The war economy has created crippling inflation for ordinary Syrians.
The shift of the Syrian economy towards military victory for the regime above economic or social considerations has caused a dramatic standard of living crisis for ordinary Syrians.
This shift has contributed to a major rise in prices of most goods and services in Syria, including basic food commodities, set against decreasing salaries and wages. According to USAID figures, 11.2 million people are in dire need of food assistance, 6.7 million of whom suffer from food insecurity, and 4.5 million of whom are at risk of food insecurity.
The Labor Observatory for Studies and Research reports that the income of the average Syrian is SYP 33,000. This is three times less than the necessary food costs for an average family of five in Damascus – SYP 101,000 per month, according to the Kassioun cost-of-living index month.
The deteriorating standard of living has forced families to make hard choices about selling assets, taking on loans, removing children from school to work and pushing children into early marriage. It has also fuelled black-market activity, widespread kidnapping and looting, and war profiteering.
The regime has made economic revitalization part of its attempt to ‘sell’ the return of the Syrian state to people in areas recaptured from rebels. In the southern governorate of Daraa, a rebel stronghold the regime took control of last July, it has promised the opening of the southern border crossing, the establishment of various exhibitions, the rehabilitation of manufacturing cities, the removal of roadblocks in cities and international support to begin reconstruction.
However, none of these steps grapples with the real problems facing society from low wages and out-of-control prices.
The Syrian government has been accustomed to introducing inflationary budgets over the last seven years, without consideration for production or the amount of cash reserves. This approach caused a 521% increase in inflation from 2010 until May 2016, while the 2013 index reached 388%, according to the Syrian Central Bureau of Statistics.
The price of bread, meat and vegetables provides a good picture of the true rate. On 17 October of this year, a kilogram of meat was SYP 4,500, while it was SYP 600 in 2011. On the same date, a kilo of tomatoes cost SYP 200, compared to SPY 50 in the past, while the price of sugar jumped from SYP 25 to SYP 250.
Some stress the need to raise salaries in the public sector by double or more to keep pace with the general increase in prices. But given that the means of production has come to a standstill and foreign reserves have been centrally drained, such an increase in the money supply would be accompanied by an increase in the rate of inflation – and of course, would only benefit public sector employees, not private sector workers or day labourers.
The perspective of production is an important part of understanding the standard of living crisis, because the decreased rates of production in all sectors, especially the agriculture sector, mirror the local increase in prices of food and products.
The agricultural situation has deteriorated to an unprecedented level, with the latest reports indicating a decrease in wheat production to 1.2 million tons, the lowest level in 29 years, according to the most recent assessment of food crops from the Food and Agriculture Organization and the World Food Programme.
This was due to the length of the drought and the lack of heavy, off-season rainfall in the run-up to 2011, followed by the conflict, which led to the destruction of large agricultural areas, the displacement of thousands of farmers and a sharp increase in the cost of agricultural inputs. The Syrian regime plans to import about 1.5 million tons of Russian wheat this year, whereas, before 2011, Syria was self-sufficient in wheat.
To provide the agricultural sector with the needed financial resources, it is necessary to open up foreign investment opportunities with real guarantees and encourage the establishment of agricultural companies that contribute to the stock market, while imposing objective conditions that protect citizens from corporate greed.
The adoption of an agricultural economic identity based on reform of the agricultural sector and increasing the production of various agricultural crops – as well as attention to rural areas, agricultural workers and the land as a means of production rather than as a commodity to sell for financial rent returns – would contribute to increasing the supply of basic food crops on the market at decreased prices affordable to all.
The regime does not appear to intend to take this course. It grants most of the commercial opportunities to elite merchants close to it and sets import policies that are advantageous to these merchants and to the regime’s allies, Russia and Iran.
With the continuation of these practices, more citizens will leave the country and some farmers will be forced to sell their land for money, decreasing agricultural production further, fuelling price increases and, thus, perpetuating the standard of living crisis.