An exhausted economy and unemployment up to 78% due to the war in Syria

An exhausted economy and unemployment up to 78% due to the war in Syria

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Shatha Khalil *
The Syrian economy is one of the developing economies that relies mainly on agriculture, services, including tourism, and secondary to industry and underground wealth.
After the revolution, the tragedy occurred on the Syrians who became displaced in the neighboring countries. The economy went from bad to worse that from the first year of the revolution, the destruction of the economic structure of the country began to drain the sectors of agriculture, industry and trade, reflected in average per capita income and the devaluation of the local currency, high trade deficit and debt to finance the military sector to eliminate the revolution.
The Syrian government financed its expenditures and its financial and military budgets through financing by the deficit, both internal and external borrowing, which will put on the future generations debts and financial burdens that they were not party to, neither causing them nor benefiting from it, especially as they do not invest them in economic development fields but they were used to meet the needs of the local market of the main food and non-food items such as oil derivatives, and any drugs (in current consumption).
The war contributed to the division of spheres of influence between the parties of the conflict led to a great chaos in economic activities, which negatively affected the lives of citizens, which is governed by a system that it does not have a vision or strategy to manage the conflict in its country, wasting the economic fundamentals and its resources in the war, without thinking about the future of coming generations.
Economists stressed that the damage caused to the Syrian economy during the years of war, produced a depleted economy and figures are the final rule.
– 66% of the construction sector was damaged, and the mining branch shrank from 13% to 2% of the GDP. This change is due to the collapse of the oil industry.
– Public consumption, which increased at the beginning of the confrontations, dropped dramatically to 45% of its rate in 2010.
– The volume of imports and exports shrank to very low levels to the point of a significant collapse in exports in the oil branch, as Syria became an importer of oil.
– The budget declined in 2016 to about 4 billion dollars, after it was 16 billion dollars in 2010, and the decline of the value of the Syrian pound (Lira)to more than 90%, now 540 pounds against the dollar after it was about 50 pounds to the dollar before the revolution.
– The salaries ranged between $ 30 and $ 40, and do not meet the basic needs because of the high prices, as the prices of basic commodities have reached to the fictional numbers in the besieged areas , reaching 4000%.
– Syria’s total output fell to about $ 5 billion in 2016 after being $ 55 billion in 2008.
– The daily production of oil fell by 95%, where the Syrian oil production of 15 thousand barrels per day by the end of 2016 after it was close to 400 thousand barrels.
– Gas production fell to 10 million cubic meters per day from the end of 2016, after being up to 30 million cubic meters, a decline of 65%. According to the system sources, the direct and indirect losses that affected the oil sector in Syria amounted to more than 95 billion dollars until the end of 2016.
As for the agricultural sector, which is the most important elements of the Syrian economy, agricultural production fell by about 70% by the end of last year.
As for the Syrian industry, its share of the damage was great. The textile industry and the food industries were damaged and the factories were closed and the capital was diverted to neighboring regions noting that the Syrian investments in the countries where they emigrated amounted to more than $ 50 billion, Egypt’s share of it was 23 billion dollar.
Exports fell from 4.7 billion dollars in 2011 before the revolution to 220 million dollars in 2014
The statistics show that there are about 38 thousand of industrial establishments in Aleppo, a few of them still work while the rest have been severely damaged and their owners deported abroad, and there are 15 industrial zones distributed in different parts of Syria have stopped production.
Figures indicated that the destruction of infrastructure was by 80% including water and electricity networks and more than 50% of the infrastructure of the services sector, such as schools and hospitals, the destruction 7% of housing units as a whole and 20% partially. Here are other figures about the disruption of economic networks in different sectors.
One of the dangers facing the Syrian society is the migration of skilled workers and holders of diplomas as about 70% of the diploma holders emigrated to the Diaspora. It is estimated that about 15% of the doctors and engineers were in Europe, where some 20,000 engineers left the country. About 3 million students are now out of the education sector, 780,000 were employed in industry, and 10 million were displaced and migrated, constituting about 45% of Syria’s population.
The World Bank released a report on Syria’s economic losses due to the war in July 2017, citing figures showing the devastation of the country on both the human and material levels where more than 400,000 people were killed, more than half the population forcibly displaced, the rate of the unemployment increased to 78%, which means that about nine million Syrians are unemployed, and the loss of $ 226 billion in GDP is equivalent to four times of the Syrian GDP in 2010, with GDP falling by 63% compared to 2010.
A study by the Frontier Economics Australian Consulting Center and the World Vision charity organization estimated that the losses in the Syrian economy amounted to about 300 billion dollars, without the cost of growth rates and after the calculation of it may reach 689 billion dollars.
