x Abu Dhabi, UAETuesday 25 July 2017

EU sanctions further choke Syria trade

Syrian business people in the UAE expect their commercial ties with their home country to grind to a halt after fresh sanctions are imposed.

A banker stacks Syrian notess at the Central Bank in Damscus. AFP
A banker stacks Syrian notess at the Central Bank in Damscus. AFP

Syrian business people in the UAE expect their commercial ties with their home country to grind to a halt after fresh sanctions were imposed yesterday on the war-torn country.

"This will make it even more difficult for business with Syria," said Mahmoud, a Syrian businessman living in Dubai who asked for his real name to be withheld out of fear for the safety of his relatives.

"I have stopped most business dealings with companies [in Syria], but more sanctions mean there will be even less opportunities."

The central bank and seven cabinet ministers will be targeted by the EU actions, aimed at further weakening Bashar Al Assad, Syria's president, and his regime.

A ban on the trade of gold and other precious metals with Syrian institutions was also included in the measures. Cargo flights from the country will also be barred from the EU, although passenger services will not be similarly restricted.

Syria's economy is already reeling from nearly a year of brutal conflict as Mr Al Assad cracks down on opposition.

Adding to the economic woeis a raft of international sanctions from the EU, US and the Arab League. The EU has already imposed an embargo on the country's oil and a travel ban and asset freeze on Mr Al Assad.

But the latest action goes further.

William Hague, the UK foreign secretary, said the sanctions would "further restrict the access to finance" of Mr Al Assad's government.

In a statement after two-hours of talks about Syria, EU foreign ministers said they would impose "additional measures targeting the regime...as long as the repression continues."

Syrians working in the UAE supported the measures.

"This is an extra nail in the coffin of the Syrian economy," said Nasser, a consultant. "It will definitely affect trade, which will go down, but at this stage cabinet ministers are more worried about their lives than their bank accounts."

Many cabinet ministers are already likely to have moved their cash outside Syria to neighbouring Lebanon or elsewhere, he said.

Close to 100 billion Syrian pounds (Dh6.29bn), more than a fifth of all funds on deposit, have left the Syrian banking system since the conflict began last year.

Foreign exchange reserves have fallen from US$19.5 billion (Dh71.62bn) before the unrest to less than $14bn at the end of last year.

The country's economic output fell by 3.6 per cent last year, according to IHS Global Insight. It expects the economy to rebound by only 1.5 per cent this year.

"Economic sanctions are having a material adverse impact on the economy in the form of shortages of daily necessities, the rationing of electricity and severe job cutbacks by businesses," wrote regional economists at the Institute of International Finance in a report released earlier this month.

But the report further noted that the country's relative self-sufficiency and open borders with Libya should help it to overcome the pain of the sanctions in the coming months.

tarnold@thenational.ae

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