Asharq Al-awsat English Middle-east and International News and Opinion from Asharq Al-awsat Newspaper

Foreign Aid Lost in Syria Exchange Rate Distortions

Foreign Aid Lost in Syria Exchange Rate Distortions

Saturday, 23 October, 2021 - 05:00
FILE - In this July 24, 2019 file photo, a woman carries bread on her head while she crosses a street in the Syrian capital, Damascus. Exchange rate distortions in war-torn Syria have allowed the government of Bashar Assad in Damascus to divert at least $100 millions of international aid to its coffers, according to new research. (AP Photo/Hassan Ammar, File)

Syrian President Bashar Assad’s government benefited from variations in foreign currency exchange rates, boosting state coffers with at least $100 million in international aid money over the last two years, according to new research.

The currency manipulation deprives Syrians, most of them impoverished after a decade of war, of much needed funds. It also allows the Damascus government to circumvent sanctions enforced by Western countries that hold it responsible for most of the war’s atrocities.

“Western countries, despite sanctioning Syrian President Bashar Assad, have become one of the regime’s largest sources of hard currency,” said the report published this week by the Center for Strategic and International Studies, a Washington-based research organization that focuses on international public policy issues.

“Assad does not merely profit from the crisis he has created,” the report added. “He has created a system that rewards him more the worse things get.”

On Friday, the United Nations acknowledged that exchange rate fluctuations have had “a relative impact” on the effectiveness of some of the UN programs, particularly since the second half of 2019 when the Syrian currency took a nosedive.

Francesco Galtieri, a senior Damascus-based UN official, said his office received the report on Thursday.

“We are are carefully reviewing it, also to openly discuss it in the coming weeks with our donors, who are as concerned as we are that the impact of the assistance to the people in Syria is maximized,” Galtieri, team leader of the Resident and Humanitarian Coordinator for Syria, told The Associated Press in a written response.

The authors of the research published Wednesday said the amount of aid lost and diverted to Syrian government coffers as a result of the national currency fall is likely to be more than $100 million over the last two years. The data they used to calculate the amount was limited to UN procurement and does not include aid delivered through other international aid groups, salaries or cash assistance.

Sara Kayyali, Syria’s researcher with Human Rights Watch, called the findings shocking and said donors can no longer ignore the fact that they are effectively financing the Syrian government and its human rights abuses. She said UN procurement processes did not meet due diligence standards, from a human rights perspective.

The Syrian pound has been hit hard by war, corruption, Western sanctions and, more recently, a financial and economic collapse in neighboring Lebanon.

Editor Picks