Why the Syrian business-class will not give up on Assad.

by Faiz Ahmed last modified 2012-10-30T13:56:07-04:00
Unlike in Tunisia, Egypt, and Libya, the Syrian business-class have few extraterritorial commercial linkages to mitigate a potential split from the regime. This feature of Syrian political-economy makes the state much more resilient to regime-change.

Political developments in the Middle East cannot be separated from the economic context. Even a limited scrutiny of the generalized economic trajectory of the Middle East & North Africa (MENA) region reveals that every single government has followed free-market policy prescriptions put forth by international economic planners/advisers in the post-1989 world order. These schemes have resulted in an increasing inequality between rich and poor, a diminishing quality of life for the vast majority of people in the region, and a generalized expansion of the security apparatuses in the MENA region to deal with the consequences of a disenchanted populace. This said, much of the mainstream analysis over the past 18 months cannot account for the internal dynamics of legitimacy creation in the countries where popular protests have broken out.

Regime legitimacy in the MENA region began decades before 1989, yet was flexible enough to adapt to neoliberalism. In the case of Syria, legitimacy for the authoritarian regime has traditionally rested on two pillars: (a) the subsidization of daily household expenses (food, energy, transportation) and (b) the creation of an internal comprador class of capitalists which began in the 1970s by forging networks of capital between elite business actors and state officials as the latter, and their offspring, ventured into the commercial realm.

The logic of this arrangement culminated in the establishment of a crony capitalist state which has become dependent upon consumerism directed towards the business interests of state officials (and their relatives) and their private sector partners. However, this relationship is also the basis of the contradiction inherent in the Syrian economy. In order to legitimate its authority, the regime has had to ensure that a (albeit thin) layer of capitalists are able to continuously accumulate wealth; and as capitalist economic outcomes such as the 'falling rate of profit' (via market saturation or monopolization) manifest, the regime is forced to choose between which segment of its base it deems more important. The crony capitalist state almost always sacrifices the well-being of the general population, and favours their immediate political and power base, not to mention their own wealth.

This particular feature of the MENA economies, and Egypt and Syria in particular, have required these regimes to pursue economic-liberalization by way of opening their economies to foreign ownership and creating avenues by which their populations can look for work outside of their countries in order to send back remittances (not to mention lessen societal pressures created by having a massive unemployed population). Thus, the Egyptian constitution has enshrined the right to seek work overseas, meaning that no exit visas are required to leave the country. These developments have accompanied a logic within Egypt which perpetuate extreme levels of land-evictions, urbanization, elimination of subsidies, and wealth concentration. All of which have occurred against a backdrop of an extremely open economy.

Except for the issue of the country's orientation to the international market, the Syrian case is in many ways similar. Syria is not a signatory of the General Agreement of Tariffs and Trade (GATT) or a member of the World Trade Organization (WTO), the country has also been shut out of most extra-regional international trade networks since 2001. The result has been that the Syrian regime has crafted a series of bilateral trade agreements; particularly with European countries, Turkey, and the Gulf states. These bilateral linkages have not differed from the general tendency of economic liberalization globally. However, coupled with Syria's status as a pseudo-pariah state in the world, particular social relations have emerged within the country.

The most important of which, with respect to class stratification, is that Syria has a much more cohesive ruling business elite than other economically-open autocratic MENA countries such as Tunisia, Egypt, and Libya (TEL). However, the reason for this is only partly explained because of the particular interconnections between Syrian state officials, politicians and their relatives. Indeed, such a configuration exists in most crony-capitalist states. What differentiates the Syrian case from that of TEL is Syria's relationship to the imperialist world. Specifically, that it has been largely shut out from engaging with it on the same scale as TEL. This has insulated the business class within from having to expand its ranks and furthering an internal rivalry. Thus, Haddad can confidently write about a united business-class, many of whom are intimately related to the regime.

An examination of the trajectory taken by the business-elite in revolutionary Egypt shows how their lack of cohesiveness helped sustain the protest movement and ushered out Mubarak and his immediate family. An instructive example is the case of prominent business-man Naguib Sawiris. Sawiris was a Mubarak stalwart in pre-revolutionary Egypt. As one of the world's richest humans, he was (and continues to be) regularly interviewed by the business-press throughout the West, as such, the trajectory of his loyalty to the Mubarak regime is easily documented. For example, during the first days of the revolution, Sawiris could be seen on major U.S. television shows touting the Mubarak regime along the various lines the regime itself justified its existence upon – that of secularism, security with Israel, and its orientation towards a free-market economy. On a side note, as a key player in the Egyptian (and global) telecommunications sector, Sawiris was intimately tied to the tactics the Mubarak regime employed to limit communication linkages between protestors. In response to the protests, the Mubarak regime immediately ordered all mobile phone and internet providers to block all transmissions, and the vast majority of providers, including Sawiris' Mobinil (and British based Vodafone) complied whole-hardheartedly.

As it became glaringly evident that the protests in Egypt were not going away, and that a widespread and sustained social movement had been formed, Sawiris' tone changed dramatically. Roughly by the end of the first month of the revolution, Sawiris appeared again in the Western business press, the Charlie Rose show specifically, primarily to denounce the regimes handling of the protests, but also to lay blame on the Mubarak regime for the state of the Egyptian economy. This is particularly interesting because it marked a rejection of his affiliation with Mubarak, and ostensibly the Mubarak Holdings Corp. – a fictitious name I have come up with as way to contextualize the fact that the Mubarak family had vast business dealings with a wide range of international banks, companies, and individuals which among other ventures, resulted in their acquisition of real estate in London, New York, Los Angeles and along expensive tracts of the Red Sea coast.

The point I am attempting to make here is that a prominent figure such as Sawiris, whose entire fortune is owed to the cronyism allowed for by the Mubarak regime, can only break from the regime if there exists alternative avenues of business relationships established on the ground. In the case of Sawiris' Orascom Telecom Holding company, these linkages have been able to expand internationally because of Egypt's orientation to open-market economic policies. Sawiris' company has operations throughout the world, but crucially, throughout the West. His break from Mubarak would have been very calculated and the risk taken by Orascom could only be mitigated because of its expanded international operations.

This is not the case in Syria. Because of the country's longstanding isolation from any meaningful networks of international-capitalism, the merchant class have only limited extraterritorial links. Sure, they may hold foreign passports and have residences abroad, but this does not translate into having commercial linkages. They are tied entirely to the current configuration of the domestic economic landscape; that is, they are not in a position to mitigate the risk of breaking withe the regime. This is precisely why the imperialist strategy of sanctions and further economic isolation is not working in Syria. The business class has absolutely nowhere to turn to, to maintain their holdings. So, while the currency devalues and the cost of household goods inflate, the business class becomes evermore dependent on the regime to dismantle the rebels and bring back some degree of stability. This is also why the Syrian regimes response of increasing public subsidies in the face of the protests have worked to alleviate some of the pressures felt by their base, but did not work when employed by the dictators of TEL. Quite simply, the dual pillars of household subsidies and cronyism the Syrian regime erected to legitimize their rule have not been undermined, and will most likely remain, unless a strategy to incorporate the existing merchant class in a post-Assad order is presented. This is also why the imperialist powers are warming to the idea of creating a unity-government, something they were unwilling to entertain when it was first suggested in December.

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