of the informal sector. It is also generally admitted that there is an issue of excess employment in the public administration and state-owned enterprises (even if public sector employment has slowed down significantly in the last years). But the statement that the discouraged forms a very small share of the active population is controversial, in the context of very high pressures on the labour market. The strong year to year variations of the volume of households and of students necessitate reviewing the methods for assessing participation on the basis of ground sociological studies.

1.5 Education Trends

Education and vocation training in Syria Following its independence, Syria had developed a strong education system. Base education

has been developed up to the remote villages. And, an original curriculum was developed in Arabic language at all levels. In the 1960’s and 1970’s, Syrian professors and teachers spread all over the Arab world, from post-independence Algeria to the Gulf countries. A significant number of students of the different Arab countries (from Yemen to Bahrain) have graduated from Syrian universities.

The situation has deteriorated since the financial crisis of 1986, with the major reduction of education spending in government budget. This spending has been improved again only in 2001. Recently, new private universities82 and schools83 have also been permitted, to be opened outside major cities. Issues on the curriculum and the adaptation of education are now of major concern84.

In 200785, there were 15,774 base public schools in Syria and 298 private, as well as 118 schools by UNRWA for Palestinian refugees (with respectively around 140 students per school, 221 and 247)86. Also, Syria provides secondary education through 1535 public schools and 61 private schools (with respectively around 224 students per school and 283). In 2007, public universities comprise 107 faculties, teaching 279,614 students and graduating yearly 24,329; Private universities 24 faculties, teaching 11,007 students.

Vocational training is provided at three levels: the technician/preparatory level, the secondary/professional level and the High Institutes level. The secondary/professional level comprises 647 schools (4015 specialized sections) educating 114,876 students87 (44% industrial, 23% female activities, 23% commercial, 10% agriculture)88.

82 Presidential decree no 36 of 2001. 83 Several decisions of the Ministry of education since 2004. 84 See per example the proceedings of the Seminar on “Bridging Gaps for Industrial Development: Interface between Academia, Policy Making and Industry”; HIAST, Damascus, July 27-29, 2009. 85 Data below are from CBSStat Statistical Abstract 2008. 86 Also, there is 5,547 classes for combating illiteracy graduating every year around 54,000 persons; mostly women. 87 There is also similar schools for religious education: 117 schools (840 sections) educating around 21,000 students (2/3 women). 88 The data on the other levels are confusing as they mix the two types (“technician/preparatory and post secondary “high institutes”) and as they depend on different ministries (only 59 schools depending on the Ministry of education, only 30 are


0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

15 ‐19

20 ‐ 24

25 ‐ 29

30 ‐ 34

35 ‐ 39

40 ‐44

45 ‐ 49

50 ‐ 54

55 ‐ 59

60 ‐ 64

65 +

Level of education of the labor force by age, men, LFS 2007

University

Professional

Secondary

Preparatory

Elementary

Read & Write

Illeterate

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

15 ‐ 19

20 ‐ 24

25 ‐29

30 ‐ 34

35 ‐ 39

40 ‐44

45 ‐49

50 ‐ 54

55 ‐ 59

60 ‐64

65 +

Level of education of the labor force by age, women, LFS 2007

University

Professional

Secondary

Preparatory

Elementary

Read & Write

Illeterate

The situation of the education system in Syria A major multi indicator cluster survey (MICS) on women and children was conducted, with

the assistance of UNICEF, in 2005-2006. The major findings of this survey are as follows: • 92% of the children in age to join primary school (age 6 years) are at school, with 91.3%

for boys and 96.2% for girls. The average is 97.7% for urban areas and 89.4 for rural. • 75.3% of the children in age to finish primary school (age 11 years) had joined secondary

school; 73.3% for boys and 77.5% for girls. The lowest ratio is obtained for the mohafazat of Rakka with 55.3%.

• 79.9% of children (aged 4-15) are at school; 80.4% for boys and 79.3% for girls. • 54.2% of the young in age to join secondary school are at school, with insignificant

differences between boys and girls. The average is 57.4% in urban areas and 50.8% for rural.

• 4.0% of the children (age 4-15) are working; 5.0% for the boys and 3.0% for the girls. The ratio is higher for rural areas (5.5%) than for urban (2.6%). In the mohafazat of Hama, the ratio reaches 12.5%. 44% of such boys work outside family and 23% of such girls. For the age range 12-14 years, 6.7% of children are working. 61% of working children (4-15) are also at school.

• 3.4% of women (age 15-49) get married before completing age 15, and 17.7% before completing age 18. Thus, 9.7% of women aged 15-19 are married.

This situation leads to a differential in the education characteristics between male and female in the labour force. For both cases, low education dominates for the aged above 45 years; but the 25-35 are less educated than those aged 35-45. The share of illiterates and “read and write” is particularly dominant for the women above 45; but it is reducing drastically for the youngest. A considerable share of men in the labour force has only elementary education; while women have taken more profit from the professional (vocational training). And more significantly, women in

industrial); see CBStat 2008 and Fouad GHALOUL in the proceedings of the Seminar on “Bridging Gaps for Industrial Development”; op. cit.


0% 20% 40% 60% 80% 100%

Agriculture

Industry

Construction

Trade & Tourism

Transportation


Services

Global

Men, Wage differential by activityeuros

<50

50 ‐ 66

66 ‐ 82

66 ‐ 99

99‐116

> 116

0% 20% 40% 60% 80% 100%

Agriculture

Industry

Construction

Trade & Tourism

Transportation


Services

Global

Women, Wage differential by activityeuros

<50

50 ‐ 66

66 ‐ 82

66 ‐ 99

99‐116

> 116

0%

20%

40%

60%

80%

100%

120%

140%

15 ‐19

20 ‐24

25 ‐29

30 ‐34

35 ‐39

40 ‐44

45 ‐49

50 ‐54

55 ‐59

60 ‐64

65 +

Distribution of wages with age categories, comparatively to national average, LFS 2007

M F

the labour force tend to be more educated (except for those aged >65). In particular, the share of the university educated is higher for all age categories.

1.6 Wages and working conditions

The 2007 LFS sets the average wage at 9017 SYP per month (150 €89, 180% the minimum wage at that time), higher for women (+3.2% on average) than for men (-0.7%). The highest wages are in Finance activities (+10%) and the lowest in Agriculture (-26%). Women wages are particularly lower in this latter sector, as in industry (-18%). The highest wages are also for the university educated (+38%): +46% for men and +22% for women; the lowest for the illiterate (-18%): -15% for men and -43% for women.

The distribution with age categories shows no major gender differences, except for the youngest and the eldest. The higher average wage for women is linked to the higher general education of the female labour force90.

This 2007 LFS differentiates the levels of salaries at 7000 Syrian pounds per month (116 €). Globally, the share of women with salaries (>116 €) is higher than that for men, mostly because this is the case in services where they are assumed to have around 60% of their total jobs, and despite their very low salaries in agriculture. And it is worth noting, that if their activities were as in LFS 2001, when 55% of the jobs were in agriculture, their average salary levels would be much lower, and the differential much more widened.

89 1 € is taken = 60 SYP in average. 90 Syria is ranked third amongst Arab countries in the gender gap index of the World Economic Forum; see Ricardo HAUSSMAN and al., 2008.


0% 20% 40% 60% 80% 100%

Illetrate

Read & Write

Primary

Complementary

Secondary

Professional

University

Total

Distribution of men employed function of working hours, LFS 2007

1 to 9

10 to 19

20 to29

30 to 39

40 to 49

>50

0% 20% 40% 60% 80% 100%

Illetrate

Read & Write

Primary

Complementary

Secondary

Professional

University

Total

Distribution of women employed function of working hours, LFS 2007

1 to 9

10 to 19

20 to29

30 to 39

40 to 49

>50

M F TState Owned 1.37 1.38 1.37Private formal 1.19 0.99 1.17private informal 0.97 0.65 0.95others 1.21 1.01 1.18Total 1.18 1.25 1.19* as ratio to 2007 average salary

Average salaries by type of employer*, LFS 2008

Like in agriculture, the spectrum of women wage distribution in industry is much wider than for me, half of the salaries are below the 116 € threshold.

The partial data for the LFS 2008 shows an

increase in average salary of +19% (more for women +25%, as they are more present in educated positions): 175% of minimum wage decided in 2008. This LFS gives for the first time the distribution according to type of employer91. The highest salaries are in the public sector, with no gender differentiation. In the private sector, average salaries are notably lower, particularly for women, expressing the pressures on the labour market.

The average wage in Syria is around 178 € per month, higher for women than men,

as they are more present in highly educated jobs. The highest average salaries are in the public sector, while the pressures on the labour market pushes private sector average salaries to be low; the lowest for women in the informal sector at only 97 € per month. There is the no gender wage discrimination in Syria, as the wage system is referenced to public sector wages. Working hours

The 2007 LFS sets the average weekly working hours for salary people at 44.1: 45.7 for men and 35.8 for women. The data on employment shows that around 78% of employees work for more than 40 hours per week, and around 30% more than 50 hours. Except for those with professional education, the number of hours seems to decrease with education; the university educated working less hours.

91 Not provided for former LFS’s.


2. CURRENT LABOUR MARKET POLICIES AND PROGRAMMES AND LABOUR MARKET INSTITUTIONS

Labour market policy is addressed in Syria by the five year plans (FYP) of the government in

the context of reducing poverty, with tasks to be performed (change of regulations, etc) and indicators to be reached. This FYP’s is established by the State Planning Commission (SPC) and adopted by the government, as a general policy document. The MoSAL implements its share of the plan and is responsible of labour market regulation.

2.1 Labour Legislations

Syrian Constitution

The Syrian constitution guarantees labour rights and the right to work92, as well as the

rights of association. However, the stipulations of the Constitution reflect its major provision that the Syrian State is “democratic, popular and socialist”, where the Baath party is “leader of the society and the State”. Within this framework, the private sector had (between 1963 and 1987) limited margins of movement and the State had used to conduct different direct labour market policies (hiring in the state-owned sector, long (2.5 years) military service helping the involvement of the newcomers in the labour market, additional civil service (up to 2.5 years for engineers and doctors per example -; etc.).

The liberalization of the economy started after the financial crisis of 1986 in different forms and phases93; but it is only in 2005 that the General Congress of the Baath party has adopted for the country the “Social Market Economy”. However, it is still unclear how this new drive stands comparatively to the constitutional provisions, and how it could be translated in labour market policies. Such translation shall be analyzed through the policy and practices implemented in the framework of 10th Five Year Plan (10th FYP, 2006-2010).

Labour laws

The core labour legislations in Syria had come in the context of the United Arab Republic (1958-1961, the Union with Egypt), who had made the initial drive towards a socialist economy (agrarian reform, nationalization of industries and banks). The two major labour laws came in that period:

• Law no 91 of 195994, and its successive amendments95 and executive decrees, regulating work in the private and public sectors; the provisions for the dismissal of employees being later modified by Decree no 49 of 1962;

• And the social security law no 92 of 1959 and its amendments, which forces to register all employees in the public and private sector in the social security.

92 The Syrian Constitution was adopted in 1973, see http://www.oefre.unibe.ch/law/icl/sy00000_.html. 93 See AITA 2007-1. 94 During the union between Egypt and Syria. Initially this law was valid for both public and private sector employees; but is currently limited to private sector employees only, as a specific law has been made for public sector employees. It has some contradictions with the civil law, which forbid long term contracts for more than 5 years; but the labour law supersedes on the civil code provisions. See Nabil Marzouk 2008. 95 In particular, the Legislative Order of 132 of 1962, Decision no 124 of 1981.


Also, these laws do not cover the cases of “domestic workers”, the maritime transport and ports workers, who are subject to specific regulations.

These laws are still valid, and are assumed rigid by the current liberal policy makers, in terms of both employee dismissal and social security. The Ministry of Labour and Social Affairs (MoSAL) had initiated the elaboration of a new Labour law96, as prioritized in the 10th FYP; the first reform since decades. The circulation of a first draft in 2007 has lead to a wide controversy (mostly because of a perceived over-flexibility97 in its modalities for hiring and firing employees, and the insufficient protection it offers to the employees), which made that the leaders of the (although tightly controlled) unions called the President level to stop the project. A new version is under elaboration, after now a long debate with representatives of the employers and the unions98. It has been submitted in July 2009 to the Council of Ministers for approval. This new version should be then soon proposed to the Parliament. However, contrary to the initial version which had somehow circulated, the new one is presently kept strictly confidential99 by MoSAL and the involved stakeholders.

As mentioned above, public sector employees were initially covered by law no 91 of 1959. But, in 1985 a new law came to regulate specifically their rights and duties. And this law was again changed by:

• Law no 50 of 2004, and its executive orders, regulating work in the government and public sector.

Its promulgation had led also in its time to some controversy, in particular concerning the conditions of firing from public employment. The “compromise”100 was made in that the firing is a Prime Minister final decision, without the need to justify the reasons. Also, as in Law no 1 of 1985 the public sector employees have no right to strike whatever the reason101. The employees in agriculture, except in public agricultural enterprises, are excluded from the labour code and regulated by law no 134 of 1958, which has also been recently modified by law 56 of 2004. The social security law no 92 is valid for both public and private sector employees, and has been slightly modified in 2001 (Law no 78). But in principle, are excluded (art 2. L & M)102: 96 Initially without major consultation of social partners. 97 Most of the initial debate concerned the fact that the projected law declared the labour contract as a “free contract between two parties” and that the provisions for firing commissions have been eliminated. 98 The employers were mainly represented by the Syrian Federation of Chambers of Commerce and Industry (FCCI), and the unions by the General Federation of Trade Unions (GFTU). And it is worth noting that the employees’ federation is almost not present in private enterprises, and that it is tightly controlled by the Baath party and State (power system). 99 During the investigations for this study, a copy was asked for the last version of the projected new law, especially after its approval by the Council of Ministers. This demand has been refused by the officials of the MoSAL, FCCI and GFTU. A copy has however been obtained from an involved source. 100 Art 137-1: “It is permitted by decision of the Prime Minister, following s suggestion of a committee composed of the ministers of Justice and of Social Affairs and Labour, and by the Director of the Central Organization of Financial Control, to fire an employee from the service”. 101 Art 64; see also Nabil MARZOUK 2008. 102 The project of the new labour law (version dated Sept 1, 2008), that shall be discussed briefly below, reproduces almost the same list of exclusions (art. 5). In terms of health care, it introduces provisions (art. 94) on the responsibility of employer to ensure medical consultation and treatment to workers. If such function is provided by a public hospital, the employer shall pay the corresponding fees.


- the workers utilized in temporary exceptional activities, unless a specific text; - the members of the family of the employer, if they depend for living on him; - domestic workers or similar; - The workers used in agriculture in the private or mixed sector, unless a specific text. - the workers working at home for the profit of the employer; - The liberal professions and those working for the employer (!)103; - The employers themselves.

It is still unclear if the “reform” of the labour code for private sector employees shall be

followed by a reform of the social security code; but the current discussions and negotiations include the provisions on the shares of salaries that employers and employees should pay to the social security.

