By Khaled Yacoub Oweis
TISIA, Syria (Reuters) - Under rainless clouds covering Syria's strategic Hauran plateau, grave digger Khalil al-Meqdad toils for 12 hours a day to feed his eight children.
"I barely make enough money to buy bread. I keep sinking in debt," Meqdad said, as he stuck his shovel in the volcanic soil that made Hauran a Middle East bread basket when rain was plentiful during Ottoman times.
With its faded vineyards, pomegranate tree groves and historical sites, Hauran is hundreds of miles from the political upheaval shaking the Middle East, and Syrian officials say the unrest will not spread to their country.
But Meqdad's lot is similar to the masses who toppled Tunisia and Egypt's presidents and who are taking to streets in Yemen and elsewhere, driven by frustration with falling living standards and perpetuation of corrupt autocratic systems they consider an affront to their dignity.
Syria, a country of 20 million people, has been ruled by the Baath Party since it took power nearly 50 years ago, imposing emergency law still in force and banning any opposition.
Since the uprisings in Tunisia, Egypt and Libya in the last three months, officials have insisted that the government, a self-declared champion of Arab rights and foe of what it describes as Islamic extremism, is "close to the people."
They say gradual economic liberalization, since President Bashar al-Assad succeeded his late father 11 years ago, has changed Syria, pointing to banks, insurance companies and private schools, in contrast to decades of nationalization.
But parallels with Egypt, which failed to translate economic reform into rising living standards, are hard to ignore.
Syria and Egypt have similar gross domestic product per capita at around $2,500. The countries' official unemployment rates stand at 10 percent, while independent estimates for Syria's unemployment range from 15 to 25 percent.
In eastern Syria, a water crisis over the past five years which experts say has been mainly due to state mismanagement of resources has plunged 800,000 people into extreme poverty, according to a 2010 United Nations report.
Hundreds of thousands more were displaced.
Hauran, which stretches from the south of Damascus across the border into Jordan, has been less hard hit. But Meqdad, who lives with his wife, mother and eight children in a two bedroom abode, can no longer count on agriculture to supplement his meager income.
The 40 donums (40,000 sq meters) he used to plant with wheat did not yield enough last year to cover its cost because of lack of rain. He did not plant anything for the 2011 season, expecting another drought.
Other farmers have also been hit by poor rains and earlier subsidy cuts. The ministry of agriculture said yields in Hauran's main agricultural province of al-Daraa fell by a quarter last year.
Youssef Saleh said he lost $4,000 last year on his 500 donums (500,000 sq metres), which he planted with wheat.
"The crop was so bad that I sold it as animal feed," he said, adding that it was prohibitive to dig wells because water was 1,000 metres under the surface and the price of gas oil, which powers pumps, more than doubled after subsidies on the fuel were lessened three years ago.
Samir Aita, a Syrian economist, said the state needed to step up development projects, but it was focusing on promoting business monopolies and "rent seeking" activities such as real estate, as was the case also in Tunisia and Egypt.
"Everyone wanted to emulate the 'Dubai model' of free trade and real estate zones...forgetting that they have a population that needs jobs and for whom the growth should be directed. Look what has happened to them," Aita wrote in a paper published on the Syria Comment website.
Wary of potential for unrest despite the iron-fisted grip of the security apparatus, the government last month lowered customs duties on staples and fruits and began distributing cash handouts to 420,000 families.
Customs on rice were lowered to 1 percent from 3 percent. Bananas now have a 20 percent tariff, instead of 40 percent. Poor Syrian families can qualify to receive $10 to $70 a month as handouts.
Abdallah Salman, who makes $150 a month working as a parking ticket officer for a private company in Bosra, qualified for $70. When he is not at work, Salman begs.
"I know people in my own clan who own nice houses who received assistance. Corruption has spread everywhere," said Salman, who pays $80 a month in rent.
PROTEST CALLS IGNORED
Despite the hardships, little is happening on the surface in Syria to indicate that the ruling hierarchy is about to lose its grip. Internet calls for protests went nowhere and a campaign of arrests against independent figures only intensified.
Assad, who came to power aged 34, said in an interview with the Wall Street Journal that reform would have to wait for what he termed as the next generation.
But senior officials called in leading opposition figures separately last month to hear their views.
"I told them to look at what happened in Tunisia and Egypt. You have to start by releasing the political prisoners, allowing free press and free expression, lifting emergency laws, preparing for free elections," one opposition figure said.
"They kept saying that Syria must maintain stability and national cohesion," he told Reuters.
Economic difficulties could pose the biggest challenge to that stability.
In Hauran's old Roman city of Bosra, a United Nations World Heritage site, poor tourism facilities have hit revenues. A deterioration in ties with neighboring Lebanon has resulted in fewer Syrian workers going there, and ripples from the global financial crisis have also been felt.
"I was counting on my children working in the Gulf after they finish their education. Now I am not so sure," said Thaher Mansour, who saved money working in Dubai.
Asked if the Arab revolution could spread to his country, Mansour said Syria was more religiously and ethnically mixed than Egypt or Tunisia, making unified opposition less likely. But a similar scenario was still possible.
"You cannot keep pressuring people like this. You simply cannot. All what it needs is a spark," he said.
(Editing by Dominic Evans and Samia Nakhoul)