Residents of Damascus suffer under rising prices and economic slowdown

AMMAN — In the latest manifestation of the battle for survival that Syrians have been fighting for more than eight years, Syrians today are acting like economists, meticulously monitoring the price of the national currency against the US dollar. With the rapid decline in the value of the Syrian pound (SYP) and, consequently, difficulties in securing basic needs, the suffering of Syrians, in general, has only deepened.

Amid the rapid devaluation of the Syrian pound, the US dollar exchange rate reached SYP 940 last Tuesday, according to the website, Syrian Pound Today. Although the exchange rate improved, reaching approximately SYP 750 on Sunday, the general decline in the value of the Syrian pound comes alongside an overall increase in prices in Syria, including in Damascus, which citizens are having to shoulder. 

“I did not leave Damascus at the height of military activities and war, but now we are thinking about migrating if the opportunity arises,” Rama Muhammad (pseudonym), a resident of Damascus told Syria Direct under the condition of anonymity for security reasons. 

On November 21, Bashar al-Assad issued a presidential decree “which stipulates for increasing the salaries of civilian and military employees by SYP 20,000 [$26.67],” (calculated at Sunday’s exchange rate of SYP 750 to $1, as noted by the website, Syria Pound Today). Previous research conducted by the Syrian Center for Policy Research, in cooperation with the American University of Beirut, indicates that “the salary of a government employee averaging between 30,000 and 40,000 Syrian lira [$40.00-53.33], while the average salary of private-sector employees not exceeding 65,000 Syrian lira [$86.67].” 

The research also revealed that over 93% of Syrians live in poverty, 60% of whom live in extreme poverty.

The presidential decree, however, was not well received by residents of Damascus and other regime-held areas. Salary increases “do not help alleviate the burdens of daily life for citizens,” said Rama, who works in a clothing store. She added that “the price of basic materials increased by between 50 and 100 pounds [$0.06 and $0.13].”

Abeer al-Dimashqi (pseudonym), who also requested to remain anonymous for security reasons, confirmed these observations, saying that “the price hikes in Damascus are obscene, especially the cost of accommodation. Now the situation is even worse, and salary increases do not achieve anything because the Syrian lira is unstable. Since the value of the lira decreases and increases, there is no benefit in raising salaries.” 

Factoring in the salary increases from the recent presidential decree, Abeer would be able to purchase “one gas cylinder, 20 liters of government-provided petrol [subsidized], 4 kilograms of sugar, one can of [vegetable] oil, one chicken, 4 kilograms of potatoes, 4 kilograms of rice, 2 kilograms of flour, 4 kilograms of tomatoes, and 2 kilograms of milk.”

Additionally, the rapid decline in the purchasing power of Syrians coincides with the onset of winter, placing additional burdens on citizens, especially in terms of fuel provisions for heating.

Memories of last winter’s crisis

Residents of Damascus have clear memories of gasoline, diesel, and household gas shortages last winter. The reasons underlying last winter’s crisis persist, namely the loss of control over oil and gas fields in eastern Syria -currently under the control of the Syrian Democratic Forces (SDF)- as well as American and European sanctions on Damascus.

In response, the government devised a “smart card system” to distribute subsidized fuel among Syrians in limited and specified quantities. This, however, did not alleviate the fuel crisis, especially because the specified quantities were inadequate in meeting citizens’ needs.

“The government has resumed electricity rationing. Every four hours they would cut electricity for two hours,” according to Abeer. Citizens are beginning to “prepare for a looming crisis. They are now buying batteries to generate electricity.”

Abeer considers the smart card system to be a step in the right direction, even though it is insufficient and unfair. “The [smart cards] provide the same amount of fuel to all families, regardless of their size. This means that a family comprising of three members receives the same amount as a family of ten.”

Under the smart card system, every family is eligible for one gas cylinder every twenty days for SYP 2,700 ($3.60), 100 liters of petrol every five days for SYP 225 ($0.30), 200 liters of diesel every six months for SYP 180 ($0.24) per liter. This comes in addition to “sometimes standing for half an hour to an hour in front of shops,” said Abeer. At the same time, she noted the discrepancies in the provision of fuel between different areas. “Everything is provided in the neighborhoods of al-Mezzeh, al-Maliki, al-Muhajirin, and Abu Rummaneh, but their prices are higher, of course, because these areas are of the rich and [government] officials. Whereas the people of other neighborhoods such as the Old City, Bab Sriejeh, al-Midan and others, stand in line and we suffer from fuel shortages. In the winters, our suffering grows terribly.”

In addition to government prices under the smart card system, Syrians living in government-held areas are aware of the “free” or unsubsidized price of fuel, i.e. outside the smart card system and the black market. “Free prices,” a source told Syria Direct, reach between SYP 3,000-4,000 ($4.00-5.33) for a cylinder of gas, SYP 450 ($0.60) for one liter of petrol, SYP 300 ($0.40) for one liter of diesel.

Additionally, winter increases the prices of clothes. “Winter jackets and female coats cost SYP  25,000 ($33.33),” according to Rama, while “the price of poor quality shoes are SYP 5,000 ($6.67).” And transportation has been badly affected by the collapse of the Syrian pound. 

Transportation costs have increased to such an extent that even the government in Damascus has been unable to control and regulate them. This is because taxi drivers are forced to buy fuel on the black market for double the price due to the limited quantities they are provided through the smart card system. These costs, however, are ultimately passed onto citizens. 

A halt in production and a rise in unemployment

The instability of the Syrian pound against the dollar is having a multiplier effect on factories and businesses, especially smaller ones. Several small businessmen have been forced to stop production, possibly laying off workers in the process. This entails an uncertain fate for workers and their families for an unknown period of time. 

“Our sources in the Central Bank expect a further drop in the [value] of the lira, reaching 1,000 liras per dollar,” a trader in Damascus told Syria Direct on the condition of anonymity. He added that due to current conditions, “the production of basic materials has stopped alongside the rise of high prices.” 

“I have a factory producing juice for children, and I would sell one bottle for SYP 50 [$0.06]. Now, even if I sold one for SYP  75 [$0.10], I would still lose [money].”

The trader said that “several traders have placed orders with the government consumer protection agency to raise the prices of their goods, but these demands are still under consideration.” 

“All traders and small business owners have agreed to stop production until a solution [is reached] that reduces their losses and compensates them. At this stage, they bear the burden of paying their workers’ salaries.”

In conclusion, “the citizen in Damascus is not able to be steadfast in front of exorbitant prices without relying financially relying on relatives abroad,” Rama said.

The report was originally published in Arabic and translated into English by Rohan Advani and Lauren Remaley