Syrians feel the economic bite ahead of Ramadan

Sunday 05/06/2016
Syrian refugee shopping with his humanitarian aid vouchers

BEIRUT - The month of Ramadan, sacred and much antici­pated across the Muslim world, is considered a time of family gather­ings, festive banquets, alms giving and worship.
Syrians are getting none or little of that this Ramadan, their sixth since the outbreak of the war in March 2011. More than ever, they find themselves trapped in need and poverty, with families divided and lives shattered by the fighting. The recent devaluation of the Syr­ian pound, the most severe in the country’s history, has added to the misery.
Five years ago, one US dollar was equivalent to 50 Syrian pounds, an exchange rate that had been sta­ble since the mid-1980s. Banks, industry, commerce, government and ordinary citizens predicated their daily lives on that rate, which provided a decent income for most Syrians.
Before the war, for example, a university professor or a senior banker in the private sector used to make up to 200,000 Syrian pounds a month — $4,000. The salary re­mains but it is worth $333 because of the drop in value of the Syrian currency, which now trades at 600 pounds to the dollar.
A cabinet minister, the highest pay grade in the government sec­tor, used to be paid $1,500 a month. That is now worth $125. A driver used to make $200-$300. That is now well below $20. A soldier’s sal­ary is $26 a month.
This pain is being felt strongly throughout Syria, as Ramadan ar­rives with its numerous dues and obligations.
Prices have tripled at least, which means the average Syrian house­hold can no longer afford most goods and services. Many people, unable to live off their low salaries, have left, seeking better prospects in Turkey or Europe.
Some have stayed but they are struggling to make ends meet. For example, a bundle of seven loaves of subsidised Arabic bread used to sell for 16 cents but costs 34 cents.
White sugar used to cost 7 cents per kilogramme. It is now $1.20. A kilogramme of tomatoes, which pre-war sold at 5 cents, now costs $1.83. Meat, affordable at least once a month for all Syrians before 2011, used to cost $3.50 per kilogramme. It now costs $23, a sum unafford­able for nearly all Syrians.
The locally manufactured ciga­rette, al-Hamra, once cost 12 cents a pack and was in high demand by blue collar workers and labourers. It now costs 92 cents.
Dining at an affordable restau­rant, which is traditional during Ramadan, used to cost $3 per per­son. It is now $6-$8 and can reach $16-$26 per person for more so­phisticated dining.
This is quite cheap if one is earn­ing an income in hard currency, such as Syrians employed by in­ternational organisations and the United Nations, but out of reach for the overwhelming majority who are paid in local currency.
The giving of alms, essential in Ramadan and mandated by Islam, is simply no longer possible be­cause they are usually given only when households have some spare cash, which no longer applies to most Syrians.
Some accuse Syria’s Central Bank of purposely playing with the ex­change rate to raise its flow of Syr­ian pounds.
The government had three sources of income — oil, economic surplus and taxes — all of which have ceased providing today.
Revenue from the oil sector, in the red in 2007-10, has dried up completely since the oil fields are held by the Islamic State (ISIS).
Surplus was once high from tel­ecommunications, tobacco manu­facturing and government banking but these have all been cut back by at least 60% because of the war.
New taxes cannot be levied in time of war, so how will the state bankroll its massive war and con­tinue to pay all state employees?
The public sector costs $1.05 bil­lion annually, with $137 million in pensions. One creative idea would be to encourage Syrians to buy dollars — and abandon their Syr­ian pounds in exchange for foreign currency, flooding the market with local currency that the government can use to pay salaries and fund its war on all fronts.
Others argue that the devalua­tion of the Syrian pound is because Russia and Iran, the main foreign backers of the regime of Syrian President Bashar Assad, are not providing enough economic as­sistance. Some even accuse anti- Assad Saudi Arabia, which still has the largest reserve of Syrian pounds, of devaluating the Syrian currency from Riyadh.
Regardless of who may be behind Syria’s economic crisis, the Syrian pound is not recovering and the state refuses to dollarise the econo­my, arresting those who buy or sell hard currency.
Until a political settlement can be reached, the economic situation will deteriorate for all Syrians, with or without Ramadan.