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HTS to ‘shrink the state’ through privatization and civil servant sackings

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Syria’s new Islamist leaders are embarking on a radical overhaul of the country’s economy, including plans to sack a third of public sector workers and privatize state-owned companies that dominated under the Baath Party and the Assad’s.

The first sackings began just weeks after the ouster of Bashar al-Assad on December 8, while the pace of the announced crackdown “against waste and corruption” has triggered protests by government employees, including fears of a “sectarian purge of jobs,” Reuters reported by Riham Alkousaa.

Reuters spoke to five ministers in the interim government formed by Hayat Tahrir al-Sham (HTS), all of whom described the broad scope of plans to “downsize the state.” They said this included the elimination of a large number of “ghost employees” (people who allegedly received salaries for doing little or nothing under Assad).

Reuters lends support to the sectarian narrative, arguing that under Hafez and Bashar al-Assad, Syria was organized as a “militarized, state-led economy that favored an inner circle of allies and family members, with members of the Alawite sect of the family heavily represented in the public sector.”

107 state-owned companies to be divested

HTS’s economy minister, 40-year-old former energy engineer Basil Abdel Hanan, told Reuters that there was a major shift towards a “competitive free market economy.”

The government under “interim president” Abu Mohammed al-Jolani (Ahmed al-Shara) will work to privatize state-owned industrial companies, which Hanan said total 107, most of which are loss-making.

Hanan promised to keep “strategic” energy and transport assets in public hands but did not name the companies to be sold. Syria’s main industries include oil, cement, and steel.

Finance Minister Mohammad Abazeed said in an interview that some state-owned companies existed only to embezzle funds and would be closed down. Abazeed said, “We expected corruption, but not this much.”

Half of the civil servants may be sacked

Abazeed said that based on a preliminary examination, only 900,000 of the 1.3 million people on the state payroll actually showed up for work.

“That means there are 400,000 ghost names. Eliminating them would save considerable resources,” Mr. Abazeed said.

Administrative Development Minister Mohammad Alskaf, who oversees public sector staffing, went further, telling Reuters that the state would need between 550,000 and 600,000 employees, less than half the current number.

Abazeed said that the reforms, which also aim to grant amnesty for penalties and simplify the tax system, aim to remove obstacles and encourage investors to return to Syria.

HTS’s goal is familiar: Reduce bureaucracy, boost exports

“So factories inside the country can serve as a launching pad for global exports,” said Abazeed, who was an economist at Al-Shamal private university before serving as a treasury official in the HTS stronghold of Idlib in 2023.

Since 2017, HTS has been attracting investment and the private sector in Idlib “with less bureaucracy and pressure on hardline religious groups,” according to Reuters.

The new government hopes for a nationwide increase in foreign and domestic investment to create new jobs as Syria rebuilds after 14 years of conflict, three ministers told Reuters.

However, for HTS to replicate the “Idlib model,” it will have to overcome a wide range of challenges, notably international sanctions that severely hamper foreign trade.

The question of the legitimacy of al-Jolani’s government could be raised

Maha Katta, Resilience and Crisis Response Specialist for Arab Countries at the International Labour Organisation, said the economy is currently not in a position to create enough private jobs.

Katta said, “I’m not sure it’s really a wise decision,” adding that restructuring the public sector “makes sense” but questioning whether it should be a top priority for a government that needs to revive the economy first.

While recognizing the imperative for interim leaders to act quickly to get the country under control, some critics see the scale and pace of the planned changes as overreaching.

Aron Lund of the Middle East-focused think tank Century International said, “They talk about a transition, but they are making decisions as if they were a legitimately constituted government.”

Islamist government to administer neoliberal ‘shock therapy’

Economy Minister Hanan said economic policy would be designed to manage the consequences of rapid market reforms to avoid the chaos of recession and unemployment that followed the “shock therapy” imposed on post-Soviet countries in Europe in the 1990s.

Mr. Hanan said, “The aim is to balance private sector growth with support for the most vulnerable.”

The government has announced a 400% increase in civil servant salaries, currently around $25 a month, starting in February. It is also mitigating the impact of layoffs through severance pay or by asking some workers to stay at home while needs are assessed.

Hussein El Khatib, Director of Health Facilities at the Ministry of Health said, “We are saying to the employees who are hired just to get a salary: please take your salary and sit at home, but let us do our job.”

Discontent Among Public Laborers Grows

But discontent among workers is growing. Workers have been showing Reuters lists circulating in the labor and trade ministries, which have scaled back Assad-era employment programs for former soldiers who fought alongside the government in the war.

