Private versus Public Efficiency of Syrian Industrial Enterprises

Abstract

The economic reforms envisaged by the Syrian government are principally aimed to raise the overall efficiency of economic activities and to improve significantly the productivity of labour and capital. Irrespective of the degree of competitiveness and efficiency of private companies, the government enterprises are by far less efficient and less competitive. In addition, while the efficiency tendency in private firms is increasing, the trend in state owned enterprises is downward slopping. In the Syrian economy the worst performance of a private company is still superior to the best performance of o public enterprise. The weak performance of state enterprises is related to their improper managerial methods, lack of incentives, counter-productive system of remunerating workers, and complete rupture of their production from market demand and needs. The corporate governance of enterprises should be the first measure to be implemented. This will allow the introduction of competitive management, which will be oriented towards profit-making activities. The remuneration of the workers, based on their effort, will increase considerably their productivity and consequently the efficiency. The private-public partnership will allow for higher competitiveness of the activity. The technological modernization will bring better performance and higher total factor productivity, while improving significantly the quality.