Sunday, October 01, 2006

Poverty and wasted education in Syria

Reports published by the UN and Syrian Government in the last 18 months reveal some disturbing social and economic trends. Three of these trends are worth highlighting:

1) Some 11 percent of Syrians live under the national poverty line of two dollars a day. [Brief UN commentary (English) & full report (Arabic)].










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2) Almost 2 million individuals in Syria could not meet their basic needs during the last two years. Overall poverty in the country hovers around 30 percent, and is highly concentrated in the rural Northeastern regions of the country. The bottom 20 per cent of the population consumed only 7 per cent of all expenditure, while the richest 20 per cent consumed almost half. [Brief UN commentary (English) & full report (English)].

3) Enrolment in Syrian public universities is dropping every year. More years of education make no difference in terms of salary differentiation. The number of post-graduate degree holders is continuously in decline. Only 20 percent of Syrian PhDs who study abroad return to enrich their national economy. Each of these facts point to serious structural impediments in the development of the Syrian educational sector. [Brief UN commentary (English) & full report (Arabic)].

The Syrian Government is fully aware of these trends and the impending fall in oil revenues. A common theme in several reports is the shortage of skills and brain drain. Many university graduates cannot find jobs either in the public or private sectors. They emigrate or end up doing menial work in the shadow economy which, according to the Government's own report, is estimated at nearly 40% of GDP. Reforms and foreign investment are still woefully inadequade. Syrian expatriates with the necessary capital and technical skills have no real incentive to return to a country that does not guarantee their human and legal rights or freedom of expression.

10 comments:

Fares said...

TY Philip for publicizing the issue.

Khaddam is no De Gaulle

Anonymous said...

Phillip,

Interesting, but I have a few questions:

1. If the shadow economy constitutes 40% of GDP then the reported GDP is underestimating actual GDP by a full 29% with most of the missing income accruing to the bottom income classes. The question then is "How can we trust the poverty numbers?"

2. The statistic about the drop in unversity enrollment is contradictory to a "High unemployment" hypothesis. Where are these people going? Given that education is free and you do not have a job one would think that you would enroll in college if only to kill the time. As a matter of fact, college enrollment tends to increase during recessions (periods of high unemployment)

3. Poverty is concentrated in the rural Northeastern areas of the country. This statement is not even valid in this context. The study applies the same standard of evaluating poverty to rural, agricultural populations as it does to urban populations. The fact is, in the rural areas, you grow and barter for most of your basic needs (food stuff.) Consuming your own production or production that you bartered for does not enter either the GDP or income calculations. The presence of these activities automatically implies that income in these heavly agricultural areas is under-estimated.

Just some points to think about.

Jeha said...

For a Lebanese, the larger implications of this is two folds;

1- under the current regime, Syria cannot afford to remain out of Lebanon for too long. With a growing populatio, the pickings from the Syrian economy will get slimmer for the ruling oligarchs. Especially with oil running out.

2- Regadless of all the diplomatic talk, and even without Iran's influence, the current regime can ill afford to make peace. That would mean implementing reforms, and loosing Alawite pre-eminence...

Philip I said...

Syrian

I'm not an expert in this field but I'll have a stab at answering your questions:

1) Perhaps we should not assume that all of the income of the shadow economy accrues to the bottom income classes. Think of all the unlicenced and licenced small businesses which do not declare (all of) their income and evade paying taxes. Also you could question the official definition of poverty (US$ 2 or less per day). What if low income people had double that amount, US$4 per day? Is this enough to pay for rent, food, medicine, clothing..etc?

2) I doubt people would enroll in a college just to kill time (some may do). They would generally want to earn something and be independent and have self esteem. That's why you see graduates doing part time menial jobs or they simply emigrate.

3) You have a point there but I am not sure if the researchers took such differences into account. I agree, in principle they should.

Overall, the picture that emerges is still depressing. While the government is trying to do something about it (as any decent government would and should) its efforts are undermined by widespread corruption, administrative incompetence and institutional nepotism.

Philip I said...

jeha

Syria will be facing a massive employment and investment challenge in a few years time. Even if 1 million Syrian workers were allowed to take up reconstruction jobs in Lebanon, there will still be more than 2 million without proper jobs. The only thing the regime can do to survive is to abolish exit visas!

Anonymous said...

Phillip,

First I would like to stress that I do not believe that poverty is not higher than it should be.

1. At least some of the income generated in the shadow economy is going to accrue to the lower income classes. The incentive structures that exist say that a person who has nothing to lose is more likely to cheat than a person who has a lot to lose. Of course this assumes that all citizens are treated equally under the law which is likely to not hold in this case.

2. Consider the options
a. go to school
b. get a job or
c. migrate
with high unemployment rate the chances of getting a job are pretty slim; migrate and you will not be counted in any statistic. The only viable option that is consistent with a stagnant economy with no jobs is going to college.

I suspect that the problem is not the lack of jobs but a combination of lack of jobs that require college skills and the inability of colleges to provide college level skills for the few high level jobs that require such a high skill (hence the complaint that there is a brain drain in the economy??)

On a last note, I think it's important to remeber that the driving force behind all the poverty was the initial concern about equality. Socialism is introduced with the idea that it would provide a more equal distribution of income among members of society and it does. Socialist policies make sure that all is equal in poverty.

Our biggest mistake is that we keep looking for the government to provide solutions when the heavy handedness of government policies is the primary source of the problem.

2 basic questions that I put to students when the question of equity invariably appears are these

1. Suppose that we take all the wealth in the nation and divide it equally among the citizens. How long would the equal distribution last in system of voluntary and unrestricted exchange.

2. You are given the following two choices where a pot of money will be divided between you and one other person:
a. The pot contains $100 and you will be given half, or
b. the pot contains $500 and you will be given one quarter

Philip I said...

Syrian

You will recognise that under-employment is almost as bad as unemployment. When jobs or hours worked increase, real incomes do not necessarily rise because real wage rates can fall under the pressure of excess labour supply. People therefore can be entrapped in an underemployment situation for years.

The real problem to my mind is the low productivity of both labour and capital. This is essentially a management and business environment issue. Syria is blessed with natural resources and talented people. The country could do a lot better. As you rightly say, socialism has made every one poorer. It has also helped to breed a whole generation of corrupt officials and a private sector that is distrustful of government, pays little or no taxes, cheats consumers with inferior goods and services and does not invest in a meaningful way for fear of attracting attention and unwanted government "business partners".

No real progress can be made without institutional and legal reforms (backed up by law enforcement) and a healthier political environment. In other words the government has got to clean up its act and restrict its role to providing an enabling business environment.

The Chinese model of development is not one that can be followed in Syria. We are not a homogenous society, our education system is a failure and there are too many of us who do not accept or trust an overbearing and totally corrupt central authority.

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