Experts: Sanctions squeeze Syrians, but are unlikely to change Assad's behavior

McClatchy NewspapersMarch 19, 2012 

AMMAN, Jordan — Syrians are losing their jobs as the country's economy increasingly feels the effects of civil strife and sanctions, but experts and Syrian citizens alike say the sanctions are unlikely to be felt in any real way by Syrian President Bashar Assad and his regime any time soon.

International sanctions first placed on the Syrian government by the United States and the European Union last year have largely stopped Syria from exporting oil and have frozen international banking transactions, as well as targeting individual members of the government. But it is likely the government is still able to smuggle oil through Lebanon, said Ala Din Diranieh, a Jordanian economist who studies Syria, and that Russia, Iraq and Iran, which remain friendly to the Assad regime, are possible sources of financial support.

The impact has been tough on the average Syrian, however. "Unemployment is not less than 50 percent," Diranieh said.

Recently arrived refugees from Syria also paint a bleak picture, saying the economy has suffered both because of the squeeze of the sanctions and the impact of security measures the regime has imposed to prevent anti-Assad rebels from moving freely around the country.

"The people who haven't lost their jobs have had their salaries cut," said Mohamed, a Syrian who arrived in Amman from Damascus on Friday after closing the stationery shop he owned there. He asked not to be further identified out of concern for family still in Syria. "No one is buying anything. It's almost impossible to find fuel and cooking gas, and when you can, it is two to four times the normal price."

Syrians who recently arrived in Jordan have said that the government increasingly is putting up roadblocks to restrict travel between central Damascus and its suburbs, as well as between Syrian cities.

"My father's carpentry shop has stopped work because the workers live in Kesweh (a suburb of Damascus), and they are not able to leave to come to work," said an anti-government activist who now lives in Jordan and whose family has remained in Damascus.

Rents in Damascus, Mohamed said, have tripled as people flee cities and towns around the country that have been plagued by fighting and army crackdowns against activists and the armed Free Syrian Army, the loosely organized militia of anti-Assad army defectors and civilians.

"The economy is doing badly," said Jihad Yazigi, the editor of The Syria Report, a publication that tracks the country's economy. Yazigi estimated that Syria's economy shrank by 15 percent last year.

"Investors are not investing and consumers are not spending," Yazigi said. "Oil exports that made up 46 percent of export income in 2010 are now almost entirely stopped. Companies are laying off, executives leaving the country."

The Syrian pound, which before last year normally traded around 46 to the dollar, has lost its value, hitting more than 100 to the dollar in February before the Syrian government asked local banks and traders to stabilize it and disbursed further funds to help them do so.

"They asked them to keep it around 80," Diranieh said. "But I think it will return back to 100, or even 200."

The Syrian Central Bank's foreign reserves have been depleted, and it is unclear how much foreign currency remains.

"Pre-crisis reserves were at $17 billion. Billions are estimated to have been spent to defend the currency last year," Yazigi said.

Daranieh said that he had read recently that reserves were down to $14 billion.

"But I think they may be even lower than that," he said.

Yazigi doubted the government would have problems paying the military in the short term, even though he also expects the Syrian pound to continue to decline.

Another activist living in Jordan said his father's chauffeur company in Damascus had shut down because people were no longer using such services, and that he had laid off his employees.

Like Iraq before 2003, where those close to Saddam Hussein were insulated from a more than a decade of international sanctions while much of the citizenry was reduced to poverty, associates of Assad's government can likely hold out for some time, experts said.

"Because of the extreme gap become between the rich and the poor, these people can probably survive for some time, they've stolen so much money," said Amin Taba, an anti-Assad Syrian now living in Lebanon. "Even if these people have their dollar accounts frozen, I'm sure they have dollars in the country."

In cities where the Free Syrian Army remains strong, the shortages are even more severe.

In Qusayr, a mostly empty town under siege near the Lebanese border, rebels burned used motor oil and plastic fruit crates last month to keep warm. Overnight temperatures in Damascus in the last week were near freezing, and a shortage of heating oil was reported across the country.

In Deraa, a city under siege in southern Syria, residents reported that there were shortages of food and fuel and that electricity was on for one hour at a time and off for five. Water was available once a week.

"The regime at this point basically has to defend a smaller core of people, and for the time being the regime can get weapons, and it probably has enough money to distribute to itself," said Michael Young, the editorial page editor of The Daily Star, a newspaper in Lebanon. "The people who are suffering are the Syrian population. I think when you get into these issues of sanctions, time and again, we've seen that sanctions rarely force regimes to go back on their fundamental principles."

(Enders is a McClatchy special correspondent.)

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