After Six Years at the Helm, Dardari Departs

The departure of Abdallah Dardari, the man who most symbolised in the last decade the transition of Syria from a state-led to a market-led economic system, represents the most significant change in the newly-appointed Government.

Mr Dardari was Deputy Prime Minister in charge of Economic Affairs since 2005, a position from which he oversaw Syria’s economic policies. Mr Dardari is largely credited with driving the Syrian economy towards a more liberal system and was behind most of the laws and regulatory decisions passed in the last years in the economic field.
 
Prior to his appointment as Deputy PM, Mr Dardari had been since 2004 in charge of the State Planning Commission, a position he held in conjunction with his role as Deputy PM until 2007. From that position he produced the country’s 10th Five-Year Plan running from 2006 to 2010, which formalised Syria’s liberal drive, sanctioned by the Baath Party in 2005.
 
During its 10th regional congress organized in June of that year, Syria’s ruling party endorsed what it called a Social Market economic development model, which was supposed to enable Syria to liberalise its economy while maintaining a strong social safety net.
 
Mr Dardari was much appreciated by international institutions. A media-savvy person – for several years he worked as a journalist and was the head of the Damascus bureau of Al-Hayat, a pan-Arab daily - he spoke fluently French and English and was at ease with a broad and diverse range of counterparts. Before his appointment at the State Planning Commission, he had held the position of Deputy UNDP Country Representative.
 
One of Mr Dardari’s strengths was his combination of a very good knowledge of the workings of the Syrian State and his understanding of the need for his country to liberalise its economy.
 
When Bashar Al-Assad became President in 2000, he appointed to his Government Syrians with broad international experience such as Ghassan Al-Rifai, who was appointed Minister of Economy, or Issam Al-Zaim, who worked both as Minister of Industry and then head of the State Planning Commission. 
 
Both had stronger economic credentials than Mr Dardari, but none had the inner knowledge of the extremely bureaucratic system that they were supposed to overhaul. They were replaced after relatively short spells.
 
During his long stay at the Government, Mr Dardari was often at odds with the second strong man of the Government’s economic team, Mohammad Hussein, the Minister of Finance.
 
Mr Hussein liberalised Syria’s financial sector and encouraged the entry into the market of private sector banks and insurance companies; he also oversaw the opening of the Damascus Securities Exchange and overhauled the country’s tax system.
 
Although Mr Dardari was formally more senior than him in the Government, because of his position as Deputy PM, Mr Hussein, a member of the Regional Command of the Baath Party, formally the ultimate decision maker in Syria, yielded more political influence.
 
In the last years, the reforms pushed forward by Mr Dardari appeared finally to start taking effect. Growth was strong and 2010 was a record year for foreign direct investment.
 
However, eventually, in spite of his many successes, Mr Dardari paid the price for following economic models adopted elsewhere in the region that focused on services and real estate, and that neglected to pay more attention to more productive and labour-intensive sectors of the economy such as manufacturing and agriculture, a backbone of the economy for decades. Also, services provided by the State, such as health and education, continued to deteriorate. The latest five-year plan, starting at the beginning of this year, tried to rebalance priorities by giving greater importance to education, for instance, but it simply came too late.
 
Mr Dardari also failed to shake an extremely conservative bureaucracy and was seen as too close to the interests of the best connected businessmen. Corruption is as widespread as at any time in Syria while the judicial system remains totally inefficient and fails to provide necessary guarantees for investors. In a recent meeting with local businessmen Mr Dardari was blamed for not doing enough to ensure fairer competition among private investors. Whether Mr Dardari can be blamed for not solving politically sensitive issues is, however, a different story.

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