Although the Syrian regime's lifting subsidies for thousands of families was not surprising, experts predict that catastrophic effects on the citizens are likely to occur in the first place.
On the other hand, the government's austerity plans related to reducing the cost of support will not succeed, because it will incur many times as much as a result of high inflation rates and the deterioration of the currency.
The rise in commodity prices at high rates, came as the most rapid result of the lifting of subsidies, which paved the way for a growing parallel market, in which the commodity is sold at double the subsidized prices or the cost prices announced by the regime.
Mohamed Al-Abdullah, a researcher at the Omran Center for Studies, told Eqtsad that raising the subsidy will have significant economic effects on the vulnerable segments of the people, as it coincides with the presence of high levels of inflation and high unemployment rates, in addition to the widespread poverty rates that exceeded its percentage 90% barrier.
In light of the effects of the economic sanctions whose effects have become clear on the Syrian economy, the government’s apparent inability to continue providing support to all citizens, and the regime’s relentless attempts to reduce the budget deficit as much as possible and by various means, it can be seen that the decision to lift the support was not surprising to those who follow the Syrian economic affairs.
With the successive economic crises that the Syrian regime suffers from, and its government’s attempt to devise any solutions that achieve the continuation of economic life, even if they are at the expense of the poor and marginalized groups of society.
Al-Abdullah believes that the decision to lift the subsidies will lead to a major imbalance in the prices of commodities and the extent of the government's ability to control them in light of the lack of supply in the market of commodities and the monopoly practiced by some parties on their prices.
Consequently, it is expected that there will be steady rises in prices and the inability of segments of society who are outside the scope of support to meet them.
Ultimately, this will create a livelihood crisis for a large proportion of the community members, who may have to sacrifice their material assets to survive and meet their needs.
Al-Abdullah adds that the foregoing will cast a shadow over the deterioration of the value of the Syrian pound due to the rise in inflation, the decrease in the purchasing power of a large group of the population, and the disruption of the productive and agricultural movement due to the high prices of energy carriers in all its forms. Therefore, the cost that the government seeks to reduce from the decision to lift the subsidy will incur many times as much as the deterioration of the value of the lira and the rise in inflation and prices.
On the other hand, with regard to the assumption that some resort to selling their assets in order not to miss the opportunity to benefit from the support, the researcher believes that “the monetary mass for selling these assets will not be of that value affecting the economic reality in light of the low demand for such commodities. Especially if we know, for example, that the number of families excluded from the subsidy because of owning a car manufactured in 2008 does not exceed 66,000 families, and a total of approximately 58,000 cars.”
However, it is expected that there will be a large demand for consumer goods by citizens, with a lack of supply as a result of the great fear of a rise in their prices in the future, in light of a clear government inability to prevent monopoly and control the supply in the markets.
The collapse of Syria's currency has compounded the crisis. Worth about 50 to the United States dollar before the war, the Syrian pound traded in the hundreds per dollar in recent years, but began plummeting last fall in connection with a financial crisis in neighboring Lebanon, where many Syrians kept their money, according to the New York Times.
The International Rescue Committee says Syrians are enduring the worst economic crisis since the war began, with record levels of food insecurity and rapidly rising prices of basic goods. At the same time, water shortages in northern Syria are creating drought-like conditions for millions and jeopardizing already compromised health, water and other systems.
The Syrian Prime Ministry announced last week a new plan to expand drilling and exploration for gas and oil, in an indication of its desperation to recover the oil fields controlled by the US-backed Kurdish forces in the northeastern Syria.
The director of the Syrian regime's General Petroleum Corporation, Nabih Khrestin, confirmed that the Ministry of Oil and Mineral Resources aims to work in 16 wells this year to explore, develop and produce oil with the help of the "Syrian Oil Company" and companies operating in the country.
After the end of a meeting of the regime's cabinet, Khrestin explained that the plan includes the work of 5 rigs in several fields and the entry into new exploration areas that could not be entered previously.
He pointed out that the government is seeking to increase production to secure the need for electricity and oil derivatives for citizens in light of the current difficult conditions that Syria is going through.
The Syrian regime seeks to improve the electrical situation in the country and the reality of hydrocarbons. The extent of his success in achieving these new oil discoveries, experts say.
The Oil Ministry has revealed the total direct and indirect losses in the oil sector, which amounted to about $100.5 billion since the beginning of the Syrian crisis so far.
Oil production in Syria during the past year amounted to about 31.4 million barrels, with an average daily production of 85.9 thousand barrels, of which 16 thousand barrels per day reach refineries, and the rest is obtained by the YPG-led Syrian Democratic Forces (SDF).
Syria’s conflict began in March 2011 and has killed nearly half a million people and displaced half the country’s pre-war population of 23 million.
($1=3600 SYP in the trading market)
(Eqtsad is a sister business website of Zaman al-Wasl)
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