Syria Update
27 January 2020
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New Decrees Aim to Silence Syrian Street as Economy Deteriorates
In Depth Analysis
On 18 January, Syrian President Bashar Al-Assad issued two harshly punitive legislative decrees in a bid to protect the flagging Syrian pound. The first of these orders, Legislative Decree No. 3, imposed substantial punishments for the use of foreign currency in commercial transactions; these punishments include a minimum penalty of seven years of hard labor, as well as a financial penalty of two times the value of the payments or goods and services involved in outlawed transaction. The second order, Legislative Decree No. 4, raised the penalty for those caught “broadcasting or publishing fabricated facts, [or] false or fake allegations that cause national currency depreciation and instability” in any media, including online and social media. The punishments stipulated for violations include detention and financial penalties between 1 million SYP (930 USD) and 5 million SYP (4,561 USD), a marked rise from the previous penalty range of 250-1,000 SYP (0.23-0.93 USD). The draconian penalties attached to the decrees leave little room to doubt their purpose: to use intimidation as a further wedge to gain control over the unstable Syrian economy by striking at its most visible manifestation, the Syrian pound.
The decrees complement previous restrictions imposed on money changers and other measures ensuring foreign currency transactions take place only through the formal banking system. Together, these measures aim to further control the flow of foreign currency into the market and curb speculation on the Syrian pound. On 20 January, Prime Minister Imad Khamis stated that the measures will target transactions made within Syria exclusively. The decrees “do not target sectors of business, investment or foreign trade,” according to Khamis.
Also on 20 January, the Central Bank of Syria called on Syrians to sell any dollars in their possession only to formal bank branches, at the new rate of 700 SYP to the dollar (a discount of at least 30 percent on the black market rate). Wary of losing considerable sums by changing currency at the unappealing Central Bank rate, and fearful of repercussions if caught trading on the black market, Syrians have reportedly clung more tightly to their dollar savings in response to the measure.
Syrian households to pick up the tab
Any positive impact on the Syrian pound as a result of these measures will be temporary. What is certain is that it will put Syrians’ savings at serious risk and exacerbate the humanitarian impact of a widely expected economic collapse in Syria. On 23 January, the parallel market value of the Syrian pound sat at 1075 to the dollar, down from 1200 on 18 January. However, this reflects only a temporary freeze on the supply of dollars that remain inside Syria and outside the formal banking system. It is not a sign of any meaningful recovery. Looking ahead, Syrians are likely to tighten their grip on the increasingly valuable dollars that remain in their possession, but they can do so for only so long. In the medium to long term, the raft of new measures will increase the pressure on those holding dollars to cash them out (including at disadvantageous rates set by the Central Bank), as costs rise and the real value of the Syrian pound dwindles.
These economic headwinds will persist until serious economic and political reforms are implemented — a decidedly long-term prospect. At present, new Government of Syria policies aim to cover the spread in the Central Bank’s coffers by dipping into Syrian households’ savings. These conditions will be damaging to savers, but the price volatility, black market manipulation, and shortages of goods will affect all but the most aloof Syrians.
Whole of Syria Review
1. Druze religious leadership endorse As-Sweida demonstrations
Sweida, As-Sweida governorate: On 21 January, the Druze religious leadership publicly endorsed the demands made during the ongoing demonstrations in Sweida and called upon the Government of Syria to take the necessary measures to better local economic conditions and fight corruption. Meanwhile, local media sources reported that new demonstrations had taken place in Sweida city on 19 January, following earlier mobilizations during the past week. Relatedly, the head of Baath Party Branch in As-Sweida governorate, Fawzat Shqair, stated that demonstrators are “armed and foreign actors” who are being “bribed” to destabilize the region.
The rebirth of anti-Government Druze politics?
The endorsement of the ongoing civil unrest in Sweida by Druze religious leadership removes a handbrake slowing the progress of demonstrations in As-Sweida, which have been fueled by economic malaise and sustained by security and political isolation. With religious license, the stage is now set for the potential of wider unrest. The Government of Syria recognizes the worrying potential of this development and has already escalated its tone since the outbreak of demonstrations in the past week (see: Syria Update 20 January 2020). Against a backdrop of a divided tribal and security landscape, the relative cohesion of the Druze religious leadership may prove to be a crucial factor in the intensification — or quelling — of further unrest. However, despite the appearance of cohesion within the trilateral Druze sheikhdom, cracks do exist (see the related WPCS study published by European University Institute: The Druze of Sweida: the return of the Regime hinges on regional and local conflicts). Whether the Druze factions come together or splinter under the present conditions will be of utmost importance. What is clear, however, is that the primary material and economic drivers of the nascent protest movement are unlikely to improve.
