Syria’s condition: Bashar al-Assad

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Hello and welcome to the Intelligence on Economist Radio. I'm your host, Jason Palmer. Every weekday we provide a fresh perspective on the events shaping your world. In America, the question of whether to compensate descendants of slaves is again being raised. But beyond lie many more questions. How much is enough? How to distribute it? And how to make sure it tackles inequalities that have long histories. And start with the outermost utensils and work your way in. Don't tap the teaspoon against the cup as you stir. Always use formal titles. We ask why civil servants in Bangladesh, Pakistan and India have to take Victorian era etiquette lessons. But first, In Syria this week, a sweeping new set of American sanctions takes hold. State Department spokesperson Morgan Ortegas says the goal is to cut off the revenue that President Bashar Al Assad uses to wage war against his people.

We begin a sustained campaign of sanctions against the Assad regime under the Caesar act, named after the brave photographer who six years ago brought the world documented proof of the Assad regime's brutality against fellow Syrians.

The defector, codenamed Caesar, smuggled out tens of thousands of images of men tortured and starved to death in regime prisons. The sanctions come at a hard time for Mr. Assad and for the country's exhausted people. After more than nine years of fighting, Mr. Assad has all but won the civil war. The few rebel holdouts are greatly weakened, but the regime now faces new challenges that can't be resolved with force.

This ought to be a great time for the regime of Bashar al Assad. He's been fighting a civil war for nine years, and he's really pushed his enemies back to the periphery of the country.

Nicholas Pelham is the Economist's Middle east correspondent.

He's regained the major cities and he's reduced the level of fighting to what last month was the lowest number of civilian casualties to date. But just as he seems to be gaining the upper hand militarily, he's floundering badly economically. The country is in a really desperate state, and he doesn't have the money to rebuild and really not even to feed his own population. The value of the currency has collapsed. Prices have increased three times since the start of this year, in kind of 50 since the war began. I've spoken to farmers who are closing down because demand has collapsed for meat. People up struggling to afford falafel and the food of the poor, let alone the cost of a chicken. You've now got an outbreak of demonstrations in some of the loyalist heartlands of the regime, people chanting the same slogans that the opposition used to chant when they began the Civil War in 2011.

So what's gone wrong here? Why haven't the military gains been matched with some economic competency?

The regime tends to blame the outside world. It says that America failed to bring down the regime militarily and is now trying to do the same economically. It points to a new American law, the Caesar act, that comes into effect this week, which bans trade or financial transactions with the key sectors that prop up the Syrian regime, including reconstruction. I think it's wrong to attribute all the problems that Syria has to American sanctions. This is a country which, don't forget, has been put in broken by nine years of war. It's smashed and it's still divided. And in effect, Mr. Assad has spent almost half of his 20 years in power fighting a civil war. It's devastated much of his urban infrastructure. It's destroyed his manufacturing hub in Aleppo. It's left almost half the population displaced or chased them abroad. So he is really the author of his own economic woes. And the regime simply doesn't have the resources to rebuild. Its main patrons, Russia and Iran, are more interested in taking money, getting what they can out of Syria than putting money in. On top of that, there's Lebanon, which was Syria's economic window to the outside world. It was the place where businessmen would use Lebanon as their banking centre. And now Lebanon itself is in economic chaos.

So what has Mr. Assad done? As all of these sources of support.

