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A drifting economy

2023-01-25 23:12

Issam Khoury

A drifting economy

New Year 2023 was not a festive day as is usual in Syria, as the power outage (20 hours a day) coincided with a high increase in price in all products, reaching

New Year 2023 was not a festive day as is usual in Syria, as the power outage (20 hours a day) coincided with a high increase in price in all products, reaching more than 100%.

The financial grant [1] that President al-Assad gave on December 15 to workers and employees in the amount of 100,000 Syrian pounds ($16) did not help in reviving the Syrian markets before the New Year, because it has become part of the general inflation movement in Syria.


The Syrian currency collapsed after the president’s grant, bringing the price of the dollar on December 27, 2022, to 6,700 Syrian pounds, after it was 6,000 Syrian pounds three days ago. This clearly indicates that the Syrian expatriates and refugees in Europe did not transfer the expected amounts of foreign exchange to their families during the holiday period, which made the treasury of the Syrian state of clear deficit.


Of course, the price of the dollar did not stop at this point but rather increased in the first week of 2023 to reach 7,250 Syrian pounds, meaning that the Turkish-Syrian meeting [2] through the Russian mediator on December 28, 2022, did not help decrease the exchange rate of the falling Syrian pound.


The Iranians wanted to be partners with the Russians in the Syrian-Turkish coordination process, so they decided to stop supplying the Syrian regime with oil at a reduced price, and demanded a price of $70 per barrel, the Wall Street Journal reported [3] on January 15, 2023.

This news is very accurate, as it became clear to the Iranians that the Syrian regime stopped the fuel allocation subsidy program that is subsidized to citizens, which means that the surplus money goes to the Fourth Division, and to the Katerji Company, which is now coordinating its business with Bashar al-Assad’s son-in-law, “Bassel Shawkat,” who is the son of Assef Shawkat,

The Iranians thought, Assef Shawkat is the most prominent of those accused of killing Hajj Imad Mughniyeh [4], who was assassinated in Damascus on February 12, 2008.


Bassel Shawkat, son of Bushra al-Assad, was residing in the United Arab Emirates, so the Iranian authorities were unable to prepare him to be their new young man in Syria, also, it is likely that they would not be able to, because he was realizing that Iran and the working group in state security that was headed at the time by Ali Mamlouk had a killed his father on July 18, 2012, in what was called the "crisis cell explosion"[5].


The United Arab Emirates realized that the Syrian economy was on the brink of collapse, so the Emirati Foreign Minister Abdullah bin Zayed bin Sultan Al Nahyan [6] took the initiative on January 4 to visit Damascus [7], and after that visit, the price of the Syrian pound began to gradually improve, reaching 5,700 Syrian pounds, on January 12, 2023.


The decline in the dollar coincided with a government directive on January 2, 2023, to raise the exchange rate of the dollar in official departments to 4,545 Syrian pounds, after it was 3,000 Syrian pounds, and the aim of this change is to motivate the expatriates to send money through official transfers, and not rely on the black-market money changers.


Indeed, this plan is good, but it does not fit the real exchange rate of the Syrian pound, so this plan did not achieve the desired result. From here we realize that the improvement in the price of the Syrian pound came after Emirati assistance to the Syrian treasury, and most likely this assistance was not great so as not to anger Washington, which Economic sanctions are imposed on Damascus. because the price of the dollar rose again on January 18, 2023, to reach 6,500 Syrian pounds.


From these facts we conclude the following:


  • The price of the dollar crossed the threshold of 6400 in an irreversible way.
  • Rumors issued by the Syrian intelligence contribute to a temporary reduction in the price of the dollar, but it soon returns to its real price.
  • Turkish-Syrian or Emirati Syrian political dialogues do not benefit the Syrian economy.
  • The Iranians insist on being part of the solution in Syria, and Bashar al-Assad does not have the ability to neutralize them, and this is what prompted Iranian Foreign Minister Hussein Amir Abdullahian [8] to meet with Turkish Foreign Minister Mevlüt Çavuşoğlu [9] on January 17, 2023 [10], stressing the need for joint coordination Concerning Syria according to the Astana agreement, ignoring al-Assad’s statement on January 12: “The rapprochement with Turkey, mediated by Russia, must aim at ending Ankara’s occupation of parts of Syria” [11]
  • The Emiratis are the closest to Al-Assad, and they do not welcome the Turkish-Syrian reconciliation. After Abdullah bin Zayed Al Nahyan's visit to Damascus[12], the Syrian official language towards Turkey changed, as Bashar Al-Assad declared the need to "end Ankara's occupation of parts of Syria".
  • The reality of fuel is very miserable. Since the beginning of this year, sellers of smuggled gasoline from Lebanon have spread in the Syrian streets without any government control. They sell one liter at a price of 10 thousand Syrian pounds, which is equivalent to ($1.5), while the state distributes it through gas stations to each family. 25 liters per month at the subsidized price, which is 3400 Syrian pounds per liter “$0.52”, meaning that the price of a gallon is “$2”, provided that it is from the poor category, and this quantity is not enough for any family.
  • The sellers of diesel and gasoline, spread in the streets, get the materials for sale from the Fourth Division, and from Hezbollah members, which proves that both parties are stronger than the Syrian state.


[1] https://www.sana.sy/?p=1803854

[2] Turkish defense minister Hulusi Akar and the head of its National Intelligence Organization (MIT), Hakan Fidan, met with Syrian defense minister Ali Mahmoud Abbas and Syrian intelligence chief Ali Mamlouk in Moscow along with Russia's defense minister Sergei Shoigu, the Turkish defense ministry said. https://www.usnews.com/news/world/articles/2022-12-28/turkish-syrian-officials-meet-in-moscow-after-years-long-chill

[3] https://www.wsj.com/articles/iran-restricts-supply-of-cheap-oil-to-syria-leaving-ally-in-crisis-11673755436 

[4] https://www.joshualandis.com/blog/hizbullah-and-syria-threaten-revenge-in-kind/ 

[5] https://www.reuters.com/article/us-syria-crisis-bombing-video/rebels-show-video-of-damascus-bomb-aftermath-idUSBRE86L0A220120722

[6] Sheikh Abdullah bin Zayed bin Sultan Al Nahyan is the Minister of Foreign Affairs and International Cooperation of the United Arab Emirates. He is a son of the founder of the United Arab Emirates, Zayed bin Sultan Al Nahyan. In 2020, he was a signatory of the Abraham Accords on behalf of the UAE.

[7] https://www.thenationalnews.com/gulf-news/2023/01/04/syrian-president-al-assad-receives-sheikh-abdullah-bin-zayed-in-damascus/

[8] https://twitter.com/amirabdolahian

[9] https://twitter.com/MevlutCavusoglu

[10] https://www.mfa.gov.tr/sayin-bakanimizin-iran-islam-cumhuriyeti-disisleri-bakani-huseyin-emir-abdullahiyan-ile-gorusmesi--17-ocak-2023--ankara.en.mfa

[11] https://www.bbc.com/arabic/middleeast-64254330

[12] https://twitter.com/al_ryast/status/1610667052423077888?ref_src=twsrc%5Etfw%7Ctwcamp%5Etweetembed%7Ctwterm%5E1610667052423077888%7Ctwgr%5E7562ae4a476b7d9836aacdebc9f1da29efd2cf70%7Ctwcon%5Es1_&ref_url=https%3A%2F%2Farabic.euronews.com%2F2023%2F01%2F04%2Fuae-foreign-minister-meets-assad-in-damascus

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