The labour laws and regulations provide for ensuring a minimum wage, paid vacations, a maximum number of working hours in conformity with the ratified ILO agreements. But the minimum wage and other provisions were set generally104 in the framework of sectoral bargains (through the collective contracts to be negotiated by unions and representatives of employers); and these bargains have been postponed with the cancellation of freedom of association. The constitution of independent unions from the government or from the Baath Party has been forbidden by Law regulating unions’ organizations no 84 of 1968. And only two unions, controlled by the Baath party, presently exist: the General Federation of Trade Unions for workers, and the General Union of Peasants. In their long history, they did not initiate any sectoral or general bargain. One of the major provisions in the present labour law concerns dismissal of employees. The Presidential Decree 49 of 1962 had limited the right of firing private and public sector employees, and submitted it to “Commissions on Dismissal Issues”. These commissions are chaired by a judge nominated by the Minister of Justice, and composed of members from the Ministry of Labour, the Governorate105, the unions and the employers’ associations106. And, if the commissions do not approve the dismissal, the employee should return to work or be paid 80% of its salary until he find another work (article 15). The specific labour laws of public sector employees eliminated the role of these Commissions. The law of encouragement of investments (Presidential Decree no 10 of 1991 modified by the Presidential Decree 7 of 2000) had liberated all agreed companies107 from the provisions of the 49/1962. Also, for most of the other companies in Syria, it is common practice that the employee signs his resignation letter simultaneously with his work contract; what makes him unable to put his case of firing, if any, to the Commissions. 103 The initial text was clearer, as were explicitly excluded “the liberal professions, the self employed and craftsmen”. 104 The minimum wage and the collective bargains, and their procedures were not set clearly in the Syrian labour law, contrary to other Arab countries laws (i.e. Egypt, Qatar, etc.). See Nabil MARZOUK 2008. 105 Each Mohafazat (governorate) in Syria is lead by a governor (Mohafez) who is nominated by the President. He represents the State authority in his jurisdiction; while he is assisted by a (consultative) elected council. 106 The project of the new labour law (version dated Sept 1, 2008) cancels this provision. A conflict between an employee and an employer on dismissal is referred against normal tribunals. Only, “Special Arbitration Committees” are provided for the case of collective conflicts; they are nominated by MOSAL, and chaired by a judge nominated by the Minister of Social Affairs and Labour (art. 220). 107 See the case of the new Four Season hotel: http://www.sadasoria.com/arabic/page-select-id-show_det-14-13993.htm


It is worth noting that the current labour law in Syria admits the existence of permanent, limited duration and temporary employment contracts. A limited duration contract, if continued after its term, is transformed immediately to an unlimited duration contract108. But, an unlimited duration contract could be cancelled (except for the provisions of law 49 of 1962) simply with a prior notice of 30 days. It is also worth noting that Syria had been the first Arab country to elaborate a modern labour law in 1946 (law no 279). This labour law followed a “work conference” where a social dialogue had taken place with the employers, employees and the government (mostly representing these employers). This law ended the old corporative associations, joining employers and employees in common “crafts corporations”, and permitted the creation of independent employees and employers unions109. The right of strike was recognized, under condition, contrary to law 91 of 1959. Series of strikes had taken place between 1951 and 1954, and a major strike in 1954. The government had been forced to admit the validity of this later strike and issued an amendment on the law of 1946, allowing the government to consider legal a strike when that avoids ‘social troubles”, imposing on employers to pay salaries during such legalized strikes and permitting the government to force the employers to open their establishment. A law for the creation of “work arbitration committees” have been promoted, but not adopted. The 1959 (United Arab Republic) socialist laws gave the social insurance and a share of profits to workers, but cancelled the right of strike110; firing of employees was regulated as a simple notification procedure. Between the separation with Egypt in September 1961 and the 1963 Baath “revolution”, the largest ever strike in the country was organized, while the government declared illegal the unions. It is in this context that law 49 of 1962, providing the mandatory passage through the “Commissions on Dismissals Issues”, was promulgated111. Finally, Syria is since March 8, 1963 in “state of emergency”. This state is governed by law no 51 of December 22, 1962, which stipulates in particular to “put restrictions on the freedom of meeting, residency, movement and circulation of individuals, and arrest provisionally any suspect or person constituting a threat to public order or security” (art. 4a). Thus any unauthorized demonstration or strike could lead its participants to be judged before exceptional military courts (art. 6). The Syrian constitution and labour laws have been elaborated within the framework of a state driven economy elaborated during the Union with Egypt, where the 108 The project of the new labour law (version dated Sept 1, 2008) requires 5 years of continuous execution of a limited duration to be transformed to unlimited. The termination of an unlimited duration contract is permitted at anytime with a notification of two months. 109 The workers unions had then been regulated by the law no 90 of 1959; while employers unions continued to be governed by 1946 law until the Presidential decree 31 of 1970. 110 The project of the new labour law (version dated Sept 1, 2008) recognizes, for the first time since 1959, the right of striking, “within the enterprise, to be announced and organized by the unions for the defence of the professional, economic or social interests” (art. 229); but the strike should be notified at least 15 days in advance (art. 230 a), have the absolute majority vote of all employees (art. 230 b), and be gradual (few hours, then more; no total stopping could be reached before 4 days) (art. 231). The days of strike are considered unpaid holidays (art. 224). Also, a strike cannot be made during the validity of a collective work agreement, and during the arbitration (made by the Ministry). So the new project recognizes the right, but make the organization of a strike almost impossible, especially with the cumbersome provisions on “collective labour conflicts” (art. 215-228). 111 Jamal Barout, private communication, 2009.


state is assumed to ensure the right of work and the right to obtain work, as well as social protection. Some of its flexibilities (dismissal conditions) have been rigidified later, in the context of major strikes of 1962; but more importantly the rights for unions, collective negotiations and strike have been annihilated after 1963, and the generalization of social protection never fully implemented. This has resulted in putting all improvement of labour rights subject to ministerial decisions. Also, the liberalization of the economy, started after 1986, has gradually resulted in the dissemination of practices annihilating its provisions, including the new investment laws which liberated the new ventures from conforming to the provisions on dismissals. This is while the country is still under emergency laws limiting the freedom of association.

A new labour law project has been approved in July 2009 by the Council of Ministers, after two years of controversy on its initial version. This new project is still kept confidential avoiding submitting it to public debate before the vote at the Parliament.

Implementation of Labour legislations MoSAL had always had very little means to implement governing labour legislations. Also, as this ministry is also responsible of granting licenses for unions, social organizations and NGO’s, it had always restricted the creation of such organizations, which could have played a role in denouncing violations of labour regulations. As it has been shown above, the size of informal employment is very large in Syria (61% of total employment, 85% of employment not related to state activities - state-owned, mixed and cooperative -, and 79% of employment not related to state or agriculture). Even in the private formal sector, only 66% of the employees are registered at the social security establishment. During the investigations of this study, MoSAL confirmed that its work inspection department is composed of only 63 people: 14 directors (1 by mohafazat), 9 heads of inspection sections, 14 inspectors (with a law degree) and 26 controllers (with a secondary education degree). Then 3 to 4 persons are present in each inspection section in the different mohafazats. This makes in average one inspector for every 250,000 private sector employees; what makes proper inspection impossible owing the fact that most enterprises are of very small size, and that corruption is common in the state administration, including the ministry of finance. But the inspectors do visit the enterprises (and recently some common “raids” of financial, labour , mohafazat’s utilities and police inspections have been reported on some large enterprises), especially the small shops in large cities. But their efficiency is limited. They could discover “hidden” employees in case of a sudden raid; however, they could hardly check other issues, as common practices in enterprises are: double accountability for tax evasion; registering employees at minimum salaries even if they are paid higher; making employees sign an undated resignation later simultaneously with their employment contract; etc. Consequently, limited numbers of cases have been reported on violations of labour law. Also, as mentioned earlier, it is common practice in Syria that employees in formal private sector sign an undated resignation later with their work contract. The employers avoid accordingly the cumbersome dismissal procedures of decree 49 of 1962, and use the resignation


‐2,000 4,000 6,000 8,000

10,000 12,000 14,000 16,000 18,000 20,000

Work accidents and Occupational diseases reported by the General Organization of Social

Insurance, Syria. 1999‐2008

Work Accidents Occupational Diseases

later to “legalize” dismissal. And there were no reports on complaints concerning such practices raised by labour inspectors or on behalf of justice. Otherwise, it is evident from labour statistics that no major effort was made by MoSAL to reduce the informal sector and informal employment. On the front of work safety environment, there are no data available, especially for the majority of workers not covered by social security. On the other hand, the social security establishment (GISI) reports the numbers of work accidents and work diseases for those covered. These reports show a continuous increase of accidents and diseases between 1999 and 2004, respectively by 10% and 25% yearly. Astonishingly, the numbers decline abruptly in 2005 and continue to decline afterwoods by respectively 11% and 17% yearly. 37% of work accidents in 2004 were fractures, and 76% of work diseases concerned muscles and bones; 6% had lead to death and 40% to permanent disability (only 1% and 15% respectively in 2008); .This could only be explained by the reduction of insurance coverage112, as the reduction is reported in all sectors from agriculture to public services, and for all types of diseases. A particularity of the Syrian health system is worth mentioning in this context: that health services have been for decades universally and freely ensured by public clinics and hospitals, without restrictions and in particular without any reference to a registration in social security. This free health system has enabled the general improvement of base health services in the country, even in most remote areas: 114 public hospitals, with 21,104 beds (in comparison with 355 private hospitals, with 7,646 beds), in addition to 1,315 health centers113, mostly in rural areas.

The public health services started to deteriorate114 significantly following the (unilaterally decided) “structural adjustment” policies following the 1986 financial crisis: major reduction of the government budget from around 50% to around 35% of the GDP115. The deterioration is mainly experienced in peri-urban informal areas around major cities, where a household survey conducted in Aleppo has concluded that “hundreds of thousands are settled in dangerous conditions116”, in particular for what concern access to health care. More recently, the government introduced a paying path to public hospitals, in an attempt to rationalize their budgets. The access to public health services deteriorated further, and the use of private health 112 See GISI annual reports 2004 to 2008. The decline may also results from better governance at GISI, eliminating some unjustified cases. 113 CBStat Statistical Abstracts, 2008. The figures are for 2007. 114 In general and in equity of distribution; see Dr. Fouad Mohammad FOUAD: “Can We Measure Health?” Aleppo Medical Association, Feb. 19, 2008; see also WHO database. 115 The World Health Organization reports that government expenditures on health constituted 47.8% of total health expenditures in 2006, and that they represented 6% of the budget (down from 6.7% in 2000). Total health expenditures represented only 1.5% of the GDP. 116 See the results of the survey in Wassim MAZIAK & Al. 2005; and Fadi HAMMAL & Al. 2005.


0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

Jan‐98

Jan‐99

Jan‐00

Jan‐01

Jan‐02

Jan‐03

Jan‐04

Jan‐05

Jan‐06

Jan‐07

Jan‐08

Syrian

pou

nds

The evolution of minimum wage in Syria in real terms (base 2000)

services has become dominant. In particular, the social security establishment (GISI) uses now extensively the private health services for those covered by its insurance.

The 10th Five year plan official document recognized that: “the (health) sector’s structural and functional weakness, which expresses itself in the absence of reference regulatory authority and clear health policy that prescribes the priorities and coordinates the roles of the competent bodies to prevent the overlapping, conflict of interests, bureaucratic inflation and the random growth of the private sector, prevents the optimum use of the limited available revenues. That led to health services’ weak response to the people’s actual needs, mal-distribution and low quality and economic efficiency”.

The Ministry of Social Affairs and Labour (MoSAL) has always had little means to

impose conformity with labour laws, and informal employment and illegal practices had widely developed, including in the formal private sector. Labour inspection is symbolic and gangrened by corruption. MoSAL limitations on the freedom of creation of associations have helped the continuation of these practices. Also, even the essential social protection consisting on free and universal public health services is now jeopardized by the ramping liberalization of the sector and the limitation of insurance coverage, even for the few who are registered at the social insurance.

2.2 Wage Policies

The wage policies in Syria consist of two aspects: the wage structure in the state sector (administration and public enterprises) and the minimum wage for the private sector. Also, the Syrian authorities fixe unilaterally the evolution of the retirement indemnities and social security compensations. And, there is no formal process of negotiations of increases generally or by sector, and there is no rule linking wage policy with official inflation.

The general minimum wage (GMW) is thus

fixed by Presidential Decree. This GMW had remained fixed for almost two decades, despite the strong devaluation of the Syrian pound in 1986 and later, and the high inflation rates, especially in the early 1990’s (more than 10% yearly) and lately (the official inflation rate for 2008 was of 15.4%). This has lead to an erosion of the purchasing power of both public and private sector employees.

Since the early 2000’s, several sudden GMW increases were granted by the President: 25% in 2000, then 20% in 2002 and 2004, then 25% in 2008. In 2006, only a bonus of 50% of a month salary was granted. In real terms (excluding inflation; see figure), the GMW almost doubled in the last decade; but it is still far from reaching its real terms values of the early 1980’s.


The structure of salaries in the public sector is based on this GMW; but has long been

compressed. High ranking public services employees use to earn very low salaries comparatively with their counterpart in the private sector. Travels and missions compensations were used as indirect tools to compensate these large differences. Only recently, this public salaries’ structure was somehow eased.

Salaries in the private sector are normally freely determined above this GMW. However,

MoSAL has introduced by administrative decision different minimum wages for the different categories of employees. This look to be an attempt to overcome the fact that most private employers registers their employees at their minimum wage to reduce social security payments117, whatever is their real salaries. Thus in comparison with the 2008 GMW of 6250 SYP per month (103 €) – raising from 5000 Syrian pounds (SYP) (83 €) - MoSAL fixed in March 2009 the minimum monthly salary for the movie theatre operator at 6500 SYP (1.04 times the GMW), and for his assistant at 6496 SYP, for the “general sweet manufacturer” 7440 SYP (1.1904 GMW), while the “Kenafe118 oven operator” has 7290 SYP, and the “poorer of Kenafe” 6496 SYP, the sales person 7084, and the handler and server 6500 SYP119(!). Also, this minimum salary could be different according to residency. A simple “clerk” in a private law office could gain 1.082 the GMW in Aleppo, 1.0494 in Idleb, and 0.961 GMW in Hassakeh. A “specialized writer” in such a law office will have 1.3402the GMW in Aleppo, 1.2622 in Idleb, while no minimum salary is fixed for such a qualification in Hassakeh (only for “ simple writers” at same salary than clerk).

When asked about the matrix of minimum wages during the preparation of this study, the answer of MoSAL officials was that it is very complex, made by hundreds of decisions going over several years, for each governorate and each type of work function. Analyzing partly tens of decisions, the matrix shows to be in fact complex, made of decisions expressed in real terms and not as a multiplier of the GMW. This makes difficult for any salary person to know exactly his minimum wage at a certain time and makes it difficult for inspectors to verify conformities.

It is worth noting that a monthly salary of 6250 SYP in 2008 is equivalent to US$ 134, i.e.

US$ 4.5 per day; what means that such monthly salary cannot sustain a typical Syrian family (in average 5.6 persons) above the poverty line (2 US$ per person per day). An economist has recently120 calculated the minimum monthly family salary necessary for assuring food subsistence above poverty line at 13,580 SYP (224 €), and if other needs are to be insured at 22063 SYP (364 €).

The wage policy results from administrative and presidential decisions, and is not

linked with social bargaining. The minimum wage system is very complex and inefficient. And despite major increases since the early 2000’s, this minimum wage is still half the poverty line for one employed person for an average 5.6 persons per family. Even, the average wage of 2008 is 20% below such poverty line.

117 While the share of employees of the private formal sector effectively registered at social security is very low. 118 A sweet speciality of Damascus. 119 See: http://www.aksalser.com/?page=view_news&id=012b101b7c63003e849335e5fb35c498&ar=909714936 120 See Qadri JAMIL 2007 and 2008, available at http://www.mafhoum.com/syr/articles_08/jamil.pdf


2.3 Labour market Policies

Current labour market policies

Active and passive labour market policies (ALMP and PLMP) do not constitute

terminologies used by Syrian government agencies, in particular MoSAL and the State Planning Commission for dealing with the labour market. In particular, there is no unemployment compensation scheme in Syria, and the public offices for employment deal almost only with the recruitment in state administration and public sector. We then describe here below the different government policies in matters of employment, and assess them in that respect.

After the high growth period of the early 1990’s, the second half of the decade had been

characterized by a recession in Syria, due to the combination of very low oil prices and unsuitable government policies. Consequently, unemployment rates increased. With the early 2000’s, after the installation of the new President Bashar ASSAD, and the first steps to liberalize the economy, the authorities acknowledged the necessity to create special policies to circumvent unemployment; the demographic, economic and social challenges having been largely debated in the “Economic Tuesdays”121.

Law no 71 of 2001 created the “Agency for Combating Unemployment” (ACU). The objectives of ACU were not mainly focused, as classical “active labour market policies” (ALMP), on encouraging the hiring and contractual formalization of salary workers in enterprises. But, it can be considered as constituting an ALMP in a broad definition of “providing labour market integration measures to those looking for jobs122”. As in fact, the functions of ACU targeted (target 1 to 5 in law 71, and 70% of the forecasted 35 billion SYP budget) mostly “business development”: helping, through financing and project assistance, individuals, families, small & medium enterprises to be created and expanded. Only its target 7 aimed at the training of the unemployed to be hired by enterprises for at least 3 years; while its target 6 involved the financing of infrastructures in the needing remote rural areas in coordination with local authorities (10% of the forecasted budget). Initially, several donors were expected to contribute to the project; but finally the government fully contributed to its capital of around 50 billion SYP.

ACU needed two years to start its lending activities. It had to obtain a status in relation with the existing banks123, all state-owned at that moment. Finally, the decision was made that the loans are to be delivered by the banks, with the recommendation and guarantee of ACU.

