Syrians forced to adapt as country’s economy worsens

After nearly a decade of civil war and crippling sanctions, Syrians are having to change their lives as the economy worsens with the Syrian pound devaluating and prices inflating.

Since the start of the civil war in 2011, Syria has been the target of sanctions that have resulted in a weakened economy, and when the Caesar Act that was passed in late 2019 comes into force on June 17, sanctions implemented under the act could see the situation worsen.

While the Syrian pound is officially valued at 435 to $1 US, on the black market it is being sold at a rate closer to 1,700-1,900 pounds to the dollar. The Central Bank has tried to stabilize the rate at 700 to the dollar, for remittances and some commodities, and at the banks Syrians can withdraw money at the 700 rate.

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Spiraling exchange rates impact people in numerous ways but can leave importers unable to pay for goods, leading to shortages in food and medical supplies, and leave people unable to afford those supplies that do arrive.

Along with inflation, Syrians are having to find alternatives in order to afford all of their necessities.

Fatima, a Damascus resident who spoke to Al Arabiya English on the condition of anonymity, said that basic necessities are increasing in price, even if it is just slightly.

People buy traditional bread at a bakery before the time for iftar, or breaking fast, on the first day of the holy month of Ramadan, as the spread of the coronavirus disease (COVID-19) continues, in the rebel-held Idlib city, Syria April 24, 2020. (Reuters)

“We [my family and I] went to buy toilet paper, and we buy the big 20-roll packs,” she explained. “We bought it and it lasts us around two weeks and it cost 3,500 Syrian pounds ($5 at the official rate). When we ran out, we went to get more and it was 5,000 Syrian pounds ($7.14).”

Farid, also a Damascus resident who spoke on the condition of anonymity, explained that he and his family have had to change how much they buy when they go to the store in order to limit expenses.

“For example, buying 100 grams of meat instead of 200 grams, choosing cheaper things to eat, etc,” he said. “Even for luxuries, for example, when we’re hanging out with friends, we stopped buying Pepsi and instead we make powder juice.”

For other families, they’ve stopped buying meat altogether.

“My wife and I have no other income and this drastically changed our lifestyle, for example we have canceled meat out of our diet because we can’t afford it anymore,” Omar, who prefers to keep his identity hidden, told Al Arabiya English.

For more than 35 years, now-retired Omar was a government employee with a salary that ranked high in the public sector hierarchy.

The 65-year-old’s pension amounted to $1,000 in 2011, before the brutal oppression of anti-regime protests that led to the nine-year war. Despite a November 2019 decree that increased wages for Syrian government workers, Omar’s pension is now no more than $37.

Basic salaries, around 50,000 pounds, or $71.43 at the official rate, a month for a government job that constitute most jobs in the country, are not enough for most Syrians with the worsening economy.

According to Danny Makki, a Syria analyst, even rent for most Syrians is a challenge, especially for those living in the capital Damascus, and, without massive changes, the situation will only worsen.

“Salaries are barely enough for people to live on,” Makki told Al Arabiya English, “and the statements by the Syrian Minister of Finance that Syrians can survive on their salaries if they organize their expenditure shows that the current government has yet to fully comprehend the scope of the economic chaos currently raging, measures are unlikely to solve the crisis and unless drastic action is taken to halt the decline in both currency and economy, then the situation will get even worse.”

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To minimize costs, many people have had to start shopping at the government-run Syrian Commerce Company who buy lower quality products directly from their sources and sell them at a cheaper rate than at most supermarkets.

“We [my family and I] started buying from there because one kilogram of lemons reached 2,500 Syrian Pounds ($3.57), which makes no sense. Nothing is normally more than 1,000 Syrian Pounds ($1.43) per kilogram unless you are buying something like kiwis or pineapples.”

However, Syrians have found some solace in the government’s subsidizing of products such as rice, oil, tea and sugar, although, Fatima says it is hard to find some of these.

Other cuts to personal spending

For Farid, who is currently a university student, he has had to start attending his courses less as he cannot afford the costs of daily transportation to and from the campus.

Fatima’s younger sister is also at university and is working on her Master’s thesis but has had to temporarily pause her work because her laptop stopped working. Since she needs the laptop to finish her work and her degree, the family went to purchase a new one but were shocked to discover the drastic increase in the cost for a new laptop.

“We went to the market and they don’t put the prices on the laptop anymore,” Fatima explained, “You have to ask the shop owner and they have to do their calculations based on today’s [Syrian pound] price. Just between yesterday and today, a laptop increased by 13,000 Syria pounds ($18.57). I bought a laptop a year and a half ago for what was around $700 (at the official rate) or 340,000 Syrian pounds. Today, the same laptop is worth 975,000 [Syrian pounds] ($1393).”

A man rides a motorbike past damaged buildings in the rebel-held town of Nairab, Idlib region, Syria April 17, 2020. Picture taken April 17, 2020. (Reuters)

Due to the daily fluctuation of the Syrian pound, people have resorted to selling gold as they are able to get more for it than if they were going to take the money out of the bank and since it is illegal for people to carry dollars for everyday use. However, this gold is a form of savings for Syrians and they try not to sell it unless absolutely necessary. In order to pay for a new laptop, this is what Fatima and her family are going to have to do.

High exchange rates hit home

During the war, many families fled their homes and rented houses in safer areas, hoping to return as soon as the fighting is done. But the high exchange rate which affected house rentals could drive them out of their houses again.

Ghinwa, her husband, and her daughter live in three different houses now, after the owner kicked them out of their rented house, and a five-year siege with regime airstrikes kicked them out of their original one.

“We used to own a house and a grocery store in the Eastern Ghouta’s Harasta, but now it’s all gone. Even the little money we had saved does not amount to anything with these new prices,” Ghinwa said.

“The owner of the house we rented told us we can’t stay anymore because we’re not able to pay, so we separated ourselves into three houses, each one of us lives with a different relative so that we’re not a burden,” she added.

Others whose houses were in less destroyed areas resorted to their half-standing houses and used primitive materials to build temporary walls.

War-flation

Nine years of war has significantly exacerbated Syria’s economic woes. Between 2011 and 2016, the World Bank estimates the country’s cumulative GDP losses at around $226 billion. The bank has also estimated that the losses resulting from economic disruption could exceed the physical disruptions of the war by a factor of 20.

This drop is in part as a result of a significant fall in resources devoted to economic growth, and instead a focus war-related activities, severely destabilizing the pound’s stability, Chatham House said in a report in mid-2019.

For contrast, before the war began in March 2011, the Syrian currency was trading at just 50 pounds to the dollar, compared to around 1,900 pounds currently.

The prospect of the situation worsening is something that constantly fills people like Fatima with fear, especially with the possibility of new sanctions.

“We worry every day,” she said, “We try to not think about it because it’s really depressing and we can’t do anything about it.”

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