Syrian pound drops by half in 2019
Istanbul – Even as President Bashar al-Assad’s Syrian Arab Army continues pummeling the northwestern Idlib province and skirmishes erupt between the remnant of US forces in the northeastern region of Hasaka and Russians troops, a new threat has opened for the regime that, militarily at least, seems poised on the cusp of victory.
An emerging and increasingly visible expression of economic unrest is spreading from Damascus to Sweida – a mainly Druze area in the southwest close to the border with Jordan – exposing fissures between the Assad government and a population that has in many ways accommodated itself to its continued rule.
“In the past month alone, sugar increased from 225 to 800 Syrian pounds; we drink sweet tea here, not Coca Cola,” said Riham Aazar, a 38-year-old schoolteacher in the capital. “The bulgur we use for tabouli salad has risen from 350 to 700 Syrian pounds per kilo.”
Aazar said she and her husband, an industrial engineer, are just scraping by on two Syrian salaries. Sometimes they receive occasional remittances from relatives who have emigrated abroad.
“The two of us make 100,000 pounds a month,” Aazar told The Media Line. “That’s roughly $100; nobody can survive on this kind of money.”
Before the uprising against Assad broke out nine years ago, Syria’s pound was trading at 50 pounds to the dollar.
As of Sunday, the Syrian pound was trading at 1,100 against the US currency.
The worsening financial crisis in next-door Lebanon and new US sanctions leveled last month against the regime are the chief causes for the plummeting pound.
“The exchange rate was kind of stable until 2011, but it started to drop down due to the use of the foreign currency reserve by the Assad regime to fund his military operations,” said Refat Amer, an exiled Syrian economist living in Germany.
“We estimate that Damascus businessmen and politicians had about $50 billion in Beirut banks before the Lebanese crisis.
Most of the foreign exchange trading in Syria was done by this group,” Amer told The Media Line. “And after the Lebanese central bank assigned a $300 per person daily cash withdrawal limit, we essentially see a collapsing of the Syrian economy.”
With monthly salaries for middle-class Syrians barely covering 10 days of expenses, spontaneous protests have erupted in Sweida governorate, a Druze enclave that had remained mostly quiescent under the Assad administration.
“The demonstrations started here because of the accelerating increase in the cost of living,” explained Jamal Alshoufi, a local writer and researcher. “The young people are no longer afraid to come out to protest in public. They see themselves stuck in their lives, with no work, and no money to pay university tuition.”
“This is why they have started to demonstrate peacefully, making it clear that they don’t belong to any political party. They don’t want to have anything to do with either the pro-regime or the opposition groups and that’s why people use the slogan ‘We just want to live’ when they go to the street,” said Alshoufi.
In an eye-opening acknowledgment, the official Syrian News Agency (SANA) admitted Wednesday that “a few people gathered” in Sweida’s central square.
Local police have hesitated to arrest the Sweida demonstrators.
Regime figures including MP Ahmad Shlash and intelligence chief Ali Makhlouf have taken to Twitter and Facebook to call for a “dialogue” and an end to “divisive” demonstrations in Sweida.
“So far, the young people have refused these invitations from Baath party leaders,” said Alshoufi.
Tellingly, economic discontent is leading to public rifts inside the government’s political orbit.
In late December, Bouthaina Shaaban, the president’s chief political and media adviser, kicked up a storm when she told a Lebanese TV channel that Syria’s economy was picking up steam.
“There is work underway in agriculture, industry, infrastructure and institutions, strong efforts,” Shaaban told Beirut broadcaster Al Mayadeen, known for its loyalty to Assad and Hezbollah. “I have met with officials in charge of the economy, and they told me that it’s 50 times better today than in 2011.”
Shaaban’s assertions prompted rare ridicule from regime supporters.
“Your statements are shocking and surprising,” retorted Mona Noureddin, a former agriculture minister on Twitter. “Your words are difficult for a homeland that has been bleeding for eight and a half years to accept.”
Reports of harsh measures against currency traders in the official media announcing a series of new rules related to the dismal dollar exchange rate is at odds with Shaaban heralding of growth.
On Tuesday, SANA said the Interior Ministry detained several individuals arresting them for exchanging foreign currency and transferring funds without a license.
According to the agency, “patrols have arrested individuals involved in exchanging foreign currency and transferring funds without a license and seized large amounts of money, all promptly turned over to the Central Bank.”
For the private sector, the Syrian government has promulgated harsh new rules, with violations punished by jail sentences, prohibiting shopkeepers and consumers from using any currency other than the Syrian pound.
But public sector entities, including the Interior Ministry’s passport office, require citizens to pay service fees in dollars.
“Whenever you want to renew or obtain a Syrian passport, you need to pay $300 if you are applying in Syria,” explained Idlib resident Abdulmalek Al Sheik. “At consulates outside the country, it costs $800. Officials make you pay even more if you want to get a travel document within a month.”
“For people with some money living in the few areas outside regime control, it’s a lot easier to conduct large transactions involving significant amounts like when you are buying or selling homes or agricultural land.”
“I’m selling large quantities of olive oil, and being able to use dollars or euros freely is a way to avoid the effect of the pound’s crashing.”
Last month, US President Donald Trump signed the Caesar Syria Civilian Protection Act – titled for the pseudonym of a Syrian military photographer who defected in 2013 with evidence of regime atrocities.
“Caesar” brought out 55,000 graphic pictures of 11,000 detainees tortured to death in government prisons. In 2016 the images were displayed at the US Holocaust Memorial Museum in Washington.
The new law sanctions companies and individuals that offer the Syrian government financial support.
“A major wrench has been thrown in the works at the worst possible time for Assad,” said Mohammed Alaa Ghanem, a fellow at the Syrian Center for Political and Strategic Studies in Washington, DC.
“The flicker of hope that the regime’s Pyrrhic victory generated among its constituents is now quickly dissipating,” Ghanem told The Media Line. “They were out there promoting investment in Syria’s reconstruction as a ‘lucrative business,’ but the actors who were positioning themselves to dip into that pie are now reconsidering.”