Syrians cope with economic crisis amid uprising

BEIRUT: As President Bashar Assad fights off a 10-month-old uprising, Syrians have been struggling to cope with shortages of heating oil and other fuel, electricity cuts of up to 16 hours a day and dwindling bank balances.

With no end in sight to the violent conflict, Assad's embattled regime has sought to rally support by blaming the uprising - and the "terrorists" he says are behind it - for the profound economic crisis gripping the country of 22 million. The rhetoric reflects an awareness in the regime that economic pain could erode the support it has succeeded in retaining so far amid the turmoil.

For now, though, many Syrians say their immediate needs transcend politics.

"I haven't seen such a crisis in my entire life," said Majd Amer, a resident and activist in Homs, a city that has been among the hardest-hit by the military crackdown on protesters. "Most of the residents depend on assistance from their neighbors."

Syria's economy is groaning under the weight of sanctions from the U.S., European Union, the Arab League, and the emerging regional power Turkey. The government's violent crackdown on the uprising has caused vital sources of revenue - like tourism - to dry up, and much of the economic squeeze has affected low-level merchants and businesses.

The value of the Syrian pound has dropped 50 percent from 47 to the dollar to 71 to the dollar on the black market, sparking a rise in prices that is straining Syrian budgets.

On Friday, Central Bank Governor Adib Mayaleh said Syria will start next week to intervene to "improve the price of the pound," meaning it would spend reserves to maintain the value. He declined to say how much money Syria has in foreign reserves, despite speculation that Damascus is already burning through its funds to withstand the blistering sanctions.

In a telephone interview with The Associated Press, Mayaleh blamed the economic woes on an "international conspiracy," echoing the regime's line that foreign terrorists are driving the revolt against Assad, not protesters seeking change.

Earlier this week, Syria's oil minister said Western sanctions on Syrian oil exports have cost the country $2 billion since September - an unusually blunt assessment of the economic problems the country is facing.

In a speech earlier this month, Assad blamed his opponents for Syrians' suffering, and mockingly asked if being a revolutionary meant "depriving people of cooking oil they need so they don't starve."

Analysts say the change in tone is a subtle shift by the regime. In the early days of the uprising, the government stressed it was invulnerable to the sanctions. But now, Assad and others increasingly cite Syrians' suffering - and say the uprising is the cause of it all.

The move signals a keen understanding that if the economy crumbles, it could spell doom for the regime.

"The regime is trying to mobilize against the sanctions, now that the sanctions are affecting their economy," said Said Hirsh, a Mideast economist with Capital Economics in London.

Assad has spent years shifting the country away from the socialism espoused by his father and predecessor. The result was a new and vibrant merchant class that transformed Syria's economic landscape - even as the regime's tight political grip remained unchanged.

So far, the monied classes have stuck beside Assad amid the greatest challenge yet to the 40-year rule of his family. But if the economic squeeze reaches them, it could be a game-changer for Assad since they may begin to pressure for some sort of resolution to the crisis or even turn outright against him.

The violent conflict in Syria has marked the most serious challenge to the Assad dynasty. The U.N. estimates some 5,400 have been killed since March, when the uprising began against Assad. Although the revolt began with mostly peaceful protests, an increasingly strong armed element has developed and many people are now fighting back against the regime.

Army defectors, as well, have turned their weapons on government targets.

Syrians say they are suffering a frigid winter with power cuts and scarce cooking and heating oil. In Homs, queues for gas cylinders, which cost about 5 dollars, can stretch more than 100 people; wealthier residents turn to the black market and pay double the price.

Attacks on fuel pipelines have contributed to the shortages, and because of the chaos the state is slower - or unable - to fix electricity problems, causing cutoffs.

Key revenue sources like tourism - which accounted for 12 percent of the economy, or $8 billion dollars in 2010 - have dried up. Visa and MasterCard credit cards are no longer valid in Syria, hurting prospects for international travel and business.

George Badi, head of sales at the Dedeman Hotel in Damascus, said the occupancy rate stands at about 15 percent compared, even though the hotel slashed prices by 60 percent. In January 2011 - two months before the uprising began - occupancy was 65 percent, he said.

George A. Lopez, a sanctions expert at the University of Notre Dame's Kroc Institute for International Peace Studies, said sanctions have brought the Syrian economy "to its knees."

But Syria's powerful allies in Russia and Iran are standing by Damascus, and observers say a steady influx of money from them could help keep Syria's economy afloat.

On Friday, thousands held anti-government protests, chanting for the downfall of the regime. At least 15 people were killed by security forces across the country, activists said.

Arab countries and the West have so far failed to reach any consensus on how to counter the regime crackdown. Foreign ministers for the Arab League will meet Sunday in Cairo to discuss the future of a one-month observer mission, which expired Thursday.

In Egypt, two Arab League officials said the organization is likely to extend its observer mission in Syria, despite complaints from the Syrian opposition that it has failed to curb the bloodshed in the country.

French President Nicolas Sarkozy said Friday that the Arab League should continue "its courageous action" in Syria.

"No one more than I offered to extend a hand with sincerity to Bashar Assad, (but) France will not be silent in the face of the Syrian scandal," Sarkozy said.

Sarkozy had tried to smooth over relations with Syria in recent years, inviting Assad to Paris repeatedly and mediating talks with Syria's and Lebanon's leaders. But France has been increasingly critical of Assad's crackdown.





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