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Last Updated: Friday, 1 April, 2005, 15:29 GMT 16:29 UK
Syria at reform crossroads
By Dan Isaacs
BBC News

Dan Isaacs
Dan Isaacs found evidence of a new Syria on the road to Damascus
On the road to Damascus there's a gleaming new shopping centre.

It sits in glorious isolation tucked into the rocky hillside in no-man's land between Syria and Lebanon.

In the car park the sun gleams off the bonnets of rows of expensive foreign vehicles.

Within the shopping complex there's an emporium of "forbidden" delights, all available for US dollars only and largely unavailable at any price within Syria's borders.

There are strict limits on imports of foreign goods into Syria proper, particularly from its arch-nemesis the United States.

Syrians of modest means and without access to the mighty dollar are of course, effectively excluded.

So only the can come into this duty-free haven to buy their fancy perfumes and the latest fashions - and to relax at the Dunkin' Donuts coffee shop.

Demonstrations

The shopping centre is owned by one of the most powerful businessmen in Syria.

Rami Makhlouf not only runs a chain of duty-free outlets on the country's borders - he also, amongst many other business projects, controls the country's mobile phone network, SyriaTel.

With friends at the highest level in government, Mr Makhlouf, who just happens to be a cousin of the president, is a very powerful man.

It is said that no foreign companies can do business in Syria without his consent.

A BBC request to meet Mr Makhlouf was turned down with the comment that he does not do media interviews.

When pro-government demonstrations "spontaneously" occur, it is coaches from Mr Makhlouf's businesses and schools that can be seen carrying supporters to the rally.

Syrian pro-government demonstration
Syrian business leaders often help organise pro-government demonstrations
Syrian flags and posters of President Bashar al-Assad are ready to unfurl to accompany the familiar chant of "Assad, our spirit and our blood is yours."

Ask the demonstrators themselves, and they will say they came to show their support for the president.

But ask them what would happen to them if they refused to come when the buses were loading up at the factory or university gates, and their answers are less forthcoming.

Thriving trade

Economic activity in Syria is dominated by who you know and who owes you favours.

So when President Assad promises reforms, and to "modernise" the Syrian economy, reformers look to dismantle this culture of patronage - to untangle the Gordian knot of bureaucratic regulations that effectively strangles small independent businesses.

On Syria's fertile Mediterranean coast lies the port of Latakia.

It's a thriving city, the window through which the country does much of its international trade.

Cotton, tobacco, bitumen and a wide range of fruit and vegetables all leave from here.

Electronic products, cars and a whole range of other products for the domestic market are unloaded from the giant ships moored at the dockside.

"There's no doubt that things are changing for the better," shipping agent Kamal Darwish Ahmad says.

"There has been a growth in both imports and exports over the past few years, partly as a result of improved legislation, but also because the Syrian market is expanding."

But there are those calling for a faster pace of change.
Syrian drinks seller
The Syrian government wants to modernise the economy

"It's not easy to make economic reforms," Latakia businesswoman Yasmina Azhari argues, "when there are powerful individuals doing very well out of the existing system.

"These are people who have been educated over the past 30 years in a particular way of thinking and are resisting the reforms."

Is it possible for someone without business connections to do well in Syria?

"It's possible, but it's hard," she responds. "Connections are less important now, but we are all suffering from bureaucracy.

"We all have to stop accepting things as they are, and I believe it will change."

Oil

What if Syria were to face the threat of economic sanctions?

That is very real possibility if it fails to comply fully with a UN resolution calling for complete disengagement from neighbouring Lebanon.

But Mr Ahmad, the businessman and shipping agent, is not concerned about the possible effects of such measures against Syria.

"Nobody likes to see sanctions.

"If they were imposed by the United States alone, that's only a very small market for us anyway. Wider sanctions are unlikely in the present political climate," Mr Ahmad says, "but the effect would be slight. Syria could cope."

For ordinary Syrians, exporting their agricultural produce and relying on imported goods from all over the world, any gains they may achieve from internal economic reforms could well be undermined severely by sanctions.

But probably of most concern to the government and its friends in the business community, is over the possibility of sanctions on its oil exports.

With oil being one of the country's principal foreign exchange earners, oil sanctions would drastically limit the availability of foreign currency.

If this were to happen, not only would fledging reforms be placed in serious jeopardy, but the car park outside the Dunkin' Donuts duty-free franchise at the border would no doubt become a lot emptier than it is today.


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