On the U.S. Caesar Act that seeks turn up the financial pressure on Bashar Assad and his regime, Zaman al-Wasl has interviewed Samir Seifan, a prominent Syrian Economist, to shed the light on most controversial issues of the Syrian economy.
Dr. Samir Seifan is a and the President of Syrian Management Consultants Association. He is Managing Partner of Arab Development Centre.
The cost of living in Syria is getting worse unprecedentedly, over the past eight years. Many observers, whether pro-regime or even neutral, are linking this bad situation to serious US actions to block Bashar Assad's regime.
How do you see the upcoming developments of cost of living and services in Syria? Do the regime and its Iranian and Russian allies have the means to circumvent the path of sanctions and the escalating siege, and find alternatives to bring fuel and foodstuffs to the internal market, or do they agree with those who expect the situation in Syria to deteriorate into a situation? Has not been seen by the Syrians before, perhaps more than a century ago?
First of all, the living standards of the low-income Syrians and the poor are the first result of the eight-year conflict, because the conflict has destroyed the wheel of production and the sources of income to finance the war machine rather than development.
The economic, political and diplomatic sanctions that began with the Arab League sanctions in November 2011, through the ongoing American and European sanctions, all have a significant impact on resources and living standards.
This suffering includes a big part of the Syrians. I exclude the suffering of the upper and middle ruling elite, businessmen, part of the middle class, because a part of it has deteriorated to poverty. I also exclude the beneficiaries of the government apparatus, gangs of kidnappings, theft and trading. In addition to groups who were or are still in the opposition area of control, and their armed factions of corrupt who exploited the situation to achieve small or large wealth, and turned a large number of faction leaders to jihadists corrupt.
But all categories that do not suffer from difficult living conditions are less than 20% of the Syrian people, while 80% of the Syrians are suffering from poverty and extreme poverty, including elements in the army and even security and in the administrative system and others.
Recently, after the regime regained control of additional areas outside its control, with the support of Russian aviation and Iranian militias, the suffering of the majority of Syrians increased rather than be released, as promoted by the regime's media.
This is frightening the regime because it sends a message that the continuation of the crisis of living is linked to the continuation of the system itself, unless there is a change according to a political solution that satisfies the majority of Syrians. As the argument used to justify the difficult situation is to fight "terrorism", but isn’t "terrorism"?
The most fearful part of the crisis is fuel issue. Houses needs energy from electricity, gas and fuel, public services, transport, schools, hospitals and others depend on it, and the production facilities from simple agriculture to large factories need energy, even the civil and military state machine. All are working on energy sources.
I believe that the really bad living situation in recent months is linked to two major causes:
The first is the decline of resources. The expansion of the regime's control of additional areas in Syria such as Eastern Ghouta suburbs, Qalamoun al-Sharqiya, Daraa and the Syrian desert towards Deir al-Zor and the borders of Raqqa has increased its burdens, while the cessation of support has stopped.
Also the cut off support provided to the areas that the regime regained control, all contributed to the shrinking of resources and reduced the supply of the dollar in the markets, causing the increase in the price, and the stop of the Kurdish "BYD" forces, under pressure from the Americans worsen the crisis.
The regime produces around 25,000 barrels while it needs about 140,000 barrels.
The second reason is that Syria is actually used as a pressure tool by both the Russians and the Iranians, who are competing for control of the regime and the confiscation of its decision.
Iran is pressing to respond to its demands, increasing its influence in Syria, while the Russians want the same and want to introduce a minimum of amendments that attract parties from the moderate opposition to convince the Americans and Europeans and some Arabs to support the solution of reconstruction, because the Americans, Europeans and some Arabs are weakening the political solution as a condition to contribute to reconstruction, and Syria without reconstruction is a burden and a political failure for the Russians.
There are different views on the political system nature in the constitution and how to conduct the referendum and elections, between the regime and Iran and Russia.
Q- The exchange rate of the Syrian pound has recently fallen dramatically to the lowest level in two years.
Many observers believe that this slow decline since last September will continue, and may accelerate, with the tightening of sanctions and the expected siege on the regime, along with increased need of internal market, therefore, more pressure on the foreign exchange reserves available of the regime’s government.
Q- So how do you expect the decline of the exchange rate of the Syrian pound, will we be in front of an unprecedented decrease? Or does the regime have mechanisms to deal with such issues. Do you think that the regime sees a decline in the exchange rate? Has this decline an interest on him, as some observers accuse him of?
Despite the circumstances, the regime was able to maintain its civil and military machinery and maintain life in the areas that remained under its control.
This was aided by several factors, such as stopping investment spending in the public budget, using the general reserve and obtaining credit facilities from Iran, while Russia provided the needs of arms and ammunition.
These are all debts accumulated by Syria in the future, whatever the regime. As well as the relief provided by the United Nations. In addition, the withdrawal of large areas under its control has reduced the need to spend on them, and the displacement of millions to neighboring countries have removed the burden of their salaries and spending on their services, and thus could continue.
However, after the return of its control over large areas, additional burdens have increased, without any resources due to the destruction of these areas, and the displacement of a large part of the population, the impact of the return negatively on the financial situation and the conditions of life for all Syrians.
Over the past eight years, the regime succeeded in making the exchange rate of the Syrian pound against foreign currencies and the dollar in particular slow.
Recently, the dollar has jumped above the 500 SYP today, which is around 570 Syrian pounds per dollar.
This makes life for most Syrians inside Syria even more difficult. I do not think the regime has an interest in reducing the purchasing power of the Syrian pound. The situation is expected to be worsening unless Russia or Iran accelerates to support the regime.
I believe that Iran and Russia will not allow the regime to fall under economic pressure and will provide the regime with what it needs with the minimum limits that preserve its survival, regardless of making these submissions conditional.
On the other hand, Syria is open to Iraq and Lebanon and Iran can supply Syria with Iraq or even Lebanon with some of its needs, but its capacity today is weaker and weaker if the United States is to prevent the export of any Iranian oil.
Russia also does not want to pay any money outside the operation of its military machine and the formation of military forces under its command.
Finally, as for the Caesar act, Trump would not sign it to not stifle the regime more.
Zaman Al Wasl