One of these veterans, Mohammed, told Reuters he was dismissed from his data entry job at the labor ministry on January 23 and given three months’ paid leave. Mohammed said 80 other former fighters had received the same notice, which he shared with Reuters.

Responding to questions from Reuters, the labor ministry said that “due to administrative inefficiencies and implicit unemployment” some employees had been placed on three months’ paid leave to assess their work situation, after which their status would be reviewed.

The plans sparked protests in January in cities such as Daraa in southern Syria and Latakia on the coast.

Daraa Health Directorate employees carried banners reading “No to arbitrary and unjust dismissals” during a demonstration attended by dozens of people.

Demonstrator Adham Abu Al-Alaya said he fears losing his job. He says he supports the elimination of ghost labor but rejects the allegation that he or his colleagues are being paid for doing nothing. He was hired in 2016 to manage records and pay bills.

Abu Al-Alaya said, “My salary helps me meet my basic needs, such as bread and yogurt,” adding that he also works another job to make ends meet.

He said, “If this decision is implemented, unemployment will increase across society, which is something we cannot afford.”

Middle East

US waives human rights terms on $320m military aid to Egypt

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The US State Department stated that it has waived human rights conditions on more than $300 million in military aid to Egypt.

The statement emphasised that this decision was taken in consideration of Cairo’s “helpful role” since the outbreak of the war against Iran.

Egypt began receiving substantial support from the US after signing a peace treaty with Israel in 1979.

Since the late 1980s, the country has received approximately $1.3 billion annually in US military assistance.

A portion of this aid is subject to conditions related to human rights and democracy, which can be waived on national security grounds.

Withholding funds, including during the administration of former US President Joe Biden, has caused tension between Cairo and Washington in the past.

A letter dated 21 September and addressed to various congressional committees, obtained by Reuters, stated that Secretary of State Marco Rubio “decided to waive the certification requirement under the fiscal year 2025 Foreign Military Financing programme for Egypt of $320 million.”

This waiver was subsequently confirmed by the State Department.

An accompanying memorandum justifying the decision stated that this portion of military aid was “essential for counterterrorism, border security, or non-proliferation programmes, or otherwise important to the national security interests of the United States.”

The memorandum, dated 4 September and bearing Rubio’s signature, stated: “Exercising this waiver authority is critical to the US-Egypt relationship and to US national security priorities, particularly given the helpful role Egypt has played in the aftermath of Operation Epic Fury.”

“Operation Epic Fury” is the designation used by the US military for the campaign launched jointly with Israel against Iran in late February.

The State Department memorandum, whose authenticity was confirmed by two sources in Washington familiar with the letter, did not provide detailed information regarding what was termed Egypt’s “helpful role”.

The State Department’s annual decision on military aid to Egypt typically covers funds allocated for the preceding fiscal year, which ends on 30 September.

A State Department spokesperson stated that Rubio waived the certification in the interest of US national security and that the US continues to cooperate with the Egyptian government across a range of issues.

In an emailed statement, the spokesperson said: “This waiver recognizes the importance of maintaining security cooperation with Egypt at a time of significant security challenges in the region.”

The Egyptian Ministry of Foreign Affairs did not immediately comment on the matter.

The spillover effects of the Iran war have imposed a heavy toll on US security partners, including Egypt.

Owing to rising fuel prices and other disruptions, the Egyptian economy is passing through a difficult period.

Under the Biden administration, the US withheld portions of the annual military allocation on multiple occasions over Egypt’s human rights record.

In 2024, following the Hamas-led 7 October attack on Israel and the subsequent war in Gaza, the Biden administration set aside human rights conditions, disbursing the entire $1.3 billion allocation to Egypt for the first time in its tenure.

Human rights organisations have long accused Egypt, under the administration of President Abdel Fattah al-Sisi, of widespread human rights abuses, including torture and enforced disappearances.

This week, Egyptian police detained six journalists from a fact-checking and investigative media outlet, accusing them of spreading false information on behalf of the banned Muslim Brotherhood.

Egyptian authorities state that they have taken steps to address human rights issues. Sisi said stability is paramount and that the government supports human rights by working to provide for basic needs.

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Britain expands curbs on arms exports to Israel over Gaza risks

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Britain has significantly broadened its military export restrictions targeting Israel, suspending or rejecting more than 80 licences for items the IDF could use in Gaza.

This figure is nearly triple the number affected when the policy was first introduced in September 2024.

United Kingdom Minister of State for the Middle East Stephen Doughty said that as part of what he described as a “tighter system” for assessing exports to Israel, more than 50 further export applications have been refused since approximately 30 licences were initially suspended.

