syria. this interview recorded on the campus of george mason university in virginia. lasts about half an hour. .. there are there are. .. >> it went through a number of changes. it went from a centralized state of economy to a mixed economy that evolves from central state economy aspects and some market aspects, but not in the manner

that actually allowed the market to be efficient at all. >> when did this change occur from centralized next? >> most of these countries, the late developed countries, they underwent a period where they had to actually involve the masses in order to gain support. and legitimacy. when this process, for a variety of reasons began to create problems for the regimes in power, and when external support and pressure for some of these regimes and for some of the directions that were unable at the time moving towards a market economy around the 1980s took place, you saw a lot of these third world regimes, or the global south, begin to move from a central economy to more market oriented economy and the international financial institutions like the imf and the world bank played a role in doing so, because they would

literally place condition now is on loans. the conditionality and called moving markets into the economy. >> what role does the assad regime play in the economy? >> well, the assad regime from the very beginning from 1970, when the father, senior, gave power, he was intent on bringing in actually the business community into the fold, even in an informal manner, to actually -- [inaudible] after some years of serious marginalization of the business community developed by the same regime. so what syria or the regime ended up doing is the subject of my book, which basically it ended up collectively networking with big business and such a manner that allowed the state business relationship to mature and develop in the 1970s and

1980s, and eventually hijack the economy in the 1990s. this is what we call the business networks or colonial networks. >> who did the hijacking? >> the state business relations, basically amounted to networks that ended up controlling the commanding heights of the economy. the state has seen more strategic assets with his possession but a lot of big business, individual business, quote unquote were private became very important leaders in the 1990s and 2000s. >> what are some of these business that we're talking about the part of the networked? >> a sickly, anything that involves big business, whether it, earlier on it was manufactured in the 1980s and 1990s, and commercial ventures such as car dealerships and so on your but the manufacturing included everything from pharmaceuticals to ceramic

textiles. but in the 2000s, this became more of a telecom industry. free trade zones and things that i things that actually bring in a lot of money with a very high profit margin. most of this money was siphoned off by big business network and kind of left the majority of syrians in much worse conditions than they were because actually the regime that is, ended up also to quote unquote say the economy cutting down subsidies on which most people relied. that took place for about 10 to 15 years, and ended up in 2010, 2011 producing the kind of mostly resentment and discontent that led to the uprising. >> so, professor haddad, who was getting the money, the profits? >> the profits went to the individuals within these networks. the people that are involved in these networks include state officials. this would be public sector

managers, government employees at high levels, ministers, the prime minister -- [inaudible] and, of course, folks very high up in the regime including their own family. the point is that these networks, or the point of the book is that the state business networks exist in every society. even in the united states. they are usually, usually not always, but usually corrupt and they siphon off a awful lot of money. however, in some areas, some countries there are checks and balances. much more so than others. and in a place like syria, these checks and balances were not consistent to prevent these networks that operate anywhere in the world from actually running the economy into the ground. >> so could you give some examples, number one, of this network that you talk about in the u.s., how it exists? >> in the u.s., for instance, after the invasion of iraq one

of the major construction or reconstruction quote unquote ventures was, you know, commissions, somehow, or given somehow to various corporations that are very much in touch or close to or part of the network of, for instance, vice president dick cheney. whether it's halliburton, other companies, they ended up unfairly taking up these and they didn't do a good job at all by virtue of the result -- [inaudible]. these can networks -- another can of such network, if you would like to look at the much bigger scale, the entire seven to $800 billion bailout is a function of a very quote unquote legal state business network that operates that allows our system to bail out people that have caused the problem under legal pretense. the issue is in countries like

syria. the money is much smaller, and the checks and balances that what is the media or the democratic process, and other civil society associations and power centers is absent, completely absent. so even though the pot is smaller, divided in an even much more an equitable way, leading to resentment that will push people to the streets as opposed to the more sort of, you know, democratic countries where these things happen but there is a threshold, economic, and some democrat mechanism kicks in at a certain point, so it's important to not think that these willfully occur and the federal. >> so professor haddad, what about the globalization of the syrian economy? if a marriott wants to open in damascus or something like this, is there, is it just purely private? or is there a state role? >> it's actually been quite

