Syria as Industrial Nation: A Prescription for Radical Reform

The policy of patching up laws, amending legislation, and delving into the labyrinth of executive regulations to modify them is futile. What is required is surgical, comprehensive excision. All laws enacted by the former defunct regime must be completely eradicated. We must build a new legal framework that includes clear executive regulations, compatible with the astounding development witnessed in the civilized industrial world, especially in encouraging technological industries and energy.

What is the difference between us and Malaysia, Taiwan, or even Vietnam that prevents us from manufacturing a mobile phone, a simple engine, or a solar panel? There is absolutely no difference. The problem lies first in the will, and then in the management. If these two elements are achieved, Syria could very easily become a civilized industrial country. We must change the path; we must innovate.

In Syria, there is no pure national industry. Since the 1970s, the plan was set and executed to the letter—and the result has been achieved. Yes, achieved: Syria has become a country that buys many times more than it sells. That was the scheme, and it succeeded. The destruction of national industry and the economy has been accomplished. Enough talk about protecting national industry; there is no pure national industry in Syria.

The world is manufacturing intelligence, while we are still manufacturing illusion and ruin. We still insist on banning ready-made, cheap imports, yet we allow fragmented imports to be assembled, mixed, or converted to become expensive, "ready-made national" products. Do you remember the "Import Rationalization" policy? Let me explain what it was: The former regime would ban the import of an automatic washing machine, for example, under the pretext that there were factories producing similar machines. However, it allowed these very factories to import the same washing machine in parts (disassembled) under the label of "industrial allocations"—not for trade—so they could assemble it, sell it, give it a brand name, and market it as "Made in Syria."

An industry that relies entirely on imported raw materials cannot be described as national. Show me one national industrial product whose components are locally manufactured. There is none. All factories import all components separately, reassemble, mix, or convert them, then market or export them under the label of Syrian industry. This means that anyone who claims that national industry saves foreign currency and relieves pressure on the exchange rate is mistaken.

This is the reality of most industries in Syria. Additionally, even when there are raw materials produced by nature, the former regime did not encourage adding value to them. Instead, it exported them in their raw state, as was the case with cotton, which was exported raw, or phosphate, which was and still is exported raw. This indicates that the former regime did not encourage establishing factories that would use these materials for local manufacturing; rather, it exported them cheaply in their raw form and re-imported them back to us at multiples of the price as various finished products.

How do we make Syria an industrial country? This question is answered through this extensive research article, directed at those concerned with industrial affairs, and specifically addressed to the officials managing industrial affairs in the Syrian Ministry of Economy and Industry. This research describes the reality of industry during the rule of the former regime and contains proposals and solutions for exiting this miserable reality.

First: Diagnosis

All Syrian factories depend on imported materials and components. All factories have approved "allocations" lists from their relevant industrial directorate. These allocations are essentially permits allowing the factory owner to import them. It is important to note that an industrialist who imports these raw material allocations is not permitted to sell or trade them; they must enter them into their production process, and they are considered in violation if they trade or dispose of them otherwise. I provide this information to demonstrate that the industrialist has the privilege of import capability. This means that the industrialist not only depends on imported materials but also enjoys protective power that allows them to practice importing. This in itself shows us that the local product is a disassembled imported foreign product, practically no different from its similar foreign counterpart except that the former is labeled "Made in Syria" and the latter "Made in [another country]."

This truth applies to everything we see in the markets labeled as "local products" that the state must protect, and which we are not allowed to import similar items for, or at least must impose high customs duties on their counterparts to increase their market entry cost. Unfortunately, this is the reality of local products, starting from engineering industries like refrigerators, washing machines, electrical appliances, motorcycles, cars, and others. These carry nothing national in their name except the name of the factory owner who imports their components, from the engine down to the power switch.

Can you imagine, for example, that in 2005, Syria had a national car factory producing a car called "Sham"? This factory imported every component of the car without exception, including the tires it would inflate after assembly, then market it. The fallen president would boast, ride it at the factory site, and announce its launch as the "pride of Syrian industry." This is the industry of illusion and ruin.

As for the pharmaceutical industries, considered advanced in Syria, they also depend entirely on imported raw materials for all their components. The painful fact is that there is not a single factory in Syria that produces even one antibiotic, vitamin, excipient, or even a fever reducer, despite the fact that many countries produce and export them to us, like India or Pakistan—countries not scientifically or cognitively superior to Syria.

