The Shadow Economy in Syria

The most prominent reason for the emergence of the shadow economy in Syria is the adoption of the liberal market policies and the continuation of the developmental decline of social segments and sectors that was the cornerstone to the growing of the shadow economy in Syria. That was in conjunction with several reasonsmost notably are :

  1. GDP growth rates because of declining the spending of the Syrian family due to the increasing prices of fuel, imported commodities and the vulnerability of the efficiency of the market that lead in its turn to the erosion of the purchasing power and the vulnerability of the efficiency of the market.

  2. The administrative complications, vagueness of instructions and resorting to invisible meansin the fields of economic work.

  3. The inflexibility and realism of tax legislation: there is a positive correlation between the size of the informal economy and the negative lists.

  4. The economic recession especially in the countryside.

  5. Increasing the squatter settlement, reaching 50% which leads to increasing work in the informal sector becauseit is easy to practice and the weakness of state control in those areas.

  6. The orientation to relay on capital intensive rather than labor intensive and failing to keep pace with technological developments.

  7. Unemployment and the decline of the government sector in labor absorptionand failure in horizontal expansion and budgetary pressure in the public sector.

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