AMMAN — On August 20, the World Food Program (WFP) revealed that 9.3 million people in Syria are currently food insecure, with an additional 2.2 million at risk of facing the same fate.
In order to secure food for its citizens—over 80% of which live in extreme poverty—Damascus set up the Syrian Trade Establishment (STE) in 2017, which sells basic goods at subsidized prices throughout the regime-held territory. However, in recent months, Damascus has struggled to procure enough food to stock the STE’s shelves.
Specifically, the Syrian government has had trouble in importing sugar, rice and wheat this year. It has announced multiple tenders to import these foodstuffs but has mostly failed to fulfill them, generally due to issues in securing enough foreign currency to execute them.
As a result, food prices have sharply increased in recent months, with basic goods like cooking oil and sugar over 350% more expensive than they were this time last year, and bread prices more than doubling in the same time period, according to WFP data.
Officials have made statements assuring citizens that food supplies are sufficient to meet the needs of the population, with the Interior Trade and Consumer Protection Minister, Talal Barazi, saying on August 6 that there is “no need to fear,” given that wheat supplies are “abundant” and that it will be sold at an affordable price to all.
The Minister’s statements conflict with an interview given by the head of the STE, Ahmad Najm, to pro-government paper Al-Watan on August 22. According to Najm, “companies have faced difficulties” in importing subsidized goods, and goods that were supposed to have arrived from completed contracts have not yet done so.
Popular sentiment seems to also contradict the official line by the Minister, even within traditionally regime-loyalist areas, with Syrians taking to social media to criticize the rising prices of food and increasing shortages. Notably, on August 20, a popular Syrian Arab Army (SAA) commander, Colonel Maan Eissa, was arrested for a Facebook post which criticized the poor food rations that his unit was receiving.
One Syrian who lives in the regime stronghold of Latakia told Syria Direct that people were selling their furniture in order to pay for food, noting that their family had sold their refrigerator and television already.
Others, they said, follow the modified proverb: “A meal a day keeps the doctor away.”
Failing imports reflect the depth of the currency crisis
Damascus has failed to complete multiple tenders this year, with attempts to import sugar, rice and wheat unsuccessful.
Thus far, the regime has issued three tenders to import 25,000 tons of sugar in 2020, with all of them going unfulfilled, according to the specialist economic publication, Syria Report. In addition, the country had a severe shortage of rice this summer, prior to a shipment arriving in the country in late July.
The intermittent, and oftentimes, complete lack of ability to import these key foodstuffs has meant rising prices even when goods are on the subsidized shelves of the STE. In late July, the price of rice increased 50 percent, from 400 to 600 Syrian lira ($0.18 to $0.28) per kilo, according to the Syria Report.
However, problems which seem to be chronic to the “Smart Card” program—the e-system through which families can register for pre-apportioned rations at the STE—mean that families often end up having to buy rice on the non-subsidized market, where the price is 2,500 lira ($1.15) per kilo.
The story is quite similar with sugar, which is supposed to be sold at the STE for 500 lira ($0.23) per kilo, but shortages mean it can only be found on the market for 1,500 lira ($0.69) per kilo.
Syria is also facing a wheat shortage, as it has thus far mostly relied on wheat imported in 2019. Syria’s annual demand for wheat is around 4.3 million tons, but domestic production only supplies about 2.2 million tons annually—half of the pre-war levels.
Further, around half of the wheat produced domestically is done so in the northeast, which is currently controlled by the Kurdish-led Autonomous Administration of North and East Syria (AA). This year, however, the AA banned its farmers from selling wheat to traders and organizations outside of the northeast, further reducing the domestic supply of wheat available to the regime-held territories and increasing reliance on imports.
Damascus has issued five tenders for wheat this year, with only one succeeding thus far, and two having been newly extended until mid-September. If the tenders remain unfulfilled, there could be a serious bread shortage in 2021, as reliance on last year’s wheat stock depletes the reserves available.
In an effort to relieve the pressure on the government and facilitate the importation of key goods, the government has relaxed import restrictions, outsourcing the responsibility of importation to the private sector. On March 29, the Syrian Ministry of Economy and Foreign Trade ruled that all importers, including private companies, could import flour, regardless of its origin. Prior, the ministry would periodically specify a select group of countries from which flour could be imported from.
Damascus made a similar move previously, in October 2019, when it relaxed restrictions on import origins for natural gas, amidst a severe fuel crisis. Later, on March 4, the government further relaxed restrictions to allow more private sector actors to import fuel and diesel for three months.
These efforts, however, seem to have done little to ameliorate the shortages in both the wheat and fuel sectors.
The problem facing importers, regardless of the origin of imports or whether the government or private sector is doing the importing, is undermined by the severely degraded value of the Syrian Lira, which has lost 70% of its value since the prior year. An unfavorable foreign exchange rate increases the price of imports, an additional hurdle that is proving difficult for Syria’s beleaguered economy to overcome after nearly ten years of war.
Damascus blames sanctions for its economic woes
For its part, the regime and affiliated media outlets have blamed the shortages and increase in the basic cost of living on the new round of American sanctions known as the Caesar Act, referring to a foreign-backed conspiracy on Damascus.
While it’s quite possible that the new round of sanctions harm imports somewhat, it is more likely the current economic troubles the country finds itself in has more to do with the rampant corruption which has eroded the economic and political fabric of Syria over the last decade.
Recently, there has been an increase in “monopoly, exploitation and fraud,” Manaf Quman, a Syrian economics researcher with the Omran Center for Strategic Studies, told Syria Direct.
Instead of taking productive steps towards ensuring the basic needs of its citizens, Damascus is “leaving the responsibility for securing basic materials to merchants, transforming [the country] into a free market,” and creating an environment that is fertile for “war profiteers,” according to Quman.
It is likely that the regime “can cope with import problems, as it has gone through many difficult times in the past years” in addition to the fact that the economy has already been “mafia-ized.”
However, whether citizens will also be able to survive the worsening economic situation remains to be seen, as the “system is not based around caring for them in the first place,” Quman added.