2. Turkey shores up efforts to contain northwest Syria displacement
Aleppo and Idleb governorates: On 21 January, Turkish Foreign Minister Mevlut Cavusoglu reiterated the urgent need to end the bombardment in Idleb governorate and announced that Turkish aid agencies had begun to build more than 10,000 housing units in border villages — 5km from the Turkish border, in Idleb’s rural areas — to shelter the growing number of individuals displaced due to the ongoing hostilities. It is estimated that these housing units will accommodate up to 60,000 individuals during the first stage of the project. Meanwhile, shelling and clashes between armed opposition groups and Government of Syria forces continued on frontlines in western rural Aleppo. However, no considerable territorial advances have been reported. Concurrently, intensified aerial bombardment by Russia and the Government of Syria continued to target western rural Aleppo and southern and southeastern rural Idleb, concentrated on communities along the M5 and near Saraqeb and Ma’aret An Nu’man.
Preparing for displacement
As intense aerial bombardment designed to displace the populations of frontline communities continues, Turkey has doubled down on efforts to contain the humanitarian consequences inside Syrian territory, fearing the potential that displacement will cross into its own borders. In addition to the aforementioned 10,000 housing units, the Turkish Kizilay aid agency confirmed that it will set up 1,000 emergency housing units, to be completed within the next two to three weeks. The hostilities in northwest Syria are escalating an already dire humanitarian situation, with displacement coming as a major concern for Turkey, and a source of leverage to gain support from Europe. According to the Response Coordination Group, approximately 71,275 individuals were displaced from western, southern and southeastern rural Aleppo between 14 and 24 January. These numbers are likely to grow as the military offensive continues, especially in the event of an expected Government of Syria ground assault to advance frontlines that have remained largely static for several weeks under the continuing aerial attacks.
3. Rival tribal factions trade denunciations, recriminations
Deir-ez-Zor city, Deir-ez-Zor governorate: Local sources report that on 17 January, representatives of Government of Syria–affiliated tribes denounced and refused to recognize the legitimacy of tribal sheikhs who are supportive of the Self Administration, Syrian Democratic Forces, or U.S. forces. This announcement comes in response to an incident in which two leaders of the Al-E’keidat tribe publicly voiced opposition to Iran’s influence in Deir-ez-Zor and announced their support of the SDF. These events follow a meeting convened by the Al-E’keidat tribe on 31 December, in Al-Hasakeh, at the behest of the Self Administration and the SDF. During the meeting, the acting sheik of the tribe was reportedly ‘replaced’ with another sheikh, who has close ties to the SDF, while several tribesmen close to the SDF were installed on the Al-E’keidat tribal council.
Rift valley: Euphrates tribes sought as allies
Though somewhat arcane in their details, these events reflect wider efforts by various powers active in eastern Syria to transform rifts within and among tribes into a broader power base and long-term influence. The members of the Al-E’keidat tribal confederation can roughly be divided among those aligning with the SDF and those aligning with the Government of Syria; the recent appointments, declarations, and denunciations will rock the boat and expose rifts within the tribe. The support of military actors has been important in solidifying the prominence of tribal leaders throughout the conflict and, indeed, throughout modern history. As such, disputes over legitimacy within tribes are a reflection of the continuing search for local support by the Government of Syria and the SDF, as well as Iran and Turkey (see: Tribal Tribulations: Tribal Mapping and State Actor Influence in Northeastern Syria). Looking ahead, divisions among and within tribes can be expected to remain so long as all parties continue their efforts to build support in eastern Syria.
4. Bread prices pegged to foreign currencies in Idleb, A’zaz
Northwest Syria: On 20 January, the Salvation Government announced that the price of bread sold in Idleb governorate would be calculated in dollars and converted to Syrian pounds on a rolling basis, according to the daily exchange rate for the USD. Reportedly, the Salvation Government has informed bakery owners that violations of the new bread pricing system will be punished with fines exacted through Salvation Government–administered courts. Relatedly, on 19 January, the local council in A’zaz pegged the price of bread to Turkish lira.