The United Nations Humanitarian Coordinator in Lebanon, Philippe Lazarini said in assessment of the harmful living reality of Syrian people that the families live at the lowest standard of living after exhausting their limited resources since the beginning of the war years. The assessment showed that 5.70% of Syrian refugees live below the poverty line with 8.3 $ 30 per day noting that about 30 per cent of Lebanon’s population living below the poverty line and 10 per cent living in extreme poverty.
When talking about one and a half million displaced people, over seven years in Lebanon, the treatment mechanisms must be different, especially when the figures indicate that there are more than 482761 displaced children of the ages of education between 3 and 18 years old according to Education Coordinator of the displaced in the Lebanese Ministry of Education Sonia El Khoury.
The information indicates that there are about 210 thousand children of these students within the educational system according to the Syrian Arab curricula, the majority of which are different from the Lebanese education system, while the remaining numbers are waiting the implementation of plans preparing to be absorbed within the programs of the system of formal education or vocational education or subject to courses in Vocational training to acquire certain skills that will enable them to be productive people in the future. The goal is to absorb an additional 100,000 children for the 2017-2018 academic year, and Britain will work to support the Lebanese Ministry of Education with funding and follow-up.
The value of the Syrian Pound (Lira):
The current year witnessed a significant deterioration in the value of the Syrian Pound. The exchange rate against the US Dollar reached its highest level at 560 lira (against 47 lira in 2011), while in some weeks it fell to 400 lira.
The deterioration of the value of the lira coincided with an increase in prices and a decrease in the purchasing value of wages that it did not rise in line with this deterioration and to meet the needs of a large group of the Syrian people. In contrast, the decline in the exchange rate did not lead to a drop in prices that it increases the state of difficulty experienced by the citizen across the country.
According to official Syrian reports, the family needs a monthly average of six hundred dollars to cover the basic needs, while the average wage does not exceed 150 dollars.
One indication of the deterioration of the value of the lira , the issuance of the Central Bank of Syria in July 2017 of a new currency, considered by the governor of the bank “a necessity to address the price increase”, of the category of Syrian two thousand pounds, after the largest traded currency was one thousand pounds.
The economic researcher Younis al-Karim stresses, that the fluctuations of the lira reflect the events that occur on the ground, “as Lira is the Constitution and borders, and this is one of the most important rules of economy and political economy.”
Karim pointed out that fluctuations in the price are the tool of the regime to obtain funds through the Central Bank and exchange companies and banks, which are one of the arms of control of the exchange market which is fully under the control of the Central Bank, and achieve economic gains, as the regime seeks to raise the value of the pound and devalues the dollar on holidays and events, where the Expatriate remittances are increased for their family members residing in the country.
He believes that there are conflicting whales within the regime and keen to emerge coherently with the continuation of its institutions to work according to its infrastructure and pay salaries without interruption, as if the Syrian economy was not affected by the war.
However, the regime suffers from a financial problem that Al-Kareem describes as dangerous where it no longer has a printed Syrian currency or US dollars, which would constitute a golden opportunity for it to move towards a new capital based on liberalizing the market and lifting subsidies on all commodities, including bread and the privatization of other goods such as electricity .
And because of Syria ‘s loss of its production capacity and cutting off several sectors , the most important of which is oil, economists expect the continuation of the fall of Syrian pound to reach 600 lira per dollar, which requires at least six months to return to work after the economic sanctions have lifted.
The indicators do not indicate a wage increase in Syria in the coming period. It is a process that requires an increase in the mass of publications from the Syrian currency, which will not be allowed by Russia, which seeks to control all economic joints of the country.
Economists see that amidst the fluctuations there are huge companies and capitals related to the stage of reconstruction, and Syria will go to the dollar to try not to collapse the state institutions, ie, to allow the dollar to be the second currency in Syria without becoming dominant.
“The regime is physically unable today to regain control of most areas and thus the economic, political and social situation continues.
And all the conflicting parties , militarily, economically or even diplomatically are aware that there is no solution looming in the near future, despite the ongoing diplomatic talks conducted by the leaders of the major countries that hold the strings of the game in Syria and move the pawns of war and its princes in accordance with its different interests in different directions.
And that the diversity of its projects and agendas within the country, especially in the Middle East in general, increases the fragmentation of the painful reality and extends the dark tunnel as far as possible.

From the foregoing, we conclude that reforming the Syrian economy requires decades to recover and return to its pre-war situation, and further exacerbates its suffering that part of the damage seems irreparable. There are people who fled from the state and will not return. The years of education and culture that have been lost and the damage which has inflicted so much on physical capital and human capital are a very great to the extent that it needs hundreds of billions of dollars to repair it.

Economic unity
Rawabet Center for Research and Strategic Studies