Syria… a faltering economy facing stormy crises



With the recent dramatic developments, which led to the downfall of the President’s regime Bashar al-AssadThe economy is facing complex challenges, starting with the reconstruction of the destroyed infrastructure, which was the mainstay of economic activity in the country. Roads and public facilities, and factories Commercial facilities are now in need Investments Huge projects to get them back to work, which clashes with limited resources and ongoing security tensions.

Besides, he suffers Syrian economy From the absence of talent who migrated in search of security or opportunities abroad, which creates a large gap in skilled human resources. It also led to the collapse Monetary institutions And finance leads to a loss of confidence in the economic system, which makes it re Financial stability One of the urgent priorities.

Despite this bleak reality, the moment of the fall of the Syrian regime may provide a window to rethink the country’s future. This decisive moment could be the beginning of the development of a comprehensive vision based on reconstruction with international participation and strengthening Production sectorsProviding an attractive investment climate that supports the path to economic recovery and restores Syrians’ hope for a better future.

The magnitude of economic losses

Estimates vary Syrian economic losses During the past years of the war; While former finance minister Kenan Yaghi revealed in press statements last May that the damage caused by the war in his country was estimated at around $300 billion, other studies and estimates point to higher figures, including estimates from the Syrian Policy Center. , which indicates losses in the amount of up to 650 billion dollars by 2021.

  • $26,000 is the loss of every Syrian from these conflicts in about 13 years!
  • 16 billion dollars are losses Agriculture sector Which provided jobs for about 5 million Syrians.
  • The industrial sector lost $25 billion. As a result, exports fell from $9 billion in 2010 to less than $1 billion in 2023.
  • $115 billion in sector losses oil And gas due to the drop in production to less than 15,000 barrels per day after it previously amounted to around 400,000 barrels.
  • 12 million people suffer from displacement inside and outside of Syria… 6 million people live in severe poverty… and 12 million Syrians suffer from food insecurity.

Economic decline

The Secretary General of the National Democratic Action in Syria, Mahmoud Marei, said in exclusive statements to the Ektisad Sky News Arabia website:

  • After the events they witnessed Syria In recent days, there has been a significant deterioration of economic conditions in the country.
  • The value of the Syrian pound has fallen in an unprecedented way (..).
  • This deterioration was directly reflected in the prices of goods and services, as the prices of food, medicine and all basic products increased by about 50 percent.
  • In addition, serious shortages of basic foodstuffs such as sugar, rice, meat, milk and cheese have been recorded in the markets.
  • In light of this situation, the income of the workers is significantly reduced, as the salary of a civil servant does not exceed 30 dollars per month, which leads to the rise of the poverty rate to a frightening level.

And I was a witness Syrian pound An unprecedented sharp collapse after the fall of Bashar al-Assad’s regime. The value of the Syrian currency against the US dollar fell by 42 percent in trading in the city of Damascus, reaching an unprecedented low, where one dollar is now equal to 22 thousand Syrian pounds, according to currency trading website Syria Today. In the city of Aleppo, the dollar reached 36 thousand lira, which is a drop of 64 percent.

This sharp decline reflects the worsening economic and political crisis in the country, and will have a significant impact on the lives of citizens.

The economic situation worsened

According to data contained in the World Bank’s latest reports on Syria, namely the “Syrian Economic Observatory” and “The Well-being of Syrian Families after a Decade of Conflict” published in the spring of this year:

  • The country’s ongoing conflict – exacerbated by external shocks – has worsened an already deteriorating economic situation in 2023… and has also led to a significant decline in welfare. Syrian families.
  • Continued lack of financial resources and limited humanitarian aid have further weakened the ability of families to provide for their basic needs amid rising prices, declining basic services and rising unemployment rates.
  • In 2023, the value of the Syrian pound significantly depreciated by 141 percent against the US dollar.
  • Consumer price inflation has increased by 93 percent, and this situation has been worsened by the reduction of government subsidies.
  • As the economy slows, incomes remain Public finances Record the drop. In response, the authorities further cut spending, especially in terms of capital spending, while closely adjusting support programs.

According to the regional director of the Department for the Middle East in The World BankJean-Christophe Carre, said: “More than a decade after the bloodiest conflict of this century, Syria’s ability to absorb external economic shocks has seriously declined, especially with the recent decline in aid flows, difficulties in obtaining humanitarian aid and intensifying regional geopolitical tensions.”

