Monday, January 23, 2012

Syrians feel sanctions as food prices double and power outages increase English

The violence and chaos that has beset Syria, compounded by international sanctions, is causing its citizens much hardship. (Reuters)
The violence and chaos that has beset Syria, compounded by international sanctions, is causing its citizens much hardship. (Reuters)
Syrians are beginning to feel the brunt of economic sanctions as food prices have almost doubled in recent weeks with the Syrian pound having plummeted to its lowest records against the dollar, prompting the government to announce partial floating of its currency and allowing its value to be determined by the fluctuations in the foreign exchange market.

People across the county are struggling to cope with continuous power outages of up to six hours every day, an increase in tariffs and oil and fuel shortages.

A man who works in an import-export company, who did not want to be named, said his company stopped all its business activities because of the economic crisis and the “loss of confidence in the partner which are Syrian government transportation firms.”
He said these firms tend to confiscate imported products transported from ports of entry to distribution centers only to later claim that “terrorists” ambushed these vehicles.

A woman in the Damascus suburb said prices of some locally-produced basic food products have increased by 30 to 50 percent, while some imported food products were no longer available in the market.

The price of a gas canister, for example, increased from 250 to 400 pounds ($2.5 to $4) on Sunday in some areas while in other places its reached 700 pounds in other areas that are hard-hit by violence and locked military and security forces.

The rise in the price of gas was met with immediate anger even among the staunchest of the regime’s supporters.

The Syrian al-Dounia television quoted Adnan Dakhakhni, head of the Consumer Protection Association, as criticizing the decision to increase the price of gas, which he said affected people throughout the country.

But the crisis appears to have hit government institutions as well. Prime Minister Adel Safar has sent a letter to ministries to cut spending and halt new projects in the 2012 budget.

The Arab League, Turkey, the European Union and the United states have all imposed various economic sanctions on Syria, targeting its oil and gas industries and financial sectors.

Meanwhile, the continuous devaluation of the Syrian pound against the dollar has deepened the plight of Syrians. The exchange rate for the black market rates reached 75 pounds to the dollar, while the official rate was 57 pound to the dollar. Before the uprising, both the official and the black market rates were about 47 pounds to the dollar.

As the crisis in the country prolongs and the pound continues to devalue, the demand for the dollar as a safe haven increased. But private banks have become reluctant to sell the dollar at the official exchange rate, significantly lower than the exchange rate in the black market.

By allowing the banks to sell the dollar at the market rate, the government hopes to see more money flow into the economy, despite fears that the Syrian pound will further be devaluated.

(Translated by Mustapha Ajbaili)

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