Syria’s war kills middle class
Damascus - Syria’s middle class is withering under the long civil war. The conflict has deepened class divisions, exacerbating poverty and enriching the coffers of the elite while forcing the middle class to flee.
Economic estimates indicate that the middle class, which once made up more than half of Syrian society, has shrunk to less than one-quarter of the population. With no end to the conflict in sight, this social segment is contracting and middle-class Syrians have been tapping savings to survive.
“The crisis undergone by Syria since March 2011 has affected social, economic, living and other aspects of life. The middle class, which was a leader, a pioneer and an incubator for Syria’s textile, food and other [industries], was affected more than any other (class),” said Hayyan Salman, an assistant to Syria’s economy minister. “The poor have become poorer but the rich have become richer.”
According to official Syrian data, tourism shrank by more than 95% between 2010 and 2014 and losses by all economic sectors totalled $32 billion.
The middle class, which has traditionally controlled the majority of small enterprises, suffered most of the losses due to the destruction and looting of their plants, factories and workshops. Many owners were kidnapped and forced to pay ransoms.
“More than 550 notable Syrian businessmen left Syria to neighbouring and other countries, while many owners of yarn and textile factories moved their businesses to Egypt,” Salman said. “Most textile factories in Aleppo, the economic capital, were removed to Turkey. What couldn’t be moved and stolen was destroyed.”
The middle class in conflict areas relocated to secure areas held by the government or went abroad, further damaging local economies.
“Shutting down factories and laying off labourers led to more unemployment, less supply and more demand,” Salman said. “A major disruption resulted: prices jumped with higher unemployment and inflation. Some studies put inflation at 60% while a hike in dollar exchange rates deepened the middle-class crisis.”
Semi-official sources, who requested anonymity, estimated that the poor made up 20% of Syria’s society before 2011, the middle class 60% and the rich 20%. During the war, the rich retained their share of the country’s wealth, while the middle class shrank and the poor increased in number. The middle class now constitutes 20-25% of the Syrian population.
Hisham Khayyat, an economist, said the middle class is the lever of any development process and includes government and private-sector employees and owners of small enterprises.
“Before the war, small and medium enterprises amounted to 95% of the private sector and hired 120,000 workers,” he said, citing studies. “The share of these enterprises in the shadow economy was 40%, bringing the total number of their workers to 200,000.
“Many of these enterprises were completely destroyed during the war and are now outside the production process. Their owners and workers are now displaced or refugees looking for food aid. Some owners are now street vendors.”
Abu Matar owned a workshop for car accessories in Darayya, a town south of Damascus. “In 2007, I established the workshop in the eastern neighbourhood of Darayya, where I produced car accessories and decorations,” he said. “Since the products were popular, I expanded the workshop in 2010, bringing in new machinery with higher productivity.
“The cost was high and was covered by loans from the Industrial Bank and a private bank. Less than a year later, the war broke out,” he said. “During clashes between the Syrian army and opposition gunmen, the workshop was completely destroyed. I could not take anything out of it.” Studies by Syrian economic centres show that, on average, a Syrian family made $400 a month before 2011.
“A family now needs 175,000 pounds or $550 per month, according to studies by economic groups,” Khayyat said. “What family can honestly make this much now? A government minister’s salary is no more than 125,000 pounds, or $400, compared to 72,000 pounds or $1,400 in 2011.
“How can the middle class, made up mainly of employees and small entrepreneurs, make ends meet?”
With the Syrian pound losing 700% of its value since 2011 and millions of Syrians displaced from their towns and villages, the problem is becoming deeper and their living conditions are worsening.
“Hundreds of thousands of refugees left because of material and economic pressures, not fear for their lives,” Khayyat said. “Some reached destination countries after severing their ties with their homeland — they sold their homes, properties or cars and left.”