Eastern Ghouta: Hyperinflation compounds struggle in rebel area

Eastern Ghouta: Hyperinflation compounds struggle in rebel area
From Al Jazeera - March 6, 2018

Residents of rebel-held areas in Syria are struggling to afford daily necessities, as hyperinflation is compounding the already dire humanitarian situation in the war-torn country.

Inflation of the Syrian pound (SYP) has resulted in a financial crisis for the majority of civilians in rebel-held Eastern Ghouta, due to lack of money in bank reserves and exchange rates selling at extremely high prices.

The Damascus suburb has been under heavy aerial bombardment by the Syrian government and Russian warplanes in the last two weeks.

Adnan al-Ali, a money exchange employee in the town of Saqba, is responsible for handling remittances sent by people to their relatives in Eastern Ghouta, but said that business has been affected by the constant attacks.

"Our first office was bombed last month, injuring some of our staff," he told Al Jazeera. "We had to move our office underground where it's safer for us and our customers.

"During the day, it gets crowded with people who have money sent to them from their friends and relatives outside Eastern Ghouta or from different countries."

Economic losses

According to the World Bank, the seven-year Syrian war that has devastated the country has incurred $226bn in total economic losses so far, "about four times the Syrian GDP in 2010".

Humam Jazairi, a former minister of economy, was quoted by theFinancial Times in November 2016, saying that the inflation rates have increased up to 400 percent since 2011.

Furthermore, Syria's reserves have depleted rapidly, from $18bn prior to the outbreak of the uprisings in 2011 to $700m in 2016.

The "severe decline in oil receipts since the second half of 2012 and disruptions of trade due to the conflict" have heavily affected the exchange rate and depreciated the currency, the World Bank said.

The Syrian pound, which used to sell for 50 to one US dollar before the war, is now selling at an average of 500 SYP to one dollar. Skyrocketing prices have since bankrupted a large portion of the population, with many facing poverty.

Cost of smugglers

Holham Jazmate a member of the Syrian Economic forum in Turkey told Al Jazeera that money exchange offices contact smugglers inside Damascus in order to bring cash into Eastern Ghouta.

The smugglers then extract a profit fee of up to 25 percent of the cash being delivered.

"A lot of the owners of money exchange offices also own food stores," Jazmate said. "They increase the price of food to civilians to make up the difference for paying the smugglers to bring the cash into the city.

"As there is no official observation of the prices or the money transaction rates, these offices get what they want from the people, who desperately need cash in order to buy necessities," he added.

'Everyone is struggling'


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