DAMASCUS: Labour Minister Ali Khalil predicted on Wednesday that Syria’s unemployment rate would remain at around 8 percent this year but would fall sharply if Israel and Syria reached peace.
“This is a high number for Syria. But it would go down with improved stability in the region. We are also expecting improvement from a better agricultural season and investment projects approved by the government,” Khalil said. “Israel has created instability in the region. But we are hoping that the geopolitical situation would improve.”
Khalil said some of the military spending needed to defend Syria would be diverted toward infrastructure and development projects that increase job opportunities after peace.
The minister’s estimate puts the unemployment rate at a level similar to the last two years, compared to 6 percent in 1994 and 4.8 percent in 1981.
Riad Seif, an independent member of parliament, said this week that unemployment could be as high as 20 percent due to worsening economic conditions.
Economic growth has tapered off from high single-digit rates to around zero in 1999 due to declining productivity and investment. Calls for the government to back off from its command management of the economy have intensified.
But Khalil said the scope of reform that could be applied to the public sector, which employs 25 percent of the workforce excluding the military, was limited because the government was reluctant to add to the unemployment problem.
But there has been some reform, he said. Three government-owned textile firms were required to run on commercial and performance management lines in 1999. “They all turned a profit last year. We hope to extend this policy to the 20 to 25 other major textile companies,” he said.
Similar market-driven reforms, such as lifting restrictions on exports, would help improve productivity, draw investment, and create jobs for 200,000 people entering the workforce each year, the minister said.
Increased technical qualifications and the low cost of Syrian labor would make Syria an attractive investment proposition within a better political climate, Khalil said.
Wages such as $80 a month for a teacher working for the government might appear low but they are supplemented by subsidies estimated at more than $2 billion of Syria’s $5.1 billion budget expenditures, he said. - Reuters