Planet Money
2:27 pm
Tue May 22, 2012

Crony Capitalism, Syria Style

Originally published on Tue May 22, 2012 2:08 pm

This week in the New York Times Magazine, Adam Davidson writes about the surprising diversity of Syria's economy. There are pockets of affluence in the cities, a budding private sector, and even a few American franchises.

There is also a government official who embodies everything that's wrong with Syria's economy. His name is Rami Makhlouf, the cousin of Syria's president Bashar al-Assad. His nickname is "Mr. Ten Percent," because he knows how to get a cut of any business deal in Syria.

Joshua Landis, a Syria expert at the University of Oklahoma, explained how it works. In 2000, Bashar al-Assad passed a series of economic reforms which allowed entrepreneurs without government connections to open their own businesses. But there was a catch. If the business didn't pay a cut to corrupt officials, "they could punch you in a hundred different ways," said Landis. "They could force you to sell, tax you, or revoke your permission to change the sewage or electric lines."

Ultimately, Landis says, the reforms created a class of crony capitalists, angering the independent merchants who hoped that they might mark a turning point in Syria's economy. So why hasn't Syria's business class turned against the regime? Read the full column to find out.

Copyright 2012 National Public Radio. To see more, visit http://www.npr.org/.