Analysis: Allies prop up Syria's economy

Beirut, Lebanon — Syria's civil war has ravaged the country's economy, causing damage that could take years to repair, and people have been forced to focus on finding basic necessities, like food and fuel, experts say.

Gross Domestic Product has plunged nearly 40 percent since 2010, the year before the war began, as production has seized up, the regime has been rocked by international sanctions and oil fields lost to rebels.

But so far, the economy has avoided total collapse, with the currency stabilising of late despite a massive loss in value, and crucial financial support forthcoming from key allies Russia and Iran.

"The Syrian economy has transformed dramatically... the economy that we used to know has been destroyed to a large extent," said economist Jihad Yazigi, author of The Syria Report, an economic news site.

"There are vast segments of the Syrian economy that have stopped production and many economy players have left the country," he said.

"The war has produced a new economy, which is what we call a war economy."

"Robbery, kidnappings, checkpoints and control over oil fields... have become the sources of income."

"Both the informal economy and the war economy are on the rise. There are some businessmen who have benefited from the war, and new institutions and networks have grown with it," he added.

The conflict began in March 2011, when the regime cracked down brutally on peaceful anti-government protests.

The opposition took up arms and the country spiralled into a civil war that has killed more than 140,000 people and displaced nearly half the population internally or externally.

- 'Extreme poverty' -

"Syria's economy has become a war economy because Syria is a battleground where there are multiple, complex fronts," according to Mazen Irsheid of Jordan's United Financial Investment Co.

The effects on the economy have been devastating. The Economist Intelligence Unit (EIU) estimated GDP will plunge this year to $34 billion from $60 billion in 2010.

The United Nations says the unemployment rate is nearly 50 percent and that half Syria's population of 23 million is now living below the poverty line, with 4.4 million languishing in "extreme poverty."

The dire economic straits have forced Syria's residents to adjust, as people focusing on securing such basic needs as bread, tea and sugar.

According to official Syrian estimates, tourism sector has lost $1.5 billion and manufacturing has lost $2.2 billion since the war began.

Oil production has fallen by 96 percent, from 385,000 barrels a day to just 14,000.

The industry has been doubly buffeted, first by European sanctions and then by the gradual loss to rebels of the country's biggest oil fields, in the east.

Europe once bought 90 percent of Syria's oil, but now production is too meagre to even meet domestic needs of around 150,000 barrels a day.

That has forced Syria to make up the shortfall by importing some $400 million of oil a month from key ally Iran.

Tehran has proved key in propping up Syria's economy, extending the regime a $3.6 billion credit line in July.

Loading...

Editor’s note:Yahoo Philippines encourages responsible comments that add dimension to the discussion. No bashing or hate speech, please. You can express your opinion without slamming others or making derogatory remarks.

  • Muslim group calls for universal peace
    Muslim group calls for universal peace

    As predominantly Catholic Philippines and the rest of the Christian world observe the Holy Week, peace advocates like the Young Muslim Professionals Network (YMPN) are appealing to Filipinos of various creeds and persuasion to embrace the universal message of kindness, love and peace. The group issued the call as peace negotiations between the government and the Moro Islamic Liberation Front teeter due to the Mamasapano incident where members of the rebel group killed 44 police commandos on a …

  • Ex-WB exec pushes BBL passage
    Ex-WB exec pushes BBL passage

    A former World Bank official has warned of dire consequences for the Philippines if the proposed Bangsamoro Basic Law (BBL) is not passed into law. Nigel Roberts, former director on conflict, security and development, said that more conflict could occur without the BBL. “It takes about 15 years to get back to pre-conflict GDP growth rates, and 20 years for trade to recover,” Roberts said in his blog at the World Bank website. The World Bank estimated that economic losses amounted to $10 …

  • Despite typhoon, summer is here
    Despite typhoon, summer is here

    Super Typhoon Chedeng roared toward Luzon as the weather bureau announced the official start of summer in the country yesterday. The Philippine Atmospheric, Geophysical and Astronomical Services Administration (PAGASA) announced yesterday the official start of the dry or summer season in the country due to the termination of the cold northeast monsoon. “The general public is advised to take precautionary measures to minimize heat stress and take note of the need in optimizing the daily use of …

  • Noy told: Just answer the questions
    Noy told: Just answer the questions

    Just answer the 20 questions. The Makabayan bloc of seven party-list representatives made this appeal to President Aquino yesterday after his spokesman claimed the Chief Executive has already answered most of the questions posed by the militant lawmakers regarding the Mamasapano incident. For instance, he said the President has not yet explained why he allowed then suspended Philippine National Police chief Director General Alan Purisima to take the lead in Oplan Exodus or the mission to …

  • DFA: Malaysia paying rent for Sabah
    DFA: Malaysia paying rent for Sabah

    Malaysia does not acknowledge the Philippine claim over Sabah but the Department of Foreign Affairs (DFA) maintained yesterday that the Malaysian government is paying rent for Sabah, indicating it rightfully belongs to the Philippines. The Malay Mail Online reported that Malaysian Foreign Minister Datuk Seri Anifah Aman said Malaysia has not and does not acknowledge the Philippine claim over Sabah when asked by media about the reported offer of the Philippine government to downgrade its Sabah …

  • 63 OFWs returning from Yemen
    63 OFWs returning from Yemen

    Sixty-three overseas Filipino workers (OFWs) are set to return home from war-torn Yemen, Labor Secretary Rosalinda Baldoz said yesterday. Baldoz said the licensed recruiters of the OFWs have assured the government of their immediate repatriation. Administrator Hans Cacdac of the Philippine Overseas Employment Administration has ordered the recruitment agencies to fulfill their obligation to bring home the OFWs. Baldoz called on Filipinos still in Yemen to avail themselves of the government’s …

  • Jinggoy gets furlough for shoulder checkup
    Jinggoy gets furlough for shoulder checkup

    Despite opposition from ombudsman lawyers, the Sandiganbayan yesterday granted detained Sen. Jinggoy Estrada’s request to undergo a medical checkup at the Cardinal Santos Memorial Hospital. Estrada was allowed to undergo a medical examination for pain in his left shoulder from 3 p.m. to 6 p.m. The senator was ordered to shoulder the expenses incurred by the Philippine National Police in  escorting him. In a pleading filed Monday with the anti-graft court’s Fifth Division, Estrada’s lawyers …

  • Tekken’s Josie Rizal gets flak
    Tekken’s Josie Rizal gets flak

    A professor of the University of the Philippines yesterday hit the portrayal of a Filipino character, whose name was based on Jose Rizal, in a Japanese-produced video game. “(It’s) offensive and unsuited for a big company like Bandai because they have the money to do research,” Gonzalo Campoamor II, professor of Life and Works of Rizal in UP Diliman, told The STAR. Japanese giant Namco Bandai recently introduced Josie Rizal, the first Filipino character in the popular fighting game franchise …

POLL

Should Aquino be held accountable over the Mamasapano operations?

Loading...
Poll Choice Options