‘Fatih’. The Silk Road’s secret glue

I was recently buying lunch in Damascus when two Iraqi immigrants entered the shop. It was an elderly mother and her daughter. The daughter asked a small boy working in the shop to find a chair for her mother. The heat outside was suffocating.

‘There’s so many of us in Syria’, the mother addressed the shop owner with a smile on face. ‘You must be tired of Iraqis by now’.

‘Of course, not’, the shopkeeper replied. ‘Syria is fatih’, he replied. He used the Arabic word for ‘open’.

He made a good point. Syria has a long history of receiving immigrants. I remember meeting Iraqi Shiite and Iranian Sunni dissidents in the country in the early 1990s. It was the Lebanese who fled to Syria more recently as a result of fighting between Israel and Hizbollah. I was again in the city at the time and recall seeing bored refugees taking shelter inside mosques. The men sat on plastic chairs and smoked cigarettes. The women looked after tired children.

But it’s the Iraqi refugees that represent the biggest influx so far. The United Nations estimates there are 1.2 million Iraqi refugees in Syria.

It’s a huge number. The country’s total population is just 20 million.

To put the figure into perspective it’s equivalent to the sudden arrival of 4 million Polish refugees in the United Kingdom or 18 million Mexican refugees in the United States. Imagine the social implications.

Yet, the country has so far absorbed the influx with few ramifications. Sure, the average Syrian grumbles. But the shop owner’s response was typical. It’s Syria’s duty to accept refugees and the country will remain open, or faatih.

It’s an admirable sentiment. But it comes at a cost.

No surprise, apartment rental prices have soared in Damascus. Even the price of construction materials have jumped. That hurts the average Syrian citizen, especially young men who must typically own their own apartment in order to marry.

Moreover, looking after refugees isn’t cheap. For instance, nearly 70 percent of refugee Iraqi children attend Syrian schools. So far the Syrian government has received limited international aid to help offset the costs. The upshot is that the government’s fiscal position remains weak at a time when the country’s falling oil production has reduced export and tax revenues. It might be that Iraqi refugees are the straw that breaks the Syrian camel’s back.

Yet, the economic implications aren’t all bad. I was recently reminded of this by a Bosnian friend. Call him Amir. He was a refugee living in Jordan with his siblings in the early 1990s. The Bosnian War was in full swing at the time. We studied Arabic together at Jordan University and became friends. I subsequently lost contact. But Amir recently contacted me via Facebook. He left Jordan in 1996 and is now happily married and working for the Customs Department.

Amir’s links to Jordan are still strong. He is an Arabic speaker and has returned to the country many times since leaving. Trade between Bosnia and Jordan has surged in the past decade, in part because of Amir and other Bosnians like him.

The Iraqis living in Syria have had a similar effect. The head of the Red Cross in Syria recently stated that business on the Iraqi-Syrian border is flourishing as a result of bilateral trade. The Syrian Investment Agency noted that Iraq was the largest foreign investor in the country last year.

Muslim refugees are an important driver of Silk Road trade. It’s a feature of the Silk Road’s economy that is often overlooked. First, Silk Road countries are unusual for their willingness to accept refugees, especially Muslim refugees. Second, the Silk Road countries receive a disproportionately large number of refugees. Data from the United Nations High Commission for Refugees indicates that Silk Road countries account for 5 out of the world’s top 10 recipients of refugees, respectively, Pakistan, Syria, Iran, Jordan, and China.

Many are an economic burden. But many are laying the foundations for stronger trade relations. Faatih’, or the willingness to accept refugees, is the Silk Road economy’s secret glue.

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Silk Road Gallery

Canton Trade Fair
August 12th, 2010

Editorials & Articles

“China cheat sheet helps investors survive”, Bloomberg, September 1, 2010

“No more silver bullets for Beijing”, Wall Street Journal, June 17, 2010

“China’s historic return to the Gulf”, Foreign Policy, April 2, 2010

Speaking Events

International Monetary Fund, Washington, October 10, 2010

SuperReturn Asia, Hong Kong, September 29, 2010

The Global Pricing Forum, Hong Kong, September 14, 2010