Hardships batter Syrians as economy plummets

Friday 24/04/2015
Making ends meet in Damascus

DAMASCUS - Take a quick look at shop windows of Syria’s capi­tal and you will see lux­ury items are still avail­able four years after the start of the civil war. From Scotch whisky, French cognac, Cuban ci­gars and bridal gowns from France and Italy, you can buy it all in the wealthy government-controlled suburbs of Damascus. But only if you are able to pay prices some 700% higher than before the war.

The fact that such goods are available at all however is testa­ment to the government’s failure to curb the import of luxury items and shore up its dwindling strategic hard currency reserve. The haunt­ing obsession for most Syrians in government-controlled parts of the country is the economy, which goes in parallel with their concern about deteriorating security condi­tions.

“Since the war erupted in March 2011, Syria’s economy shrunk by 60% and one-third of the work­force has become unemployed,” economist Abed Fadhlia told The Arab Weekly.

Life in the “Country of Jasmine” — as some Syrians call it — has be­come unaffordable to many with an average monthly income of around 20,000 pounds — about $93. Fadhlia said the most impor­tant economic indicator is the Syr­ian pound now at its lowest level against the US dollar in about four years.

He said the pound’s depreciation could be attributed to the sharp drop in Syrian exports, the cessa­tion of direct and indirect foreign investment, the slide in Syria’s foreign reserves as tourism and export earnings suffer from the un­rest, capital flees the country and people buy dollars as they grow increasingly fidgety about the fate of the pound. Traders also use val­uable dollars to import luxuries. Reserves plummeted to less than $4 billion down from $18 billion in 2011, Syrian government data indi­cate.

Before the crisis, the dollar trad­ed at roughly 46 Syrian pounds. It’s now sold at 280 pounds to a dollar on the black market and 250 pounds at the Central Bank of Syria.

Other significant increases include:

— One gram of 21-karat gold rose from 1,200 pounds to 9,100 pounds.

— An apartment in the quiet Damas­cus suburbs jumped from 2 million pounds to 8 million.

— One litre of subsidised kerosene fuel, used for heating, increased from 15 pounds to 125 pounds

To help public servants cope with the increases and avoid street riots over price hikes, the government doubled the monthly salary of a government employee from 10,000 to 20,000 pounds.

Traditionally, agriculture, indus­try, tourism and oil make up the bulk of the Syrian economy. How­ever, these four sectors were the biggest losers of the war in Syria.

Syria’s production of wheat de­clined from 3.7 million tons in 2010 to 1.8 million tons in 2014. Cotton production, which is considered the main source of hard currency along with oil, plunged to zero. All cotton-growing areas are in flash­points in central, northern and western Syria.

War also dealt a blow to the Syr­ian industrial sector. Sheikh Najjar Industrial City, the largest in the country with an area of 4,412 hec­tares in Aleppo, was ransacked by armed groups three years ago.

According to the Trade Ministry, the value of Syrian exports declined to severe levels in 2011 and hit un­precedented low levels in mid 2013. But in 2014, exports rose by 20%. No reasons or money figures were disclosed.

Fares Shihabi, chairman of the Federation of Syrian Chambers of Industry, told The Arab Weekly that thousands of factories were plun­dered in Aleppo, Syria’s economic capital.

He accused unnamed “regional states” of having “worked to sys­tematically destroy the Syrian in­dustry”.

Tourism, the main lifeline of the Syrian economy which directly contributes a big chunk of the gross domestic product (GDP), is nearly at a standstill. Syria used to receive more than 1 million tourists a year, mostly Arabs.

Western and US sanctions have weighed heavily on the Syrian economy, mainly on the oil sec­tor. Syria’s oil output, which stood at 380,000 barrels per day (bpd) ahead of the crisis, dropped 80% when militant groups seized most of the oil wells in northeastern Syr­ia. With increased demand and lit­tle supply, fuel prices jumped.

The April 1st closure of Nasib bor­der crossing with Jordan, Syria’s gateway to the Gulf Arab region and a main import route for the govern­ment in Damascus, also chocked Syria.

Fadhlia said the closure dealt a “painful blow” due to the absence of alternative crossings after Tur­key closed its northern crossings.

“This is detrimental for all coun­tries, without exception, including Syria, Jordan and the Gulf,” Fadhlia said. The war’s ugly face is visible to many Syrians who are trying to provide for their families. While some have managed to cope with the harsh living conditions, others, seeing no sign of a political solu­tion, have fled.