Have fallen away, as is his wont, he's tried to blame others. He sacked his Prime Minister, he's introduced a series of economic measures to try and hold onto what revenues he still has in the country. He slashed imports by 50%, he's stopped his banks from issuing loans, ATMs have pretty much shut down across regime held areas. And indeed he's sort of been fleecing the most powerful businessmen in Syria, including his cousin Rami Makhlouf. But all these seem to be kind of piecemeal measures. They seem desperate. It has to be said that there's not really much vision coming from the top. Bashar Al Assad has been surprisingly absent from the political scene. He hoped that some Gulf states might bail him out, but that seems to be floundering as well, because the Caesar act is going to deter many who might have engaged with the regime from banking on Mr. Assad. Perhaps his two best hopes are ironically the areas which are outside regime control because they will not be subject to the Caesar Act. So the kind of two areas in the north, and it might be that he tries to increase trade with them, that he uses these areas which were previously kind of at loggerheads with him as middlemen to access the outside world. And then of course there's Hezbollah. It's a Shia armed group which is Lebanon's most powerful force and has been heavily involved in the fighting in Syria. In Lebanon, they control the only airport and they control many of the crossings into Syria. So it might be that you're going to see increased reliance on Hezbollah to bring in imports from the outside world. But all this is going to lead to an increase in reliance on smuggling rings, it's going to lead to an increase in racketeering. This isn't really the basis for trying to manage a country's economy.

And so can he find his way out of this? Is there a chance that all this could bring Mr. Assad down at last?

Mr. Assad has been remarkably successful at defying predictions for his demise. But this time, it has to be said, there is a difference. The economic crisis in Syria is unsettling the regime in a way that the war rarely did. Even at the worst moments of the fighting, Mr. Assad managed to retain the loyalty of half the population. He particularly relied on minorities, whether they were Christians or his own Alawite base. They're a kind of splinter sect that comes from mainstream Islam. And then you have the Druze minority as well. But all seem to be wavering. They wonder what's happened to the peace dividend. They wonder whether Mr. Assad is going to be able to feed them. It looks like the whole patronage network is crumbling before their eyes. And so they're all beginning to wonder whether he is not the solution to their problems, but the problem itself.

Nicholas, thank you very much for joining us.

Jason, thank you for having me.

On this date in 1865, two and a half years after President Abraham Lincoln's Emancipation Proclamation, Union soldiers arrived in Texas to report that enslaved people were free. The Lone Star State was the last to receive the news. Since then, the 19th of June, or Juneteenth has been celebrated as a way of commemorating the end of slavery in America.

Slavery is the original sin.

Last year, the holiday was marked by a historic hearing in Congress.

The matter of reparations is one of making amends and direct redress, but it is also a question of citizenship.

For three and a half hours, the House of Representatives considered a bill to create a commission that would address the lingering effects of slavery and and consider a national apology for the harm it had caused.

National reparations policy is a moral, democratic and economic imperative. We as a nation have not yet truly acknowledged and grappled with racism and white supremacy that has tainted this country's founding and continues to persist in those deep racial disparities and inequalities.

Today, with protests in recent weeks highlighting racial tension in America, compensating the descendants of slaves with reparations is again a subject being debated in Washington and beyond. It's one step down what would be a long road in today's America, tackling the ethical, philosophical issue of how to make amends for a long, dark chapter in the country's history. Tucked within that question of how, though, are the onward practical considerations. And economists have already begun thinking about them.

Really, there's two big questions there.

Callum Williams is a senior economics writer for the Economist.

The first is if the US Government did decide that it wanted to embark on a reparations program, how much money should it pay? And two, what's the form in which that money should be paid? Cash, grants, loans or other sorts of spending.

And so what about past instances of reparations? Can they be any guide as to what to do in this case if it should come to pass?

There's been actually quite a few examples where governments have decided to pay reparations for past evils, including in the us, in terms of how much to pay, there's a few precedents that have been set. One is to look at certain costs that certain groups have incurred as a result of maltreatment. So, for instance, if you look at some of the claims that Israel put forward to West Germany following the Second World War, that argument rested partly on the idea that Israel had incurred large costs in resettling people in Israel. And so the delegation from Israel sort of said to Germany, we need to have some sort of compensation for that. And the second approach is to try and calculate the lost income and wealth that certain groups in the past have suffered as a result of discrimination and being singled out in an illegal way. So, for instance, if you look at what happened following America's forced relocation and incarceration of Japanese Americans during the Second World War, there was an official report into that in the early 80s which found that those people had been unfairly and illegally deprived of around $2 billion because their businesses had been forced to close and so on. And in the end, in the late 80s and early 90s, the US government did in fact pay out roughly that sum to around 80,000 victims.

