Economic articles

Syria...Inflation Eats the Fathers While the Sons Pay!

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If I were a father of many children with less money than needed to feed them, hearing distorted and always failing attempts, repeating your solutions for every problem you encounter, listening with ears blocked by excuses to the recurring complaints of your children and the solutions of the brilliant ones among them.  

As a father bearing most of the responsibility, you would choose one of two patterns, no third option. The first is to strive to find additional effective work to increase your income. The second is to resort to austerity and shortages, cutting expenses by canceling the dinner meal, for example, if you rely on it in the first place, and preventing a daughter from going to school, turning on the heater during harsh cold spells, giving up preserved and pickled foods, and having more children hoping by chance for a "small provision" hanging by a thread.  

If it is right to consider the government as a father and us as the children, it adopts the model of the second father in dealing with its ongoing economic crisis for years or even decades.

**Latest Medicine... "Rationalizing Consumption"**

With hunched shoulders, eyes brimming with disappointment, and hesitant voices, Syrian officials repeat to the "sons of the homeland" through the media the pretext of sanctions that make their economy dilapidated. Let's assume this is the only reason and pretend to believe that. We agree that this economy needs a new economy and that what the living situation of Syrians has reached is the level of shy famine, and money is measured by weight and inflation has reached the highest.  

It is evident from the government's recurring practices that resorting to rationalizing consumption is the only way out, through procedures to lift subsidies for different segments of society in addition to goods and services that are no longer subsidized if available in the first place.  

Many experts say that the right thing to do is to work on increasing production (first father model) and providing a good investment environment, including laws and flexibility that allow those willing to produce to produce.

**Necessary Steps**

We usually put money in our pockets when going to the supermarket to buy things we bring back in bags. But today we carry money in bags to buy necessities that fit in our pockets. This is inflation.

Inflation is faced by introducing higher denominations or by reducing cash payments relying more on digital, which the government is heading towards, forgetting that resorting to credit cards, which has been adopted by several countries for more than a quarter century, requires high quality technical tools and infrastructure in addition to high wages and salaries, not to mention a general culture and societal acceptance of an issue that requires smart devices for everyone, available electricity and accessible internet.  

**"One Hundred Thousand" Solutions**

Economics professor Ali Kenan suggested to a local radio station issuing a 100,000 Syrian pounds banknote, stressing that Syria's economic reality needs denominations higher than 10,000 pounds.  

Kenan said that issuing it will not affect the value of the currency because it is not linked to banknotes, but rather to production volume, imports, exports, and bank transfers. He said inflation is happening and people's payments are large. "In the case of buying a house or goods worth 5 billion, the buyer needs cars to transport the money."  

He explained that the demand for money in the Syrian economy is huge, and the higher the volume of transactions, the higher the demand, while there is no banking system to receive and give depositors the necessary amounts, as it has set limits on daily withdrawals, which pushed many traders to refrain from dealing with it and adopt the "cash" payment system.  

In a related context, the economics professor said that the average monthly wage should be 10 million pounds, compared to what it was before the crisis, equivalent to $600, i.e. 30,000 pounds previously, taking into account living costs of food, clothing and medicines.  

Kenan stressed that raising wages is necessary, and the government is capable of doing so but is worried. He pointed out that the wage bill in Syria is around 2.8 trillion, which can be increased to 6 trillion, doubling wages by 100%.  

Therefore, definitively adopting solutions without preparing a suitable environment to achieve the desired benefit from them may exacerbate problems. Getting rid of the rationalization mentality contributes to increased production, which has become very clear to be the "father of solutions". The mentality of the first father, who strives to increase income to feed his children, is the most effective. It is essential to listen to their complaints, endeavors and suggestions.

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