Tuesday, August 21, 2007

IMF releases full (and more sobering) Syria Article IV report

Syria's spin doctors splattered the IMF's overwhelmingly positive "preliminary conclusions" all over the place last month (with many selective edits). The full report, released on August 16th, provides the sobering picture of Syria's massive subsidies program, which represents 20-25% of GDP.

Syria's economy is expanding - there is no doubt about that. Its the state's growing fiscal crisis that's the problem. With oil production declining rapidly, Syria's ability to subsidize its people's lives seems to be nearing an end. There is talk among reformers in Damascus that subsidies will be "targeted" to those that need it most. While this sounds good, given rampant corruption in the country (as well as porous borders with Lebanon, Turkey, Jordan and Iraq) its hard to understand how discounted diesel and other basic staples are not going to make it into hands of those that need it least (at least in Syria).

1 comment:

Master Blaster said...

What's the deal with all the subsidies loud chatter? All talk?