And so how do those examples inform the discussion about compensating the descendants of slaves?

To put it bluntly, there's not really any consensus about how to do this. Different economists have very different ways of going about it. So one approach is to focus on what was promised to ex slaves at the end of the American Civil War, and that was basically summarized as 40 acres of land and a mule. So just focus on the land. Assuming that each slave family were to be Given that 40 acres, that would imply the US government paying around $160 billion. That's roughly what buying all that land would cost today. Another, which is favoured by other people is to look at the gap in average wealth between black households in America and white ones. Now, the gap in average net household wealth is about $800,000 between black and white. So if you were to decide as a government to make good on that and to compensate people for that, then you'd be paying roughly $8 trillion, which is about 35 to 40% of GDP. So a very significant sum.

But even if a number could be settled upon, you said the other issue is exactly how to disperse it. I mean, what are the issues there?

So some people say you just need to give people cold hard cash. These have some downsides. If you look, for instance, at the research on inheritances, and this actually is research that's taken place in Sweden. Most people tend to pay off their windfall pretty quickly. They tend to spend it a lot faster than economists might assume. And so if you're interested in sort of permanently solving economic equality between black households and white ones, then it might not be the best solution. I mean, there's another issue with cash payments, and this is an issue that's been really identified by scholars who are very pro reparations, who nonetheless argue that what could in theory happen is that reparations payments could actually increase non black incomes relative to black ones. And that could happen if spending that was facilitated by those payments went largely to non black owned firms.

So what's the alternative? What would economists propose that you do instead of.

So just to pick one example of something that's becoming kind of more popular over time is this idea of baby bonds. Those are basically cash payments that are given in particular to poor children and they're sort of held in trust potentially by the government until that child turns 18. And then that money can't just be used for consumption spending. It has to be used for some kind of broadly defined productive use. So that might be used for like college tuition or a down payment on a house or starting a business or so on. And so some people would argue, and there is some research to justify this view, that that's a potentially more effective way of permanently closing the gap in net wealth between black households and white ones.

And the other question is, quite apart from this academic discussion, how much appetite there is for this in America, both in the government and among the people at large. What's your take on that?

I think partly because of the extremely high cost of doing this, public opinion is still in the majority against this idea. That said, there is a kind of long term trend towards greater support for it. So there was a survey last year which found that about 30% of Americans thought that it was a good idea. And that's kind of double the level that said that they were in favour of the idea at the beginning of the 2000s. And I think it's also the case that it's become generally a bit more of a mainstream issue. If you look at a lot of the now ex candidates for the Democratic nomination for president, quite a lot of those people said that they wanted to look seriously at this question. Joe Biden said last week that he was very keen on studying this issue. And I think the protests that have rocked America in recent weeks have also drawn attention to this question. So we're a long way off this becoming official public policy, but certainly the debate is moving in that direction.

Callum, thanks very much for your time.

Thank you.

It's not just politicians and policymakers grappling with the legacy of slavery and economic inequality. Many companies, including Twitter, Nike and the National Football League, have declared Juneteenth a company holiday this year as part of a broader push to look at race in their businesses and in America. This week, our sister podcast the Economist Asks talks to Melody Hobson, chief executive of Ariel Investments, which is one of the largest asset management firms with African American ownership. She says corporate America has woken up to the need for action, not just supportive statements.

One of us really is all of us. And racial unrest, civil unrest, economic inequality is bad for business. And so I think they see it as not just a moral imperative, they also see it as in their own enlightened self interest, to be responsible for doing their part in moving the needle on this issue.

You can find the Economist Asks wherever you get your podcasts. In India, Bangladesh and Pakistan, becoming a civil servant requires months at training centres learning etiquette and Victorian table manners. Courses like the Art of Managing Bread and Rolls are meant to help trainees navigate their new jobs. It's all very genteel, but is it really necessary?

