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Syria’s Downward Spiraling Economy

Two years of war have severely destabilized Syria’s economy. The Syrian pound, valued at 47 to the US dollar before the outbreak of hostilities, now trades at 330, around 15% of pre-war value. Similarly, unemployment now stands five times the rate it was two years ago, the public sector has suffered a loss of $15 billion, and the economy as a whole has shrunk by 35%.

Worse though is Syria’s growing reliance on foreign aid, specifically that from Iran, Russia, and China. Due to the destruction of factories, disruption of agriculture, and shrinking oil revenues as rebels control oil fields and Western countries impose sanctions, Syria no longer able maintains its former level of self-sufficiency.

A result of the government’s struggles may soon be a reversion to a stricter socialist policy, similar to how the country was run in the 1980s. Ironically, it is reforms instituted by Bashar al-Assad at the beginning of his presidency that are now being reviewed. Should these changes go into effect, the modest reforms toward an open market and private business could reverse, with greater government control on wages and subsidized goods.

Despite the government’s troubles and the spiraling currency, it is unclear whether the country’s economic crisis will play a factor in the ongoing civil war. The government blames foreign sanctions and the opposition on the economic difficulties for the conflict, and due to the national division it is quite probable that the situation will not influence the population in either direction. But whether it makes a difference politically, the fighting takes its toll on the economy, and those Syrians who have not yet become refugees are feeling the hardship all the same.

– David Wilson

Sources: New York Times Washington Post
Photo: NPR