Friday,20 July, 2018
Current issue | Issue 1127, 20 - 26 December 2012
Friday,20 July, 2018
Issue 1127, 20 - 26 December 2012

Ahram Weekly

The price of civil war

Nearly two years into the Syrian uprising, the country’s economy is in free-fall and some 40,000 civilians are believed to have been killed, writes Bassel Oudat in Damascus

Al-Ahram Weekly

When the uprising in Syria started some 21 months ago, the regime led by Syrian President Bashar Al-Assad decided to use all the resources at its disposal, military and otherwise, to fight the protesters. The decision has been costly, in both human and economic terms.
Since the uprising in the country began, nearly 40,000 civilians have been killed, and a similar number have gone missing. More than 100,000 people have been detained, with a similar number in hiding from the authorities.
About 2.5 million houses have been destroyed throughout the country, according to unofficial estimates. Damage to infrastructure is said to be about 40 per cent in the cities and 75 per cent in the countryside.
Businesses are either closing down or trying to leave the country. In 2012, hundreds of factories closed down because of reduced demand or the difficulty of obtaining raw materials. Even government-owned companies have felt the pinch, and most have put their investment plans on hold at least for the time being.
Unofficial estimates speak of a drop of five per cent in GDP last year, whereas before the uprising the Syrian economy was growing by some 3.2 per cent a year on average.
Syrian exports are down to $3 billion from their former level of $14 billion. Foreign currency reserves have gone from $17 billion before the uprising to just an estimated $1.1 billion today, which is only enough to cover two months of the country’s imports.
The Syrian pound has lost half of its value, the stock market has fallen by 90 per cent, deposits in banks have fallen by 40 per cent, and inflation is running at 50 to 100 per cent.
Syrian banks can no longer issue credit cards valid outside the country. They cannot offer credit for imports, and they do not now transfer money into or out of the country.
Syria used to make some $6 billion out of tourism annually, but tourism revenues today stand at only five per cent of their former level. Joblessness nationwide is estimated at some 40 per cent.
UN officials say that nearly four million Syrians will need financial assistance by next year. More than half the country’s big businesses have moved abroad, with some relocating to Egypt and the UAE.
International oil companies operating in Syria have shut down, and the Syrian oil minister admitted recently that because of the international sanctions against the country Syria is losing about $3 billion annually from the oil sector alone. Syrian oil exports have dipped from 380,000 barrels/day to 150,000 barrels/day.
Some natural gas pipelines have been destroyed, and shortages of oil products have pushed prices of fuel up by 50 to 100 per cent. Blackouts of 4-12 hours a day are now common across the country.
Agricultural production is also down by almost 20 per cent because of shortages of essential supplies such as fertilisers, which the government is restricting in order to deny the opposition a cheap way of making home-made explosives, or because of fighting in the countryside. Poultry and meat production is also down.
The budgets of ministries and government agencies have been slashed by about 40 per cent, leading to a reduction in government services. Thus far, the government has been able to continue to pay the salaries of its two million or so employees, but its ability to continue doing so is dwindling.
The Syrian opposition claims that the government has been selling off the country’s gold reserves, estimated at some 25 tonnes, in order to fund its operations, though the government denies the claim.
There are signs that the government is using inflationary measures in order to stay afloat. Opposition sources say that the Syrian government printed between 120 and 240 tonnes of banknotes in Russia, bringing them into the country a few months ago.
Syria is now isolated not only internationally, but also within the region, with transit trade through the country having come to a complete halt. The US and the EU have imposed sanctions on some 200 Syrian officials and about 40 government agencies. Even the Arab countries are helping to tighten the noose, mostly by keeping trade to minimum levels.
Western nations are no longer selling weapons to Syria, buying its products, or offering it development and training programmes.
George Sabra, chair of the Syrian National Council (SNC), an opposition group, told Al-Ahram Weekly that once the regime falls, Syria may need up to $60 billion just to fix its infrastructure and stop the economy from going into free-fall.
Haitham Manna, leader of the Syrian National Coordination Body for Democratic Change, said that the country’s losses in terms of both private and public property since the start of the uprising could be put at around $132 billion.
Desperate to prove that it can survive the sanctions against it, the Syrian regime has dug deep into its pockets, but the continuing expense of military operations against the resistance, and the damage done to the economy, cannot be sustained for long.
The Syrian opposition, while painting a grim picture of the country at present, is optimistic about the future. Members of the opposition point out that the country will be able to rebuild itself once the regime is gone and its corrupt practices are over.
According to the opposition, one businessman alone close to the Syrian president used to control about 65 per cent of the Syrian economy. If such wealth were used wisely, opposition spokesmen say, the country could easily return to prosperity.
Yet, even if the regime can be ousted before it can inflict yet further damage to the economy, the damage that has already been done is so serious that it will take months, if not years, to reverse.

add comment

  • follow us on