QAMISHLI, Syria (North Press) – A new research revealed that the Syrian government has embezzled millions of dollars of foreign aid by forcing UN agencies to use a lower exchange rate, British newspaper The Guardian said.
“The Central Bank of Syria, which is sanctioned by the UK, US and EU, in effect made $60m in 2020 by pocketing $0.51 of every aid dollar sent to Syria, making UN contracts one of the biggest money-making avenues,” The Guardian reported based on a research from the Center for Strategic and International Studies (CSIS).
Following the new US sanctions and the collapse of the banking system in Lebanon, the Syrian government resorted to increasingly depend on “the non-traditional fund raising methods.”
“The researchers analyzed hundreds of UN contracts to procure goods and services for people living in government-held areas of Syria, where more than 90% of the population are living in poverty since the Syrian pound crashed last year,” the British newspaper added.
It is noteworthy that the official exchange rate of the Central Bank of Syria has become about 2,500 SYP against one US dollar this year, it is about 3,450 SYP in the black market.
Based on this, legitimate traders and consumers prefer to use the black market rate, as they receive more Syrian pounds for foreign currency.
Since the UN is forced by the Syrian government to use the official rate, half of foreign aid money exchanged into Syrian pounds in 2020, when the rates were hugely divergent, was lost after being exchanged at the lower, official rate, The Guardian noted.
In this regard, Natasha Hall from CSIS said that “This is an incredibly systematic method for transforming aid before it has an opportunity for implementation or use on the ground.”
The CSIS research confirms that “if the goal of the sanctions in general is to deprive the regime of the resources necessary to commit acts of violence against civilians, and the aim of humanitarian aid is to reach the needy, then this aid is completely inconsistent with these two mentioned objectives.”
“Examining 779 publicly available purchases for 2019 and 2020, listed on the United Nations Global Market Database, the researchers found that up to $100 million was lost in the exchange rate. If salaries, cash and other funding flows are not disclosed, the bank may achieve hundreds of millions of dollars,” according to the CSIS research.
For its part, the UN financial tracking system said that the amount of money exchanged into Syrian pounds has not been monitored as this was beyond their mission.
“There is no way for us as independent consultants to know the full extent of how aid is spent within the country… We just wanted to point out Even with this limited gateway to understanding how much is being spent, it has already amounted to tens of millions of dollars,” Hall noted.
The UN should negotiate a preferential exchange rate with the Syrian government, to reduce the amount embezzled at least, Hall believed.
Observers say that Damascus has long hoarded international aid intended for the poor and needy in Syria; Last year, North Press reported on the government monopolization of aid amid the coronavirus outbreak.
In April, the Internal Security Forces of North and East Syria (Asayish) revealed that they had found boxes of aid from the UN in the headquarters of the pro-government militia National Defense Forces (NDF) in Syria’s Qamishli city.
The boxes found by Asayish reportedly contain foodstuffs and medical equipment.