Regarding the World Bank’s expectations in this context for the Syrian economy:

  • The Spring 2024 edition of the Syrian Economic Monitor predicts that the prolonged economic contraction will continue into 2024.
  • With real GDP exposed to unprecedented uncertainty, it is expected to contract by 1.5 percent in 2024, with a 1.2 percent decline in 2023.
  • Private consumption, the main driver of growth, is expected to remain subdued as purchasing power continues to decline due to rising prices.
  • Private investment is also expected to remain weak in light of the volatile security situation and uncertainty in the economic landscape and at the policy level.
  • Inflation is expected to remain high in 2024 due to the effects of currency depreciation, as well as persistent foreign exchange deficits and the possibility of further reductions in food and fuel subsidies. The 2024 budget indicates a continued reduction in support for basic goods.

Widespread influences

Syrian journalist and analyst Sherif Shehadeh tells the “Iqtisad Sky News Arabia” website about the humanitarian and life situation in Syria:

  • Certainly, without a doubt, that Military development It has direct and indirect effects on Economy.
  • If we want to understand this influence more deeply, history provides us with countless proofs.
  • Wars are known to create economic crises: prices rise, materials fall, and cases… Greed And monopoly, which we call selfishness, and that always happens during wars.
  • Disruptions to roads connecting towns and villages and delays in the delivery of essential materials, leading to a suffocating economic crisis.
  • In Syria, we witnessed how this caused a crazy rise in prices, as a result of the opposition’s control of roads and areas (..).
  • This reality has had a major negative impact on the economy, making it very difficult to secure basic materials.

He adds: “Let’s not forget that.” Economic crises The results of wars are not limited to one country, but their effects extend to several countries (…)… Also, wars are considered one of the most dangerous negative factors on Food safetyWhich in turn leads to health crises, such as poor nutrition and lack of fresh food, all of which also affect the country’s trade balance. We must be aware that the continuation of wars represents a great danger for the economy and the health of citizens.

The latest data published by the UN envoy to the United Nations indicate that the Syrian crisis is still one of the most difficult humanitarian crises in the world. Before the influx of more than half a million returnees and refugees from Lebanon since September, there were more than 16.7 million people in need of humanitarian assistance, while this latest violence adds more lives that are now in urgent need of rescue.
Deterioration of humanitarian conditions

According to reports The World BankRegarding living conditions in Syria:

  • In 2022, poverty affected 69 percent of the population, or about 14.5 million Syrians.
  • Although extreme poverty did not actually exist before the conflict broke out, it affected more than one in four Syrians in 2022, and may have increased in severity due to the devastating effects of the February 2023 earthquake.
  • Several external factors, especially the financial crisis in Lebanon in 2019, contributed to this And the corona pandemicAnd the war is ongoing UkraineThe welfare of Syrian families has further declined in recent years.
  • More than 50 percent of the poorest groups live in just three governorates (Aleppo, Hama and Deir ez-Zor),
  • The governorates in the northeastern part of Syria record the highest poverty rate. Families headed by women and families of internally displaced persons are at the greatest risk of poverty.

Integrated economy

For his part, the professor of international economics, Dr. Ali Al-Idrisi, confirmed in exclusive statements for the website “Ektisad Sky News Arabia” that the escalation of the crisis in Syria will lead to the worsening of the already tense economic situation, with serious repercussions on various economic and life sectors. .

Observers believe that the new reality in Syria, with its radical transformations, may provide an opportunity to re-examine the paths that the economy has taken over the past decades.

This change, despite its complexity, may allow the country to move towards a new economic approach that addresses weaknesses and establishes a phase of recovery.
Using international support and initiating a comprehensive national dialogue, it is possible to build a more resilient and sustainable economy that fulfills the aspirations of the Syrian people for stability and prosperity away from the crises that have burdened them.

Al-Idrisi talks about the suffering the Syrian economy is now facing, including deteriorating infrastructure, after a long conflict that has contributed to the destruction of roads. Health institutionswater and electricity networks, which complicates the reform and development processes, which leads to a decrease in local production, because it is damaged Agricultural and industrial activity Due to lack of security, displacement of population and difficulty in accessing resources, which leads to increased dependence on imports and worsens the trade deficit.

It also indicates an increase Displacement rates Internal conflict and migration, as internal fighting has pushed populations into displacement and migration, straining stable areas for social services and affecting the labor market, noting at the same time that the unrest has led to the collapse of the local currency to record levels, with rising commodity prices and falling purchasing capacity for citizens.

He added: “The fighting has hampered the efforts of humanitarian organizations to deliver aid, which has increased the suffering of the population in the affected areas,” while explaining that as the crisis continues, Syria’s need for aid grows.





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