Tom G. Palmer | Executive Vice President for International Programs
The Decline
Syria is located in an area of the world known for conflict, but it had one of the freer economies in the world from the 1930s through 1950s. In 1958, Egypt’s dictator, Gamal Abdel Nasser, connived with Syrian military officers to create a political union with Syria called the United Arab Republic. Though blessedly short term, the damage to Syria was enormous. The socialist Ba’ath Party took over power in a coup in 1963, and further nationalization and socialist controls led to a drastic economic decline. General Hafez al-Assad, a prominent member of the Ba’ath Party, was involved in that coup, as well as another in 1966; he finally seized absolute power in 1970 and aligned the country more clearly with the Soviet Union. As nationalization and state control grew, so too did corruption, cronyism, and the entrenchment of dictatorial rule. The full horror of state power was seen in Hama, where Al Assad’s military encircled the city and killed tens of thousands of people in indiscriminate shelling and bombing.
Following Assad’s death in 2000, his son, Bashar al-Assad, took over control of the state. Despite some initial hopes for partial liberalization and economic revival, the iron grip of the dictatorship squeezed the space for both free enterprise and free discussion. Declining production in the nationalized oil industry put the state in a more precarious situation and led to even more extortion of private-sector producers. Economic crisis and more grotesque human rights abuses followed.
“It became more and more difficult to run a business. . . I had to go through seven checkpoints just to get from my home to my factory. I could have been kidnapped at any of those checkpoints. At one point I was sleeping in the factory to minimize mobility as a way of protecting myself.”
The Collapse
The struggling economy and Assad’s violent suppression of human rights and freedoms sparked an uprising in 2011. The repression was brutal. The Ba’athist-controlled military, now more clearly a tool of the Assad family, unleashed total war on the Syrian population, which led to the emergence of a multitude of resistance groups and militias, the influx of extremist foreign fighters hoping to build a religious dictatorship on the ruins of Syria, and the very direct intervention of the dictatorships of Russia and of Iran and its Lebanese proxy militia, Hezbollah. To raise money to bolster his regime and pay back Russian debt, Assad took to kidnapping and ransom demands from anyone he thought might have money, in addition to major narcotics trafficking.
The economy shrank from an estimated $50 billion to less than $8 billion. Dr. Mazen Derawan, a Syrian-American businessman, who recently returned and is promoting free-market reforms, said, “It became more and more difficult to run a business. Assad activated the ministry of finance and customs authorities to extort money from businesses, pressuring people to pay them or they would delay their [shipments] or disrupt their business. . . . I had to go through seven checkpoints just to get from my home to my factory. I could have been kidnapped at any of those checkpoints. At one point I was sleeping in the factory to minimize mobility as a way of protecting myself.”
Eventually, Mazen was forced to flee the country; he could return secretly every few months to check on his business. Assad’s henchmen kidnapped one of his employees, put him in a dungeon, and demanded $3 million in cash from the company to release him. As Mazen said, “We didn’t have that much money, so they kidnapped two more employees and demanded $400,000 to release them. We ended up paying that because we didn’t want to exacerbate the problem, but the original employee stayed in prison for two years. They stripped him of his civil and legal rights.”
After more than a decade of internal conflict with various Syrian forces, in December 2024, Assad was forced to flee Damascus for Moscow and the safety of his sponsor, the Russian dictator Vladimir Putin who had bombed Aleppo and other areas into rubble to support Assad’s grip on power. Thousands and thousands of unjustly held people, including Mazen’s employee, were finally released. The collapse of the oppressive regime has inspired hope for a new future. But transitioning to a free society with a free economy will not be easy—as my decades of experience of working with partners to realize legal and economic reforms has taught me.
The Potential
The Economic Freedom of the World Report, which is published by the Fraser Institute, measures economic freedom in 165 countries. It’s based on five measurable variables: size of government; legal system and property rights; sound, stable money; freedom to trade internationally; and regulation that interferes with voluntary exchange.