The etiquette lesson started when the British Raj ruled what is now Bangladesh, Pakistan and India, and they've continued ever since, particularly in Bangladesh and Pakistan.

Susannah Savage reports on Bangladesh for the Economist.

And these go on throughout the entire training that people undergo to become civil servants. So in Bangladesh that's six months, in Pakistan that's up to nine months.

And so what are the lessons themselves like? What kinds of things are being taught?

So at the Bangladesh Public Administration Training Centre, civil servants spend the lessons learning how to eat with a knife and fork in the continental, as opposed to American style, which they describe as cutting and eating each mouthful in turn with the fork and. And the left hand tines down, whereas the American one would be cutting up everything and then scooping it up with the fork tines up. So that's very specific. And in Pakistan it included sort of things like how to talk to someone on the phone, how to address people above you, how to stir your tea.

So I understand that the historical precedent here, but why are they still being made to do these classes?

There are lots of different reasons given for this. So I interviewed a civil servant who completed her training not long ago in Pakistan. Her name was Naima and she sort of said that the old ways are the best ways and that the reasons they're Stuck in Pakistan, even long after the British left in 1947, is because they suit the conservative culture in Pakistan and it sets the Pakistani civil service apart from other types of business, other types of work culture. I spoke to a few different civil servants in India and Bangladesh and they felt a bit differently. Some of them felt that it was to sort of make sure that the civil service remained the domain of the elite, that you could only really enter if you were from a privileged background. And I spoke to a social scientist from the University of Bergen who told me that in such hierarchical places like South Asia, this helps to reinforce that hierarchy and it gives bureaucrats a sense of self importance.

But it's not elective, right? People have to take these classes.

Is it easy to pass them in Pakistan? They used to be graded practically. So I spoke to a civil servant called Sarim. He described how he got in trouble because his spoon touched the side of his cup when he was stirring his cup of tea. And that you would get in trouble if you put too much food on your fork or if you made a noise with the knife scraping the plate. You would risk being sort of losing points and not passing your entrance exam into the civil service. Now that's been adjusted so that it's a multiple choice exam on paper where you answer questions about how you should behave rather than have having to demonstrate how you're behaving. I don't think people really fail them, but I think it is quite a sort of steep learning curve, from what I understand, for people who aren't used to them. So Sarum found the whole experience quite funny because he came from a family where lots of these rules were normal, as did Naima. But they said a lot of their peers who'd grown up in rural parts of the country were very unfamiliar even with eating with a knife and fork, because that's not typical in South Asia. Most people eat directly with their right hand. And for those people being scrutinised by instructors each week was quite nerve wracking and I imagine a bit of a deterrence. But I think most people pass.

And what's your view on the degree to which all of this is actually useful, not just sort of for the feelings of self importance, but the degree to which it's sort of an inherent and necessary part of the civil service?

I think, you know, foreign diplomats all over the world have some sort of lessons like this on how to fit in, particularly when they're going somewhere new. So in that respect it could be seen as helpful. But then I also spoke to quite a few people in Bangladesh who felt that there was a need to make the civil service more Bangla and that it's Bangla to eat with your right hand. They should be allowed to do that. I mean, I think the Indian civil service is moving in that direction very slowly. One civil servant I spoke to there described how he no longer serves dinner on sort of white crockery with silverware and he serves thali from his native state of Rajasthan and that he serves that even to foreign dignitaries and that they enjoy the sort of authenticity he said. So I think that maybe there is an attempt to move away from some of these sort of colonial era styles of etiquette, but it's happening incredibly slowly.

Susannah, thanks very much for joining us.

Thanks, Jason.

That's all for this episode of the Intelligence. If you like us, give us a rating on Apple podcasts and you can subscribe to the economist@examiner.com intelligenceoffer See you back here on Monday. Sam.