‘Khibz w milh’
Three distinct bread pricing models now operate in public bakeries in Syria, with prices denominated in SYP in Government-controlled areas, dollars in HTS controlled-areas, and Turkish lira in some Turkish-controlled areas. The retreat to foreign currencies is an ominous sign of the pound’s slumping value. In the case of the Salvation Government, the changeover signals that previous rounds of price hikes and reductions in the weight of bread packages have not kept pace with the Syrian currency’s decline, which is likely to continue into the future. Real prices in Idleb continue to rise, and gas, a crucial bakery input, has jumped from 7,000 SYP per cylinder in November to 11,000 SYP today. As a result, bread prices have leapt from 250 SYP to 400 SYP per package. The switch to dollar (or Turkish lira) pricing will help contain pressure on bakers, but the costs will be passed on to consumers, who are likely to be subject to disadvantageous exchange rates set by local functionaries. Bread remains one of the most important staples of the Syrian diet; the common expression ‘khibz w milh’ — bread and salt — is used to denote the bare essentials. Indeed, prior to the conflict, bread accounted for approximately 40 percent of a Syrian household’s caloric intake.
5. Two areas, two approaches to rising anti-Government sentiment
Dar’a, Dar’a governorate and Kanaker, Rural Damascus: On 18 January, local and media sources circulated a compact signed by Dar’a tribes and prominent families and setting out their commitment to work together to “eradicate corruption in all its forms and hold accountable whoever killed our children”. The statement followed shortly after two former opposition combatants were reportedly kidnapped in Dar’a Al-Balad, on 17 January. Local and media sources reported that local sentiment in Dar’a places blame for the kidnapping on a local reconciled armed group led by Mustafa Al-Masalmeh, who is now linked to Government of Syria security services. According to local sources, the incident has intensified local discontent with the reconciled armed groups that are now widely seen as an inseparable part of the Government of Syria’s security apparatus. Meanwhile, local sources reported that demonstrations and protests continued across communities in southern Syria, particularly in eastern Kerk and Dar’a Al-Balad, in parallel with kidnappings, targeted killings, and attacks on Government of Syria checkpoints.
Relatedly, on 16 January, media sources reported that Russian representatives had met with former opposition members in Kanaker, Rural Damascus, in light of recent anti-Government mobilizations in the area. Reportedly, the Russian representatives sought to understand the reasons for the unrest. The community reportedly reiterated its demands for the release of detainees and clarity regarding the fates of the disappeared, in addition to expressing resentment over the conduct of Government of Syria forces and Iran-affiliated militias.
Syria in split-screen
Though nominally unrelated, these developments offer an instructive window onto the means of de-escalating — or amplifying — the unrest and disaffection that are mounting across much of Syria. On the one hand, the Russian rapprochement in Kanaker suggests that the Russian Reconciliation Center may seek a more active role in bringing dissatisfied communities under control, given that recent efforts led by Government of Syria intermediaries have failed. On the other hand, the intensity of unrest in southern Syria raises a higher bar to meaningful de-escalation; the continuing unrest increasingly resembles a nascent opposition (Syria Update 20 January 2020). In southern Syria, no signs of renewed Russian mediation have emerged, and the influence of Russian military police remains geographically concentrated in western rural Dar’a and parts of Dar’a city, where their role is more pragmatic and limited primarily to dealing with detentions, conscription, and kidnappings (Security Archipelago: Security Fragmentation in Dar‘a governorate). The Dar’a ‘compact’ referenced above speaks to the serious challenges that will await any efforts to deconflict southern Syria, as security and economic conditions remain in flux, and neither the Government of Syria nor Russia has firm ground to stand on in the region.
6. Lebanon government formed, but progress is dubious
Beirut, Lebanon: On 21 January, a new Lebanese Government formed, following three months of deadlock since the resignation of Prime Minister Saad Hariri, on 29 October, prompted by spontaneous nationwide protests. Although portraying itself as a government of technical experts with no overt political agenda, the newly formed cabinet is by and large packed with ministers endorsed by and tied to Government of Syria–affiliated political groups, namely the March 8 alliance of Hezbollah, Amal Movement, and the Free Patriotic Movement (FPM). The newly formed government is led by Prime Minister Hassan Diab, a political newcomer who entered the ring at the proposal — and with the ostensible support — of the same March 8 parliamentary bloc. Notably, Diab’s government excludes large elements of key political parties that are antagonistic toward the Government of Syria, such as the Future Movement — the largest Sunni political party — as well as some Christian political parties, and the Progressive Socialist Party, which represents a significant number of the country’s Druze minority.
