Syria’s remaining cash reserves are quickly dwindling as the country’s anti-government uprising marks its 13th month, according to intelligence officials and financial analysts who describe a steady hollowing-out of the country’s economy in the face of sanctions.
The financial hemorrhaging has forced Syrian officials to stop providing education, health care and other essential services in some parts of the country, and has prompted the government to seek more help from Iran to prop up the country’s sagging currency, the analysts said. Revenue from Syrian oil, meanwhile, has almost dried up, with even China and India declining to accept the nation’s crude, they said.
Anti-regime activists said Syrian government forces have attacked the central city of Hama, killing more than 30 people one day after a visit by U.N. observers monitoring the country's shaky cease-fire. (April. 23)
A look at the Syrian uprising one year later. Thousands of Syrians have died and President Bashar al-Assad remains in power, despite numerous calls by the international community for him to step down.
At the same time, President Bashar al-Assad appears to have shielded himself and his inner circle from much of the pain of the sanctions and trade embargoes, which are driving up food and fuel prices for many of the country’s 20 million residents, U.S. and Middle Eastern analysts and financial experts say. Assad’s reserves and sizable black-market income are probably sufficient to keep the regime’s elite in power for several months and perhaps longer, intelligence officials and outside experts said.
The government is not expected to have trouble funding its military operations anytime soon.
“The economic pressure is severe, but unfortunately it’s not yet enough,” said a Middle Eastern intelligence official whose government closely monitors economic trends in Syria. The official, like several others interviewed, spoke on the condition of anonymity to discuss sensitive intelligence on Syria’s economy.
The assessments of Syria’s fiscal deterioration come amid new efforts by Western governments to tighten the financial noose around the nation, which faces increasing economic and political isolation after brutally repressing anti-government activists for more than a year.
The European Union on Monday adopted measures prohibiting the sale of luxury goods to Syria, and the Obama administration ordered sanctions against individuals or firms that provide Assad with surveillance equipment and other technology that could be used to stifle dissent.
The new strictures are among more than a dozen rounds of sanctions since the start of the uprising in March 2011, and more are expected next month when representatives of as many as 75 countries gather in Washington to coordinate efforts to shut down Syria’s remaining revenue streams.
Defense Secretary Leon E. Panetta, in testimony to U.S. lawmakers last week, said that the sanctions are “undermining the financial lifeline of the regime,” cutting government income by nearly a third.
Western officials stress that the sanctions and an earlier embargo against Syrian oil imports are intended to target the country’s government and business elite, rather than ordinary people. But the measures have fueled a succession of fiscal shocks that are being felt across the Syrian economy, so far without directly endangering Assad’s 12-year rule, analysts say. These include not only a jump in consumer prices but a sharp drop in the value of the Syrian pound. Wages have stayed stagnant.