ACU aimed at creating 450,000 job opportunities in 5 years. But it was stopped after 3 years of operation, after that its General Manager officially criticized the Prime Minister and the

121 The Syrian Economic Sciences Society organizes since the 1980’s a series of debates, usually each Tuesday, which were the only open forum for discussions in the 1990’s. See www.syrianeconomy.org. The promoter of ACU was one of the main economists of the Society, the late Dr. Issam ZAIM, nominated head of the State Planning Commission. 122 See ILO definition of ALMP in http://www.ilo.org/public/english/standards/relm/gb/docs/gb288/pdf/esp-2.pdf. 123 The first private banks started their activities in 2004.


government policies124. ACU was dismantled and replaced in 2006 (Presidential Decree no 39 of September 2006) by the “Public Corporation for Employment and Enterprise Development” (PCEED). PCEED was placed under the authority of MoSAL, while ACU was directly dependent on the Prime Minister Office.

ACU claimed to have created between 175,000 and 196,000 jobs125, a figure that constitutes

(for only 3 years of effective operation) between 81% and 91% of the net jobs created in 6 years, between 2001 and 2007 (as in LFS’s). The decomposition between rural and urban jobs created by ACU is not available. However, its data indicated that it had developed 27,261 small projects (9,622 rural; 11,977 in services; 5,642 industrial) and 54,195 family projects (34,894 rural; 13,263 in services and trade; 5,678 in industry). The share of agricultural projects is significant, but maybe not sufficient for the massive job losses for this sector. Then one can assume that the activities of ACU had little effect on the job losses in agriculture (or maybe just slowing it down for some moment); but it may had have a significant effect on the exceptional sudden jumps of employment creation in 2005 and 2006. Such acceleration in job creations had been slowing down after the dismantling of ACU.

ACU had also invested since 2002 in some infrastructure projects126, with good employment impact:

• The rehabilitation of 80 schools in rural areas, especially in the North-Eastern region (the region declared “devastated” later in 2008): 320 million SYP out of a total of 350;

• the financing of 3 rural roads in the mohafazat of Rakka: 10 million SYP; • And other projects on water sanitization, health development and industrial zones. The PCEED, that replaced ACU, has a much more limited scope127 (see box comparing the

scopes of both organizations, as defined by their governing laws) and evasive targets. Most of the ALMP aspects were eliminated, and PCEED was more dedicated to training and micro-financing for the self-employed. But even for these targets, its roles were set as supportive to other organizations. This is particularly the case in target 1, where PCEED has only a “suggesting” role, helping to “assess the reality” of the labour market (target 4). This is also the case for target 7, where it had to act not independently, but “through” civil society organizations and NGO’s. This is while such organizations are restricted. Also, target 5 has an unclear scope and modalities.

124 see per example http://www.alriyadh.com/2005/01/17/article9414.html 125 See in particular Nabil MARZOUK 2008 and Samir AITA 2009. 126 See State Planning Commission, 10th Five Year Plan chapter 6. 127 Presidential Decree 39 of 2006.


In practice, the operations of PCEED128 took a much lower profile than ACU, and no one could now see the crowds in villages and informal urban zones gathering with their files to seek loans129. In 2008, PCEED had only organized 19 training sessions for “entrepreneurs” in the different mohafazats. 319 persons profited from these trainings (among them 38 ladies). The rhythm accelerated slightly in 2009 (16 sessions in six months). Also, PCEED launched a specific program in collaboration with the UNDP for Women’s Empowerment and Poverty Alleviation (WEPA, with a budget of around US$1 million!)130. In 2008, 5 villages were chosen

128 The information on PCEED operations were kindly provided during this study by Dr. Mujahed ABDALLAH, General Manager of PCEED. 129 http://www.ahewar.org/debat/show.art.asp?aid=2269 130 see http://www.undp.org.sy/index.php/our-work/social-development-for-poverty-reduction/65-womens-empowerment-and-poverty-alleviation

Box Between ACU and the PCEED

Law 71 of 2001 provided the following targets for ACU: A. Studying and financing a cluster of production and services activities, which can provide revenues and jobs opportunities, which can create new employments and production and diversify the economic and servicing sectors, and which can absorb the available labor force and that entering the labor market (for the first time). B. The program shall include a number of production and services activities, which shall be executed in the governorates, especially in the rural and remote areas, as follows: 1. Small and medium agricultural and industrial projects; 2. Handicrafts and machine activities, especially traditional crafts in rural areas; 3. Tourism servicing projects, especially near the archeological sites and along major roads; 4. Other projects adapted to the specificities of each governorate, its regions, “nahias” and rural areas; 5. Urban and construction limited projects for the cooperative habitations and the development of informal urban zones; 6. Projects improving the environmental conditions; 7. Training and re‐training, especially on new and ICT technologies; 8. The projects mainly dedicated to women and youth; 9. Participating to reducing unemployment, in particular in rural and desertic areas: 20% of the grant resources of ACU shall be dedicated to the collective projects aiming such; 10. Encouraging the financed or assisted sectors to improve their competitivity and to export; 11. Contributing to the financing of the training programs and of the training to new activities; 12. All other projects that ACU considers relevant for its programs. While Presidential Decree 39 of 2006 provided for PCEED: 1. Proposing suggestions to MoSAL to make the adaptations between the questions of employment and labour, on one side, and the government economic policies on the other side; 2. The activation of the employment environment, in order to create new jobs opportunities; 3. Contributing to the training and retraining of jobs’ seekers, to adapt them to the jobs offered in the labor market; 4. Assessing the reality of the labor market and its changes, in coordination with other concerned parties; 5. Facing sudden development in terms of unemployment rates; 6. Assisting the persons willing and able to be self employed to create new projects in the poorest areas, through the assistance of civil society organizations and NGO’s; 7. Increasing the productivity and the quality of the available jobs opportunities; 8. Collaborating with concerned parties to spread the culture of initiative in entrepreneurship and the culture of job seeking in the private sector.


by WEPA and 365 women have been trained; and the process accelerated in 2009, with 6 training sessions in six months and 658 women trained. Also, the PCEED continued with the classical ALMP program named “Training for Secured Employment”, which had been initiated by ACU. The program aimed at training the unemployed for specific jobs requested by the signing private enterprises. PCEED proposes the candidates to by trained for 3 months by the enterprise, reimburses the salaries paid during these 3 months for the trainees, if at least a one year work formal contract is signed, and assists the enterprise to bring the foreign expert for training131. The program started in 2008 with two companies (103 trainees), and continued with three new contracts in the first six months of 2009 (96 trainees). PCEED continued also the micro-financing projects launched by ACU, but at a much smaller rhythm. Between July 2007 and July 2009, 184 business plans were studied and 138 submitted to banks (including the newly implemented private banks) for granting loans. The total of the credits agreed reached 1 billion SYP for a minimum of 1785 job opportunities to be created (an average of 1.15 million SYP per job created, comparatively with SYP 134,000 in average for ACU!132).

Finally, ACU and PCEED transformed the 26 centers for rural development of MoSAL into business incubators, where the training sessions and the business advices are organized.

It is worth noting that in both cases the social partners, in particular the unions, were not

consulted. ACU came as a major policy tool launched by a socially-oriented head of the State Planning Commission, late Dr. Issam ZAIM. This is while PCEED came after a conflict between ACU and the orientations of the government, in particular the Prime Minister and the Deputy prime Minister for Economic Affairs, Dr. Abdallah DARDARI; the latter first succeeded ZAIM as head of State Planning Commission.

The conflict has started after that a state-owned newspaper (Al Thawra) criticized Dr. Hussein AMMASH, the general manager of ACU for his inefficiencies. The Prime Minister followed with a direct critic that ACU has a “hidden” budget. In an interview with another state-owned newspaper (Tishrine) Dr. AMMASH objected that the conflict was mainly concerning the infrastructure projects performed in the rural areas, while outside the (then) 9th Five Year Plan. He criticized the government as it had blocked agreed loans and grants to ACU from different Arab, Islamic and international organizations, and reduced by 60% ACU budget. On Government policies, he commented that133 “there are proposals to move the country from central planning to market economy; they (the government) may see that this needs downsizing government investments; but this is an extremely wrong policy, as the transition requests increasing the investments and not reducing them (…). And what have been proposed so far were advocacies for the market economy, and not an economic policy (…). My wish is that ACU continues, with me or another person at management, as it has an important social role, as well as economic. This kind of institution is crucial in a transition phase. It may even be necessary in ordinary situations, especially when the social safety nets are inefficient”. The article appeared

131 The hiring of foreign workers is strictly controlled in Syria. Thus this clause acts as a gift for the concerned private enterprise enabling it to bring legally its foreign experts. 132 See Nabil MARZOUK 2008. 133 see http://www.marmarita.com/vb/showthread.php?t=4655


December 12, 2005, Dr. AMMASH was dismissed on December 13, and ACU dismantled in 2006.

The main recent labour market policy consisted on the creation in 2001 of an “Agency

for Combating Unemployment” (ACU). ACU developed infrastructure projects in urgently needing areas and distributed extensively small loans for business development. It is most probably the main contributor to the significant increase of employment in 2005 and 2006. A conflict between this agency and the government erupted in 2006, which led to its dismantling and replacement by the “Public Corporation for Employment and Enterprise Development” (PCEED), mostly dedicated to training, with a much more limited impact.

National framework of labour market policies The national framework for what could be assessed as a labour market policy was set in 2005

within the 10th Five Year Plan (FYP, for the period 2006-2010)134, the first to adopt “social market economy”. The first section of chapter 6 of the plan (out of 28 chapters), “Cross Issues through Sectors”, is dedicated to: Creating job opportunities and poverty alleviation”135. The first subsection of the chapter concerns poverty, and the second subsection is dedicated to labour. It acknowledges the failure of the 9th FYP (covering the period of 2000-2005) to achieve its targets concerning labour: “unemployment rose from 9.5% to 12.3% instead of diminishing to 6%; the share of primary school educated in employment rose from 60% to 66% instead of diminishing to 54.6%. But the share of those professionally trained136 in employment rose from 12 to 15%”. Then, the 10th FYP plan sets six targets for employment:

• The activation of the labour market towards the reduction of unemployment and the adaptation of employment supply with the needs of this market (…);

• The modernization of the labour laws (including the social security law); • The modernization of the policies and institutions of professional training and re-

training, and the reform of the education system; • The augmentation of labour productivity through qualification and training; • The support to small, micro and medium size projects, creating proper environment; • The adaptation of the informal economic sector in order to allow it to participate to the

development process. It is worth noting that these targets are broad in their scope, and that no measure was forecasted to reduce informalities. However, a major target indicator was put ahead:

• reducing the unemployment rate from 12% in 2005 to 8% in 2010 (knowing that with the current policies, this rate may raise to 17%); through the increase of investment ratio (to GDP) to 30%, 1/3 of the investments should be oriented to extensive use of labour and the increase of the share of preparatory and professionally educated to 50% of the labour force (reaching 100 thousands graduating yearly from preparatory schools and 200 thousands yearly trained or re-trained).

134 available in Arabic at http://www.planning.gov.sy/?page_id=23 135 see State Planning Commission, 10th Five year Plan 2006-2010; 136 This category includes those graduating from less than secondary and above secondary schools with professional curricula.


The 8% unemployment indicator has lead the government to announce the success of its policies towards unemployment in 2007, while the 2008 figures, not yet fully published, will open the way to further assessments of such policies. Also, the performances of PCEED appear modest comparatively with these targets.

The detailed policies and work plans of the 10th FYP were general and mostly targeted towards poverty alleviation. However, for labour market institutions, the document aimed at: “the modernization of the employment offices in all mohafazats, in order to provide information on job opportunities, their place and conditions, the enabling of a comprehensive information system clarifying the ways to obtain loans, and creating the link with the information on the different technologies and their costs, and the ways to obtain consultations and studies”.

It is also then clear that the 10th FYP did not target directly the formalization of informal employment, or moving towards decent work, or any passive labour market policy, such as unemployment compensations. In particular, it is worth noting that the social security system was only addressed through a sub-program dedicated to the reform of the social security law (which had to be implemented in 2006!) aiming at: “eradicating the evasion137 from paying social insurances and the reactivation of the labour inspection institution; the revision of the tariffs of social insurance on employers and employees138; easing the procedures to pay social insurance duties; insuring new advantages to be paid to the insured and the enlargement to categories not profiting presently from insurance payments; creating new branches for insurance, especially making that Syrian migrants abroad pay fully social security contributions, and enhancing the effectiveness of investments of the surpluses of the social security establishment”. The figures shown above on the social security establishment tend to demonstrate the contrary: that the coverage of insurance had been reduced.

It is worth noting in this context that the 10th FYP almost ignored ACU in setting policies and

targets at the time of its elaboration (2005), when in fact ACU was at the peak of its activities. It is also worth noting that the 10th FYP ignored totally the issue of the consequences on the labour market of the conflict with Lebanon and the return of Syrian circular workers from that country, as well as the starting significant flow of Iraqi emigrants; this is while both issues appeared to have significant impact at the time of the elaboration of the plan. It also specifically ignored to set as a specific target the reform of the social security establishments; i.e. the necessity to merge the General Organization for Social Insurance (GISI) and the Insurance and Pension Establishment (IPE); the first dealing with those employed after 1985 and having large surpluses, and the second stopping accepting new members since that date, mainly paying retirements, and with large deficits139. It is also worth noting that a whole chapter (no 23) was devoted to “women empowerment”140, while that for labour was a subsection of a chapter. The women chapter had however no target indicators.

137 According to manager of GISI, even some state-owned enterprises and public administration do not pay regularly their contributions. 138 Currently the contribution are as follows: for companies with more than 5 employees, 7% from the employee, 14% from the employer (retirement, inabilities and death) and 3% on work accidents; for companies with less than 5 employees, 2% on employer (retirement, inabilities and death) and 3% on work accidents. 139 See Samir AITA & Samir SEIFAN, Chapter III: Finance & Banking, in Samir AITA (editor) 2005. 140 Contrary to the other chapters, no specific target indicators were set for this chapter.


In anyway, a midterm assessment report141 of the 10th five year plan had indicated that only 44% of the job creations forecasted by the plan for its first half-period has been effectively realized (277 thousands instead of 625 thousands in 2 and ½ years), and that from the estimated 1 million demands for small and micro-financing, only 50,000 have been realized, a share of 5%.

The general framework of current governmental policies was set within the 10th Five

Year Plan (FYP 2006-2010); the first to adopt liberalism, under the slogan of “social market economy”. This FYP only addressed labour within the context of poverty, with a main objective to reform the labour law to render it more flexible for the business environment, and no detailed commitments on active or passive labour market policies. In particular, no clear reform path was set for the social security system, to solve present difficulties, to face challenges of liberalization and to generalize protection.

Active and passive labour market policies The recent evolutions on labour market policies reflect a strong debate among policy makers

in Syria on the spirit and ways to conduct such policies. Somehow, one could qualify the creation of ACU as a major push from political actors oriented towards social policies; while the 10th FYP and current policies, with the new role of the PCEED, as a drive for the actors oriented more to business, entrepreneurship and welfare policies.

ACU acted in an extensive way and touched actively (from infrastructure financing to training, with extensive lending to micro and small projects) many rural areas, trying to stabilize the flow of rural-urban migration and the consequences of liberalization. Its operations were somehow voluntary and erratic, but this made that it acted as both an active and a passive labour market policies institution.

MoSAL and the PCEED operate differently today. They have made their priorities as follows142:

• The modernization and computerization of MoSAL employment offices. • A study has been launched, with the assistance of the UNDP, for a project of an

“employment orientation” office in one mohafazat, which will complement the action of the “employment offices”. If successful, the pilot project shall be generalized to other mohafazat.

• The program on assessing an employment (demand and supply sides) and poverty maps143. Also, a project on assessing the “education system output” is to be launched. A recent decision has also been made to implement an Observatory on Employment under the authority of this program.

• A substantial program (21 million €) has been launched for 3 years (2004-2008) with the European Commission assistance on the “Modernization of Vocational and Educational

141 A confidential report made by an assessment unit supported by UNDP. The manager of the unit had to quit his job after the issuing of this report, even if it has not circulated publicly. 142 MoSAL Minister Conference presentation April 2008. Quotations from the presentation are in Italics. 143 Both programs are conducted with the assistance of UNDP, with teams placed at the premises of PCEED, within a dedicated UNDP project named: National Information System for Labour and Employment Policy. An Observatory of Employment should be handled by this UNDP project team.


Training144”, in collaboration between MoSAL and the Ministry of Education. This program has now been terminated and no documents were available on its achievements.