Lebanon’s ‘Salvation’ Government: new faces, same factions
The newly formed Lebanese government is likely to be approved by the Lebanese Parliament in the near term given that the majority of the members are of the same constituent political blocs as the cabinet members. Whatever its immediate fate in parliament, the cabinet is curiously unifying in its failure to satisfy the Lebanese street and the traditional political class. Naturally, this places its longevity in doubt. The government will likely focus on harvesting low-hanging fruit by advancing a short-term agenda that will do nothing to ameliorate the structural factors behind Lebanon’s chronic political paralysis and economic decrepitude. For Syria, the most notable such conditions are the nation’s unfolding economic crisis and its degree of openness toward the Government of Syria. In terms of the latter, a predominant concern is the support promised to Lebanon by the International Support Group for Lebanon (at the CEDRE conference), which is conditional upon the government’s commitment to reform and its continued neutrality — in effect, a policy of no policy vis-a-vis regional geopolitics, including the Syria conflict. In that sense, the funding which Lebanon now desperately awaits is in serious doubt. The latent (though strategically muted) presence of Hezbollah in the cabinet is one impediment from an international perspective, as is the doubt around Lebanon’s ability to undertake painful economic reforms as it creeps toward collapse.
7. Iran to renovate 250 schools, train Syrian teachers
Various locations: On 23 January, Syrian Minister of Education Imad Al-Azab announced that Iran was in the process of signing a memorandum of understanding to renovate 250 schools in Syria, at the cost of 12 billion SYP (approximately $11 million). Reportedly, the majority of the schools to be renovated under the scheme are in Aleppo and Rural Damascus governorates. Al-Azab noted that the parties have agreed to complete the works in advance of the start of the coming school year, in August.
Dollars and cents, hearts and minds
Education is among the worst-affected sectors in Syria, due both to chronic funding shortages and explicit targeting, largely by the Government of Syria. Al-Azab stated that 8,000 Syrian schools are in need of rehabilitation, of which the Ministry of Education reportedly plans to rehabilitate 2,000 during the 2020 calendar year. Considering the fiscal disorder of the Syrian state and Iran, this ambition likely rests somewhere on a continuum between fantasy and outright falsehood. Moreover, given the scale of the sector’s destruction, Iran’s hope to bring 250 schools up to code will be seen as a small step forward. Iran’s ambitions are in some doubt, given the raft of earlier Iranian-Syrian memoranda of understanding that have produced no tangible outputs. Nonetheless, it is important to note that although many of Iran’s high-profile economic ambitions in Syria have been thwarted by fiscal realities, Iran’s on-the-ground initiatives to build a base of popular support (and dependence) in Syria have consistently yielded results. A plan to bring Syrian schools back online may constitute such a project. Indeed, even without the requisite investments in school rehabilitation, Iran may find ways to sow ideological influence among Syrian pupils. Indeed, delegations of Syrian educators are also reported to be visiting Iran in order to receive training on testing and professional educational standards, while further support may come in the form of textbooks and curricula. In this way, Iran many yet succeed in capturing hearts and minds, even if it lacks in dollars and cents.
Key Readings
The Open Source Annex highlights key media reports, research, and primary documents that are not examined in the Syria Update. For a continuously updated collection of such records, searchable by geography, theme, and conflict actor, and curated to meet the needs of decision-makers, please see COAR’s comprehensive online search platform, Alexandrina, at the link below.
Note: These records are solely the responsibility of their creators. COAR does not necessarily endorse — or confirm — the viewpoints expressed by these sources.
What Does It Say? Syrian Minister of Electricity Muhammad Zuhair Kharbutli stated that the memorandum of understanding with an Iranian company to rehabilitation the Aleppo thermal plant was canceled because the company requested that the full cost, 64 billion Syrian pounds ($59 million), be paid up front.
Reading between the Lines: Due to a fluid regional context, such actors may be tempted to resort to historic means of targeting U.S. and international actors — including asymmetric attacks that may play out over years.
Source: Al-Iqtisadi
Language: Arabic
Date: 22 January 2020
Trump, Salih agree to US-Iraq ‘security partnership’
What Does It Say? Meeting at the World Economic Forum, U.S. President Donald Trump and Iraqi President Barham Salih discussed the ongoing role for U.S. troops in Iraq, with Trump reportedly stating that he does “not want to stay in Iraq,” and would draw down forces in an “unprecedented way”.
