SHOESHINE BOYS and girls line up with their simple kits along the pavement across from the luxury Cham Palace Hotel, which charges more than a poor man’s monthly wage for a single night’s stay.
Women holding bundles which may or may not be babies sit on the broad walkway in a colonnade.
Grubby children peddling chewing gum and lottery tickets pursue pedestrians for blocks in the hope of receiving a coin or two. In all the years I have been visiting Syria, I have never seen such desperation.
Economic sanctions touted as targeting the regime actually affect the poor, punish the middle class, and destroy commerce.
In November, a dollar bought 54 Syrian pounds; today a dollar is worth 70 and more. Prices have risen by 35-50 per cent. Unemployment and underemployment are soaring. The Central Bureau of Statistics put the unemployment level for 2011 at 8.6 per cent for males, 22 per cent for females, and 20.4 per cent for youth. These figures do not reflect reality. Many men have never formally entered the workforce or have gone abroad for work while only 10 per cent of women are employed outside the home.
Before the troubles began 11 months ago, the economy was growing at a rate of 4-6 per cent. This surge came after the launch of a liberalisation programme which transformed the country’s command economy into a “social market” one, featuring a free market with guaranteed development for the poor.
Independent economic consultant Nabil Sukkar says oil exports have fallen but Damascus expects to make up some losses by increasing non-oil exports such as agricultural products (especially olive oil), pharmaceuticals and textiles.
Although Syria’s imports are falling, the country could end up with a larger budget deficit. Syria’s $17 billion in reserves, reduced to $14-15 billion, “are not being replenished as before by oil exports and tourism”.
He points out that “sanctions have created bottlenecks and black markets. Smugglers benefit.”
Unrest and sanctions have reversed the economic liberalisation programme which had opened Syria to foreign banks, external investment and tourism and led to economic ties with the EU. An association agreement was drafted but never signed.
Sukkar, a former World Bank regional specialist, believes the government or its successor will pursue a policy of “economic self-sufficiency and protectionism”.
Political commentators also suggest that Syria could turn away from the West, particularly Europe, because of sanctions.
A positive consequence of sanctions, Sukkar observes, was the abrogation of the free trade agreement with Turkey. This deal provided for a large flow of subsidised Turkish goods into Syria, undercutting the domestic textile industry and other manu- facturers.
The economic damage inflicted by sanctions, disruption of internal communications, and cuts in commerce could have a more harmful and long-lasting impact on the economy than unrest. If Aleppo and Damascus, the country’s economic hubs, are overwhelmed by the rebellion, the consequences for the economy could be massive.
Despite the unrest, the Syrian entrepreneurial spirit has not been crushed. Ahead of St Valentine’s day, sweet shops displayed heart-shaped boxes of chocolates while boys sold red roses near St Thomas’s Gate in the Old City.