Fleeting recovery: Reef Dimashq struggles as markets stagnate

REEF DIMASHQ/PARIS — Eid al-Fitr was bittersweet this year for Samah Abdullah, 35, and her family in the Reef Dimashq city of Douma. The daily struggle to make ends meet muddied the “joy of coming together with some family members for the first time in several years,” as displaced relatives returned for the holiday.

Abdullah, who sells household goods for a living, is the sole breadwinner for her three surviving children. Her husband was detained and died in the Assad regime’s prisons, while her firstborn son was killed by a regime airstrike in 2016, when he was 14 years old. 

She expected her sales during Ramadan and Eid al-Fitr to be higher this year, “with the large number of displaced people returning” to Douma. The reality was “the opposite,” Abdullah told Syria Direct. 

Last Eid, Abdullah could afford to buy “complete Eid outfits” for her children, but not this year. She still feels relatively fortunate: “I fell short for my kids, but there are families that couldn’t buy a single piece of clothing for their children,” she said. 

With the fall of the Assad regime last December, civilians in areas it controlled expressed a sense of relief. This reaction was particularly acute in “settlement” areas like Douma in East Ghouta, which were controlled by the opposition until 2018 and faced collective punishment and marginalization for years after returning to regime control. 

In the early days after Assad fell, cities and towns in Reef Dimashq came back to life with a burst of economic activity and construction. Markets were crowded, and the cost of many food items fell. But it appears this initial improvement was built more on hope than any economic policies followed by the country’s new administration, which at times had a negative impact as Turkish goods flooded local markets. 

“Before Ramadan, Turkish secondhand clothes flooded Reef Dimashq markets, harming clothing stores and sewing workshops,” Samah’s nephew, who owns a sewing workshop in Douma, told Syria Direct. As the market slowed, he and his workers—who are paid for each item they produce—were hit hard. 

While some professions related to construction and building supplies have seen an uptick, “many youth and men are without work,” he added. As displaced people return, some have been “unable to enter the labor market so far.” 

Low prices, sluggish market

“We can’t describe how we feel about the fall of the regime. We feel safe, after feeling unsafe for ourselves, our families, our homes,” said Saleh al-Hassan, who owns a grocery store in the West Ghouta city of Darayya. “We had to fight for everything, even a bundle of bread.” 

After the regime fell, the prices of some goods fell by as much as 50 percent, al-Hassan said. Many importers “canceled 30 percent of the value they had been paying in royalties to the regime.” The price of a 50-kilogram bag of sugar, for example, stood at around 1.5 million Syrian pounds (SYP) before the regime fell (around $100 at the exchange rate of SYP 14,750 to the dollar at the time). Today, it sells for around SYP 360,000 ($32 at the current rate of SYP 10,925 to the dollar). 

Similarly, the price of a kilogram of basmati rice fell from SYP 45,000 ($3) to SYP 20,000 ($1.80). A kilogram of bulgur dropped from SYP 18,000 ($1.20) to SYP 8,000 ($0.75). 

While these figures “point to a market recovery,” there was a notable “decline in sales this Ramadan, compared to last year,” al-Hassan said. Typically, “we would prepare for the season two weeks before, and significant activity would continue until Eid.” This year, “activity is very low,” and lower prices “forced us to sell goods we had in stock at a loss.”

Al-Hassan was counting on the return of displaced people to Darayya to drive a recovery in the market, but the uptick was temporary, limited to “the first days after liberation.” Many of those returning are struggling, as their financial situation was poor “even in the areas they were displaced to, in northwestern Syria,” he said. 

Ahmad Jamil al-Nakkash, 35, who owns a furniture workshop in Darayya, made a similar observation. He used to bring in $250 or $300 a month, but his combined earnings over the first three months after the regime fell were short of that, he told Syria Direct. 

While repair work began immediately in Darayya once the regime fell, “the markets are stagnant, including the furniture market,” al-Nakkash said. He attributed that to “the poor economic conditions of returnees, who restore their homes at a bare minimum,” alongside the “problem of salary disbursement for government employees” in the first few months. The impacts of that “continue until now,” he said. 

The influx of Turkish products was initially positive, as it helped “lower the price of some goods,” but their presence in the market “has negative results for the citizen, the state and local production,” economics researcher Hayyan Habbaba said. In response, the new government has attempted to “regulate the markets through several measures, including adjusting customs duties on some imported goods to encourage local production,” he told Syria Direct. 

While interventions like controlling land and sea ports, fighting corruption, aiming to root out false employment in state institutions and “foreign policy communications” are in the public interest, “citizens may not see results in the short term,” he added. 

Local community initiatives to improve living conditions are important, Habbaba said, but “don’t build a state economy.” The “sanctions imposed on Syria—especially American sanctions—are the main obstacle to economic development.” 

In January, the United States eased some sanctions on Syria for six months, but left in place restrictions on private investment that is needed for economic recovery and reconstruction. The following month, the European Union (EU) suspended sanctions on Syria’s energy and transportation sectors. 

On Monday, EU foreign ministers discussed the possibility of further sanctions relief for Syria at a meeting in Luxembourg. EU foreign policy chief Kaja Kallas said after the meeting that “we have not seen many steps from the new leadership” in Damascus, noting that member states agreed to “evaluate the process so far.” 

‘War trade’

Market transactions and the fluctuating value of the Syrian pound is taking a toll, grocery store owner al-Hassan said. While transactions between customers and sellers are done using the pound, retailers and wholesalers use the dollar. “Small traders fall victim to exchange rate fluctuations,” he added.

“The supplier refuses to deal with us in Syrian [pounds], and takes all payments in dollars. When we sell in pounds, the price falls and the risks of our work increase,” he added. “We gather capital slowly because of people’s poor financial conditions. They buy only what they absolutely need, in small quantities.”

But Rateb al-Shami, a grain dealer in Douma, said the discontent of middle-class traders is not related to weak sales alone, while it is “one of the important reasons.” Rather, “many traders are used to war trading, meaning that they benefited from a monopoly situation and the deteriorating exchange rate,” he said. “Under those circumstances, they made great profits.”

“Traders would raise the prices of goods, citing the high price of the dollar and scarcity of items in the markets,” al-Shami said. These reasons “began to disappear after the regime fell. The price of the pound improved, the markets opened up and goods from neighboring countries came in,” he added. “This led to a drop in the profit margin, not a decline in sales.” 

Many traders “would store large quantities of goods and put them on the market when their value rose, exploiting citizens’ need for them,” he explained. With Turkish goods flooding in and prices falling, “traders are trying to sell off their goods to avoid storing them, which under the current conditions could produce major losses, unlike before.” 

Some 90 percent of Syrians currently live below the poverty level. “Fourteen years of conflict in Syria have undone nearly four decades of economic, social and human capital progress,” the United Nations Development Program (UNDP) wrote in a February report. Its assessment is that Syria’s economic growth will not recover to pre-conflict levels before 2080. 

Al-Shami remains optimistic that Syrians’ economic conditions will take a turn for the better. “While conditions have not improved, people have a great sense of relief, and that will affect their way of life, including economic life,” he said. “Many of the challenges young people faced have disappeared—such as arrests, forced conscription and extortion at regime checkpoints.” 

For her part, Abdullah hopes to finally turn the page on the war and all she has lost, finding a path to “financial and security stability” for herself and her children. 

This report was originally published in Arabic and translated into English by Mateo Nelson.