In Syria, 1,000 pounds in the national currency can get you five walnuts. A state employee’s monthly salary barely buys 4 pounds of meat. Prices change every day — almost always upward — in what few shops remain open.
These are symptoms of an economy on the brink of collapse as fresh U.S. sanctions known as the Caesar Syria Civilian Protection Act kicked in Wednesday, bringing more economic pain to the war-wrecked country.
After nine years of conflict, with hundreds of thousands dead, entire cities leveled and millions of Syrians turned into refugees, the government of President Bashar Assad has survived the war and — with Russian and Iranian help — largely defeated its rebel adversaries.
But it may not survive the victory: It now faces a compound crisis involving a shortage of dollars in neighboring Lebanon where Syrians must do their banking, chronic corruption and mismanagement, the economic devastation of the COVID-19 pandemic and waves of sanctions that have snarled any investment in the country — all enemies Assad cannot defeat on the battlefield.
“The situation is going from bad to worse. The conflict is concentrated in some areas, but the economic situation is now everywhere. And it’s dramatic,” Corinne Fleischer, the World Food Program’s country director in Syria, said in a phone interview Wednesday.
Since September 2019, the Syrian pound’s value to the dollar has plunged fivefold; it now stands at 3,000. Prices have gone up 210% compared with last year, Fleischer said, 35% of that in the last month alone.
The World Food Program’s food basket — which provides 2,000 calories per day for five people over one month, with no meat or dairy products — cost 4,000 Syrian pounds before 2011. It now costs 80,000 pounds, at the top end of an average monthly salary range in Syria, Fleischer said.
“People tell us they have sold everything. They have nothing left. They have to wait for prices to go back down again to buy food,” she said. “They’re not waiting to buy a new television.”
Those conditions have spurred renewed complaints against Assad’s rule even among the ranks of those who supported him during the war. This month, protesters in the city of Suwayda, about 60 miles southeast of Damascus, the capital, took to the streets to demand better living conditions and call for Assad to leave.
The Caesar sanctions are set to compound that misery, adding to existing restrictions from both the U.S. and European Union that since 2011 have already left Syria all but isolated financially.
US Secretary of State Mike Pompeo said the sustained campaign of sanctions is to 'hold the Assad regime and its foreign enablers accountable. (Reuters)
In announcing the sanctions, U.S. Secretary of State Michael R. Pompeo said 39 Syrian officials, companies and “foreign enablers” were being targeted, including, for the first time, Assad’s British-born wife, Asma Assad, whom he called “one of Syria’s most notorious war profiteers.”
Also targeted was Assad’s brother, Maher, as well as Mohammed Hamsho, a top Syrian businessman and financier for the government.
“Many of the dozens of people and companies the U.S. government is sanctioning today have played a key role in obstructing a peaceful political solution to the conflict,” Pompeo said. “Others have aided and financed the Assad regime’s atrocities against the Syrian people while enriching themselves and their families.”
The Caesar act is named for a Syrian photographer who smuggled out a trove of pictures showing torture and execution by Syrian government forces.
Pompeo’s senior envoy for Syria, James Jeffrey, said the administration hoped the suffering would stoke anti-Assad unrest in vital parts of the country. But he declined to offer a timeline for the downfall of Assad, which Washington has been unable to bring about in the years of fighting and sanctions.
The new injunctions punish any company or person providing significant support to the Syrian government, any entity owned or controlled by it, or to its military allies. They specifically target anyone dealing with certain sectors of the Syrian economy, including the gas and oil industry, construction and engineering as well as any party lending money to Damascus. And they make it mandatory for U.S. authorities to act against violators.
Taken together, they further restrict reconstruction efforts in the country, a potential bonanza that had many nations seeking to restart relations with Assad. Those falling afoul of sanctions would be barred from the U.S. markets and not allowed to use dollars or U.S.-based money transfer systems.
Though there are exemptions for humanitarian activities, analysts and sanctions experts fear the sanctions could hamper aid work.
“The issue isn’t immediate lifesaving or food programs, but rather things like rebuilding schools or houses, connecting them to the grid, water systems; areas where there is inevitably an aspect of reconstruction which may by its nature involve the government,” Justine Walker, an international sanctions expert, said in an interview.
Walker said that though it was clear there were exemptions aimed at not hurting the civilian population, “when you get to that point where the sanctions are so broad that it becomes very difficult to purchase olives or local produce from Syria, for example, then that clearly has an impact on the local market. If you can’t move goods very easily into Syria, then that creates a problem.”
It also in effect freezes out neighbors hoping to take advantage of investment in Syria.
“This is as much a warning to their allies who are willing to consider putting money in Syria and invest in Syria’s reconstruction,” Lebanon political analyst Michael Young said, adding that the sanctions were especially daunting for Lebanon.
“Lebanon has one outlet to the Arab world, and that’s Syria. Nothing can go through Syria because that will be considered by the Americans as helping the Syrian regime. So this is where Lebanon will take an additional hit, with all the other hits it has taken.”
Fear of that hit drove Hassan Nasrallah, head of the sanctioned Iranian-backed Lebanese group Hezbollah, to warn the Lebanese government to not submit to the Caesar sanctions. The group is designated a terrorist entity by Washington and is subject to a bevy of sanctions.
“America resorting to the Caesar act is proof of Syria’s victory in the military conflict,” Nasrallah said in a speech Tuesday. He added that attempts to make Hezbollah disarm by starving the Lebanese would fail.
“Those who put us between the choice of killing us with arms or killing us by starvation,” he said, “the arms will stay in our hands and we will kill you.”
In Syria, discontent is increasing, despite attempts by Assad to quell the anger. This month, he sacked his prime minister; on Wednesday, the government declared a new revised exchange rate of 1,250 Syrian pounds to the dollar to encourage remittances flowing into the country.
But without fresh dollars, it’s unclear if the state can continue, said Dareen Khalifa, a senior Syrian analyst at the International Crisis Group think tank.
“Some U.S. officials are talking about regime collapse, and what they’re really saying is they want state collapse,” she said in a phone interview.
Khalifa said that recently seen unrest is still no challenge for the Assad government.
“We know many Syrians including loyalists are frustrated with Bashar, but that doesn’t mean they are capable or willing to challenge his rule.”
It’s also unclear whether the sanctions would have the effect of pushing Assad into negotiations or empower those voices now asking him to leave, said Aref Dalila, a Syrian economist and former dean of the economics faculty at Damascus University.
“When you weaken these people, you are weakening their ability to achieve change,” Dalila said in a telephone interview from Dubai, in the Emirates.
“Imagine there is a single oil barrel left, and people are dying of need. The government will still forbid them from using it to fulfill its own needs."