New and accelerating repercussions have occurred on the crisis between Bashar al-Assad and his cousin, Rami Makhlouf, as the Syrian Finance Ministry issued a decision on May 19 to seize all movable and immovable property of Makhlouf, a businessman, who was the economic arm of the Syrian regime for 20 years.
In his latest video, Makhlouf has accused some influential figures in the regime, referring to Assad’s wife, Asmaa al-Assad, of trying to seize Syriatel Telecommunication Company, and fire him from the presidency of its board of directors. Makhlouf has warned of economic disasters in the country, in the event of damaging his company and business.
The ministry has said that the confiscation decision was made because Makhlouf has failed in paying taxes imposed on him by the Syrian administration in favor of the public telecommunications and post authority, a sum estimated at 234 billion Syrian pounds.
Makhlouf has already warned of miserable consequences that might affect the Syrian economic in general if the policies of the post-war rich people continue.
For the first time since the start of the Syrian war, Rami talked about the high prices crisis in Syria with an increase of more than 30% in the goods’ prices, attributing the crisis to the practices of some beneficiaries close to the Syrian regime.
The Syrian pound is the first victim of the struggle between Assad and Makhlouf. Since the beginning of May, the Syrian pound has been dropping unprecedentedly, recording a significant drop against the US dollar on May 19, where the exchange rate reached 1805 pounds, which affected the markets and led to big rise in the prices.
Since the beginning of 2020, the exchange rate of the S.P against the US dollar has increased by nearly 60 percent, as the exchange rate at the end of 2019 was 915 against the US dollar. According to the recent exchange rates, the Syrian pound has lost more than 29 times its value against foreign exchange since the revolution in 2011, when the US dollar price was around 50 pounds.
According to the recent exchange rates, the Syrian pound has lost more than 29 times its value against foreign exchange since the revolution in 2011, when the US dollar price was around 50 pounds.
Relatedly, MENA Research and Study Center sources confirmed that the exchange rate of the Syrian currency against the US dollar in the black market is 1700 S.P. in Damascus, whereas in the opposition’s controlled North, it is 1800 S.P.
This rise occurs proportionally with the supply and demand in the market, especially with the end of Ramadan and the approaching of Eid. MENA’s sources confirmed that the prices rose suddenly after Rami Makhlouf released his latest video.
James Jeffrey, the US special envoy to Syria, had earlier said that the crisis between Assad and Makhlouf can be interpreted in one of two ways. “Way one is this is the straw that broke the camel’s back. I don’t think so; I wish so, but I don’t think so. The second one is this is another indicator, like the fall of the Syrian pound, like the difficulties the Syrian Government has in getting oil shipments in, like the difficulties it has having bread and other staples in the stores, that the regime is under extraordinary pressure.”
Economic and political analysts believe that the latest escalation is caused by a dispute inside the small circle of the ruling family, floated on the surface after being hidden under ashes by some of its members. According to analysts, Rami Makhlouf has announced disobedience against his cousin.
Economic analysts interpret the lira crisis due to several factors, including the decline in oil prices on the international market, which negatively affected the countries supporting the regime, including Iran, in addition to the lack of foreign currency and gold from the Syrian Central Bank, and the suspension of exporting, the largest contributor to foreign exchange earnings.
Additionally, the trade of oil, wheat, vegetables and some other important strategic goods is not controlled by the regime anymore, which led to a decrease of local products in Syria and the suspension of production, as well as the destruction of factories, production lines and infrastructure, the most important pillars of the economy.
The experts add the economic sanction imposed on the Syrian regime to the list of factors that led to the status quo, in addition to the instable situation in Lebanon, especially regarding the financial sector.
The EU and US sanctions imposed on individuals, who support the regime economically, have also affected the economic situation in Syria. Among those figures is Rami Makhlouf, Samer al-Fowz, Wassim Qahtan and many others.
The crisis between Assad and his cousin, has led to the suspension of many economic activities, which were related to Makhlouf companies, thus, his companies have exchanged their assets into foreign currencies, transferring them abroad, increasing the demand for the foreign currency and also the supply of the Syrian pound, leading to its deterioration.
In an attempt to control the state of chaos in the Syrian market, and amidst widespread public discontent with the rise in prices that mismatches with the prices list of the Ministry of Internal Trade and Consumer Protection, Bashar al-Assad has issued two presidential decrees.
The first is dismissing the Minister of Interior Trade and Consumer Protection, Atef Al-Naddaf, and assigning the controversial governor of Homs, Talal Al-Barazi, to this position.
The second is exempting the imported raw materials, subject to a customs fee of 1% from all customs duties and taxes imposed, for a period of one year, as of June 1.
The head of the Damascus Chamber of Industry and its countryside, Samer Al-Debs, in an interview with the pro-regime Al-Watan newspaper asserted that the issued decree would reduce the prices of local products on the Syrian market, as it saves about 10% of the value of his import bill on the primary materials for the Syrian industry, which was paid as fees and non-customs additions.
It seems that the deterioration of the Syrian pound and the suffering experienced by the citizens in light of the corona pandemic together with its subsequent measures, the issue of controlling markets and controlling prices and making them commensurate with the income of individuals are almost impossible, and all the measures of the system to overcome the economic crisis we will not be able to heal the wound of the citizens. This might result in a massive popular revolution as a result of poverty and hunger.
This post is also available in: Arabic
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