The cornerstone for Syria's first modern shopping mall, a 20-minute drive from Damascus, was laid last week. Not an ordinary mall, but a giant complex containing stores selling international brand names, luxury hotels, swimming pools and a special entertainment area for tourists - 200,000 square meters of floor space costing $500 million to build.

According to the developers, the complex will provide around 7,000 jobs when construction is completed, in 2013. The jobs may be the mall's greatest contribution to Syria's people. Just as the head of the mall development company was explaining the mall's wonders to the businessmen and senior officials who were invited to the cornerstone laying ceremony, the Syrian workers' union, one of the largest organizations in the country, published a worrisome report on unemployment rate.

It noted that wage increases in the country were increasingly lagging behind the inflation rate. The minimum monthly retirement pension allowance was recently raised to about $130, and national health insurance is expanding, but the rising cost of gasoline and basic goods is pushing more and more people below the poverty line. The goal of reducing poverty - the primary aim of the government's current 5-year economic plan - is slipping further away. Even the Deputy Prime Minister for Economic Affairs, Abdullah al-Dardari, has admitted that the government has not managed to stem it.

Notwithstanding the impressive ceremony outside Damascus, the government is not carrying out the projects it has promised and is postponing or canceling investments designed to spur the private sector. As a result, while the official unemployment level was 11 percent in 2009 and 8 percent in the first quarter of 2010, unofficial estimates put it at 20 percent or more. According to a study by the state planning authority, economic growth has dropped from 5.5 percent in 2007 to just 3 percent.

These figures are not only about the lower income levels. They also demonstrate just how little can be expected from higher education or from education in general. For example, according to Syrian central bureau of statistics figures, 80 percent of university graduates must wait at least four years for their first job. Nearly all of them hope for a government job, with its guarantees of economic security, a pension and decent working conditions.

While they are waiting, tens of thousands of new graduates join the labor force, graduates who cannot marry or start families because they cannot support themselves. Some try to emigrate to other Arab states, but the employment options in these countries are also declining.

Due to the severe shortage of jobs in the government or in properly run private companies, university graduates are forced to take low-paying jobs without benefits or insurance, in car repair shops, small stores, service industries and the like, where they work 12-hour days for below minimum wage.

They learn, too late, that their university education has not prepared them for any kind of professional work and they must accept menial jobs "like a refugees," as one communications graduate explained in an interview to Al-Arabiya television.

As to refugees, around 1.2 million Iraqi refugees live in Syria, most of them after fleeing the war in their country. Over the years they have created tremendous pressure on the Syrian labor market. While by law they are "guests" in Syria - that is, prohibited from working - they gradually have entered the workforce, taking jobs from Syrian citizens. But despite their willingness to work for low pay these refugees are increasingly finding jobs in Syria more difficult to come by. Some, unable to support their families, have even decided to return to Iraq despite the security issues there.

"This is not an economic crisis but rather a prolonged economic problem that will have to be solved through foreign investment, significant administrative reform, getting rid of bureaucratic obstacles, encouraging the private sector, privatization and the government divesting itself of companies that lose money, reducing the number of people employed by the government and providing high level professional training that is goal-oriented," the economist Nabil Marzouk said in an interview with the Syria News website.

These methods are neither new, nor unknown to the Syrian regime, but in the eyes of the government their implementation could cause much more political damage than the high unemployment rate. Privatization, for example, would mean ending the "monopoly arrangements" enjoyed by people who are close to the government - relatives of the president and of senior officials. Trimming the fat from the bureaucracy would mean not merely widespread dismissals but also ending the bribery and sub-contracting mechanism among the clerks, which supports thousands of families. Modern professional training would mean significant changes to curricula and teacher training programs as well as major spending on modern equipment and instruction materials.

It is easier to build new shopping malls that will hire several thousand salespeople and security guards than to develop and implement broad economic reform. It is easier to create government jobs funded by donations from Arab states than to develop a free market. The question is when the balance between political and economic needs will be upset.