All of this, of course, is due to the backward and destructive approach adopted by the builders of Syria's economy since the 1970s. Wretched is this policy and wretched are those who devised and planned it—that policy which prevented Syrians from establishing a real, complete national industry from A to Z. This former regime prevented Syrians from keeping pace with the civilized world, which developed its industries and research centers. In Syria, there is no scientific research center providing studies specific to any industry.

Even the clothing industry now has all its components imported, from thread and fabric to buttons, zippers, and pins. I must not forget food industries like sugar and vegetable oil, where these two materials are imported raw in thousands of tons and millions of dollars, to be refined and purified in so-called sugar and oil factories monopolized by influential figures and "whales," built on the ruins of real sugar factories that relied on sugar beets. All of this is thanks to the destructive economic policy practiced by the former regime since the 1990s.

In Syria today, there is not a single primary pharmaceutical material industry. All drug factories would halt if their supply of antibiotics, excipients, or production requirements stopped. The same applies to all chemical industries. Consider that the manufacture of plastic plates or chairs is classified as a chemical industry in the lists of the Syrian Ministry of Industry. I am not exaggerating when I say that even food industries like poultry and canned goods contain nothing national in their components, starting from feed and medicine to agricultural seeds, preservatives, fertilizers, and pesticides. All of it is imported, even packaging materials like cardboard and ink. Imagine the meaning of the word "imported" and the hard currency it costs, estimated in billions.

The entire Syrian economy is based on imports, starting with its industrial sector. Unfortunately, there is no factory in Syria that relies on local materials in its production, including mineral water factories. As for public sector factories, it's a tragedy not worth detailing: Kanar tissues factory, pencil factories, canned goods factories, Ceronix, Sar detergents, dairy and cheese factories, a minibus factory in Homs, a screens factory in Al-Qaboun, and many other absurdities. All their contents are imported, including the flavoring put in biscuits or gum, not to mention that the former regime wasted prime real estate locations in city centers by establishing them with negligible development.

Ironically, even these industries were restricted to the "whales" and cronies. The fallen regime set conditions for their establishment that only his cronies could meet. If ordinary people managed to implement them, it required years of extortion and bureaucracy to obtain the license. And if the project succeeded, all regulatory bodies would pounce to either sabotage it or force partnership. This pushed many investors to emigrate and stay away. Below are some of these decisions:

• Factories may only be established in industrial cities, allegedly for organizational purposes.

• Bulletin No. 10 grants the industrialist an annually renewable grace period to relocate their factory, under the threat of demolition.

• Law No. 21 of 1958 remains the decisive authority for licensing, in addition to other approvals: security, Ministry of Defense, Agriculture, Environment, Water Resources.

Countless approvals, and in the end, you obtain a temporary license in which you pledge to relocate the factory later. All of this is just for the license, and we haven't even reached the stage of construction or importing production lines and raw materials. And you can imagine the complexity of reaching the production stage, followed by the need for connections to obtain allocations, then dealing with finance, social security, customs, and securing import permits. A long and complex journey only endurable by the patient and those with influence. This is the true reality of the industrial work journey in Syria, which remains in effect to this day.

Second: Solutions

• Encourage the local manufacturing of primary raw materials and grant easy licenses for it.

• Abolish the specific Industry Law of 1958 and issue modern laws compatible with global development.

• Completely cancel Executive Instruction No. 3294 of 1998 and avoid delving into its amendments.

• Encourage the establishment of industrial projects delving into the world of medicine, especially primary materials.

• Encourage modern industries in the fields of energy and technology, and grant advantages like tax exemptions or zero-interest loans, while moving away from traditional industries that rely on imports.

• Allow the shadow economy to thrive by not pursuing small manufacturers and workshop owners, letting them operate until conditions improve, to facilitate livelihoods, focusing monitoring only on fraud and deceit.

How do we make Syria an industrial country?

• When industry becomes accessible to ordinary people and not monopolized by the wealthy.

• When innovators and inventors have a seat at the table among the active participants in building the country, rather than those seats being reserved only for those with influence and connections.

• And finally, and most importantly: When we Syrians become sellers more than buyers.

By Issam Al-Tizini