Under the initial decision taken in September 2024, 30 of roughly 350 licences were suspended after the British government concluded there was a “clear risk” that certain military exports could be used to commit or facilitate serious violations of international humanitarian law in Gaza.

The affected equipment included components for military aircraft, drones, naval systems, and targeting gear.

Doughty said additional measures adopted this month established what he termed a “double safeguard” mechanism within the approvals process.

Export applications must now be assessed both against existing international humanitarian law criteria and in light of Britain’s position on the legality of Israel’s presence in the Palestinian territories.

“We have so far suspended or refused more than 80 licences,” Doughty said, adding that he had personally examined each licence.

Despite the wider restrictions, British-origin parts entering the international F-35 fighter jet supply chain continue to be largely exempt.

The UK government argues that preventing British-made components from entering the global F-35 pool could undermine the programme as a whole and have serious consequences for the security of the UK and its allies.

Direct exports of F-35 parts intended specifically for Israel remain suspended.

Doughty defended maintaining the supply of components via the international programme, arguing that halting it could have severe ramifications for the broader European and allied security architecture.

Foreign Affairs Committee Chair Emily Thornberry challenged this position, arguing that the issue was political rather than purely legal.

Thornberry suggested adopting an approach similar to the Dutch model, under which components entering the international supply chain could be flagged as “not intended for aircraft bound for Israel”.

The initial suspension was implemented in September 2024 by then Foreign Secretary David Lammy.

Lammy stressed at the time that the measure did not constitute an arms embargo and applied solely to items assessed as usable in military operations in Gaza.

Since then, the policy has been tightened further under Prime Minister Andy Burnham.

The expanded export restrictions follow the Burnham government’s adoption of a more confrontational policy toward the Israeli government.

Foreign Secretary Ed Miliband drew sustained applause at the Labour Party’s annual conference in Liverpool after delivering a sharp critique of the Netanyahu government’s policies and defending the decision to ban trade with Israeli settlements in the West Bank.

Accusing Israel of committing war crimes in Gaza, Miliband stated that the British government heard public outrage over the conflict, telling delegates: “We hear you. You were right.”

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Middle East

Netanyahu holds secret UAE talks with Saudi Arabia and Arab officials

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Israeli Prime Minister Benjamin Netanyahu met with representatives of Gulf and Arab nations that lack diplomatic ties with Israel, including Saudi Arabia, during his weekend visit to the United Arab Emirates.

Sources close to the gathering told the Israeli newspaper Yedioth Ahronoth on Monday that representatives from Morocco, Libya, Jordan, and Qatar also took part in the meeting.

Netanyahu made a unannounced visit to Abu Dhabi on Sunday, where he met with the country’s leader, Mohammed bin Zayed Al Nahyan.

According to Israeli media, this marked the first time the United Arab Emirates officially confirmed a visit by Netanyahu.

The meeting was arranged by Mossad Director Roman Goffman “at the request of Saudi Arabia, which asked for Israel’s assistance against Houthi attacks in the Red Sea region,” according to Yedioth Ahronoth.

The discussions addressed Iran and the Houthi militia. The newspaper added that the Arab states heard from Israel that “Israel is prepared to assist countries in the region with air defence systems, just as it aided the UAE during the conflict with Iran.”

Conflict in Yemen intensified in September when Ansarullah militiamen launched a rapid offensive that seized Yemen’s entire Red Sea coastline, including the vital maritime corridor of the Bab el-Mandeb Strait.

The Yemeni resistance also imposed a blockade on Saudi Arabia’s energy exports and staged multiple attacks against the kingdom.

Saudi Arabia reportedly sought military assistance from the US to counter Ansarullah.

Washington declined to attack the Houthis directly, but announced that it would provide intelligence and targeting support.

Reporting on the same visit, The Jerusalem Post said Netanyahu spent six hours in the UAE and that the principal subject of his discussions with MBZ was Iran.

Citing sources familiar with the matter, the newspaper added that the trip came “after Netanyahu exerted heavy pressure on the United Arab Emirates to arrange a meeting ahead of the Israeli elections on 27 October.”

Separately, the Associated Press, citing a person with direct knowledge of the meeting, reported that Netanyahu’s visit to the UAE was arranged in part to ask MBZ to deny reports that he had warned the Israeli prime minister of an impending Hamas threat prior to 7 October 2023.

According to Israeli media, Netanyahu’s office denied the AP report, issuing the following statement:

“Fake news. The visit focused solely on strengthening ties between the two countries and on regional issues.”

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