Subsidies cut or removal poses great concern for most Syrians

The steep depreciation of the Syrian pound and the soaring prices of almost all consumer commodities have overburdened the Syrian government and forced it to mull removing or cutting subsidies for consumer goods, a move that could pose great concern for most Syrian people. A recent survey unveiled that the government's subsidies have reached 386 billion Syrian pounds (about 3.88 billion U.S. dollars) in 2012, about 29 percent of the size of the state budget and 13 percent of the size of the GDP. The survey said this figure has further increased in 2013 to reach 499 billion Syrian pounds (about 5 billion dollars), or 36 percent of the general budget. Media reports said the government has thought thoroughly about removing the subsidies before deciding finally to raise the prices of some subsidized items, particularly diesel, petrol and gas, achieving thus a daily profit amounting to 150 million Syrian pounds (1.5 million dollars). The decision to raise the price of oil derivatives has infuriated the majority of the Syrian people, especially as their wages remain unchanged. Following the recent increase in fuel prices, Syrian Prime Minister Wael al-Halqi assured its people that the government has no intention of removing the subsidy policy, stressing that it has recruited all its capacity to meet people's requirements. He also voiced the government's commitment to providing free basic services related to education and health to citizens. Moussa al-Ghareer, a professor at the Faculty of Economics, warned that the state subsidies would pose very great pressure both on the budget and the GDP, indicating that if the cost of the subsidies soars further, it may have negative impacts and become unaffordable by the government. In remarks published by local al-Watan newspaper, al-Ghareer pointed out that the subsidies of electricity and oil derivatives cost about 80 percent of the total government subsidies of all items. He indicated that some studies embrace the notion of reconsidering the state subsidies and raising the prices of subsidized commodities in order to reduce the budget deficit, adding that the government would grant, in exchange, annual cash to needy families. Yet, the middle and lower classes are the hard hit by the 27- month-long crisis, as most of them have been obliged to leave their houses in the suburbs of the capital Damascus and other hot areas in central, southern and northern parts of the country to flee dangerous clashes. Any cut in subsidies may put additional pressures on them and make matters worse. "We are almost living on bread and if its price is raised, we would eventually have nothing to eat," said Amal, a mother of five children and a widow in her 50s. Lamia Assi, former minister of economic, proposed three steps to enhance the value of the Syrian currency and improve the GDP. She said the core of the problem of the Syrian economy lies in the GDP's shrinking, adding that the treatment would be by launching all the forces of production, whether for large, medium or small industrial workshops, and transferring all factories to safer areas, in addition to facilitating small and medium loans. She also suggested that the Central Bank of Syria be the only seller of the U.S. dollar, and called on stopping financing the imports of the private sector, and importing commodities directly by state institutions to distribute them to citizens or producers by the real prices without profit margins.