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Syria: economic sanctions and the life after the elections
Material posted: Publication date: 14-05-2012

Recently, us President Barack Obama has extended its sanctions against Syria due to the fact that Damascus "continues to pose an unusual and extraordinary threat to the national security, foreign policy and the U.S. economy." At the same time, some experts believe the sanctions are ineffective, as many countries to them never joined, and also argue that they are disadvantageous for Europe.

How lives in Syria in the face of economic sanctions and what the future of the country in the near future, said the Deputy chief editor of the publication "GDP", scientific supervisor of the Russian society for Oriental and African studies, Ph. D. said Gafurov.

Said, what are the most painful sanctions now act against Syria? How have they impacted the lives of businesses and ordinary citizens?

– Sanctions against Syria was not applied, in General, significant damage to the economy. Moreover, they can be circumvented. The ban on exports to Syria have enthusiastically welcomed the Chinese because they had the opportunity of substitution of supplies and equipment for its. Ordinary Syrians has become more difficult to buy, for example European medicine, but this niche was immediately occupied by Indian generics. Similar substitutions occur almost everywhere. In addition, worldwide sanctions only contribute to the enrichment of all kinds of speculators, and in the East with its tradition of caravan trade they will be particularly spacious.

The real problem, which is detrimental to the Syrian economy was the deterioration of the balance of payments. Traditionally, monetary and fiscal policy in Syria was very balanced. This is not surprising, because the Syrian school of financiers in the Arab world is considered one of the best. With them often compares the Egyptians, however, the leader, it seems to me, remains Syria. In the financial institutions of Persian Gulf countries – UAE, Saudi Arabia, Qatar and others – a lot of Syrians. Now many of them have to quit. In addition, there have been some problems with remittances of Syrians working abroad, which play a role in the balance of payments of the country.

Syria has been a major tourist destination mainly for the wealthy Arabs from Persian Gulf countries. Of course, in the current environment the flow of tourists ceased. Empty hotels, little visits the most famous historical sights. And since the tourism sector in the Syrian economy occupied a significant place and has been sufficiently developed, the outflow of tourists has caused significant damage, including employment.

From a financial point of view, sanctions do not work, in principle, for the simple reason that at hand, Syria is Lebanon's developed banking sector, which are not subject to penalties. Since the Syrian peacekeepers were in Lebanon, many banks have established relations with the Syrian leadership, including with the military. The invasion of Israel have hurt the banking sector of Lebanon, and now they strongly cling to Syrian clients.

The Minister of Finance of Syria once said: "the crisis has forced us to do what we've been going to, but did not, looking at the unpopularity of such measures among the population". During the crisis in Syria monetary and financial authorities were effective exchange rate monetary and fiscal policy. They almost managed to prevent price increases, but the exchange rate of the Syrian Lira has fallen dramatically: more than half. The economy is beneficial, because it stimulates exports. If, after the stabilization of the situation they will be able to maintain the same course, it will be a very wise decision. Much greater damage to the economy causes a direct impact of terrorists on the infrastructure.

– Who now cooperate with the Syrians? As the situation in the country influenced the attitude of investors?

– At first glance it may seem that hardly Syrian products will be of interest to Europe, but it is not. Now is actively developing the export of goods of the textile industry. European brands in the middle price category today, bought sewing in Pakistan and Bangladesh. Slightly more expensive clothes previously produced in Turkey, but for quite some time the Turks were simply rerouted the orders of the Syrian enterprises. The quality of textile is not inferior to the Turkish clothing entering the European market. Turkey also buys in Syria food. Buying in Istanbul, say, ice cream, you are likely to read on the label that it is made in Aleppo or in Damascus. Turkey did not join the sanctions against Syria, and, most likely, the Turkish business will have on the government pressure to take this line of policy was carried out and on. Syria is one of the largest suppliers of goods to this country.

From the investment point of view, sanctions are tangible. In particular, they interfere with the construction of a new gas pipeline from Iran through Iraq Mosul into Syria to the Mediterranean sea, which will come "North" of Iranian oil, and it is the shortest way of delivery in the Mediterranean and in Europe.

In Syria is highly developed manufacturing, especially light industry: textile, leather, Shoe. At a high level is the agro-industrial complex – there are beautiful olives and grapes, fruits, produces a good wine. Not many know this, but in Syria, there are also the plants that produce satellite antenna, watches, appliances. In every Syrian household, even the poorest, have satellite TV, since the equipment is very cheap.

– What awaits the country in the future?

In Syria held parliamentary and presidential elections. The new government – a new budget. While budget expenditures are closed pretty easy, since Damascus had received assistance from Iran, China and even Venezuela. Apparently, Russia has given the Syrian government loans, the rest of the country help to "plug the hole" of the budget virtually for free. Do not suffer even municipal budgets – walking the streets of Damascus, you can see how the city carried out a planned repair of roads, not stop construction.

Most importantly for Syria now is to survive the period of decline of the balance of payments associated with the reduction of tourist flow, solve security problems with the new government to adopt a balanced budget. There are, of course, a danger that the new Parliament will force the government to adopt populist measures that lead to unsecured expenses. Sanctions are felt, but not too much, slightly decreased standard of living. Stop investment projects aimed at the supply of oil to Europe.

Thus, sanctions against Syria have an impact rather on their participants. Europe is suffering from the loss of lucrative energy projects and access to hydrocarbons, and the Chinese, in turn rejoice in the benefits. Now the Iranian, Syrian and partly of Iraqi oil will go most likely to the East – in China, India, countries of South-East Asia. And the Syrian business and population is much harder to tolerate clashes and the outflow of tourists than American and European sanctions.

 

Interviewed Anastasia Kazimirko-Kirillova,
CCI-inform


Source: http://www.tpp-inform.ru/global/2305.html

Tags: Syria


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