close into the 1980s. after the 1990s, early 1990s you begin to see the centers open up. the issue with places like syria is that you can open up such centers and there are in existence today. and they proliferate. but a lot of these centers are very carefully selected as opposed to countries like egypt and tunisia. very careful to limit investment in any way, shape, or form. however, you will find bmw, four seasons hotels chains and so on. you will find them but in smaller numbers and they're always connected to some sort of deal whereby the government has some control, if not over the ownership of the property but the usage, the usage rights. >> so how has the government made this system inefficient? what has caused the inefficiency? >> the inefficiency is really a function of how economic -- were

made based on the members rather than on a broader economic strategy that's part of the future for the country based on its resources, its endowments, human and other resources. and in the end you had what i call the circumscribe liberalization process where the benefits of the liberalization process were siphoned off by these networks as opposed to being spread out into society. and in the end, the policies became so rampant that they started producing contradictory outcomes. so you would have -- allow you to mobilize the sale of certain brand of jeans or bananas, for instance. you actually are given some privileges and distinctions that the value to set prices, and that ends up to reduce competition and increasing the

profit margin of people who are well connected and reducing the economy to become productive, given that much of the support went into commercial and trade ventures. not into manufacturing and labor intensive manufacturers. so you had an effect of an increase of unemployment and increasing the profit margins of a very small number of people at the same time. that was exacerbated by the decline of subsidies and created, we have seen a quite a bit of dissent, especially in the rural areas outside of the main part of the cities. >> professor haddad, who are some of the players that we might not have heard of thomas some of the large business leaders in syria? and what role are they playing in the current crisis in serious? >> well if you know, the conquest -- probably a different trajectory at some level, especially after the first few months. it became a totally different kind of thing. it started out as resentment and

rebellion against -- >> economic resentment? >> it was makes. it was really problematic to look at the arab uprising and pin it down on one thing because we were talking about several decades of a particular kind of system that was politically inefficient and definitely undemocratic. so economically efficient early on, they're gone but then actually declined and became quite problematic in terms of gaps between the haves and the have-nots. but all of these systems, all of these reasons combined together to create a readiness to act. and the assad regime, they don't act unless there might be a positive outcome but at least not -- [inaudible]. when that movement took place in tunisia and egypt, serious became more emboldened compared to years before. and the economic issues played a major role at the beginning, especially at huge tycoons, a

cousin of the president was considered basically the symbol of the economic dimension of the uprising. because he basically controlled as many of us assume a good portion of the new private economy. and that was also by design. these kinds, this kind of, this kind of transgression caused many people to feel in a country that supposedly socialist, they feel that the system has basically, is completely broken. and the economic, i mentioned, coupled with the fastest, there are no avenue for dissent in syria. coupled with the increase in the declining, well, the decline of subsidies, created a situation of hopelessness in many parts of

syria, not all parts, which explains why city has prolonged the uprising as opposed to the other countries. i mean, there was something about the syrian political, economic system that provided a bit more stability. however, what we call the dominant effect instigated the uprising's early on, and it took a while for the entire country to be engulfed in this process. because the cities have better infrastructure. we are not just yet ready to go to the streets, even if they're not happy with the regime. >> published a stanford business networks in syria is written by bassam haddad, who was head of the middle eastern studies program here at george mason university. professor haddad, is there a black market in syria? >> are you looking to invest? right now, there's no market in

syria at this point. before him, absolutely. one of the ways the networks, which is a good part of the book, one of the ways the networks actually a committed so much capital in the '70s and '80s is through the black market and through illegal trade. because certain power centers and power, you know, individuals could actually enforce transgression so to speak. and allow for this kind of market to grow almost indefinitely, creating new kind of social groups that were beholden to the state, which is why these networks were quite solid for about two decades. and he even took a while before the uprising actually began to break them down. and they didn't even break them down at the highest level. a broken bat at the lower levels when people thought that the regime might not actually make it. the business network members

sort of -- even if in a quiet way. so the black market in illegal trade, smuggling, basically created the sources that said networks -- [inaudible]. after that period the rule of law was applied a little bit more broadly. not necessarily for any other reason, other than making sure that they would be no new entrants to this kind of special club. >> in the western press during this crisis or uprising in syria, it was always described as the commercial center of the country. tell us about that activity. >> for several hundred years, if not more, it was basically sort of the meeting point between europe and asia. and has always developed, was developed as a center of trade and commerce.

