In an attempt to understand strategies the Syrian regime uses to keep the dollar exchange rate at SP 150, Zaman alwasl has met Samir Seifan, an economist and researcher, to explain some economic issues affecting Syrian economy and budget.
Seifan said that strategy Syrian regime used to fix the Syrian pound exchange rate against the US dollar has been successful somehow; despite the rate is 3 times the rate three years ago, but still far less than expected. He said that regime used many methods to achieve that like observing and controlling exchange offices to prevent them from manipulating the exchange prices. It reach to arresting people work in the currency exchange field besides closing the none abide offices.
Although this method helped in controlling the Syrian pound exchange rate, but its role still minimum, according to the researcher. “Other important factors helped in stabling the Syrian pound exchange rate was the law of supply and demand for the foreign currency” Siefan said. He explained that demand for foreign currency has fell down as governmental needs for the foreign currency decreased as a result of reducing investments which used to comprise 40% of the public budget.
Besides, minimizing importing equipment for public sector, as most of services nearly stopped. “Moreover, stopping importing the consumable product like sugar, tea and rice, and equipment for teaching and health, losing control over wide area of land helped regime to shrink expenses. As many employees and workers in public sector were killed or left the country, regime stopped paying them salaries, which helped in reducing spending” the economist added.
Other factors according to the researcher were the reduction in the private sector and people's expenses to the minimum, besides displacing people from their areas and forcing them to live in camps, forcing others to leave Syrian to neighboring countries, and decreasing in demand for US dollar for treatment or studying abroad, helped in reducing the elevation of the Syrian pound exchange rate.
On the other hand, supplying US dollar has fallen down as well, the Economist explained: " that resulted from stopping or reducing in petrol production and exporting, reduction in exporting Vegetables and fruits, Shrinking of inward money transfer and lastly, many investors and businessmen exported their money abroad in the beginning of Syrian revolution".
As a result of the rational use of the stand by budget by the regime, Iranian and Russian financial support, and the Russian’s support in regard to arms, all that helped in keeping the balance of Supply and demand at that level.
Two other factors can be added helped in supporting the Syrian pound, Seifan added, first of them was forcing businessmen in Syrian to pay a proportion of their income to support regime. The other factor is the money sent to the opposition, it help in a way in pumping foreign currency and US dollar in market.
The economy expert does not see in selling gold alloy or pounds any effect on the demand/ supply equation, because in the end the gold price would follow the international prices. However he sees that way might helps war traders, as hiding gold in their housed or even under the ground would be easier for them than hiding foreign currency notes. “the idea is nothing more than propaganda” the economist expressed.
In regard to Petrol and gas, Seifan said that in Syria there are three areas rich of them, the first is in al-Hasaka, which used to produce 220 thousand barrels of heavy oil, and now the area is under the Kurdish PYD control, the second storage is based in Dier Ezzor, and used to produce 140 thousand barrels of light oil, and most of area is under the control of different militant group and out of Syrian regime control, the third store of oil situated in the middle region of Syria around Palmyra and to the East of Homs, it produces gas mainly. Practically, most oil storages in Syria are out of the Regime control.
The Expert confirms that there is no oil exporting as the production capacity for both Homs and Baniyas refineries do not exceed 240 thousand barrels a day.
The Economist does not believe in the claim that raw petrol is transferred to Iraq be refined and imported again, as there is no pipe to do so, besides the local refinery are capable to do the job.
Seifan feels sorry for losing the precious source of fund used to come from petrol as most of the oil storage are under different militant groups’ control, and find it difficult to recover the production capacity of 380 thousand barrel a day, because most the infrastructure needed for refining petrol has been destroyed.
In the end, Seifan finds that lack of democracy and the dictatorial regime were the main factors helped the Syrian regime in staying all that time despite the severe economic crisis in Syria, and he explained that in democratic regimes, it is enough for few demonstrations and polls to overthrow a government or a regime, in in Syria the situation is a tragedy.
He thinks that Syrian regime can stay as long as it receives military and arms support from Russia and Iran, and militant support from Hezbullah and Iraq, besides the shifting of Syrian revolution from freedom and dignity demands into sectarian conflict. Translation by Yusra Ahmed
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