• The initiatives of the NGO’s, in particular the “Shabab” entrepreneurship project of Syria Trust for development (the Trust) and the other specialized activities of the Syria Young entrepreneurs association were set within the MoSAL policies.

• Completing the studies on the creation of an “Unemployment Compensation Fund”, on the reform of the social security system and on the investments made by GISI.

• the development of the social security system, so it can cover the non presently covered categories in the formal and informal sectors;

• And a women empowerment project for women in collaboration with the UNDP. One could characterize the priorities and their effective implementation as follows:

• Active labour market policies (ALMP) o the focus is made on training, and to a lesser extent on micro-credits, which

volumes have been drastically reduced since the dismantling of ACU; o The training programs of the PCEED are more entrepreneurship oriented, while

the professional training was devoted to the Ministry of Education, with unclear outputs.

o most of the main projects of MoSAL are now directly piloted directly by international organizations (mainly the UNDP and the EU) or by NGO’s (mainly the Syrian Trust for Development) contrary to the ACU experience;

o A considerable energy is put on assessing the employment and poverty maps; the employment supply (labour demand) side map has been conducted in the early 2009, and still needs months before full assessment; the demand side map is to be launched soon. The employment demand and poverty maps have been just launched jointly.

• Passive labour market policies (PLMP) o A program for a Social Welfare Fund (SWF, which in some documents is named

INSAF, i.e. fairness in Arabic) is forecasted, following the advice of the World Bank, after the brutal elimination of major subsidies in May 2008; it shall only be decided after the assessment of the employment (supply and demand sides) and poverty maps. The SWF should pay a minimal subsistence allocation to the “vulnerable ultra poor not able to work”145, amongst the 11.4% of the population officially living below the lower poverty line146. The idea on a SWF had been in discussion since 3 years, especially after that the government had announced its intention to eliminate the subsidies on oil derivatives to equilibrate the budget147. These oil derivatives were sold much beyond neighbouring countries prices, and

144 http://www.delsyr.ec.europa.eu/en/eu_and_syria_new/projects/6.htm 145 amongst the 11.4% of the population declared living below the lower poverty line; see http://www.undp.org.sy/index.php/our-work/social-development-for-poverty-reduction/398-establishing-a-social-welfare-fund-swf-in-syria 146 see http://www.undp.org.sy/index.php/our-work/social-development-for-poverty-reduction/398-establishing-a-social-welfare-fund-swf-in-syria 147 Many studies have been made on the issue since 2006, with some estimating the value of the subsidies at more than the equivalent of 2 billion US$ (20% of the budget). These amounts resulted in particular from large smuggling activities to neighbouring Lebanon and Turkey.


were used mostly domestically (heating in winter) and for pumping for irrigation. When the measure was finally implemented in May 2008, a program for coupons per family with limited quantities at an advantageous price was launched. This program is not expected to be renewed, and should be replaced by the SWF (currently under assessment with UNDP assistance148). However, the implementation of the SWF is waiting for the finalization of the poverty and unemployment maps, mentioned above, launched in 2009. The poverty map had been realized as a general census, and not a sampling survey, of the poorest family, to assess which would have the right to receive the compensations forecasted. It is worth mentioning that no program had been launched to accompany the measure cancelling the subsidies in rural areas, while the prices of fertilizers were also liberalized. This, in addition to draught and other government measures, has lead to an exceptionally low harvest in Syria in 2008; the country became suddenly a wheat importer after decades of surpluses. This measure could also be the reason for the loss of around 133 thousand jobs in agriculture in 2008, making the official unemployment rate increasing in one year from 8.4 to 10.9%.

o The perspectives on establishing an “Unemployment Compensation Fund” (UCF) are still unclear149, as the government has put the priority on the SWF. No information was provided during the investigations of this study on the progress of the assessments and analyses needed for such an unemployment fund, in particular concerning the restructuring of the two social security systems. However, the studies for this project shall benefit from the comprehensive poverty and unemployment census, the results of which are currently been analyzed150. This project may also take profit from the current modernization efforts of the employment offices of MoSAL. However, significant efforts still need to be made as these offices act presently as registration offices for those who seek public employment.

The main focus of MoSAL and government policies consists currently on passing the more flexible labour law, on the reform and liberalization of public employment offices, and on establishing a poverty census in Syria for the disbursement of assistance from a “Social Welfare Fund” (SWF) to circumvent the already applied liberalization and subsidies elimination policies. The fate of all three focus points is still unclear, as well as that of the discussion on the establishment of an “Unemployment Compensation Fund” (UCF).

148 The corresponding UNDP subproject is named “establishing a social welfare fund (SWF) in Syria”. It has an amount of around 330 thousand US$. 149 It is worth noting that Article 3 of law 92 of 1959 initially stipulated that “the Minister of Social Affairs and Labour should create all means to insure the generalization of health insurance within one year, and the creation of unemployment insurance within three years”. This stipulation was never executed. See Nabil MARZOUK 2008 and http://www.an-nour.com/index.php?option=com_content&task=view&id=8638&Itemid=28 150 The authorization to meet the team responsible of this project for the purposes of this study was not granted by MoSAL.


Labour market policies, international organizations and NGO’s Contrary to the experience of ACU, the leading role in labour market policies is now much

more focalized around the aids and assistance from international organizations and the newly created NGO’s. The main international organizations involved in this context are the UNDP, UNRWA, the EU, FAFO and more recently the World Bank; while the main NGO’s involved are the Syria Trust for Development (the Trust) and the Agha Khan foundation.

The UNDP, with its flexible assistance, plays a major role151, as it has launched several

initiatives, in particular: • The “Poverty Alleviation and Women Empowerment” programme, which “endeavours to

reduce internal migration and population concentration in major cities by creating employment and business opportunities in the remote regions of the country”.

• And the project for the “establishment of a database for a comprehensive labour and employment policy in Syria”, including:

o The household-based labour force sample survey, which will give a picture of employment and underemployment situation in the country and update the information outlined in the 1993 labour force survey.

o The national institution-based survey of the labour force, which will give information on the demand side of the labour market. And the study of the prospective output of the educational and training system in the country, which will give information on the supply side of the labour market.

Other programs are devoted to very small projects, on per example the “socio-economic assessment of the displaced Iraqis in Syria”. Several European Union projects were also launched in Syria within the framework of the MEDA assistance and EIB’s FEMIP programs.

The “Modernization of Vocational and Educational Training” (MVET) program, discussed above, was launched in 2004 and lasted until June 2009. 18 vocational training institutions were involved, belonging to different ministries (Education, Industry and Higher Education), as well as 63 enterprises engaged in human resources development. Also, three employment offices were addressed and the chambers of Industry of 3 pilot mohafazats (governorates). A mission for the evaluation of the progress of this project has concluded in December 2008152 that “in view of the status of the programme in August 2008 and of the dissatisfaction of some stakeholders and beneficiaries at the time, (…) granting an extension of the programme on the same basis would not permit to overcome major weaknesses and to allow the programme to achieve its objectives and results”. The pointed difficulties concerned: regulatory issues in Syria not overcome (mainly the derogatory status of the training institutions within the project), problems of collaboration between the programme and MoSAL, as well as “the insufficient elaboration of the curricula (within the programme) and the absence of a proper

151 See http://www.undp.org.sy. Contrary to other international organizations, UNDP adapts its support activities in a flexible manner to the needs of each government institution, within a broad framework. Other institutions, in particular, involve heavy procedures and more precise definitions of inputs and outputs, and of periodic evaluations. 152 See MVET Final evaluation mission November 8- December 15, 2008, Aide Memoire.


system for their validation by stakeholders”. The replacement of this program within the next EU indicative plan for Syria is not clear.

Another EU project had also made some assessments on the employment situation: “The Institutional & Sector Modernization Facility” (ISMF). A report153 of this project, linked to the modernization of some ministries, had analyzed the labour market situation, and estimated the current excess supply of the (presently employed) labour force. Based on a productivity improvement approach, it estimated the excess employment surplus in 2006 at 498,200 workers (then 10% of the currently employed). Another Syrian economist154 working with the project estimated within this framework the share of public sector employee in excess to be 325,000 (65% of the total excess, and 24% of public sector employees).

Also, the European Investment Bank has created a unit to finance small & medium enterprises in Syria: the SME Fund. The project was implemented since 2003 in two phases amounting respectively € 40 and 80 millions155. The UNRWA, the UN agency for assistance to the Palestinian refugees, delivers support for labour market issues for this community. In a recent project, teamed with the EU delegation in Syria, the training center for employment run by UNRWA graduated 500 students, who all found quickly a job in the market156. A major semi-official NGO had been created recently, chaired by Syria’s First Lady: Syria Trust for Development (the Trust)157. It comprises a Research Division mostly dedicated to employment issues158. And its activities are divided in four projects, amongst which two are dedicated to rural development, micro-credits and training:

• FIRDOS: village business incubators; entrepreneurship development; microcredit schemes; mobile information centers.

• SHABAB: business awareness program; know about business program; business experience program; business clinic program.

Between 20 and 60 villages around the country have profited from the Trust (FIRDOSS) programs and donations; also few hundred persons have profited from training programs. An assessment of some of the assisted villages159 indicated that “there is anecdotal evidence to suggest that a significant share of men migrate to cities within Syria or to Lebanon for work; yet, this fact was not reflected in the 2004 Population Census estimates (…)- the share of males is higher or on par with females for all age groups. We hypothesise that CBS counts men working outside their villages in their surveys, not only people who were present in the households at the time of survey (…). The villages have a high estimated population growth rate of 3.6%, whereas for Syria the rate was 2.5% in 2004”. In all issues, education, gender, participation to the work force, employment, access to sanitary services, the villages’ indicators were worse than the Syria average, and even the Syrian rural average. 50% of the employed are in the construction sector in 153 See Constantin ZAMAN2007-1 and 2007-2. 154 See Nabil SUKKAR 2006. 155 http://www.bei.europa.eu/attachments/country/syria_en.pdf 156 See http://www.delsyr.ec.europa.eu/en/whatsnew_new/detail.asp?id=510 157 See http://www.syriatrust.org. The Trust includes also other initiatives: Worldlinks for the teachers; Massar for the children; Amal for the handicapped and Bidaya for entrepreneurship. The grouping of all these initiatives within the Trust dates from 2007, while some has been initiated earlier. 158 see Nader KABBANI 2008 and http://research.syriatrust.org/ 159 See MEHCHY and KABBANI 2007, available at http://www.syriatrust.org/site/images/files/Eblavillages.pdf


Syria and Lebanon, as there were little employment opportunities in the nearby, while the villages were located in a touristic area. The Syrian Young Entrepreneurs Association (SYEA)160 was created in the same wake, teaming with SHABAB. It organizes yearly job fairs, and had launched the “Venture” project, as a national program (!) that supports the implementation of small and medium business ideas. It provides business training and consultation, as well as granting financial support to cover start-up expenses. A dozen of projects are assisted every year. Also, SYEA is supposed to assist PCEED in its efforts to transform the rural development centers to business incubators. The Agha Khan Foundation is mostly involved161 in microfinance and entrepreneurship development. It has set in 2003 the first operating microfinance institution in Syria: FMFI-S, with now 15,000 active clients, and has recently expanded its activities in collaboration with the German development KfW Entwicklungsbank. It is worth noting that a significant Ismaeli community exists in Syria, with its major religious center in Salamiah (Hama governorate) Thus, while some government efforts are praiseworthy, in particular with the present census of employment and poverty, the displacement of the government responsibilities in labour market policies and institutionalization to the international organizations and donors, and to only the authorized welfare NGO’s depending on the power system in Syria, characterizes the new (neo-) liberal orientations. It is also remarkable that the latter NGO’s tend to be the only organization permitted to “represent the civil society” in international collaborations, and in the meeting with donors and international institutions. It is also remarkable that PCEED activities have been limited to only supporting international donors and semi-official NGO’s. This is in a time were the external and internal factors have made the size of the employment problem in the country very significant, and while a real social dialogue is more needed than ever. In an earlier work162, we have argued that EU partnership policies and MEDA/FEMIP programs act, because of the dominant ideology within the European Commission, even again European interests. Thus, while Europe need to slow the flow of immigrants from the South Mediterranean countries and more stability in its environment, few programs and grants have been dedicated consistently to the creation/reinforcement of labour market institutions and social safety nets in these countries. This is in addition to the adverse effects of the free trade aspects on their labour markets. Some authors have also severely judged what they named the Syrian GONGO’s (Government operated non-governmental organizations)163, as they act “in the continuity of public policies” as “tools of social control and cooptation”. (…) “The foreign aid has then become a rent to be captured by the regime through an “associative umbrella”. Per example, the EU assistance dedicated to the programme for the development of a civil society constitutes 75% of the funds of FIRDOS”. The general manager of SYEA was also quoted stating that: “what we do is offering a wasta (string-pulling); the system work this way”. 160 http://www.syea.org/en/ 161 http://www.akdn.org/syria 162 See Samir AITA 2008-2. 163 See Caroline DONATI, 2009. In fact, the GONGO denomination is not accurate in this case, as they are managed and protected by the First Lady, independently from the government stricto sensu (ministries, etc.).


0

50,000

100,000

150,000

200,000

250,000

300,000

350,000

400,000

450,000

500,000

Jan‐07

Mar‐07

May‐07

Jul‐0

7

Sep‐07

Nov

‐07

Jan‐08

Mar‐08

May‐08

Jul‐0

8

Sep‐08

Nov

‐08

Monthly exports at Syrian Ports, in tons, Port authorities 2007‐2008

Tartous Lattakieh

International organizations (UNDP, EU, etc.) and semi-official NGO’s have taken the lead on issues related to labour market policies, and have changed the focus towards only entrepreneurship development, training and microfinance. Some of the assistance projects were dedicated to assist MoSAL and other ministries in their labour market policies, but the outcome is mitigated. The (neo-) liberal welfare orientation of most of these projects, and their limited impact (despite their large funding) comparatively to the dimensions of the employment problems in Syria, may not lead to proper solutions and divert the social dialogue needed today more than ever. EU assistance to Syria in this field has been focused on a project for vocational training, with deceiving results. It also insisted on pointing the excess employment in the public sector.

Influence of the current economic and financial crisis Syrian economists and policy makers agree that the current global financial and economic crisis could hit the country through different mechanisms, while few precise data are currently available164:

• FDI’s: Following the crisis with the US late 2005, policy makers have eased the regulations on foreign direct investments, especially for Gulf countries real estate development. These real estate projects constitute the major part of FDI’s in the country; and many projects have in fact been launched before the world crisis in the autumn of 2007. But a specific financial crisis has also hit the gulf countries and its companies; then some of their forecasted and not started projects have been put on hold. This has been confirmed by the strong slowdown of cement sales reported by “Omrane”, the state-own company in charge of (locally produced and imported) cement commercialization.

• Exports and local Investments: More importantly, the economic crisis has hit many of the countries to which Syria exports its manufactured products, diminishing demand. And this came parallel to the liberalization measures made by the government on imports. This is the case in particular for the textile industry, where reports indicate many company failures (up to 30% of the companies in this sector have stopped their activities according to some estimations). These failures have led the government to impose new duties on Chinese textiles. Also, agricultural policies and the elimination of subsidies have conducted to a lack of perspective in a market

164 see Samir SEIFAN, 2009, an unfinished report on the subject for the MoSAL and Samir AITA, “Strategies of Investment in the ICT sector in Syria in the Framework of the Global Financial Crisis”, confidential report, Ministry of Telecommunication, Syria May 2009.


0

100

200

300

400

500

600

700

Jan‐08

Feb‐08

Mar‐08

Apr‐08

May‐08

Jun‐08

Jul‐0

8

Aug

‐08

Sep‐08

Oct‐08

Nov

‐08

Dec‐08

Foreign Transfers through Syrian Banks (Central Bank, year 2008, US$ millions)

constituting a significant part of Syrian exports, and where world prices have varied greatly in the last two years. Exports have slowed down during the last months of 2008 and the levels of investments have also been reduced. There are also reports on lay-offs (5 to 15% of the current employees in some industries).

• Workers’ remittances: Syrian migrants to Gulf countries and to industrialized nations contribute significantly to the country through remittances. The volume of yearly remittances is not known with precision; but it is estimated to reach up to 9% of the GDP (then a level much higher that FDI’s flow) and constitute the major “social safety network” for the economy, in particular for most of the vulnerable communities. The Gulf countries have been severely hit by the financial and economic crisis (a local crisis triggered by the global crisis), as well as most industrialized countries. Lebanon165 seems less affected. Thus, not only an unknown number of migrants in the Gulf have returned home166, despite the efforts deployed by the Syrian government167; but the volume of yearly remittances is expected to slow down significantly.

