How Syria’s Economic Difficulties have Caused a Food Crisis

10 June 2020 Phoebe Sleet, Research Analyst, Global Food and Water Crises Research Programme

Background

Food prices in Syria have risen to their highest levels since the start of the country’s nine-year civil war. Over the last six months, the cost of staples has doubled as the value of the Syrian pound has plunged by more than two-thirds and as COVID-19 restrictions impede supply chains. A record 9.3 million people are now food insecure, an increase of nearly 1.5 million compared to six months ago, despite a period of relative peace in the country’s remaining conflict zones. Ongoing wheat shortages have also exacerbated the problem and the government has struggled to provide subsidised bread, which is now available on the black market for up to ten times its subsidy price.

Comment

The Syrian Government has been vocal in its criticism of US sanctions, which it claims are responsible for its economic hardships and has accused Washington of ‘economic terrorism’. The sanctions are due to come into force in mid-June. While sanctions have played some role in Damascus’s latest difficulties, Syria’s economic hardship has its roots in neighbouring Lebanon, where a financial crisis was the trigger for the country’s latest crisis. In late 2019 and early 2020, Lebanon’s mounting financial problems finally pushed the country into its most serious economic crisis in decades.

Shockwaves from the Lebanese crisis rippled into Syria, where the Syrian pound was put under severe pressure as a result. Lebanon is among Syria’s closest economic partners, one of its most reliable sources of hard currency, imports, its banking hub and where Syrian companies set up fronts to trade internationally, to avoid the shadow of international sanctions. Estimates suggest that between US$30 billion and US$40 billion worth of Syrian capital is locked up in Lebanon. That capital has been locked in Lebanon since October, when the Lebanese Government introduced controls to stop capital flight in an attempt to stave off a crash. The main backers of the Assad regime, Iran and Russia, have also faced financial difficulties of their own, limiting their capacity to aid the Syrian state.

Domestic concerns have also contributed to Syria’s latest crisis. After nine years of conflict, the country’s middle class has effectively disappeared and 80 per cent of the population now lives in poverty. Between 2011 and 2019, the war cost Syria around US$530 billion ($761 billion) and ravaged its infrastructure and economy. More recent internal turmoil has also exacerbated problems. The Syrian pound faced yet another major fall after the regime moved against Rami Makhlouf, a Syrian tycoon and cousin of Bashar al-Assad, as well as a key backer of the regime. The move sparked immediate fear in currency traders and businesses in Syria, and the pound plummeted again. As a result of the economic crisis, Syria’s food security faces not only threats to accessibility as the country’s poor struggle to afford the cost of basics, but also threats to availability. Increasing costs have meant that farmers are struggling to afford inputs such as fuel, fertiliser or pesticides.

Syria’s food and financial hardships have led to rare demonstrations in parts of the country. The southern town of Sweidaa saw one of the country’s largest protests since 2015, with protesters chanting anti-Assad slogans. While the protests have been limited to the south of the country and so far, are peaceful, the protests that led to the civil war in Syria were triggered in part by socio-economic concerns. Much has changed in Syria since 2011 and another war is not necessarily going to arise from this latest crisis, but the protests are a reminder that food and economic crises can cause problems for the regime in Damascus.

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