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French Version

Syria needs EU help to rehabilitate

A Syrian-European Association Agreement holds out considerable opportunities and challenges for Syria's struggling reform program. The country's economic reform goals are becoming clearer and were outlined specifically last month by State Planning Commission chief Abdullah Dardari at a conference on Syrian banking. Not only will Syria welcome "public-private" partnerships and continue its move toward a market-oriented economy, but Syria's public sector will be encouraged to participate in "the market" and NGOs will move their activities "from philanthropy into development."

While setting such goals is a good move in and of itself, Syria needs to strengthen its institutions now in order to implement detailed reform policy. Over the last few years, a number of promising economic reform policies have become bogged down in implementation, due in no small part to limited capacities of Syrian institutions. Even the best of reform measures have certain windows of opportunity that must be met in order to deal effectively with the country's demographic and economic problems. To meet these targets, Syria must embrace EU assistance like never before.

Most eyes are now focused on the EU's recently inaugurated $21 million Institutional and Sector Modernisation Facility (ISMF) program. More than 20 percent of project funding will be allocated to the training of senior Syrian government officials - whether in Syria, or abroad - for upgrading the capability of Syrian institutions, especially Syria's State Planning Commission. The program intends to help the Syrian administration adapt the necessary tools to manage a market economy and selectively discontinue those that were used to manage a central command economy. It targets strengthening institutional capacities and sectoral polices and training, building telecommunication, transportation, construction supervision, maintenance and operation, transportation planning and traffic engineering strategies and designs as well. ISMF's programs seek to help build legal and regulatory frameworks conductive to improved economic development and to prepare and to implement administrative reform programs with an emphasis on training, IT and inter-ministerial information exchanges.

There is reason to be optimistic the ISMF will have considerable impact on Syria's economic reform process. After all, a number of EU programs have already borne fruit. For example, the National Indicative Program (2002-2004) has supported the Finance Ministry in modernising legislation and regulations concerning fiscal policy, budgeting, customs tariffs and practices. Another program assisting the Finance Ministry and the Central Bank of Syria concerns the establishment of a Bank Training and Rehabilitation Centre, which focuses on building institutional capacity and boosting technical assistance and training in the finance sector. The overall objective of these programs, like most EU assistance, is to help Syria conclude an Association Agreement with the EU and participate effectively in the Euro-Mediterranean Free Trade Area.

One area of vital importance notably absent from EU assistance concerns is setting up economic research groups to assist decision-makers. A good model would be the Conference Board, a private research group with a global membership that helps define and generate economic indicators that can be used to measure the health of the economy. Given the conflicting economic indicators available on Syria, such research groups will be vital to managing economic success or failure into the future.

On a broader level, however, maximizing the benefits of EU help requires exposing different levels of the Syrian administration to EU assistance. Priority should be given to training cadre with suitable education, as they are likely to possess the theoretical background necessary to understand market economy tools and their application to the Syrian economy.

If Syria learns effectively from Europe's hard-earned lessons in market reform, the prospects for the Syrian economy are likely to brighten rather quickly. Syrians have shown exceptional ability to persevere under rapidly changing circumstances, and there is no reason to believe that Syrian businesses will not do the same when confronted with the challenges of freer markets. The time for concerted and meaningful institutional reform is now.

Beirut,06 28 2004
Abdulkader Husrieh
The Daily Star
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