Also, some other aspects of the crisis have been observed through the banking system. Syrian banks are not fully integrated in the world financial system, and only one case has been reported of (reasonable) losses in investment funds168. However, the recent credit expansion of these banks, in particular in the car market and the real estate, has shown cases of difficulties. This was also the case for the credit to some large companies who were hit by the crisis. The effect of these credit difficulties are not well documented, and one should wait until the publication of 2009 financial report to assess their influence169.

The Syrian government has acknowledged that the crisis could have an impact on the

economy and labour. Early 2008, the Prime Minister had asked the different ministries to deliver reports on the effect of the crisis in their sector. These reports remained confidential or uncompleted. The economists involved in the studies have stressed that the effects result both from the world/gulf countries crisis and from the current government policies. Also, the (non-finalized) report for MoSAL170 had indicated that the effect of the crisis alone could be an increase of the official unemployment rate of 3.6%!.

165 With currently estimated 350,000 Syrian workers. 166 From the around 400,000 estimated working there, probably more if those with double citizenship are accounted for. 167 During the wake of the crisis, MoSAL signed agreements with its Gulf countries counterparts to regulate the dismissal of Syrian employees in the Gulf. 168 See Audi Bank Syria, Financial report 2008. 169 Some companies committed to the publication of their financial reports to the Commission of regulation of the Damascus stock market have delayed their mid-2009 reports ; see http://www.syriasteps.com/index.php?d=126&id=40629 170 Draft report elaborated by Dr. Samir SEIFAN thankfully made available by MoSAL.


The government did not adopt any specific stimulus measure to circumvent the effect of the crisis, except local limited measures for specific industrial sectors (i.e. textiles) when the conflict with the industrialists were voiced out after the failure of several companies.

The global financial and economic crisis, with also its implications in the Gulf

countries, is affecting the Syrian economy. FDI’s have slowed down, as well as exports, resulting in difficulties to the business sector; but the most important mechanism of transmission of the crisis is the slowing down of workers’ remittances, which act in Syria as the major “social safety network”. Also, the effects of the crisis comes timely with those of the currently accelerating liberalization policies; and the government has not initiated any stimulus or social program to circumvent these combined effects.

Social Dialogue Within the framework of the liberal “social market economy”, the government is advocating establishing a social dialogue with the business community and the civil society. However, for representing the civil society, it chooses to dialogue with the new business clubs (i.e. SYEA) or with the semi-official NGO’s (the Trust), and rarely with the (although strictly controlled) official unions. And all the latters are not representative of the workers and employees, as the unions are mostly present in public administration and the state-owned sector. The social dialogue takes then place informally through mainly the internet blogs (also very controlled, with a significant share of Syrian blogs banned), eventually through a somehow improved press environment171, and sometimes in the streets with the risk of confrontation with the security services (as the right of demonstration is also cancelled by the “emergency laws”, still valid in the country). The cases of voiced critics against government policies, even by officials, are clearly demonstrated by the case of the general manager of ACU, or by that of the former governor of the central bank criticizing, while in office, the way a new central bank law is elaborated. Strikes and demonstrations for social issues and work conflict are not rare; but they are quickly reduced and no information is allowed to document them. Several examples can be made:

• The strike of the employees of a public construction company in Harasta near Damascus in May 2006, for the non-payment for several months of their salaries and the absence of health care. Their demands have been fulfilled.

• The strike of the female employees of the Central Bank in September 2007 against the practices and regulations imposed by the governor172.

• The strike of the students of Al Ittihad private university in Rakka in November 2007 against the increase of university duties173.

• The strike of the employees of Lattakia port in January 2008 against the government decision to give a rental contract to a private company of Tartous port and its intention

171 It is common for the Syrian authorities to ban some issues of the authorized magazines in the country, although usually controlled, as well as Lebanese newspapers when they address Syrian political or social issues. 172 http://www.voltairenet.org/article151590.html 173 http://www.aksalser.com/?page=view_articles&id=2fc0bc202c321716d6b4fb4de1134785&ar=214044402


to do the same for their port. The strike concerned also several months of delay of payment of salaries and bonuses174.

• The general strike of the drivers of micro-buses in May 2008 against the government decision to increase brutally the prices of diesel oil, while their tariffs were not changed. The tariffs were changed accordingly175.

It is worth noting that many of these strikes concerns public sector employees, for which the right of strike is much more strictly forbidden than for private sector employees. But the most significant case of the absence of social dialogue is the project for a new civil code in Syria. The government has launched the preparation of such new code regulating mainly marriage, divorce and succession issues. This is a very sensitive issue in a country composed of different religious communities, and where the Sunni Islamic interpretation of the Shariaa is a main source of legislation. The committee that has prepared the draft has been kept confidential, and still. But the draft had been leaked publicly at some point, fostering a massive wave of protestations through the blogs, pointing the Salafist background of this project and its annihilation of the principle of equal treatment of citizens. A women major Syrian blog (Syrian Women) had played an essential role in denouncing it176. The polemics diffused involving main religious and secular personalities who critized it violently, and denounced the way with which it was prepared. The Council of Ministers had no solution but to retreat and to withdraw the project (for a time). The President issued at that time a short Presidential Decree to reinforce penalties on “honour crimes”. This episode constituted the largest case of civil society mobilization against government policies177, since years. The social dialogue is restricted in the country on the rare official NGO’s. Social claims take mainly the form of critics through internet blogs, despite their strict restriction. Also, cases of strikes have been registered lately, even if they are strictly forbidden by the still ongoing “emergency laws” and if the international pressures on the country from 2004 to 2008 have slowed social claims. These forms of protestations have shown effective to make large mobilizations leading the government to retreat on a civil code project, judged Salafist by both secular and religious actors. This victory of the civil society may explain the confidentiality surrounding the new labour code being elaborated.

174 http://www.forsanalsham.org/901.htm 175 http://www.anntv.tv/ArticleDes.asp?Id=22 176 http://nesasy.org/ 177 http://www.aljazeera.net/NR/exeres/640FEEF6-59DB-4A2F-86F0-B5BB9784B785.htm


‐

50,000

100,000

150,000

200,000

250,000

300,000

350,000

400,000

450,000

2001 2002 2003 2004 2005 2006 2007 2008

Evolution of the number of registered at the employment offices in Syria

Professional

Institute

simple worker

Driver

University

secondary

primary

3. OPERATION OF THE EMPLOYMENT SERVICES

3.1 The employment offices

Law 91 of 1959 had provided for the creation of “offices of employment” for helping work

search in both the public and private sectors. But these offices were never effectively activated. In 2001, a new law (no 3) had been set for the “employment offices”. It even intended to regulate the employment abroad through these offices. Then MoSAL had activated these employment offices, while no private employment offices existed in the country.

The new offices have started

their operation in March of that year, and were implemented in the different governorates. For the public, they were mainly perceived as offices to seek public employment; the role that they effectively played. 397,750 persons were registered looking for employment in the first year178; but the number of registrations declined the following years. Thus, in 2007, only 110,300 registered and 125,679 in 2008. In total 1,726,457 have been registered as employment seekers by these offices.

The registered are generally classified in 7 categories: primary education; secondary education; university education; driver; simple worker; institute education; and professional worker. Those with the lowest qualifications constitute most of those registered (see figure).

The high numbers in registration in the first years reflect the fact that “incentives in the public sector – higher wages, benefits, pension coverage and job security – continue to reinforce preference among youth for public sector employment”179, especially for women. Job seekers registered in mass when the offices opened. After 2004, the slower rhythm of registrations expresses mainly then the yearly willing to seek for a public sector job. This represent less than the half of new entrants yearly to the labour market, and less than one fifth of the population reaching yearly the age of work.

In the 8 years of operation of the offices, around 300,000 persons were placed in the public administration and the state-owned sector, and less than 3,000 in the private sector180. But not all of the remaining, which represent around 30% of the labour force, could be assumed as unemployed job seekers. Consequently, MoSAL is clarifying the status of the large numbers of candidates registered in the database. Thus, 144,968 names have been deleted recently for

178 The data on employment offices have been made gratefully available by the Employment Directorate of the MoSAL. 179 Quotation from Nader KABBANI 2009. 180 Interview with the general Manager of the employment offices.


0%10%20%30%40%50%60%70%80%90%

Employment made by employment office by type and procedure, in percentage of year registered 2007

exception

proposed

0.0% 0.5% 1.0% 1.5% 2.0%

Damascus*Damascus Country side

AleppoIdlebHomsHama

LattakiaTartousDeraa

SuweidaDeir Ez Zor

RakkaHassaka

Kuneitra**Total

Employment seekers registered at Employment offices in 2007, by governorate in perecentage of working age population

multiple entries. Also, the employment offices have called job seekers to validate their registrations, since the system had been changed in 2007 from paper based to IT. So far, only 712,238 have validated their registration (almost 15% of the labour force, what a give an indication on unemployment trends); 45% of the totally registered (only 32% of the validated job seekers of university educated, while 47% of primary educated). The remaining registers are pending, and will not been dealt with in the prioritization procedure.

No data has been made available for gender distribution of registered job seekers. Also, the distribution between

governorates (see figure) shows higher tendencies to register (2007) in Tartous, Suweida and Lattakia181 than average, and a very low tendency to register in Aleppo.

Normally these offices should analyze in details the work experience of jobs’ seekers, and provide guidance and counselling; but still the offices lack experience for matching job offers and demands, as well as for providing guidance.

The registered employment seekers are

proposed by the employment offices to the state-owned sector and to the private formal sector, which should theoretically inform the employment offices of all jobs vacancies, a disposition rarely applied. Globally, the state-owned sector is proposing around 40,000 jobs yearly; not all are filled, as the government can cancel the job opportunity if a proper candidate is not found. Two ways are considered: by mandatory proposal from the employment office, for low qualification jobs, where priority of proposal is made according to region, qualification and period of job searching (see proposed in figure); and by exceptional appointment through a selection procedure, for higher qualifications, especially the new university educated job seekers182 (see exception in figure). In 2007, 39,777 have found employment (almost totally in the state-owned sector) forming 36% of the number of those newly registered that year. In 2008, the number of effective employments in the public sector had declined to 37,282 (30% of the newly registered). However, most of those who have find jobs amongst university educated were hired by the exceptional procedure. This is also the case for those with a professional institute education. In

181 The very high tendency to register for Kuneitra governorate (4.6% of WAP in 2007) is linked to the fact that this governorate consists mostly of the occupied Golan Heights, and that most of its population sought refuge to Damascus and Damascus countryside governorates. 182 However, job seekers have to be registered at employment offices to apply.


total, 51% of those hired in 2007 used the exceptional procedure; and this share increased further to 71% in 2008.

A negligible share (less than 0.1%) of those proposed to the private formal sector is

effectively employed. The interviews for private sector jobs’ vacancies have mostly a procedural aspect. A private industrialist, interviewed for this study, has indicated that “he offers such jobs vacancy offers in exceptional situations, especially when he needs to import a foreign worker and to justify it; most of the jobs’ seekers send by the office don’t have the proper qualification. They insist during the interviews that the enterprise should mention that it has refused the candidate, in order that they don’t lose their turn for public jobs”. The private entrepreneurs use mostly advertisements at enterprise doors to announce for jobs vacancies for simple workers; they receive hundreds of employment propositions. For more qualified personnel, informal connections and rarely newspapers advertisements are used.

MoSAL has also recently centralized and computerized the operation of the employment

offices, in order to “control the distribution of job propositions and effective employment between governorates”183 and to “avoid corruption”. But more importantly, the new labour law in preparation intends to impose a mandatory passage by the employment offices of all job seekers in the private sector, even for those who are unemployed and have find a new job (art. 17). This measure is designed to avoid keeping in the employment offices registries, employed persons seeking for jobs in the public sector. But, it could lead to a considerable pressure on the operations of these offices.

This project of new labour law devotes a complete chapter (18 articles) to the employment offices. It extends their coverage to the unemployed outside the Syrian territory (art. 14), for which they are assumed to organize employment even outside the country (art. 15), “protecting their rights there”. But an unemployed in the country is defined only as a Syrian citizen (art.1) or assimilated (art. 28.a; i.e. Palestinian refugees under the 1956 status), and any hiring of foreign citizen is submitted to the strict approval of the ministry (art. 27), whatever the status of residency in the country of this foreign citizen. It is also remarkable that the new labour law makes no reference to any unemployment compensation scheme or procedure, in relation with employment offices.

The new labour law imposes on employers to inform the employment offices on any job vacancy in his enterprise (art. 26). This could constitute a major shift from current practices (where 66% of private formal sector employees are not registered at the social security). At the current pace, the employment offices will have difficulties to play a determinant role in reducing unemployment, and may continue to act only as registration offices.

The current employment offices have only been activated in 2001, reaching in 7 years a

total number of registered job seekers equivalent to around 30% of the labour force. Only 15% of them seem to be actively seeking a job, in fact a public sector employment, as the employment offices have acted predominantly as offices for hiring to this sector. Around 40,000 public sector jobs are filled this way yearly, mostly for the educated.

183 No data has been made available on such distribution of effective employments between governorates.


MoSAL is improving the operations and procedures of the employment offices, and intends with the new labour law to extend their role, not only to the private sector hiring as a mandatory passage point, but to the employment of Syrians in foreign countries.

This is while the employment offices place currently less than 500 job seekers in the private sector, and play a negligible role in the labour market.

Private employment services Private employment services are not currently allowed in Syria. But MoSAL intends to

permit and regulate such services in the projected new labour law. However, a Prime Minister decision in November 2006 had allowed the opening of private

offices, for importing Asiatic domestic workers. But the real facts on the ground have even preceded this decision. The number of such domestic workers had been estimated in 2007 reaching 150,000, evolving to attain quickly 400,000184. Several cases of abuses on these workers, with the complicity of the authorities, have been reported185.

MoSAL has also by law the right to grant special authorizations to companies to import foreign work. The case has been made when the crisis occurred with Lebanon, and the light was shed that the new private banks have a significant number of Lebanese personnel and managers, not completely in line with work regulations (as this is the case for Syrian workers in Lebanon). The concerned were invited to regularize their situation, what depends only on a decision of exception of the minister. More recently, MoSAL has issued a decision that all private banks should limit the total share of their foreign workers to only 3%. This decision has initiated a controversy, as all private banks exceed this limit, while their foreign employees have all now work permits. Other cases of foreign workers were reported as for Al Zayed company, a gulf investment and real estate venture, importing hundreds Bengali workers186. Also, many illegal offices operate for placing Syrian employees abroad. Here also, cases of abuse have been reported187, what necessitates the regulation and effective verification these activities. Today, there is no clear statistics or registries on Syrian workers abroad; and this is also the case for non-citizen workers in Syria. However, the new projected labour law mixes in the same article (art. 23) the “private employment services” (operating for citizens within the country) and the “labour importation private offices” (importing foreign workers to work domestically, in particular domestic workers)188. The formulation of this short article is confusing, as both offices could “contract directly with the workers to do specific jobs” and, function of specific decisions to be issued by MoSAL, should have to register workers in the social security. Private employment offices have started in the 2000’s for the importation of foreign domestic workers. Such activities were finally regulated end of 2006; but the number of 184 http://thawra.alwehda.gov.sy/_print_veiw.asp?FileName=99169613820070819230235 and http://www.thara-sy.com/thara/modules/news/article.php?storyid=562 185 http://swoforum.nesasy.org/index.php?action=printpage%3Btopic=3235.0 186 MoSAL foreign employees' database. 187 http://www.jouhina.com/magazine/archive_article.php?id=401 188 The case of the private employment offices placing Syrian workers abroad is unclear in the formulation.


foreign workers has reached a sizeable share of the work force: more than 200,000 currently. This, with other exemptions for foreign workers granted by the ministry, shall make it difficult to regulate private employment offices and the labour market, especially that the new labour law is unclear on this point and leave all issues to ministerial decisions.


4. THE INFORMAL ECONOMY AND THE MECHANISMS OF EXCLUSION

In the above chapters, we have shown that numerous factors (which could be also qualified as shocks: demographics, external and internal migration flows, and the rapid changes in the economic policies) are posing currently significant challenges to the Syrian labour market, that the government lacks the proper policies and institutions to cope with. The Syrian society had found its way to cope itself with this situation through a larger development of the informal economy.