Each country receives a score and a ranking; the top-ranked countries are Hong Kong, Singapore, Switzerland, New Zealand, and so on. Countries are ranked from the most free to the least free. After many years of socialism and cronyism, tyranny and dictatorship, where is Syria?
Syria is third from the bottom, followed only by Sudan and Zimbabwe. Let’s compare the third highest and third lowest in the degree of economic freedom with the results. If we compare per capita GDP per person, adjusted for purchasing power parity (PPP), in the two countries, we see that in 2022 Switzerland had US$90,138, and Syria had US$4,772. (The numbers are starker when comparing current US dollars, with Switzerland at US$93,245 compared to Syria at US$1,051.) The relationship between economic freedom and per capita output and income is quite clear and remarkable. Countries grow rich not because of geography (Syria has a coastline, while Switzerland is landlocked; Syria has oil, while Switzerland has mountains; etc.). They grow rich—in terms of the ability of the people to consume more, and thus to live longer, healthier, and safer lives—when they enjoy the institutions of freedom: the rule of law; protection of property in life, liberty, and estate; freedom of exchange both domestically and internationally; democratically accountable government; and the general presumption of liberty, rather than the presumption of state power over every decision in one’s life
We often hear from socialist ideologues that if you have economic freedom, the rich get richer and the poor get poorer. We can check the data. The percentage of national income that goes to the poorest 10% of any population fluctuates around roughly 2.5% across all countries. To put it directly: if you’re going to be poor, it’s better to be poor in Switzerland than in Syria. A poor person in Switzerland lacks a new iPhone. A poor person in Syria lacks potable water, sufficient nutrition, and saline solution to prevent deadly dehydration from cholera-induced dysentery.
Freedom is about so much more than just money. Money is just a means to acquire what we desire in life. Sometimes it’s a useful proxy measure of wealth. The evidence shows that more economic freedom leads to healthier and longer lives. In other words, health and long life are the gifts of economic freedom. Economic freedom enables you to see your children grow to adulthood and to hold your grandchildren, or even your great grandchildren, in your arms. It means seeing your children go to school, rather than to the fields. It means not living in fear of where the next meal for your family will come from.
Economic freedom brings more than just more and better consumption. It brings peace, as well. With more economic freedom comes greater willingness to live together in peace, as people realize mutual benefit through voluntary trade. When people exchange, rather than fight, to obtain what they want, the gain of one person does not have to come at a loss for others; as U.S. President John F. Kennedy famously said, “A rising tide lifts all boats.” Economic freedom also reduces corruption. As the involuntary interactions between citizen and state are reduced, the opportunities for state officials to extort favors also decline. When you don’t have to beg for permission, state officers can’t shake you down.
The Transition
Transitioning to a free state with a free-market economy will not be easy. Decades of government interventionism have generated a downward spiral. Revenge comes easily to people who have been wronged for decades. But following the collapse of the Assad regime, there is the potential for social reconciliation, prosperity, and harmony through a free-market revival.
Atlas Network is excited to support a newly established pro-liberty think tank, the Free Syria Center. Dr. Derawan is one of the founders; he is joined by a remarkable group of academics, analysts, lawyers, writers, and entrepreneurs. The Free Syria Center aims to “provide innovative scientific and practical approaches and solutions in order to lay the foundations” for a new legal system and institutions with “constructive discussion aimed at establishing an inclusive and dynamic Syrian economy that achieves the desired sustainable development and a decent life for the Syrian people.”
The initiative of Syrians is necessary to free Syria from decades of oppression and poverty. No outsiders can resolve the problems for them. The Free Syria Center is working to generate broad public understanding of how a rising tide can lift all boats, regardless of sect, language, or ethnicity, and to work with legislators and policymakers to navigate the paths of reform that can lead a pluralistic and independent Syria to shared prosperity, security of life and possessions, democratically accountable government, the rule of law, and peace.