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Interview with Syrian Minister of Economy: We are moving to a social market economy. - ASHARQ AL-AWSAT English Archive
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Damascus, Asharq Al-Awsat- In an exclusive interview with Asharq Al Awsat, in Damascus , Dr. Amir Husni Lutfi, Minister of Economy & Trade, expressed his belief European Union is being pressured to delay it from signing a partnership agreement with Syria . Elaborating further on the obligations an association agreement would entail for Damascus , the Minister said, “We’ve been hearing the Europeans say the agreement is forthcoming but other parties are calling for it to be delayed until further notice without clarifying why.” The government of President Bashar Assad, he said, was “ready to sign, having made the necessary preparations at a ministerial level to apply the agreement” once it comes into action.

On the effects of the agreement, which aims to strengthen relations between Europe and its Mediterranean neighbors, on the Syrian economy, Lutfi indicated, “Several studies have already been conducted by a number of organizations, international and local. The majority concur that, in the short run, the Syrian economy is likely to be adversely affected by the application of the partnership agreement. With time, however, the negative consequences will lessen and become positive in the long run. An increasingly open Syrian economy will offer businesses the chance to be creative and innovative so as to compete globally, since competitiveness is related to quality and cost.”

Speaking about the role of the business community inside Syria , the Minister said, “The business sector needs to identify the goods that can be produced locally and are high quality and low price, in order to reduce the negative impact of the partnership on the local economy.” He pointed out the government had also “applied to join the World Trade Organization and concluded multilateral and bilateral agreements with Arab countries under the Greater Arab Free Trade Agreement which we are complying to. In addition, Syria has signed bilateral agreement with Turkey and intends to sign a similar agreement with Iran in the near future.”

As Syria prepares to switch to a social market economy, Lutfi assured his citizens the government “does not intend on following a 100% free market economic model devoid of state intervention.” He added, “During the 10 th Baath Party Regional Conference, the leadership recommended the centrally planned economy be gradually transformed into a social market economy to avoid a crisis.”

He indicated the term, social market economy, was proposed during the conference, in June 2005, “by members of the Regional Command to assure citizens of the continuing limited intervention of the state as it works to ensure a better distribution of income and protect society.” Lutfi stressed the government’s economic policies “will always take into account the needs of Syrian society”.

In the past, the Minsiter continued, “The centrally planned and controlled system did not offer citizens what the needed. Everyone agrees that it has come to a halt and stopped working.” Reform from within or adjustment became impossible. Therefore, he said, “It became necessary to shift the economy to an internationally- accepted system, especially after the fall of Communism.”

Regarding the role of the Ministry and other economic bodies in overseeing this transformation, Lutfi revealed a specialist team was drawing up economic policies for the future to ensure the transition occurs as smoothly as possible. It was crucial, he said, to build a mentality that accepts competition and change. “To reach our desired objective, in the shortest period of time, we require harmony, understanding, and clarity of vision,” he added.

On whether a date for establishing a stock exchange and a free-floating currency exchange rate was agreed on, Lutfi said, “When the law on creating a board to liberalize the currency was issued, it indicated the board was responsible for setting up a stock exchange within a year’s time.” He added, “The stock market is dependent on new legislation that will organize the joint stock and holding companies and oversee the conditions under which companies can register.” In turn, “This will create new opportunities for investment and share dealing. The process goes hand in hand with legal developments.”

Asharq Al-Awsat

Asharq Al-Awsat

Asharq Al-Awsat is the world’s premier pan-Arab daily newspaper, printed simultaneously each day on four continents in 14 cities. Launched in London in 1978, Asharq Al-Awsat has established itself as the decisive publication on pan-Arab and international affairs, offering its readers in-depth analysis and exclusive editorials, as well as the most comprehensive coverage of the entire Arab world.

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