Informal economy is not evil. It has for long permitted the existence of a private sector, when laws and regulations in the country constrained its activities. It has permitted to the non-citizens (Palestinian refugees not covered by the status of 1956, non-registered Kurds, and particularly to the large recent flow of Iraqi refugees), but also to the Syrian citizens massively emigrating from rural areas to urban informal zones, to find some ways to make their minimal living. This was also the case for most of the Syrian circular migrants to Lebanon, who were in an informal employment situation in both countries. In these cases, the informal economy played a major role, through social networks and despite government policies, in economic and social “inclusion” facing shocks and exclusions, in an exceptional way rarely reproducible in other countries without major social troubles.

But on the other side, informalities and the informal economy constitute and lead to mechanisms of exclusions, which have to be faced and analyzed, as well as addressed by proper policies. A very large size of informal economy reduces taxes and social revenues of governments and then their capacity to intervene and build up policies, especially when rent revenues from natural resources to the government decline, such it is presently the case in Syria, with the now negative energy trade balance after years with oil constituting the major share of government budgets. More importantly, informalities lead to the development of poverty and unhealthy living conditions in remote rural areas and urban informal zones.

It is in that context that one could interpret the approach of ILO towards “decent work”, that “all those who work have rights at work (as well as after work in retirement), irrespective of where they work”, in a “goal to promote decent work along the entire continuum from the informal to the formal end of the economy, and in development, poverty-reduction focused and gender-equitable ways”189 (and the equity must also be seen beyond only the gender issues).

But the issue does not only concern the relation between Syria and international institutions,

such as the ILO, and the compliance with its conventions and to the human rights international standards190; it concerns also and mostly how the “social question” and the “social compromise”191 are posed today inside Syria for its citizens and residents. More than half a century after independence, thirty six years after the oil boom, twenty three years after the crisis of state capitalism and the implementation of the structural adjustment policies, and after twenty years of the first liberalization measures and the entry to globalization, the policies adopted to treat the external shocks and to tackle with the social consequences of the new accelerating liberal policies since 2005, questions the “social compromise” and its sustainability. This

189 see ILO 2002-2. 190 in particular the UN Covenant on Economic, Social and Cultural Rights ratified by Syria and its additional optional protocols not ratified; see Samir AITA 2008-2. 191 For a discussion on this issue see Samir AITA 2007-1 and Elisabeth LONGUENESSE & al. 2005.


0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

15 ‐19

20 ‐24

25 ‐29

30 ‐34

35 ‐39

40 ‐44

45 ‐49

50 ‐54

55 ‐59

60 ‐64

65 +

Precentage distribution of salary people in Syria by sector and age category, LFS 2007

Civil society

Cooperative

Mixed

Family

Private Informal

Private Formal

Public

‐

50,000

100,000

150,000

200,000

250,000

300,000

350,000

400,000

450,000

15 ‐19

20 ‐24

25 ‐29

30 ‐34

35 ‐39

40 ‐44

45 ‐49

50 ‐54

55 ‐59

60 ‐64

65 +

Precentage distribution of salary people in Syria by sector and age category, LFS 2007

Civil society

Cooperative

Mixed

Family

Private Informal

Private Formal

Public

question is precisely that of what is social (and how?) in present policies, presented under the slogan of “social market economy”.

In this perspective, the present chapter discusses issues related to informalities, formalization

and mechanisms of exclusions; it also addresses some additional issues on current government policies aiming to regulate and institutionalize the labour market.

4.1 The mechanisms of informality and exclusion

Informality and jobs creation As it has been discussed above, the Syrian (formal) economy and government policies are far from able to foster the creation of formal jobs for the (currently between 200,000 and 300,000) newcomers to the labour market and to absorb the considerable size of migrants. They are also challenged at the level of establishing proper social redistribution schemes for social services (health, retirements, etc.).

The LFS displays interesting features on how the informal sector has been essential for both the youngest and the eldest. Analyzing the different age categories (see figure), the share of salary people192 in the informal sector is the highest for the youngest population (30% of those employed of 20-29 years), as well as for the eldest (almost 40% of those with salary jobs above 65 years). The informal sector acts as an opportunity provider for the youngest population to access to the labour market, as well as a compensation for the insufficient (or in most cases inexistent) retirement salaries for the eldest). The share of the informal sector reduces drastically to around 12% for those at age 45-59. There is no data on informal salary employment in the formal private sector, but it is expected that similar observations can be made.

192 The distribution of salary men between males and females function of age category is not available.


‐

200,000

400,000

600,000

800,000

1,000,000

1,200,000

1,400,000

1,600,000

private Formal Private Informal family Enterprises

Self‐employed, salary people and Family workers in Syria, men LFS 2007

Self employed Salary men Family workers

‐

20,000

40,000

60,000

80,000

100,000

120,000

private Formal Private Informal family Enterprises

Self‐employed, salary people and Family workers in Syria, women LFS 2007

Self employed Salary women Family workers

During the 1980’s economic policies, the government was the main provider of salary employment opportunities: thus, more than 70% of those of age 45-54 are employed by the public sector. But this has significantly slowed down, in absolute and relative terms: only 40% of those of age 25-29 are employed in the public sector. And this, by the way, has lead to the aging of public sector employees.

Out of the public sector, the informal sector has created the largest share of salary work opportunities in the 1980’s. But since the 1990’s, the formal private sector salary employment developed significantly, and is now providing more jobs for those aged 20-24 than the public sector. In parallel, the informal sector salary employment developed significantly, even if its share has slightly decreased comparatively to the formal private sector.

But informality in salary jobs is not all. The numbers of self-employed men in the informal

sector is larger than the numbers of salary men. Those self-employed are also in a non-decent work condition, without protections. What is more striking is that the numbers of self-employed men in the formal private sector is almost as large as the numbers of salary men in this sector. This questions the degree of formality of those self-employed, as they have no clear status in the labour law and the social security system. And this is while half of the present development of the private formal sector employment is made through the development of self-employment; a tendency which may increase with the present dominant micro-finance schemes in labour market policies.

The issue on social protection of the self-employed is less the case for women. The share of self-employed women is as large as salary women in the informal sector, but much less in the formal private sector. For women, the issue concerns mostly family workers, which share is dominant in the informal sector and in family enterprises.

It is notable in that respect that the new labour code does not address the issue of the self-employed, a dominant form of work in the Syrian (private) labour market, and exclude family workers from its scope, in particular domestic workers. Whatever the efforts to legalize salary work and its social protection, this could reinforce an exclusion mechanism for the self-employed and family workers.


A first mechanism of exclusion consists on the deterioration in decency of the status of salary employment and the absence of social protection for the overwhelming development of self-employment. The private sector has contributed significantly to create salary employments, and the share of public sector in salary employment has declined from 70% for those aged 45-55 to less than 40% for those 20-29. The informal sector is contributing as much for salary employment creation. But, the formal private sector has contributed to create a similar amount of self-employment jobs, and current labour market policies tend to increase this tendency as well as self-employment in the informal sector. The new projected labour code and the current social security regulations do not address properly self-employment. Thus, not only most salary people have no social protections, but also the self-employed and the family workers are excluded categories. The family worker exclusion is gender marked, as it constitutes a major informality mechanism for women. Informalities and exclusion in agriculture The agricultural sector is by excellence dominated by informalities. The agrarian reform, started 50 years ago, had marked the entry of capitalism to rural areas, as well as the development of education and health. Its implementation has slowed the brutal spreading of mechanization in the mid 1950’s and avoided it to lead to a brutal and massive rural-urban migration. The state was assumed to play a substantive role in developing agriculture production techniques, circumventing prices variations and developing irrigation, and its sustainable management in a country where water resources are scarce. The state failed in a first period to play this role; but after the financial crisis of 1986 and the achievement of the irrigation projects, it activated an “agriculture policy”193 mainly motivated by the concern of food security: production of major crops were subsidized and the share of irrigated land was developed to circumvent the effects of the capricious rain falls and of the limited share of water from trans-border rivers. Agricultural production developed significantly. However, at the turn of the millennium, the agricultural policy had several major challenges to face: the continuous use of massive irrigation techniques depleted water resources and accelerated the salification of the land, and the need emerged to use more efficient production and irrigation techniques. But more importantly, with the high population growth rate in rural areas, the size of land properties had become insufficient to sustain subsistence. More fragmentation of the land would lead to lower the productivity. The choice was made by the government to liberalize the sector, starting as early as 2000. In December of that year, the Regional Command of the Baath party has taken the decision (no 83) to dismantle the state farms, mostly implemented in the North Eastern region of the country194 in irrigated lands. The decision “was a response to (...) intense corruption in the state farms”. The state farms totalled only 140,000 ha of the 1,513,000 expropriated by the state in the agrarian reform; but they constituted 1/3 of the 443,000 ha handed over to private individuals, or

193 See the web site of the National Agricultural Policy center: http://www.napcsyr.org/ 194 See Myriam ABABSA 2004.


of the 338,000 distributed collectively to peasants in cooperatives195. After complaints and some peasants demonstrations, the land was finally distributed, by parcels of 3 irrigated ha (an insufficient surface for a family of 6 persons), to former owners (1/2), to employees of relevant state institutions (1/3), and to agrarian reform recipients, sharecroppers and agricultural workers196. “The state farm privatisation process was followed in Jazira (the North Eastern region of Syria) by an unexpected counter-revolution. Indeed, the primary beneficiaries of the “reform” process are not the traditional rural constituents of the Baath party, but a re-emergent class of latifundists tied to the central state and traditional power structures”197. A large play of selling and grouping (although illegal) of parcels has taken place around 2003, to group the land in big latifundia. This has “completely upset the land structures which prevailed in the Euphrates Basin”. It has also been managed in order to insure clientelism to the regime, reinforcing particular tribal structures198. Even if there is no detailed account on what happened to the land initially distributed to peasants, it is expected that the selling and grouping operations has extended much beyond the state farms. And this was a major transformation of the Syrian agrarian relations, legalized afterwoods by a new law in 2006199 (cancelling the former provisions forbidding to move a peasant from the land he works on), and by the increase of the maximal legal size of agricultural property200. The loss of 460,000 active persons in agriculture in 2003 and 2004, and a similar number of employments (almost 10% of the labour force, and mostly women, see above), should have struck the attention of policy makers201; in particular as the losses continued the following years. But no specific measures were implemented by the government in 2003 to accompany and circumvent the social consequences of this privatisation202, leading the simple peasants to experience exclusion: poverty for those who remained in rural areas, and informal urban zones for those who migrated; but also disappearance from the labour force statistics. The necessity to address this issue in policies emerged only in 2005 during the elaboration of the 10th Five Year Plan (for the period 2006-2010). Recognizing that poverty has developed consistently in the North-Eastern region, the plan recommended for it a “special attention” and prioritisation (on informal urban zones!), as well as the urgent need there to “improve the access of the poorest to social safety network”203. For this region, the plan urged the establishment of micro-financing institutions and the prioritization of (private) investments.

195 From the remaining: 38,000 ha were sold and 351,000 ha, most of them in the North Eastern region, were not distributed; “the population was considered insufficient to allow meaningful re-distribution”; see Myriam ABABSA 2004 quoting Raymond HINNEBUSH 1989. 196 See Myriam ABABSA 2007. 197 Myriam ABABSA 2004. 198 Myriam ABABSA 2005. 199 Presidential Decree no 56 dated December 22, 2004 which setted the agrarian relation on the basis of “free contracts between parties”. This despite the voiced protestation of leftist parties within the government; see http://www.an-nour.com/index.php?option=com_content&task=view&id=8531&Itemid=26 and http://www.barasy.com/news-print-4862.html 200 http://www.annidaa.org/print.php?id=9699&kind2=mid 201 and of social researchers and economist. And it is striking that this economic and social issue has not lead to consistent research and analyses, including in the “Economic Thursdays”, see www.syrianeconomy.org. 202 This also to be related to the fact that the state-owned Agricultural Bank, which acted as an agriculture development agency providing loans in form of seeds and fertilizers, was asked to transform to a classical bank, instead of transforming it to a development agency. 203 SPC2005 in the Poverty Alleviation and Agriculture and Irrigation chapters.


However, the mid-term (2008) assessment204 of the plan indicated that the general poverty indicator rose from 30 in 2004 (base year) to 41.6 in 2008, instead of diminishing towards the 2010 target of 22.6. Similarly, the extreme poverty indicator increased from 11.4 in 2004 to 17.4 in 2008, instead of moving towards the 2010 target of 8.7. “Poverty spread in rural areas, and particularly in the North-Eastern region; also poverty developed significantly in the Southern region (…). This shows the institutional deficiency in the development of the North-Eastern region, and the weaknesses in the implementation of the poverty alleviation programs, as for the program concerning the 1000 poorest villages and the micro-financing program”. Also, only in 2009, a Presidential decree205 was promulgated giving 10 years tax exemption (until the end of 2012) to projects executed in the North-Eastern region; this is while the situation has worsened in 2008 with the annihilation of subsidies and the freeing of prices for agricultural inputs (fertilizers, etc.), in addition to exceptional draught.

It is worth noting that it is in the early period of the 10th Five Year Plan that the government dismantled the Agency for Combating Unemployment and its infrastructure and micro-financing programs in the North-Eastern region, leaving the problem to be dealt with by only the NGO’s and international institutions. It is also worth noting that the agricultural policy center in Syria opposed at different circumstances the government measures206.

A second mechanism consists on the exclusion of rural workers. A counter-agrarian reform was initiated in Syria in the year 2000, by a decision of the Baath party, which started by the dismantling of state farms and was followed by liberal laws annihilating the former government policies to fix peasants on agricultural land. It led to a massive rural-urban migration, started in 2003-2004 and the development of extreme poverty, in particular in the North-Eastern agricultural rich region of Syria. The process is still continuing; and no substantial government policy was initiated to accompany and circumvent its effects. The tentative dealing with this problem with the Agency for Combating Unemployment was stopped in 2006, and it was left to NGO’s and international institutions, through training, micro-finance and entrepreneurship development. This massive exclusion mechanism has touched more than 10% of the labour force send to urban informal zones and poverty. The concerned workers were simply taken out from labour force surveys, all becoming “informal”.

Does draught constitute a mechanism of exclusion and informality? One of the main characteristics of the Syrian economy is its large dependence on agriculture

(and oil). Agriculture continues to constitute a significant share of the GDP and of employment, while it is very dependent on precipitation levels, which vary greatly from year to year, and on consequently the flow of trans-borders’ rivers. And, it is worth investigating how this fact could be correlated to the large yearly variations of the work force and employment, discussed here above.

204 SPC UNDP 2009. 205 Presidential decree no 54 dated September 10, 2009. 206 See per example NAPC 2008.


0

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14,000

1986

1988

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1996

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Syria and Lebanon GDP per capita PPP(US current $), IMF

Lebanon

Syria

‐8.0%

‐6.0%

‐4.0%

‐2.0%

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

1992

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1996

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1998

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2001

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2003

2004

2005

2006

2007

Syria and lebanon Growth of per capita PPP GDP, IMF

Lebanon Syria

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100

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2000

2001

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2007

Evolution of Rain Precipitations in Syria (annual in mm, CBStat)

Al Qamishly Deraa Hama

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100

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200

250

300

2000

2001

2002

2003

2004

2005

2006

2007

Evolution of agriculture production in Syria (index number base 2000, CBStat)

Cereals

Vegetables

Industrial crops

Fruits

Milk & Its products

Livestock

Wool,hair & silk coccons

In 2007, Syrian GDP stood at SYP 2,025 billions, approximately US$ 40.5 billions. In PPP terms, this put the per capita GDP in Syria at around US$ 4,500, comparatively to US$ 11,908 for Lebanon.

The evolution of the Syrian GDP since the 1980’s has been dependent on oil production and prices, rain precipitation and government policies. The drop of oil prices of 1999 had severely affected Syrian growth, as well as that of Lebanon. Bad precipitations are assumed responsible of the negative growth in Syria in 1997 and 2003. But all in all, these seasonal effects were not compensated by significant high growth in other years, and the general level of GDP growth in Syria had remained weak for almost the whole 1996-2003 period.

When the levels of yearly precipitations are analyzed, as well as the index of agricultural production, the GDP and employments drops in 2003 do not seem to correlate strongly. 2003 were not an excessive year of draught in average, and the production of most major agricultural products had increased this year, except for cotton. Only, cotton production dropped in 2003 by 13% comparatively to its usual levels. Furthermore, it has dropped again by 23% for the years 2006 and 2007, as the government stopped encouraging cotton production.


