Life in Damascus: Syria’s Economic Crisis Hits 12-Year Low
The country sinks further into turmoil from sanctions, corruption, and war.
BEIRUT — Syria’s economy has hit its lowest point since the start of its civil war nearly 12 years ago, with spiraling inflation, a currency plunge and severe fuel shortages in both government-run and rebel-held areas.
The capital city has come to a near standstill. Streets are almost empty of cars and households receive a few hours a day of electricity at best. The cost of food and other essentials has skyrocketed, and the increasing economic pain has led to protests in areas controlled by the government.
But why has the economic situation gotten worse in recent years, and what does the future look like for the Syrian people?
A BRIEF HISTORY
The Syrian pound hit an all-time low of 7,000 pounds to the dollar on the black market last week before rebounding to around 6,000. It’s still a significant plunge, given the rate was around 3,600 one year ago. The central bank increased the official exchange rate from 3,015 to 4,522 on Monday, apparently trying to entice people to use the official rate rather than trade in the black market.
Amid fuel shortages, the government has hiked the price of gasoline and diesel. At the official price, 20 liters (5 gallons) of gas now cost nearly a full month’s salary for an average civil servant, which is about 150,000 Syrian pounds, or $25 at the black market rate. Some employees have stopped showing up for work because they can’t afford transportation.
Since wages don’t come close to meeting the cost of living, most people “live on remittances, they live on two or three jobs and on humanitarian assistance,” said Joseph Daher, a Swiss-Syrian researcher and professor at the European University Institute in Florence, Italy.
Geir Pedersen, the U.N. special envoy for Syria, told the U.N. Security Council on Dec. 21 that the “needs of the Syrian people have reached the worst levels since the conflict began.”
Protests have broken out in some government-controlled areas, particularly in the towns of Sweida and Daraa in the south. In Sweida last month, a protester and a police officer were killed after a demonstration turned violent.
DRIVING FACTORS: SANCTIONS, CORRUPTION, AND COVID-19
Apart from years of war, sanctions and widespread corruption, Syria’s economy has gone through a series of shocks since 2019, beginning with the collapse of Lebanon’s financial system.
“Given the open borders between Syria and Lebanon and both of them (being) increasingly cash based economies,” their markets are inextricably linked, said Nasser Saidi, a former Lebanese economy minister. The currency collapse and removal of subsidies in Lebanon has driven devaluation and higher prices in Syria, he said.
Then, like the rest of the world, Syria was hit by the global economic downturn caused by the COVID-19 pandemic along with Russia’s war in Ukraine, which has driven up global fuel prices and pulled away the attention and resources of Damascus’s ally, Moscow.
The most crucial factor is a recent slowdown in oil shipments from Iran, which has been Damascus’s main source of fuel since the early years of the conflict. Before the war, Syria was an oil exporting country. Now its largest oil fields are controlled by U.S.-backed Kurdish-led groups, so Damascus is forced to import new oil.
Jihad Yazigi, an economist and editor-in-chief of the Syria Report, noted that Damascus buys oil from Iran on credit, but “when they sell the oil into the markets…they sell it for cash.” So the oil supply showdown also diminishes the government’s cash supply.
Syria’s Oil Minister, Bassam Toamah, blamed fuel shortages on Western sanctions and lengthy delays in oil supplies, without exactly explaining what the reasons for delays were.
IS THE SITUATION BETTER IN OPPOSITION-CONTROLELD AREAS?
Not exactly. Every year, residents of makeshift displacement camps in the last rebel-held stronghold in the northwestern province of Idlib suffer through storms and freezing weather.
This winter they have also been hit by the economic crisis in neighboring Turkey, which controls large swaths of territory, as well as by rising prices and shrinking aid caused by the Ukraine war. Idlib, for example, has seen lengthy fuel lines.
Meanwhile, a recurrent battle between Russia and other international players over allowing aid to cross the border from Turkey into northwest Syria is playing out at the United Nations.
A six-month extension of the cross-border aid mechanism is set to expire Tuesday, with a vote by the U.N. Security Council to renew it scheduled the day before. Russia wants the aid deliveries to come through Damascus, arguing that the aid coming from Turkey is exploited by armed groups and that the international community is providing insufficient help to people in government-held areas.
On the other hand, humanitarian organizations are painting a dire picture of the consequences that would come from cutting off the cross-border assistance.
Tanya Evans, country director for the International Rescue Committee, said that fuel and food prices are rising, while funding for humanitarian aid is shrinking. This along with winter weather and a cholera outbreak “will be a deadly mix should the only lifeline left to this part of Syria be closed,” she said.
WHAT HAPPENS NEXT?
If the crisis continues, there will likely be more protests, analysts said. But they largely dismissed the possibility of a new nationwide anti-government uprising like the one that erupted in 2011, prompting a bloody crackdown that threw the country into civil war.
For now, the country will likely continue to limp along with the help of aid and remittances from abroad. According to Daher, Syrians are currently being surveyed as part of a soon-to-be-published study which shows that they’re receiving on average $100 to $200 a month from relatives abroad.
“People are very tired and thinking first of all to survive,” he said. “And there’s no political alternative to translate this socio-economic frustration into a political one.”
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This article was originally published by AP and republished through syndicate partners. Associated Press writers Bassem Mroue in Beirut, Albert Aji in Damascus, and Ghaith al-Sayed in Idlib, Syria, contributed to this report.