Credit crunch afterthoughts

Young professionals and entrepreneurs discuss the challenges and opportunities for Syria in face of the global financial meltdown. Establishing a small-size, entrepreneurship-style business at these turbulent economic times seems to be what some are going for; others are scared to make an investment. How do Syria’s young men and women view their lives as banks around the world get bankrupt? Julian Weinberg investigates.

“Every crisis will open some markets and close others,” says Bahoa, a recent graduate of Kalamoon University, having obtained a government education scholarship. He is now waiting for his government employment contract to begin.

Perhaps unfazed, or just cool under pressure, Bahoa’s response was similar to a number of other Kalamoon University graduates who spoke with Forward Magazine. “Our stock market will gain a lot of experience from what is happening now in the world, for the benefit of making a better system,” continues Bahoa, commenting on the Syrian Stock Market that has just begun a trial trading period. With stock markets around the world crashing, one would be forgiven for thinking that the timing could have been better. Bahoa feels the timing could actually be to Syria’s advantage, as long as lessons are learned.

Crisis? What Crisis?

There was far from a unanimous opinion among the graduates on how the Syrian economy would react in response to the global financial crisis. Echoing statements by the Syrian ministers that the economy is somewhat sheltered from the international banking sector, Adnan, a business analyst with a Syrian software company, comments, “there is a separation wall between internal and international markets,” forecasting that it is the private sector that will suffer, but the internal market will be unaffected. Tareq, an employee with an international advertising company, expects international companies to suffer, but any effect on the internal market is a long way away.

Nadine, who now works for a large confectionary company, was quick to explain the position of the private sector as she saw it: “Many people are being fired in the private sector because companies want to minimize costs. Prices of raw materials are decreasing. Before, companies managed to adapt to the high prices [which had soared throughout 2008] and now must adapt again in order to manage costs.”

What is the effect of these fluctuations? “Exports and imports are effected, and production has decreased, plus there are not enough raw materials so production lines are effected,” she explains. Nadine’s analysis matches that of Abdullah Dardari, Deputy Prime Minister for the Economy, who explained in an interview with Reuters on February 4 that, “Syria’s foreign trade constitutes 70% of GDP, and this means that its vulnerability to external factors is very large.”

Entrepreneurship amid turbulence

“[The crisis will] generate new opportunities for those people who can introduce themselves into the market when before they didn’t have the resources,” says Anas, an employee at a children’s TV company. Many of the Kalamoon graduates were brimming with ideas for how Syria could actually benefit from the global financial crisis. Since large companies have large overheads, now was an “opportunity to start a business” because entrepreneurs have much lower costs: As big businesses fail, small businesses could flourish.

“Promotion and marketing companies, so important for businesses, and generally very expensive, are the arena new companies could enter at a lower rate, and thus reduce the costs for domestic companies too,” says Adnan. Anas, meanwhile, believes that now is the perfect time to invest in computer software and open a small store, due to the decrease in the cost of computer materials now. New companies could take advantage of those looking for work and hire with lower wages, thereby utilizing domestic talent through training and restructuring, while decreasing the company’s costs keeping them competitive. “Syria is in a very promising position,” Anas continues. “We have very little here, and people can find great opportunities if you think deeply”.

Not everyone was as optimistic, however. Adnan, who was planning on finding work in the Gulf, has decided to stay in Syria and develop his skills here. “There is a huge risk in investing now; I don’t really know what will happen, maybe the whole world will collapse,” he says with a worried look on his face. Adnan has good reason to be worried, as international stock markets have plunged over 30% in value, international banks have gone and are going bankrupt, and unemployment rates around the world are soaring.

What will the future hold?

Syria will continue to move to open its market, explains Bahoa, citing the example of the negotiations with the EU to finalize an already initialed Association Agreement. “[The] old management style will not survive in the new environment, and must change towards global marketing,” suggests Bahoa. “Organizations must see that human resources are the most valuable asset.” With as rich a pool as these young professionals, Syria may be in good hands after all.