DAMASCUS, Syria (North Press) – Syrians have been enduring the worst economic crisis since the war began, as most indicators of the Syrian economy are witnessing an almost daily collapse with record levels of living conditions and jeopardizing already compromised health systems.
Most of the residents and those with economic expertise live in a state of despair, due to the continued decline in indicators of the economic situation, since no party is trying or concerned of finding any solution that can stop the daily decline in the economic reality that people suffering from.
Corruption and Nepotism
What worsens the situation is the way economy is managed, which some describe as authoritarian and bureaucracy, as there are no traders in the country, but there are fiefdoms for each sector.
An economist pointed out that the money reached Syria from the UAE alone amounted to three billion dollars, as such an amount could have a positive impact if it was spent in a way that would benefit the economy and citizens.
However, this did not happen, and thefts happen openly by public top officials with public facade, according to the economist.
The economist further explained that the matter needs to fight corruption in all its forms, otherwise, the economic depreciation will continue.
Economists in state-held areas agree that the economic reality in Syria is “extremely difficult”. They wonder how can a poor country like Somalia be an asylum country for many Syrian refugees.
While others blame the authorities that issued unstudied decisions that ended with these problems, and incompetent governments, which were incapable to appropriately manage economy. Markets should be liberated from all restrictions and decisions that took a toll on the national economy, exchange rate of the dollar against the Syrian pound should be liberated, and inflation must be addressed.
Removing Obstacles
In an interview with North Press, an economist and industrial facility owner proposed the cancellation of decisions that have been proven to fail in daily experiences. These include decisions by Syria’s Central Bank that restrict the freedom to withdraw and transfer funds, cancel the platform for financing imports and the export undertaking, and criminalize dealing in dollars.
In addition, the economist and industrial facility owner suggested the establishment of a platform in Syria’s Central Bank for buying and selling dollars to determine the true equilibrium price between supply and demand for the dollar.
He believes that these steps will contribute to preventing anonymous Facebook pages from controlling the country’s economy.
Meanwhile, Samer Khader, a pseudonym for a professor at a Faculty of Economics, indicated that the factors for stabilizing the Syrian currency are unavailable; additionally, there is a significant decline in production and exports, and a weakness in the role of the central bank.
He said that the government mishandled the issue of imports, as it opened the door to importing unnecessary luxury items.
In addition, Khader said that certain dealers have a monopoly on basic commodities, enabling them to control prices which in turn leads to a significant price hike due to the lack of competition.
Khader noted that there are many reasons for raising the exchange rate, adding that this ultimately results in “significant profits for influential figures.”
Clear Steps
The economic expert said the factors that caused the devaluation of the Syrian pound have been “evident for over a year.” He further noted that the “most significant financial disaster” that the Syrian economy had encountered was the outflow of capital in US dollars to other countries, which further weakened the Syrian pound.
The appreciation of the dollar, he said, has inflicted significant damage on the economy, including a decrease in the purchasing power of already meager salaries, as well as in savings and cash reserves in Syrian pounds, whether held at home or in banks.
Furthermore, it has led to an increase in the prices of goods and, most notably, created a state of fear of a further rise in the exchange rate, thereby increasing demand for the US dollar and further strengthening its value against the Syrian pound.
A burden
Generally, traders resort to buying and hoarding dollars. One of the traders stressed to North Press that dealing with the Syrian pound in his daily business has “become a real burden.”
He explains that keeping his money in Syrian pounds until he buys new goods would result in “significant losses in its value.” Moreover, converting it into dollars or gold “is not an easy task” as it would be challenging to purchase goods again with them. He highlighted that this is the situation with most traders who work with limited capital.