Political understanding between Autonomous Administration and Damascus must be complemented by the economic aspect – Economic Researcher
North-Press Agency
Mohammad al-Bozou
An academic and an economic researcher spoke to North-Press about the reasons for the deterioration of the Syrian pound (lira), and the solutions that the Syrian government and the Autonomous Administration of north-eastern Syria should make through political and economic agreements and understandings for the economic budget and its impact on the Syrian future.
Chalang Omar, an economic researcher told North-Press there are many reasons for the decline of the Syrian pound which date back to 2011, where it has lost more than 1500% of its value. This is related to the damage of all Syrian economic sectors as a result of the war, and the result of large areas out of the control of the Syrian government forces and exposed to bombing and destruction. This led the Syrian economy to suffer from a structural crisis.
Omar stressed that, the recent decline of the Syrian pound in the last two months has new reasons, including the loss of control of the Central Bank "Syrian Bank" to intervene in the exchange market to reduce speculation and play the role of the budget, and not to return the value of the pound, but the budget. Omar added that, the second reason is the needs and crisis suffered by the neighboring countries in Lebanon and Iraq, which affected the Syrian pound negatively, and the allegation of Syrian businessmen who are close to the Syrian government in these two countries has a significant impact on the decline of the Lebanese and Syrian lira, as a result of restrictions imposed on the banking sector, and imposed on the Syrians as well.
Omar said the Syrian government was resorting to the banking system of these two countries, Iraq and Lebanon, to complete its commercial transactions. There are also large amounts of Syrian businessmen in the banks of the two countries. Also, the sanctions imposed on the Syrian economy by Europe since the beginning of the crisis have a significant impact. He pointed out to the following reason that, the Turkish military invasion in north-eastern Syria and its occupation of the areas of Sere-Kaniye (Ras al-Ain) and Tal Abyad (Gre Spi), and the departure of many foreign organizations operating in the northern territories had a significant impact on the deterioration of the Syrian lira, where the organizations were paying the salaries of their employees and funding lots of infrastructure, reconstruction and relief projects in the U.S. dollar.
The economic researcher confirmed the U.S. statements and its desire to control the oil fields and staying in north-eastern Syria reduced the possibility of the return of the Syrian government to these fields and benefit from, and this was a negative factor on the Syrian lira. Omar explained that, the Syrian government in Damascus cannot find serious solutions to the decline of the Syrian lira, because there are also millions of manpower outside the country and that, a strategic plan for the recovery needs a stable political climate.
Omar believes that, the ordinary citizens are the most affected by the decline of the Syrian pound, because their purchasing power has become low and the employee who was earning SYP 60,000 per month, is earning now about SYP 80,000 and the increase recognized by the Syrian government and the Autonomous Administration for their employees is a nominal increase, and not real for contributing to the purchasing power of the families, but it is a compensatory increase to the decline of the Syrian pound.
Omar stressed the ability of the Autonomous Administration to influence the exchange rate is limited, as it doesn't have the tools of monetary policy, and thus cannot affect the exchange rates, adding that tools of the monetary policy "is done by the central bank in Damascus, and the Syrian government is responsible for the deterioration of the lira.”
He also believes the solutions to the decline of the lira are the compatibility between the Syrian government and the Autonomous Administration, where they can reach economic understandings and contribute in adjusting the exchange rate of the lira partly. This can be done through reaching understandings related to the shape of the future Syria, investing resources and taking advantage of the resources in the areas of the Autonomous Administration, in north-eastern Syria.
He added that, in case of an economic agreement between the government and the Autonomous Administration, this will open the way for political understandings as well, and that the economy will be the locomotive for reaching a political understanding, similar to the military agreement that took place between the SDF and the Syrian government forces.
He noted to the need for compatibility between the Syrian government and north-eastern Syria administration "economically and politically, to face the Turkish offensive, as most of Syria's wealth is located in north-east Syria: agriculture, oil, dams and lots of resources freed by the SDF, SDF had previously stressed that, the wealth belongs to all Syrians, so there must be understandings for the economic budget.”
"If this agreement was reached between the Syrian government and the Autonomous Administration, it will benefit all Syrians, the return of the Syrian labor and refugees from abroad, and it will be a factor of confidence and development of regional relations as well, the agreement between them will be the most appropriate solution for the problem of the decline of the Syrian pound, and the shape of Syria's future in reconstruction,” Mr. Omar concluded.