Anti-Assad demonstrations break out in southern Syria as currency collapses

Protests have broken out in Suweida as people have taken to the streets to call for the removal of President Bashar al Assad amid deteriorating economic conditions and collapse of the Syrian pound. 

Scores of young men gathered in the southwestern Syrian province on Sunday – a Druze-majority area and Assad stronghold – in footage captured by Suwayda24, a network of citizen journalists in the region.

Videos show the crowd marching through a market chanting, “Syria is ours and does not belong to the Assads,” as well as, “Leave now Bashar,” and other anti-Assad slogans.

Among them was “the people want the fall of the regime” – echoing the anti-government slogans during the early days of the popular uprisings in 2011.

The crowd also challenged the government’s allies: “Syria is free, out with Russia…out with Iran”.

There were also demonstrations in the town of Tafas, west of Daraa, where the government has threatened a crackdown after a series of attacks on pro-Assad officials and security forces.

Some of the slogans included “if a regime can not control prices, then it has to stand down,” and “in all countries, a man immolates himself for the people’s interest, while in Syria, the people are immolated for just one man”.

In January, demonstrations had broken out in Suweida in response to economic woes and the collapse in the Syrian pound.

The renewal of protests highlights the challenges facing Assad’s Alawite-dominated regime, as its war-torn economy grapples with a financial crisis exacerbated by the spectre of sanctions, corruption, a regional banking crisis, and a global pandemic.

Dramatic collapse

 Stretching a decade, Syria’s civil war has killed over 380,000 people and displaced nearly half of the country’s pre-war population.

With the help of Iran and Russia, Assad has regained control over much of the country’s territory, apart from the rebel-held northwest. But it has come at the cost of turning the country into a rump state with an economy on the verge of collapse.

The government is unable to provide basic services, having lost 75 percent of its GDP since the war began. Shortages of food, petrol, gas, and other basic goods are pervasive; electricity blackouts are widespread.

Government revenues have taken a hit due to the economic turmoil in Iran, its principal backer. Russia’s own economic woes make it unable to underwrite as well.

Meanwhile, the situation for ordinary Syrians is dire.

Over 80 percent of Syrians are said to be living in poverty. In May, the UN stated that 9.3 million people, more than half the population, are “food insecure”.

The country remains sanctioned by the European Union, which has impeded much-needed humanitarian aid.

New US sanctions against the regime are due to take effect by mid-June – the Caesar Syria Civilian Protection Law – which would penalise foreign companies that deal with Syrian firms linked with the government.

A new round of sanctions could see further pressure build on the government and intensify the country’s financial stress.

Escalating financial crisis

The Syrian pound slipped to a record low last week, tied to fears over the consequences of pending US sanctions and the seizure of business tycoon Rami Makhlouf‘s assets upon the country’s battered economy.

Makhlouf, Assad’s cousin, had been one of the most prominent loyalists that bankrolled the regime’s war efforts.

However, Makhlouf’s untouchability came to an end after the government – under pressure from Russia to crack down on corruption – demanded that he pay vast sums of money or face repercussions.

When Makhlouf refused, the regime moved to seize his assets, reflecting the growing tension between them and the country’s powerful kleptocratic elite.

The Makhlouf affair rapidly led to insecurity among big currency traders.

The pound’s drop has paralysed economic activity, as merchants and traders are hesitant to buy or sell in a market where the currency has declined by 5-10 percent on a daily basis.

As a  result, there has been a dramatic rise in the price of consumer goods, as well as the closure of shops, largely due to prices inevitably having to double. 

The very latest from Syria tells us that yesterday, large shops and fuel stations in most provinces were partially closed after the pound hit a new record low, approaching 2,500 Syrian pounds against the US dollar.

The currency crisis has been compounded by the fallout from Lebanon’s banking crisis and the pandemic.

With little faith in their local banking sector, many Syrians relied on Lebanon as a dependable refuge for their savings and a way to purchase dollars.

However, the Syrian pound’s decline accelerated from mid-October onwards, when Lebanon’s financial crisis choked the influx of foreign currency. Rising Lebanese debts and the inability to pay them off led to the imposition of capital controls.

With Lebanon’s money supply drying up, the knock-on effect has been an acute dollar shortage and the plummeting of the pound.

Adding further fuel to the fire has been the pandemic. 

The lockdowns implemented due to Covid-19 have had a devastating impact on the private sector, with a nationwide curfew freezing business activity over the last two months.

It has also led to a precipitous fall in remittances, a vital lifeline for the country. The World Bank estimates $1.6 billion worth of remittances flow into Syria annually and comprise around 15 percent of nominal GDP.

Medicine in the country is scarce and access to them is often disrupted given the widespread closures. There are reports that pharmacies, too, have shut down.

Most pharmacists “aren’t selling essential drugs due to accelerated loss of the buying power of the Syrian pound/lira,” said Zaher Sahloul, senior adviser and former president of the Syrian American Medical Society, on Sunday.

“The situation is desperate and adding to the public anger from their government,” he added, fearing that things will only get worse.