that continued, of course throughout the centuries into the 20th century, and made it what it is in terms of its trade, in terms of its trade potential. now, it's also larger than the capital, damascus, not by much but it's a very large city. it's not just the second city. so has been a place where many traders and manufacturers as well preferred because it was historically quite a vibrant or because it was far away from the center where they might have a bit more freedom, even though that margin of freedom was not wide. >> where are you from originally? >> i am lebanese, but my mother is sick and spent an lebanon supported history, correct? >> right spent is there a lot of trade between lebanon -- how would you describe lebanon's economy? >> it's going to take up to saturday because the lebanese

economy is really very difficult to describe the nominally it's an open capitalist economy, but the kinds of networks and crony network, that exist in lebanon, turned this kind of seemingly open economy into peacetime and created the situation where is there difficult to move up, hence, many lebanese, many young men and women end up leaving the country to find jobs elsewhere. you see them in various places in the country is very small. so lebanese, the lebanese economy actually provided syria with the gate to the world in the 1980s. that ted was a two-way gate. so you will get those who are not actually sold to the market

officials are lebanon in the 1980s, then provide these goods to certain layer of the population, the upper layer. then in the 1990s when the trade routes were more open, lebanon continued to be one of the ways that this took place. but in the '80s lebanon, turkey where the two places where the legal trade -- the legal trade in smuggling allowed the black market to thrive, and created capital accumulation that literally -- new social group had developed an interest in the stability of the regime. hence, we talk about the syrian regime as brutalize as it is, we also should not assume it was only violence that was basically causing the long-term stability. it was also the support of this groups, as well as the distributed approach of the syrian state, the welfare of the state that continued from the

'60s, '70s, '80s, begin to break down in the 1990s and only recently did these policies begin to mean less and less to the point where people felt they aren't getting what they want politically, economically are not getting what they want. and, of course, they're cutting subsidies in the end on food and gas was the last straw for making many people in the syrian, in syria feel hopeless. and those, majority existed as i said earlier, is in the countryside or the smaller cities. much more so than the main cities. >> professor haddad, does the military in syria played a role in the economy? >> as -- the military is not where the local part is that it's actually the duty service branches that have come to dominate serious sort of structure. this is where power and authority like him much more so

than the military. of course, the military is more than 300,000 strong. it's powerful in that sense but some authority in terms of ability to act autonomously, even if limited the syrian regime is very -- from the egyptian viewpoints. whereby the military doesn't have the kind of command, independent command and control that will allow the military to come at any given point and tell the president, look, you've got to leave. you know, we've got to deal with this crisis through this kind of, you know, arrangement whereby the head of the military and i suppose the regime in some way. this is not possible in syria. the military does not have that power. those who have power at very close to the presidency, and distributed through the service branches more than a dozen of them, and these elements, socially and politically and economically, are so intertwined with the regime that this kind of option or schism is really

not possible. it might be in the future when there's an imminent collapse, but at this point is completely organic. not allowing for these kind of options. that's what a lot of outsiders don't understand, didn't understand why the syrian regime is likely -- [inaudible] for quite some time and that's because schisms are not as possible. it looked like for a lot of the people inside the regime, whether they support the top leadership or not, it looked like they know that the part of the regime is also their fault. so the rational calculation there of, you know, the entire ship will sink or swim, and there's no option for schisms that will allow for an exit. so even if a group of people within want to succeed or wants to try to make a deal, they will not be considered legitimate because of their, you know, very high proximity to the reins of

