x Abu Dhabi, UAEFriday 28 July 2017

Despair for Syrians as strife batters economy

Business is sidelined in Syria as the country's people reel from brutal violence and the downward spiral of the economy.

Food prices in Syria are rising as the flow of food is squeezed by the conflict. Bulent Kilic / AFP
Food prices in Syria are rising as the flow of food is squeezed by the conflict. Bulent Kilic / AFP

Every two weeks, Ahmed, a Syrian businessman based in Dubai, sends money home to his brothers and sisters who live near Damascus.

The cash helps to pay for food, clothes and heating to keep the biting chill of the Syrian winter at bay.

"They need it to survive," says the property developer, who asked for his real name to be withheld out of fears for the safety of his relatives. "They previously had land and now, because of the fighting, they cannot reach the farm to work any more."

The plight of his family in a small town 25 kilometres from Damascus is similar to that of millions of other Syrians across the country.

A nearly year-long clampdown on opposition groups by the government of Bashar Al Assad, the president, has left thousands dead and countless more injured. But for many more Syrians, the fighting - together with tightening global sanctions - has also had a painful financial cost.

Job losses from factory closings, soaring prices of diesel and other goods, a plummeting currency, and the running down of government reserves have left the economy teetering on the brink of collapse.

For business people trying to survive, the situation is critical.

"I don't think we recorded any revenues in 2011," says Abdul, an executive of a company in Syria's services sector. His real name is also not being used out of concern for his safety. "We have had to suspend many of our operations and are looking to move some of our assets outside of Syria. This period will witness the fleeing of businesses to other parts of the Levant or the Gulf."

Defaults by firms and individuals unable to repay loans has left many banks fighting to stay afloat.

"The banking system has been hit in a major way because of restrictions on the US dollar and withdrawals that Syrians are making," Abdul says. "Borrowing money is not an option for businesses any more."

Syria's currency, the pound, has lost about 50 per cent of its value against the dollar in black-market trading in recent months, pushing up the cost of the few imports seeping through the borders from neighbouring Lebanon and Iraq.

A shortage of supplies means inflation is rampant. Diesel used by many Syrians to run cars and heat their homes is scarce.

For many years, the price of fuel has been kept artificially low by government subsidies.

Islam, a 27-year-old Syrian waiter in Abu Dhabi, says his parents living in Daraa, in the south-west of the country, are having to survive on five gallons of diesel a day.

"Diesel is not available to everyone, and if you can get it, it's expensive, around US$1.30 [Dh4.70] for one litre," he says. "It's very cold and rainy and they need diesel to service their heaters."

With many countries halting exports to Syria, raw materials needed to keep the wheels of industry turning have run short.

"We have three big sugar factories in Syria, and they're closed because they cannot get raw materials," says Ahmed. "As people are not going to work, they are not paying taxes or invoices for telephones and electricity. How can you manage an economy when people are not being paid or paying their bills?"

Amid chaos in most other parts of the economy, the property sector is holding up relatively well, say people within the industry.

Values have remained stable as Syrians rushed to purchase property, land or build extensions as the value of the currency dropped.

"People are benchmarking the value of their property based on the dollar rather than the pound because of its continued depreciation," says Mohammed, a property broker based in Damascus.

Syria's property boom began in early 2004, after the US invasion of Iraq triggered a surge of refugees into the country.

"As the economy staggers from bad to worse, many Syrians hope there will at least be one silver lining: a leadership change.

"In my opinion, the regime will not fall by guns but by economics," says Ahmed.

The real names of all people quoted in this story have been withheld for their protection

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