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Gross Output and GDP of Agricultural in Syria (constant prices 2000, billions SYP, CBStat)

Gross Output GDP

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1000

1200

2001 2002 2003 2004 2005 2006 2007 2008

Men and Women working in Agriculturein Syria (thousands, LFS's CBStat)

Men Women

So the correlation is not directly with rain falls, but more with issues related to pumping of underground water (and the price of fuel necessary for pumping), agricultural products prices and government policies (in particular the prices at which they buy the main crops from peasants forced to produce it)207.

More importantly, the gross output of the agricultural sector has not varied significantly

from year to year (in constant 2000 prices); and this is also the case for the GDP in agriculture. The general tendency is for growth, for both output and GDP, with continuous improvement of the ratio of GDP to output. On the side of manpower, the average number of men working in agriculture has decreased by 20% between 2001-2003 and 2005-2007, while the number of women working in agriculture has decreased between the two periods by 61%. The total of employment in agriculture has then decreased by 34% between the two periods. Simultaneously, the GDP had increased by 9%. This means that productivity in agriculture has increased significantly from SYP 184 millions per employee (2001-2003) to SYP 302 millions (2005-2007): an increase of productivity of 64%.

The losses of employments in agriculture are then clearly linked to major structural transformations of the sector, more than to draught and climatic conditions. And the situation may have even deteriorated further in 2008208 after the liberalization of the prices of oil derivatives and fertilizers. Even when one considers cotton alone, the major crop for low education women (seasonal) employment, production has decreased by 23%, while 61% of women jobs in agriculture, mostly related to the collect of cotton, have been lost.

It is worth recalling, that with the former agricultural policies (Agricultural Bank, subsidies, etc.), specific mechanisms were implemented to circumvent the effects of exceptional years of draught, especially on poor peasants; in particular the cancelation of their (seasonal) loans. These mechanisms tend to disappear presently, leaving the peasants with small agricultural exploitations vulnerable to the whims of Mother Nature; especially, that no massive program was implemented during that last decades for these most vulnerable, enhancing production techniques, rationalizing in particular the use of water.

207 It was reported that for two consecutive years, the Syrian authorities did not buy wheat at prices compatible with costs of production. This has lead to a decrease in wheat production in the coming years. 208 The economic statistics for 2008 were not available at the time of elaboration of this report.


The Syrian authorities have implemented, since the turn of the millennium, liberal policies aiming to increase productivity. Labour productivity in agriculture increased by 61% in few years; and this has lead to the deterioration of the employment situation of the rural population living from agricultural. The effects were stronger on the most vulnerable. This productivity only oriented policies has also lead to the deterioration of the “food security”, insured in Syria for more than 15 years. Syrian workers in Lebanon One of the most astonishing aspects of Syrian LFS’s and censuses is that they completely omit to describe Syrian workforce in Lebanon. No information is given to analyze this circular migration, and relate it to the labour markets in both Syria and Lebanon. This circular migration is not new, and results from historical relations: the two countries had no formal borders until the 1950’s. And it is of considerable size: in 1970, before the civil war, Syrian workers in Lebanon numbered 279,541, for a total Lebanese labour force at that time estimated at 572,000 persons; while this circular migration constituted around 20% of the Syrian labour force209. In the construction sector of the very dynamic Lebanon of that period, which had profited from the oil revenues transfers from the gulf, the Syrians constituted 90% of construction workers, but also a significant share of those working in agriculture, industry and tourism. In 1975, as many as 400,000 Syrians worked in Lebanon under proper regulations.

The civil war and the entry of the Syrian troops to Lebanon had lead in some of the worst periods to large departures, as well as of many Lebanese, seeking refuge in Syria; but a significant number remained in the country, while they have to avoid some regions where they were persecuted, as associated to the Syrian army. The deteriorated economic situation in Syria after 1979 helped this migration by necessity.

The number of Syrian workers in Lebanon diminished significantly around 1986, when both Lebanon and Syria experienced a severe financial crisis, forcing many to return to land agricultural exploitation210. After the 1990 “Pax Syriana” in Lebanon, they returned massively, especially after 1992 when the neighbouring country experienced large growths of its activities and re-construction. But the polemic developed in Lebanon in the middle of the 1990’s on their presence, transforming them from the “ghosts” of the 1960’s to “invaders”. Eccentric figures on their numbers circulated, in a country where statistics and censuses are extremely politicized: up to 2.4 millions, downsized later to 1.4 millions in 1996, on one side; and down to 110,000, on the other side; while the Lebanese work force was in 1996 of only 1.25 millions, and the Syrian of 3.6 millions211. More reasonable estimates ranged their numbers around 700,000 in 1997; what still constitutes 34% of Lebanon total working population (Lebanese and foreigners) at that time, and 18% of the total Syrian work force.

The flow declined in 2000, and continued further until 2005, as xenophobia against Syrian workers developed in Lebanon, in line with the protests against the presence of the Syrian

209 See the recent excellent sociological study on Syrian migrants in Lebanon of John CHALCRAFT, 2009. 210 See Thierry BOISSIERE, 2005. 211 For a review on the numbers polemic, see John CHALCRAFT, op.cit.


troops, marked by physical aggressions, leading in some cases to death. An excellent study212 on their social situation advocates that they departed massively just after the assassination of Rafiq Hariri in February 2005; but they returned also massively few months later, just after the departure of the Syrian troops from Lebanon in April 2005213.

What has changed between the 1960’s and the 1990’s is not only the perception of the

Syrian workers in Lebanon, but mostly their status: from regular workers under Lebanese laws, they became predominantly informal workers in both Lebanon and Syria. The 1994 Bilateral Labour Agreement established temporary work visas for seasonal workers, but “the work contract was not a condition of the border work permit (visa), and hence the contract provision was a dead letter, a point that must have been clear to the drafters”214; the Agreement ensured in particular that Syrian workers were not enrolled in the Lebanese social insurance system. The Syrian government was not imposing the, although mandatory by law, labour law and social insurance inside Syria; why should they do it for the Syrian workers in Lebanon? These workers in Lebanon became then “menial labour”215, involving “low pay, long hours, hard labour, insecurity (could be fired at will) and poor conditions”. “The regulation in effect regularized this situation”.

The conditions of the Syrian workers in Lebanon were favourable to the Lebanese economy and employers216, but also to the Syrian economy (through remittances) and governmental authorities. “The stabilization and reconstruction of Lebanon, both growth and recession in Syria, along with rising expectations and pressure on livelihoods there combined to underpin the flow of migrant labour”. Contrary to some discourses, the presence of the Syrian army in Lebanon did in no way improve the conditions of the Syrian workers; on the contrary, it acted against the attempts for forming unions and for joining the although strong Lebanese social movement. And it is worth noting that the Lebanese Minister of labour had always been in these periods a pro-Syrian regime politician.

Syrian workers still constitute today a significant share of both Lebanese and Syrian

labour markets, with no rights or social security (mandatory in both countries). And this situation represents a strong mechanism of informality and exclusion. Also, if in the past, this situation was bearable to some degree, as the Syrian circular migrants could profit from the Syrian free public health services, the present deterioration of these services poses a tremendous challenge, further increasing precariousness.

It is worth noting that the Syrian labour force in Lebanon is constituted of different categories: permanent workers, with some who had fled military service in Syria and cannot return to Syria; quasi-permanent, with those who return periodically home where their family still resides; and seasonal workers, with those who only flow to Lebanon in specific periods, for agricultural crops collection per example.

212 John CHALCRAFT, op. cit. 213 It is worth noting that the Syrian LFS’s show a sudden jump in the labour force and in unemployment in 2005. 214 John CHALCRAFT, op. cit., p 141. 215 John CHALCRAFT, op. cit., p 161. 216 Chalcraft, based on Nada KHOURY 2001, indicates that 97% of enterprises refused to answer a Lebanese National Employment in 1996 on foreign workers.


A third mechanism of exclusion and informality concerns the Syrian workers in Lebanon. This circular migration has always constituted a significant share of the Lebanese and Syrian workforces. It is not covered by statistics, while it can completely change the perception of employment and informality, and explains part of the yearly variations. The 1994 labour agreement between Syria and Lebanon, and the presence of the Syrian troops until 2005, institutionalized its informal situation in Lebanon, leaving most of these workers as “menial labour” without rights. This situation has constituted a tremendous opportunity for Lebanese and Syrian economies and employers, but left these workers excluded from decent work and in a precarious situation, largely subject to the turbulent variations of the Syrian and Lebanese economies and relations.

Non-citizens, refugees and informalities Another mechanism of exclusion is constituted by the work status of part of the

Palestinians refugees (not covered by the 1956 law), the non-citizen Kurds, the Iraqi refugees and the foreign workers, in particular Asiatic domestic workers. As discussed above, the numbers involved for each of these categories of population are significant comparatively to the size of the Syrian labour force.

The Syrian society social networks have tremendous resources and permitted the

integration of the massive flow of refugees, especially from Iraq. The Syrian regulations impose no visa for Arab countries’ citizens and are lax with the residency permits217, especially in crisis situation218, allowing them to access freely the public services (education, health, etc.); but on the other hand, it does not give a status to these residents, which can enable them to access formal and decent work. The Palestinian refugees could rely on the support of the UNRWA, and a small share of the Iraqis are registered at the UNHCR (mostly those seeking reinstallation in other countries); but this access to relief organization does not compensate the absence of work status. The resident Kurds considered non-citizens (they mostly resides in the “devastated” North-Eastern region, if not migrating to the informal urban areas) lack also decent work status, as they are excluded from formal employment, and they have little relief support besides now from the neighbouring Iraqi Kurdish region. Seeking ways of living, all these categories access the labour market through the, although large, informal sector. And the size of the informal sector had then increased considerably since 2005 with the massive arrival of Iraqis, much beyond what could be perceived from the Syrian LFS’s. Many cases of abuses have also been reported219, especially for the Iraqi refugees: child labour, prostitution, etc.

Otherwise, the numbers of Asiatic domestic workers in Syria had also become

significant220, while they are excluded from the Syrian labour code221 (and from LFS statistics). 217 It is worth noting that, contrary to the present situation, the new labour code project does not distinguish between Arabs and non-Arabs in foreign labour; no privileges for work permits is given to Arabs. 218 This was the case for the Lebanese during the civil war or the Israeli aggression of 2006, and for the Iraqis after the invasion of their country. Syria imposed a visa renewal obligation (with lax implementation) only after the express demand of the Iraqi government. 219 See Maha KATTAA & Sattouf al-CHEIKH HASSAN, 2008. 220 as stated above, their number could have reached 400,000 (!), thus 8% of the total Syrian labour force. And no proper statistics are available from MoSAL. 221 It is worth noting that the new project of labour law still excludes domestic workers, foreigners and Syrians.


Thus while Syria has signed the relevant ILO conventions, foreign domestic workers lack a status protecting their access to decent work conditions. Their employment has been permitted by a decision of the Minister of Interior (no 234, dated March 19, 2001), and their situation in relation with employment agencies and residency has been further subject to a decision of the Council of Ministers (no 81 of 2006). Here also cases of abuses have been reported: retain of passports, excessive fees by employment agencies, unclear situation in case of conflict with employer, violence, sexual abuses222, racial discrimination223, etc.

The situation of most of these categories of the Syrian population has then become

similar to that of most of the Syrian workers in Lebanon; but in this case, the “low pay, long hours, hard labour, insecurity and poor conditions” are exerted by Syrian employers. The informality of their situation accentuates their precarious condition; and the efforts for formalization are subject only to ministerial decisions, which can vary abruptly224. It is worth noting that even for those formally employed and with a proper residency permit and labour contract; the new projected labour code does not consider those who lose their work as unemployed: the unemployed is only a Syrian citizen seeking a job (art. 1).

Another mechanism of informality and exclusion result from the fact that Syrian

regulations lack proper residency and labour legislations for the work of non-citizens, while the numbers have become significant for non-citizen Kurds, Iraqi refugees and Asiatic domestic workers. The things are left case by case subject to varying ministerial decisions. This situation has largely increased the size of the informal sector and put additional challenges on the Syrian labour market. The social networks and the relief organizations have helped an incomparable absorption of refugees and non citizens, but most of the concerned categories are in precarious conditions, subject to menial work, and even human rights abuses.

Women labour and exclusion Women are not discriminated in principle from men in the constitution and labour laws. However, practical situations and detailed legislations could lead to such. Numerous actors are presently promoting women empowerment225 and a national strategy had been set for that objective226, but the government still does not legalize227 independent women associations, such 222 see http://nesasy.org/content/view/6815/310/ and http://nesasy.org/content/view/6276/97/; the Syrian women observatory (a real NGO) considers some cases as “white slavery”. 223 The Syrian women observatory reports discrimination in swimming pools forbidding access to domestic workers; see http://nesasy.org/content/view/7789/97/ 224 see the recent decision of MoSAL to limit the share of foreign employees in the new private banks to 3%; see http://www.syriasteps.com/index.php?d=126&id=40085 225 The State Planning Commission web site (see http://www.planning.gov.sy/?page_id=70) indicates that the Ministry of Agriculture and Agrarian Reform, MoSAL, the Syrian Committee for family Affairs, FIRDOS, MAWRED, (both are initiatives of the Trust), BIDAYA (SYEA), the General Union of Women, An Nada association (?), Mubadara (WACSI), the Afaq Al-Roh association for disabled women and the Association for Women’s Role development (combating violence against women) as acting for women empowerment. It omits to mention that Mubadara was the only independent active civil society association which has been granted license in 2004, that was canceled by MoSAL in 2008. It omits also to mention that many other associations are active, but has never been granted licenses; see http://nesasy.org/content/view/6741/257/. 226 See http://www.planning.gov.sy/files/file/WomanStratigy2006.pdf


as “the Syrian Women League”228, which are however very active through the internet and have played a major role in combating the controversial projected new civil code. Also, the Baath lead General Union of Women, which contributed significantly to promote women rights in the 1960’s, has lost most of its role to the favour of the new GONGO’s.

The quick decline of women participation to the labour force in Syria should have struck the attention of policy makers and researchers. The facts that it was mainly linked to major losses of the work force in agriculture and to accelerating rural-urban migration, in addition to the strong pressures, from both Syrian men and refugees, on the labour market, have been little addressed. Women in agriculture lost 265,497 jobs between 2001 and 2007; so 33% of their total LFS’s reported employment in the country. The highest losses were accounted in the Raqqa, Hama and Lattakia mohafazat. The conditions of women in agriculture have been discussed by some authors229, and different social issues were raised comparatively to the present efforts of the different organizations helping to improve their situation. Also, several issues have been depicted leading to discrimination against women; some are related to “cultural” issues and others to regulations: the new Agrarian Relation Law and the Civil Code. These issues range from low age marriage for women and school evasion to the regulations and practices of inheritance, passing by the non-existing social coverage for women seasonal working.

But barely the relation between women work in agriculture and men circular migration to Syria main cities and Lebanon is addressed. Owing the size of men immigration to Lebanon and their sizable rural-urban internal temporary migration seeking employment, there is a large share of rural women who play, alone and for most of the time during the year, the role of head of family, both in home activities, as well as in farming and in raising livestock. This is while property, farming contracts, and other issues of household relations with public services and private partners are in the name of the men, official head of family. This situation results from the informality of men work, and introduce a discrimination against women. This situation needed to be treated properly, not only through welfare assistance to women, but through simultaneously: the legal empowerment of the women living in this situation (which constitute by the way a tremendous potential for women empowerment) and the formalization of men labour, inside Syria and abroad.

Also, the case of women in informal urban zones has not been addressed properly by the

social literature and by surveys, and few efforts are observed from the official organizations and the NGO’s towards them, while they constitute today and shall continue a major factor in women exclusion and informality; knowing that the number of women living in these zones and their poor230 situation is similar to that of women in rural areas.

Urban working women are mostly educated and employed by the public sector; while those living in the informal urban zones are mostly low educated and unemployed (or not 227 This discrimination against civil rights of association is not gender oriented. 228 See http://nesasy.org/content/category/41/55/198/ 229 UNDP 2007, Maha KATTAA 2009, Maha KATTAA and al. 2008. 230 MoSAL and UNDP reported during this study investigation that when the poverty and employment census was organized in the year 2008, the majority of the persons who came, filled the forms and made the detailed declarations for the census were.... women.


participating to the labour force). The share of women working in other sectors than agriculture and public services (i.e. industry, private services, tourism, etc.) constitutes only 16% of total women employment, while the similar share for men is above 60% (2007 figures). Less than 10% of the women employed by the private sector in urban areas are salary women, while the share is of 28% for men. There is then an issue of exclusion of women from decent salary employment in urban zones, while most of the efforts of government institutions, NGO’s and international organizations are oriented to create self-employment for women.

