Wednesday, April 14, 2021

Syrian sanctions inflict suffering as al-Assad regime marches | Business and economic news

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Syrian President Bashar al-Assad is not going anywhere. He resisted the military threat posed by a decade-long war and even as the country faced its worst food and economic crisis in recent months, he managed to hang on to power.

Some in the West had hoped that economic pressure, exacerbated by sanctions, would force his own Alawite community to overthrow him, but discontent did not result in a second uprising.

However, life for Syrians in the regime-controlled territories has worsened considerably. Queues outside bakeries and gas stations have become the new normal as an electricity shortage has negatively impacted local businesses and exacerbated unemployment.

Ahmad and his brother take turns lining up outside a bakery in Damascus to buy subsidized bread.

“Today was my turn and, I’m not kidding, I stood in line for six hours, again,” Ahmad said. “Electricity, we have completely forgotten. Our uncle, who is a tailor, closed his store because he cannot operate with these three hours of operation, five hours without electricity.

The Syrian economy is in tatters. Syrians are grappling with hyperinflation, food shortages and unemployment with no end in sight.

Last year, as Lebanon went bankrupt, many Syrians who deposited their money in Lebanese banks also lost their savings. Their misery worsened as the price of bread rose, the United States imposed sectoral sanctions, and Russia curtailed wheat exports to maintain domestic supplies during the coronavirus pandemic.

Internally displaced Syrians warm up around a fire in a camp in the countryside of northern Aleppo [File: Mahmoud Hassano/Reuters]

Scorched Earth Tactics

Syrians like Ahmad attribute the lion’s share of the blame to President al-Assad’s ruthless bombardment of the country, including crucial infrastructure such as farm machinery and power plants and, as far as agriculture is concerned, his tactics of literally scorched earth in opposition areas. However, they also hold Russia and the United States responsible for the worsening crisis.

Russia supported the Syrian government in the military conflict while the United States condemned al-Assad. But the policies of both have added to the suffering of the peoples.

Until 2008, Syria exported wheat to neighboring countries. Grain sufficiency was the cornerstone of Hafez al-Assad’s regime and was based on the premise that if the people were well fed, they would remain flexible. Syria produced four million tonnes (3.6 million tonnes) of wheat in a good year.

But a drought in 2008 and a decade-long civil war made Syria an importer of wheat. As production fell by half, the government turned to Russia, an ally and the world’s largest grain exporter. Russia has offered 100,000 tonnes of aid, but no more. The rest would have to be bought or exchanged for something back from Syria.

Bassam Barabandi, a former Syrian diplomat who currently lives in the United States in exile, said the Syrian government has run out of money and is instead offering the country’s resources to Russia.

“Russia opened a line of credit to the regime to buy grain with a sovereign guarantee and in return gave access to oil [reserves] and phosphate mines, ”Barabandi said.

According to the Syria Report, a regular study of the country’s economy, Syria needs to import 1.1 million tonnes (one million tonnes) of wheat per year to meet its needs, and most of them came from Russia. But in 2020, Russia cut back on supplies. It is not yet known how much it exported, but Syria’s overall wheat imports have reportedly halved.

This year, the rains have been sufficient and yet the government will still need to import more to feed its entire population. Russia could come forward, but so far it has not.

Another reason for the wheat shortage is that northeastern Syria, the breadbasket of the country that produced 60 percent of the total needs, is under the control of Washington’s Kurdish allies.

While US sanctions theoretically allowed the grain trade to continue, in practice exemptions don’t always work as advertised.

Aron Lund, a researcher at the Swedish Defense Research Agency (FOI), said that while US sanctions allow certain types of trade, such as food and humanitarian aid, over-compliance often deters banks, insurers and shipping companies.

“Syria is a small market and it’s just not worth risking a lawsuit from the US government,” Lund said.

In addition, US sanctions on oil trade affect other key sectors.

“By restricting Syria’s fuel supply through oil trade sanctions and supporting Kurdish control over the eastern oil fields, the United States is hurting the Syrian economy as a whole,” Lund said. “Tanks need gasoline to wage war, but farmers also need it to run their tractors, factories need electricity, and civilians on all sides of the war depend on the capacity of cars,” buses and trucks to deliver people and goods. “

Price up 30%

Joshua Landis is a United States-based Syrian expert who heads the Center for Middle East Studies at the University of Oklahoma and is married to a Syrian woman. He said it was naïve to think that the sanctions will only affect al-Assad and his cronies.

“I just spoke to my brother-in-law,” he says. “His small plastics factory cannot operate most of the time because the electricity is cut off for five hour periods. He’s struggling to get fuel for his generator, pushing the price up well above the cost of electricity. Due to inflation, prices change every day, so he cannot be sure that the contracts he signs today will make money tomorrow. “

“Foreign NGOs estimate that the prices of most daily products have increased by 30% due to the sanctions,” Landis added.

Opinion on the effect of the sanctions on the Syrian people is, however, deeply divided.

Bente Scheller, head of the Middle East and North Africa division at Heinrich Böll Stiftung, said that while sanctions against the Syrian central bank could prevent international companies from doing business with Syria, it could seek help from its allies .

“Since the regime is not isolated but has powerful backers – mainly Russia – it could turn to them for goods it is unable to obtain,” she told Al Jazeera. . “If he can get military supplies from Russia, there is no way that sanctions will deter Russia from delivering civilian items.”

US sanctions are aimed at hampering the reconstruction of Syria and forcing al-Assad to initiate meaningful political reforms. Europe has also banned reconstruction aid for Syria because it sees reconstruction funds as the only lever it has left on the regime to change its behavior. But his position is challenged by critics, who say reconstruction is about the well-being of citizens, while the West has failed to achieve its stated goal by refusing to allow it.

The International Crisis Group has long proposed an “incremental incentive-based approach” – a gradual lifting of sanctions and a gradual disbursement of reconstruction funds in exchange for political reforms.

It may be worth a point. Authoritarians, after all, have never relinquished power for the welfare of their people.

As US President-elect Joe Biden takes the helm in Washington, he has a difficult and unpleasant choice to make. If it eases sanctions and allows for gradual reconstruction, Syria will return economically, but some of these funds would most certainly be diverted by the government.

“How to balance the suffering of civilians with the pressure on the regime is a political choice,” Lund concluded. “But to claim that you can destroy the economic base of the regime without simultaneously hurting ordinary Syrians – that’s stupid and dishonest.”



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