Reading between the Lines: Despite promises to draw down the U.S. military presence in the Middle East, Trump has presided over the deployment of an additional 14,000 soldiers to the region. Despite his vaciliations, however, Trump has been clear that exiting Iraq is his goal; the risk remains that he may follow through on this plan, come what may.
Source: Rudaw
Language: English
Date: 23 January 2020
For Russia, Libya and Idlib are now part of the same gamble
What Does It Say? While Russia is still reaping the benefits of the Syrian conflict, it is witnessing diminishing returns on its involvement, encouraging a pivot toward Libya in the hope that a strategic intervention can payout in north Africa as well.
Reading between the Lines: Libya has enormous resource wealth and market potential, which both Russia and Turkey are keen to tap. As the conflict in Libya drags on, both powers are doubling down on their support to competing factions, and incentives will mount to apply strategies honed in Syria.
Source: Middle East Institute
Language: English
Date: 21 January 2020
Lebanese Lira – Real Exchange Rate: USD
What Does It Say? The grassroots group surveys currency exchange shops and identifies the triggers of changes in the Lebanese lira-to-USD exchange rate.
Reading between the Lines: Following a decision by the money exchange syndicate, the market continues to hold at 2,000 Lebanese lira to the dollar, but this rate will last only so long, as traders hoard dollars in anticipation of this peg coming undone.
Source: lebaneselira.org
Language: English
Date: Continuously updated
What Does It Say? The Government of Syria has proposed building residential properties in the formerly industrial area of Qaboun; reportedly, no more than 50 percent of former residents will be permitted to return.
Reading between the lines: The fate of Qaboun and its future zoning are matters of the foremost concern, and they have been subject to considerable uncertainty. To date, the rehabilitation of affected communities appears bound up in negotiations between local industrialists and central authorities.
Source: SY 24
Language: Arabic
Date: 22 January 2020
Cultivating a Crisis: The Political Decline of Agriculture in Syria
What Does It Say? This study documents the political economy of Syrian agriculture prior to and during the conflict, noting the shift from producer-oriented supports toward a ‘social market economy’ that disadvantaged small holders.
Reading between the Lines: Contra prevailing narratives, this study shows that pre-conflict market structures — not merely drought and poor harvests — made Syrian agriculture uniquely fragile and particularly inequitable.
Source: European University Institute
Language: English
Date: 9 December 2019
The Local Council of Kafariya: Interview
What Does It Say? The interview with a current Kafariya local council member sheds light on conditions in the community; Kafariya was part of the notorious ‘Four Towns’ agreement, which swapped the populations of two predominantly Shia communities for those of two Sunni communities.
Reading between the Lines: The dire conditions in the community are made worse by the inflow of IDPs from frontline communities now being targeted by Government bombardment.
Source: Aymenn Jawad Al-Tamimi
Language: English
Date: 21 January 2020
Six trends that will shape the future of humanitarian action
What Does It Say? The modalities of humanitarian assistance must adapt to new challenges, including climate change, circumvent the abuses of humanitarian funding by elites, and combat the erosion of international humanitarian law.
Reading between the Lines: International assistance is more important than ever, but novel safeguards and new approaches will be necessary to ensure investments resolve, rather than feed, complex crises.
Source: UN-OCHA
Language: English
Date: 20 January 2020
What Does It Say? The report brings a human rights lens to its summary of the main events and violations of the Syria conflict in 2019.
Reading between the Lines: The Syria conflict has witnessed atrocities and mass civilian casualties at the hands of all parties, but human rights considerations have largely been sidelined by geopolitical calculus.
Source: Human Rights Watch
Language: English
Date: 8 December 2019
The Wartime and Post-Conflict Syria project (WPCS) is funded by the European Union and implemented through a partnership between the European University Institute (Middle East Directions Programme) and the Center for Operational Analysis and Research (COAR). WPCS will provide operational and strategic analysis to policymakers and programmers concerning prospects, challenges, trends, and policy options with respect to a conflict and post-conflict Syria. WPCS also aims to stimulate new approaches and policy responses to the Syrian conflict through a regular dialogue between researchers, policymakers and donors, and implementers, as well as to build a new network of Syrian researchers that will contribute to research informing international policy and practice related to their country.
