Under Pressure, Syria Ends Economic Liberalization, Worsening Outlook

One of President Assad's rare progressive initiatives, an effort to open Syria's economy has come to a halt under domestic protests and international sanctions, threatening to add to the country's political woes

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Syrian President Bashar al-Assad's face is displayed on a street ad reading "Together we build." AP

DAMASCUS, Syria -- Over the last two weeks, as forces loyal to Syrian President Bashar al-Assad slaughtered protesters, provoking outrage across the globe, the European Union and White House announced sanctions against Assad and leading members of his regime.

Syria's government howled in anger. "Today, the Europeans have added a black page to their record of colonialism in the region," said the foreign minister, Walid Muallem, adding that the measures would "harm the Syrian people."

Analysts say that Mr. Muallem is wrong, the sanctions will have limited effect on Syrian citizens. But the country's struggling economy and a gaping rich-poor divide both help explain why protests there happened in the first place. Sanctions or no, the chaotic, isolated new Syria will have serious financial problems.

Until protests began and were bloodily repressed two months ago, tourists were a growing source of Syrian revenue, with 16 percent of the working population in the hospitality sector and millions of visitors bringing in valuable foreign currency.

But a crackdown on protests that activists say has killed at least 850 people has thrown parts of the country into violent unrest, and most embassies advised their citizens to leave at once.

In the streets where Arabic students and backpackers used to buy Oriental knick-knacks, there are only plain-clothed security forces and grumpy shopkeepers.

The National Museum in Damascus, for years a joke with visitors for its enigmatic signs and gloomy displays of priceless Roman statues, is currently getting a facelift, and workers are busily painting and decorating bright new galleries.

But aside from Syrian art students drawing in the sunlit sculpture garden, there are scant visitors to admire the new look, nor are the bored attendants expecting many this summer.

"The gap between Syria's rich and poor has grown as the economy has liberalized."

"People do want change, but Syria was growing," said one young man in a ceramics shop in Damascus. "Now was not the time to bring down the government -- this year was going to be such a big year for Syrian tourism." He and many other shopkeepers said business was terrible. Hotel owners have had to fire waiters and cleaners.

The death of tourism is only the first sign of the economic devastation that recent upheaval has inflicted.

Since Bashar al-Assad inherited power from his father Hafez in 2000, Syria has undergone a degree of economic liberalization; it has built trade relationships, particularly with Europe and neighboring Turkey, and encouraged private banking and business.

The national GDP has more than tripled from $20 billion in 2000 to over $60 billion last year. For many people, particularly the urban middle classes, life has changed enormously.

The proliferation of banks and credit allowed people to buy things -- cars, houses, electric goods -- that they could not previously afford. Fewer trade restrictions have meant that there are far more of these goods on the market, from China and Turkey among others.

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Mark Simpson is a pseudonymous reporter working in Syria. Simpson's work has appeared in many major publications.

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