Syria: Local Currency Devaluation Exacerbates Sufferings In Damascus

Souvenir mugs featuring Syria’s President Bashar al-Assad, Russia’s President Vladimir Putin and Lebanon's Hezbollah leader Sayyed Hassan Nasrallah are seen among other items for sale in old Damascus, Syria, February 8, 2016. REUTERS/Omar Sanadiki
Souvenir mugs featuring Syria’s President Bashar al-Assad, Russia’s President Vladimir Putin and Lebanon's Hezbollah leader Sayyed Hassan Nasrallah are seen among other items for sale in old Damascus, Syria, February 8, 2016. REUTERS/Omar Sanadiki
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Syria: Local Currency Devaluation Exacerbates Sufferings In Damascus

Souvenir mugs featuring Syria’s President Bashar al-Assad, Russia’s President Vladimir Putin and Lebanon's Hezbollah leader Sayyed Hassan Nasrallah are seen among other items for sale in old Damascus, Syria, February 8, 2016. REUTERS/Omar Sanadiki
Souvenir mugs featuring Syria’s President Bashar al-Assad, Russia’s President Vladimir Putin and Lebanon's Hezbollah leader Sayyed Hassan Nasrallah are seen among other items for sale in old Damascus, Syria, February 8, 2016. REUTERS/Omar Sanadiki

The rise in the exchange rate of the US dollar against the Syrian pound has exacerbated the suffering of the people of Damascus. Recent tension erupted between Rami Makhlouf, who for decades had the country’s most prominent economic pillars, and the government who asked the businessman to pay about $180 million. As a result, the lira lost about 35 percent of its value, as the exchange rate fell against the dollar from 1200 to 1600 after it was 46 liras back in 2011.

The Syrian regime has ordered a series of measures against Makhlouf’s companies, including the Association, and his shares in the state-owned Syrian Telecom Company (Syriatel), the country’s biggest mobile phone company.

The government’s Telecommunications and Postal Regulatory Authority informed two of Makhlouf’s companies, “Syriatel” and “MTN” mobile phone to pay about 234 billion Syrian pounds to the state treasury as a penalty.

Official media quoted a Syrian economic researcher as saying that the amendment of the contracts with the two mobile companies has caused the loss of more than 338 billion pounds (482 million dollars) to the treasury.

Economists told Asharq Al-Awsat that the crisis between the government and Makhlouf had been silent for a year, but that the new conflict emerged in light of “the government’s urgent need for the dollar,” which was reflected in a terrible rise in food prices in the capital.

The World Food Program estimated that food prices rose by 107% in one year.

In parallel, the Ministry of Oil stopped, on Sunday, supplying vehicles with subsidized gasoline, in a new austerity measure that reflects the exacerbation of the economic and financial crisis.

The decision sparked criticism on social media and on the street, while government officials blamed the fuel crisis on economic sanctions imposed by several Arab and Western countries, which prevented the arrival of oil tankers.

The US sanctions against Tehran have aggravated the fuel crisis in Syria, which depends on a credit line that links it to Iran to secure its fuel.

Meanwhile, the government and the central bank have demonstrated a great inability to find solutions to the economic crisis and to control the exchange rate. Instead, they stood idle at the fastest deterioration of the value of the lira without taking any proper action.

“Our government does not have the needed dollars and is barely managing to bring in wheat, sugar and rice,” An economic expert told Asharq Al-Awsat.

“Unless the government demonstrates great flexibility in the international conflict taking place over the Syrian file, the economic situation in the country is heading towards a further deterioration,” he added.



Syria's Aviation Comeback Struggles amid Regional Turmoil

An airport worker walks on the tarmac next to a Syrian Air plane at the Damascus International Airport on January 7, 2025. (Photo by LOUAI BESHARA / AFP)
An airport worker walks on the tarmac next to a Syrian Air plane at the Damascus International Airport on January 7, 2025. (Photo by LOUAI BESHARA / AFP)
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Syria's Aviation Comeback Struggles amid Regional Turmoil

An airport worker walks on the tarmac next to a Syrian Air plane at the Damascus International Airport on January 7, 2025. (Photo by LOUAI BESHARA / AFP)
An airport worker walks on the tarmac next to a Syrian Air plane at the Damascus International Airport on January 7, 2025. (Photo by LOUAI BESHARA / AFP)

Poor infrastructure, regional conflict and sporadic Israeli airstrikes are holding back more airlines from returning to Syria, industry officials told Reuters, hampering efforts to rebuild a shattered economy after 14 years of civil war.

This month, at least 11 foreign airlines are scheduled to fly into Syria, up from just three a year ago, as sanctions are scaled back following the overthrow of long-time leader Bashar al-Assad in December 2024.

These include the world's largest international carrier, Dubai's Emirates, and the first two European Union-based airlines to fly into Syria since 2011: Romania's Dan Air and Greece's Air Mediterranean, Reuters said.

But airlines such as Royal Jordanian, FlyDubai, Turkish Airlines and Qatar Airways last month were forced to cancel many of their recently launched flights as airspace across the Middle East closed to civil air traffic due to air and missile attacks involving Israel, the US and Iran.

There are dangers closer to home too. Israel carried out strikes against Syrian government forces in southwestern Syria for a second day on Tuesday, vowing to keep the area demilitarized and to protect the Druze minority there.

At the same time, airlines are worried about the state of Syria's aviation infrastructure and management of the industry.

"Progress is needed in regulatory oversight, infrastructure investment, and compliance with international safety and operational standards," industry body the International Air Transport Association said.

Major carriers such as Lufthansa and Air France KLM, which used to fly to Syria pre-war, have visited Damascus airport to assess the infrastructure and former offices, officials at Damascus airport and Syria's aviation regulator told Reuters.

However, both airlines told Reuters they had no current interest in resuming flights.

Small Romanian airline Dan Air launched its Bucharest to Damascus route last month.

"What held back operators until now were the logistical and regulatory complexities," Dan Air CEO Matt Ian David told Reuters, adding that eased sanctions would now make Syria more accessible.

Emirates at the end of May resumed flying over Syria for the first time since the civil war, shaving up to an hour off a Dubai to Beirut flight.

However, several countries, including Britain and the United States, still advise their airlines to avoid flying over Syria. Europe's aviation regulator EASA says "there is a risk of both intentional targeting and misidentification of civil aircraft".

Syria completely reopened its airspace on June 24, its civil air authority said.

Damascus Airport's two runways were bombed during the civil war, but have been repaired. The airport was also looted during the chaos of Assad's fall.

Alaa Sallal, director of public relations at Syria's Civil Aviation Authority, told Reuters a number of airlines had been to inspect security and infrastructure at the airport.

"The airport's construction was dilapidated, the equipment was worn out and some missing," Sallal said.

Radar equipment was lacking, leaving the country reliant on Lebanese or Turkish radar to monitor air traffic, he said.

The head of Syria's General Authority for Civil Aviation earlier this month said it wanted to build new airports in Damascus, Aleppo and in the country's central region. But that will take time and money that the war-ravaged country may struggle to find on its own.

NEW AIRLINES

The mostly Iranian and Iraqi carriers that served Syria through its long conflict have largely stopped flying there, reflecting a new political landscape after Iran- and Russia-backed Assad's overthrow.

The flag carriers of Qatar and Türkiye, countries that backed Syria's rebels through the war, were the first big airlines to resume flights in January under President Ahmed al-Sharaa's new leadership.

Türkiye, a close ally of the new government, has been helping improve Syria's airports, its transport ministry has said.