Socialism and economic change in Syria

Abstract

The Syrian economy has witnessed an impressive rate of growth in the post-war period and early fifties. Its national income has increased at an average annual rate of 9 7 per cent during 1950-57. How did this growth come about in the absence of massive oil revenues as in Iraq or vast foreign aid as in the case of Jordan? Almost as interesting as the question why the economy started growing rapidly is why the rate of growth has slackened since 1957, for slackened it undoubtedly has. The acute shortage of food and imported goods during the Second World War and after, along with expenditures of the allied troops, provided a significant stimulus to Syrian agricultural and industrial production. Later on, this growth was reinforced by the Korean War which drove up commodity prices, particularly of cotton. The prevailing high prices made it profitable to open up for cultivation the Jazireh province in the northeast corner of Syria.1 By 1956 cotton production had multiplied almost seven-fold compared with 1949. Wheat and barley production also grew rapidly. In addition to this development of agriculture there was at the same time considerable investment in industry, transport and housing. The rate of gross investment ranged from I 1 per cent to 19 per cent during the period 1950-60.2 Following the end of the Second World War there appears to have been three special features of the economic situation in Syria which made rapid growth possible. First, and probably most important, was the existence of large areas of land in the Jazireh and elsewhere which could be brought into cultivation rapidly and with comparatively small capital investment. This was done by installing pumps principally on the Euphrates and Khabour rivers. This type of irrigation project involves a relatively small capital investment within the capacity of individual private investors and brings a quick return in the shape of increased output. The second important factor in the situation was the system whereby the installation of pumps and the purchase of machinery was largely financed by merchants and big landowners who are called 'merchanttractorists'.3 Both groups contributed extensively to the development of agriculture by developing large estates on commercial lines spreading, in addition to pump irrigation, the use of extensive tractor-combine cultivation and developing cotton growing in Syria. Thirdly, Syria was fortunate in this period because she could market her increased production abroad rather than depend on its home market. She was able to enter the world cotton market in a period of scarcity as a result of the Korean War which stimulated the expansion and led to an increase in exports considerably. Thus at the centre of the expansion of the Syrian economy in the period