power for decades. whereas in egypt, the military has, whether or not to participate in the brutality of the regime for decades, which as a country, united states supported for several decades, these sites have some autonomy and are able to actually make an argument that the departure of the head of state is going to be meaningful. in syria, the departure of head of state without the departure of the mechanisms is not going to be very easy, be meaningful. >> how do you see the uprising in syria playing out over ask number of months, x number of years? >> oh, i'm hoping it will not be x number of years, because the death toll has surpassed 20-25,000. some people say 40,000. you know, we cannot be sure in either case. it's such a human tragedy taking place in syria, where every time i want to address the situation, i'm really not able to think

about strategy or think of the source because it's no longer about an uprising that is democratic and against the regime here sure, the regime still pictorial and has been but authorizing has become a lot more dilute, a lot more infiltrated and is actually engaged in practices that they didn't use they didn't used to engaging. that's one of the reasons why there's a stalemate today because the opposition are many members of the opposition have actually lost the legitimate support from a good number of good, you know, a percent of the population, as was having included elements, elements from outside so you. not even see. kind of like the iraq situation as we've seen the past few months, the suicide bombings but a lot of this is actually, i mean a lot of it is into but a lot of it is extra. the opposite -- opposition connection -- have no interest in democracy but have their own

politics and interest in removing the regime, same with the united states and europe, as well as turkey, a lot of these countries have had their own problematic human rights record, and supporting the opposition for all three are motives is something that is not jelling with a lot of people in the region. because there's no believe these countries are supportive of democracy because they are either not democratic as we saw in qatar, or with the united states, they have been supporting object when reaching for decades and continue to support those but not democratic. all of these countries is actually not a legitimate person, not a credible person. >> here in the u.s. we often judge our economy by the unemployment rate, the gdp, things like this. give us a snapshot of the current syrian economy. >> the current syrian economy cannot be actually access.

the numbers are just not there. even from the very beginning the economy was not as transparent as one would've liked. but earlier on, the syrian economy was based on a combination of aggro industry, manufacturing, and oil sector. where about 60-65% of the foreign exchange in syria came from oil sales, because of its ability to actually make use of its 300, 500,000 barrels a day oil it produced. but it may be an economy that rested on these pillars, and with time after the 1990s it rested on an increase in trade, an increase in telecom type industries. but is really never reached the point where it's capitalize on its early, the early development of industry in the '60s and '70s especially. in other words, a lot of potential, again, was, fell

victim to colonial networks. that were involved in, i mean, this process basically was part and parcel of regime trying to convert its power, and sometimes the more inefficient basically secure power than the efficient ones. we also have to recognize that countries like syria doesn't exist in the most safe neighborhood of the world. it exists in a very volatile neighborhood with a very powerful and aggressive and brutal actors around it, including israel, including some of the other countries that have been in the region for decades. so you have also a dimension that -- it's invisible in the way because we are looking at syria into it, but actually there are reasons why for instance, the syrian regime would invest way too much in its military as opposed to in other areas. and that's not just to protect

the country. of course, it's also to protect itself, but it's also important, not to discount the regional and international context in which countries like syria exits. this is what explains the stalemate. syrian situation much more in the same situation. the -- as opposed to the iran, as opposed to the iraq regime, sorry, kuwait, qatar, saudi arabia actors. is really also about china and russia on the one hand, and the united states and europe on the other. so we have three levels of stalemate. local, regional and international, simply because there's so much at stake. so a country like syria, or a regime like syria for the past 40 years have had these calculations in mind. so this is not to excuse the regime whatsoever. this is to understand, the outcomes of what we have been witnessing for the past several

decades involve these kind of calculations that many of us don't take into account. >> and we've been talking with bassam haddad, "business networks in shyria: the political economy of authoritarian resilience" is the name of this book. it's published by stanford. professor haddad is also head of the middle eastern studies program here at george mason university. this is a booktv on c-span2. >> tell us what you think about our program this weekend. you can tweet us at booktv, comment on our facebook wall, or send us an e-mail. tv, nonfiction books every weekend on c-span2. >> with just days left in this month and this year, many publications are putting together a year and a list of notable books. booktv will feature several of these lists focusing on nonfiction selection. these titles were included in the "christian science monitor"'s 15 best books of

2012-nonfiction. >> for an extended list of links to various