Finally, different mechanisms create exclusion and informalities for women, both in rural areas and the urban informal zones. There is a general lack of base sociological studies and a ban on civil society organizations which impede addressing properly these exclusions. Rural women are affected like men by the deterioration of conditions in agriculture, but also a significant share of them assume full household and farming responsibilities, while men having the status of head of family are migrating to cities or to Lebanon. Also, women in informal urban zones have no access to employment as it is dominated there by informality and self-employment. There is a necessity to address legal women empowerment in rural areas, as well as the access of urban women to salary employment.

Other issues of informality and exclusion

• Child labour has not been eliminated in Syria, and may be increasing. Child labour is illegal and constitutes a mechanism of exclusion with a delayed effect.

• The retirements of the eldest are insufficient to insure for them decent living, and force a sizable share of those above 65 years to work in the informal sector. This is while most of the Syrian population is young; what allows implementing a decent retirement redistributive scheme.

.


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2004

2006

2008

Relative evolution of the SYP components of the Monetary Mass in Syria (CBS)

cash Demand SYP Deposits Term SYP deposits

4.2 Other government Policies linked to informal economy The informal economy and the monetary and fiscal policies The informal economic activity in Syria has not received significant attention in the economic literature. One major aspect behind its development much beyond the informal sector is related to the monetary and fiscal policies.

Cash transactions are dominant in the country, not only in the informal sector, but also in the formal and public sectors. Even the salary payments of most state institutions and public sector enterprises are made in cash. And, this is also the case for private formal enterprises. Also, commercial transactions are barely registered, from simple sales operations to large transactions; what makes the verification of enterprises accounts by the Ministry of Finance, and in particular the salaries paid, almost impossible. The share of income tax revenues (individuals and enterprises) in total budget revenues are very low (around 7%), despite common practices of the Ministry of Finance of taxing arbitrary enterprises despite their declared accounts231. Syria is largely under-bancarized, even comparatively to neighbouring countries. The banking sector has consisted for long of only 6 state-owned banks, and the interest rates remained fixed for almost two decades beside strong variations in inflation. In 2001, a law authorized the opening of private banks, but they started their operations only in 2004. Despite the rapid development of private (conventional and Islamic) banks, as well as of the state-owned banks (with some efforts of reform), the level of bancarization is still low in 2008, as most of the recent banking activities were focused on foreign trade financing and large companies. The size of the informal activities232 has been correlated by some experts233 with the ratio of cash currency to the monetary mass. The share of informal activities in the GDP was estimated as high as 59% in 1991, when the ratio of cash to (Syrian pounds) monetary mass was around 55%. It was estimated to have declined to around 11% in 2002, when the monetary ratio declined also to around 35%. Currently the ratio of cash to the total monetary mass in Syrian pounds oscillates between 30 and 40%234, but new phenomena occurred since the arrival of the Iraqi refugees, the withdrawal from Lebanon235 and the new monetary measures of the government and of the Central Bank236: the massive flow of cash from Iraq237 and less 231 Double accounts are common practices in the country. 232 The IMF uses the terminology of “informal economy” to designate non registered informal activities and their contribution to the GDP. This includes the informal sector and the non-registered transactions of the formal sector. This terminology is different from the employment and enterprises based definition of the ILO. 233 See Magda KANDIL, IMF private communication and Samir AITA and Samir SEIFAN: Chapter III. Finance & Banking, in Samir AITA (Ed). 2005. The estimation for 1991 was as high as 59%. 234 Statistics of the Central Bank of Syria. 235 Also, some Syrians have taken back their deposits in Lebanon. 236 An exchange rate crisis occurred late 2005 following the issuing of the Mehlis report on Rafiq HARIRI assassination. The US$ rose from around 50 SYP to 59. The Central Bank intervened massively bringing the US$ to around 45 SYP. Since, it is


extensively from Lebanon, and the dollarization of transactions. The volume of cash in hard currencies is estimated today to be of the order of that in Syrian pounds, what leads to an effective ratio of cash to the total monetary mass much above the 40%238.

Another aspect contributing to the informal sector is constituted by foreign workers remittances (and now the flow of “remittances” to the Iraqi refugees from their relatives in Iraq). The Central Bank estimates the volume of these remittances at around 1150 million US$ yearly, but other estimations put the figure between 3 and 4 billion US$ yearly (between 3 and 9% of the GDP). Only a share of these remittances passes through the banking sector and the newly authorized exchange offices and companies. A common mission IMF/WB/UNDP assessing the way the Central Bureau of Statistics evaluate the contribution of the informal economy to the GDP has even stated that Syria’s GDP is most probably under-estimated239. For fiscal and monetary reasons, the informal sector240 and the informal economic activities are then expected to have significantly developed since 2005. And this development of informalities lead to another exclusion mechanism, as per example those paid in cash has no justifications for their revenues to access credit. The development of informal employment is supported and fostered in Syria by the fact that most transactions and payments are in cash. Despite the liberalization of the banking sector, the recent events (massive Iraqi migration flows and the conflict with Lebanon) and some of government policies have even increased the share of cash in the monetary mass. Also, the payment of revenues in cash reduces the possibility to access credit. Government economic, fiscal and monetary policies and the informal economy The Syrian government has taken many steps which can lead to the reduction of the size of the informal economy:

• The opening of new private banks: the banking sector has experienced a significant improvement and growth since 2004. However, recent governmental decisions asked the new banks to increase their capital by a factor 10 and to reduce their foreign employment to less than 3%. These measures, if implemented, question the sustainability of the banking sector growth.

• The officialization of exchange offices: Exchange offices have been authorized since 2005241, and many have developed their premises. However, the volumes passing through these offices as well as through the banks still constitute only a limited share of the

remaining at this level. This intervention and the absence of later counter-measure contributed to the dollarization of the economy. One can now pay in hard currencies in the shops; a phenomenon that did not exist in the early 2000’s. 237 refugees bringing with them their earnings and head of families sending remittances to their families kept in security in Syria. 238 Samir AITA, conference on the determinants of inflation, Decision Support Center, Prime Minister Office, Syria, march 2007; partially reproduced in Al Hal Magazine: “Inflation in Syria… An economic or a monetary policy problem”, August 2007. 239 See IMF, UNDP, WB 2004. 240 In the city of Aleppo, 11,000 small industrial and craft workshops are reported in the informal economy comparatively to 7,000 registered industrial companies and 14,000 crafts; see Samir SEIFAN 2009. 241 Law no 24 of 2005.


volumes involved in the current balance of the country (imports+ remittances+other transfers). In particular, some of the aspects of the law governing these exchange offices are judged too stringent for larger development (i.e. per example the high minimum capital required to open an exchange office).

• The modernization of the Ministry of Finance: This Ministry has conducted several modernization projects, in order to enhance its assessment and collection mechanisms. In particular, a unit concerning the “Large Contributors” has been created in order to diminish tax evasion. Also, the Ministry introduced a sales tax, as a first step towards introducing a VAT, for many economic activities; what will lead to better registration and formalization of commercial transactions. The application of the sales tax is still limited.

• The Damascus stock market: The stock market has opened its premises earlier in 2009. The companies to be listed are required to issue publicly their accounts, with proper auditing by regulated audit offices. Only 50 joint stock companies are currently publicly producing their accounts through this procedure.

• Also the government had initiated the idea to generalize the payments through electronic cards. A first step would be implemented for the public servants and state-owned enterprises’ employees. But this initiative has some difficulties to take form: many of the state-owned banks still need to be reformed and fully computerized; and the same for public services and enterprises. The banking sector need also to develop much further, and ATM machines to be deployed in a wider way.

Finally, the Syrian authorities had invited the Peruvian economist Hernando Desoto to advice

on the issue. And the major drive in labour market policies is oriented towards micro-financing. Microfinancing and the informal economy

A Presidential Decree (no 15 dated February 15, 2007)242 has authorized the creation and operation of microfinance institutions under the authority of the Central Bank; with a minimum capital of SYP 250 millions (around US$ 5millions), to be fully deposited entirely at the Central Bank. The first (and only) such institution to be legally set is the “First MicroFinance Institution in Syria” (FMFI-S) of the Agha Khan foundation243 in 2008. Later, these micro-finance institutions were authorized to deposit at and lend from locally active banks244, and even to lend abroad in hard currencies245. However, micro-finance lending was effective even before this legalization. The government has publicized in 2008 that for the year 2007246: PCEED has granted (through acting banks) 53,000 loans creating 29,000 new jobs, with interest rates varying between 2 and 4%; the

242 Applicative decisions on how to open such institutions were only made one year later: Money and Credit Council (MCC) decisions 306 and 363 of 2008. 243 Decision of the MCC no 434 dated March 27, 2008. 244 Decision of the MCC no 459 of 2009. 245 Deision of the MCC no 536 of 2009. This is while normal banks are restricted from such lending, and ACU major issues was in particular this foreign lending. 246 see http://www.syrianeconomic.com/?page=show_det&id=950&select_page=35 and http://www.syrianeconomic.com/?page=show_det&select_page=&id=829


‐5.0%

0.0%

5.0%

10.0%

15.0%

20.0%

1‐Jan‐03

1‐May‐03

1‐Sep‐03

1‐Jan‐04

1‐May‐04

1‐Sep‐04

1‐Jan‐05

1‐May‐05

1‐Sep‐05

1‐Jan‐06

1‐May‐06

1‐Sep‐06

1‐Jan‐07

1‐May‐07

1‐Sep‐07

1‐Jan‐08

Interest rate on 1‐year term deposit compared to annualized 12 months inflation

Interest on 1‐year term deposit Annualized inflation

sudy team calculation

World Food Program247 1,136 loans and FIRDOS 3,646 loans (with an unknown interest rate); the Agha Khan foundation 60,000 loans, with an average interest rate of 12%; the Jabal El Hoss UNDP project (in the North-Eastern region devastated by poverty) 2,500 loans with an average interest rate of 12%; and finally the UNRWA (for Palestinian refugees 8,300 loans, with an average interest rate of 24%. These interest rates appear low compared with the 8.5% central Bank’s indicative interest rate on medium term facilities and with the high inflation rate above 15% in 2007. However, in an explicative note of the applicative instructions for the creation of micro-finance institutions248, the Central Bank had advocated that it is normal that the interest rates shall go much higher to cover the costs of loan defaults and transaction costs, if the grants decline. Other issues linked to formalization of informal economy

At the present pace, the general tendency in Syria is for a further development of informal activities and of the informal economy (employment). Most of the governmental efforts to reduce informalities concentrate presently on companies and employers side, with very slow results.

No major efforts for reducing informalities are implemented on the employees’ side. In particular, there is no income tax declaration implemented at the household level, as in developed countries. In addition, the policies for alleviating poverty through micro-credit will not necessarily lead to reducing informalities.

There is then a need for policies addressing informality from the employees’ side, creating strong motivation amongst these employees to seek for formality, as a trade-off between improved access to decent work and social protection, and the payment of taxes or duties. Different issues could be on stake:

• In the current situation, only public sector employees and a small share of formal private sector employees have access to retirement schemes through social insurance; while the retirement salaries have a deteriorating purchasing power. The wealthier categories (physicians, engineers, etc.) have implemented their own complementary retirement schemes. All other categories of employed (the vast majority) have no retirement scheme and are forced to work while aged to insure their subsistence or to rely on family safety network. The generalization of a basic retirement scheme to all employed, on the principles of redistribution between generations and inflation indexation, could be easily implemented in Syria where

247 The WFP has different programs in Syria. One is with the Ministry of Agriculture to assist the victims of draught, which is concerned here and which is included in a women empowerment program. There are other programs, especially for food assistance to the displaced Iraqis. 248 http://www.banquecentrale.gov.sy/ba-edu/MicroCredit.pdf


most of the employed are young. Complementary private schemes of savings for retirement could be developed, and help the expansion of the newly activated insurance sector.

• Also with the increasing cost of health services, and the necessity to rationalize public health spending, there is a strong case for generalizing the health social insurance to all citizens on the basis of their employment situation (so much beyond only the work accidents insured presently for covered salary people). Such extension could ensure a substantial increase of revenues dedicated to health social insurance, allowing improving drastically the corresponding services. Complementary health insurances provided by private insurance companies could develop further; and the methods they have implemented to codify health acts could profit for this generalization.

The implementation of such employee side formalization schemes is a tremendous task (such

as the necessary generalization of income tax, and the formalization on employers’ side). Its necessitate a significant improvement of the social dialogue in the country, where the excluded and the most concerned are represented by representative associations and unions, able to negotiate the social bargain.

Some of the recent measures adopted by the government could help an increased formalization of the economy, but their impact shall be slow. They are all on employers and companies side, with no major drive for the formalization of employment. The formalization of employment through social insurance, protecting base access to health services and retirement rights, appears to be of highest necessity, as informal employment is dominant.


5. CONCLUSIONS AND RECOMMENDATIONS

The labour market in Syria is extremely fragmented and has been submitted during the last years to severe shocks. Labour market policies have recognized parts of these shocks, but did not address properly all aspects related to inclusion, equal opportunity and informal economy. Several major issues hinder the establishment of such policies: in particular, the lack of targeted statistics and social studies related to the different cases in stake; the deficient labour market institutions; and the absence of free representative associations and focused social dialogue.

Some recommendations are made here aiming general guidelines helping to overcome

the present difficulties and to progress towards better inclusion and formalization. 5.1 Statistics, surveys and social studies There is a necessity to improve current censuses, household and labour force surveys to

address the major aspects affecting the segmentation of the labour market and provoking the mechanisms of exclusion. The improvements should be based on ground sociological studies. This concerns in particular:

• The statistics on the non-citizen population in the country, and in particular their working conditions;

• The statistics on Syrian migrations abroad, and in particular the circular migration to Lebanon, and its relation with the household conditions (regions of migrations, relations with the household in Syria, etc.).

• The statistics on rural-urban migrations in Syria: its current intensity; its nature (circular or permanent);

• And consequently the statistics on the labour and household conditions in the urban informal zones.

5.2 Labour market institutions Current efforts are focused on developing the employment offices, on fostering

entrepreneurship, and on circumventing poverty through micro-finance schemes. However, there is an urgent need to improve labour market institutions to address equal-opportunity and inclusion. The priority should be made on the means to eliminate the major mechanisms of exclusion and informality, knowing that this could not been made without a substantial improvement in social dialogue. This concerns in particular:

• Putting end to the banning on the development of civil society organizations, and on the restrictions of civil rights. This involve the cancellation of the “state of emergency”, the easing of the rules for the constitution of social associations, and insuring of the rights of access to information, the freedom of access to the internet, the freedom of publications and the press, and the rights for peaceful demonstrations and strikes.


• The review, through a social dialogue, of the legal status of salary people, self-employed and family workers in the labour code and other regulations, insuring for all these categories thee socio-economic rights. The review should address equal opportunity and treatment between urban and rural workers, men and women, and between citizens and non-citizens.

• The reform of the Syrian social insurance systems and institutions, to generalize base health and retirement coverage schemes to all working categories: salary people, self-employed, family workers and employers, on the basis of a social and a generation redistribution system. Such reform should be focused on offering decent work and retirement conditions, fully enforced on employers and employees, in a bargain to reduce informalities. Private insurance should be offered the opportunity to develop complementary insurances on the basis of a rationalization of health services in the country.

• The reform of the employment offices and PCEED with the aim to focus on the development of employment in informal urban zones and rural areas, the most hit by the current developments. This reform should enable the operation of private employment offices not only for foreign employees, but also for local employees. This reform should also be implemented in line with a government program stimulating economic development and formal employment in these priority areas, enhancing drastically infrastructures and public services. Such program should include an unemployment compensation scheme in compensation to the increased flexibility of labour contracts.

• The reform of the 1994 Bilateral labour agreement in order to obtain decent work conditions for the Syrian workers in Lebanon, and to insure the social protection of these workers in a regular way through the Lebanese and Syrian social insurance systems. The reform should also be generalized to the Syrian workers in Gulf countries.

• The reform of the residency laws for non citizens, in order to enable all residents to have a legal situation and to access legally the formal labour market, insuring their social and economic rights. This should in particular include the promised solution of the citizenship issue of the Kurds declared non-citizens in 1962 and their descendents.

• The reform of civil status for women, ensuring the empowerment of rural women with their economic and social rights. This reform should be implemented through a social dialogue with the freed social associations defending women rights, in particular those active in informal urban zones and rural areas.


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