Regional

Syrian middle class suffers as economy hit

Farmers harvest wheat in Arbeen, in the eastern Damascus suburb of Ghouta June 1, 2014. REUTERS/Diaa Al-Din

Syrians first turned to the popular Facebook page “Mortar shell diaries of Damascus” to trace explosions in their capital. Now the site offers updates on another daily threat: skyrocketing prices.

“They’re both things that shorten your lifespan,” jokes Laila, who did not want her real name to be published. “I check it every morning ... Every day the economic situation gets worse and worse.”

Now in its fifth year, Syria’s civil war has claimed more than 220,000 lives. Those surviving the bloodshed say they are struggling to cope with an ever-worsening economy. Hunger and malnutrition have long afflicted opposition areas besieged by government forces. But regime-held areas such as Damascus and the coast have been shielded from the war’s worst ravages. Now the economic burden of the war is rebounding on regime strongholds as well: in the past two months, rebels have made critical advances that have cut supply routes not only for the army but for traders. Prices are soaring, leaving the regime struggling to ensure stable living conditions in the capital, President Bashar al-Assad’s seat of power.

“My family now skips a lot of things we could once afford, even though all four of us bring income into the house. Lately we can only afford meat once a week – and we are the well-off ones,” says a woman from a middle-class family in the capital, who asked not to be named. “That means others will start going hungry.”

Farming now produces only a quarter of what it did before anti-government protests erupted in 2011 and spiraled into armed revolt after a state crackdown. Last month, the Syrian lira abruptly weakened from 240 to the dollar to 350 after rebels captured strategic northern cities in Idlib province and the regime’s last southern border crossing with Jordan. The lira remains volatile, despite several government attempts to stabilize it. Food prices soared and residents complain they are still rising. Foreign reserves have fallen from $21.5bn in 2009 to about $7bn, economists estimate.

It remains unclear how much help Damascus is getting from foreign backers such as Iran or Russia. Several diplomats interviewed in neighboring Lebanon say Syrian officials have sought more funds from Iran in recent months. In 2013, Iran provided Syria with a $3.5bn credit facility. “They went to Tehran with the begging bowl, and they came back with less than they wanted. There is growing reluctance in the Iranian political circle,” one diplomat said. Some diplomats suggest Iran is waiting to see how nuclear talks with foreign powers turn out before investing more in Syria’s conflict. Others say it is facing its own squeeze because of low oil prices.

It’s difficult to say whether growing economic pressures could push Mr Assad’s government to collapse. The total economic loss from the conflict will reach $237bn by the end of this year, according to the UN’s Economic and Social Commission for Western Asia. The rebel capture of the crossing with Jordan alone could cost the government another $500m-$700m in revenues a year.

“Economically, the regime looks totally dependent on foreign support ... and it is feeling pressure from all sides: militarily, economically, socially. But we’ve also been here with the regime before in the past four years. It’s not the first time its situation looked bad ... So it’s hard to say that this is a sign the regime is going to fall,” a western diplomat said.

Meanwhile, Syria’s middle class continues to be squeezed. As the rest of the world sees falling oil prices, the removal of subsidies has boosted fuel costs in Syria. The price of subsidized bread has tripled. Syria’s telecoms services, run by Mr Assad’s cousin and suspected regime bankroller Rami Makhlouf, recently increased prices for phone calls and the internet. A worsening exchange rate means an average civil service salary of 20,000-30,000 lira, once worth $400, is now worth $75. “Now it’s difficult to say who is middle class or even upper class, because of these salaries’ value,” said Syrian economist Aref Dalila, a regime critic who now works in Dubai. “Many others are leaving the country, which means billions of dollars in capital flight.”

In an effort to raise more cash, the government this month said it would allow any Syrian to get a passport at its embassies for $400. Previously, the government had done background checks on applicants to stop opposition supporters from getting passports. “It’s clearly a way for them to get more dollars and euros to restock their foreign reserves,” jokes another Damascus resident.

The half a million Syrians following “Mortar Shell diaries” now joke about their shared economic misery. Cherries cost 1,800 lira a kilo, or about $5 – an exorbitant price in a country where economists say about 60 per cent of people live on less than $2 a day. “Has the bank announced loans for cherries yet?” joked one follower on the site as he posted a picture of a bowl of the fruit. “Broke people would like to know.”

 
A version of this article appeared in the print edition of The Daily Star on May 18, 2015, on page 16.

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