Syrian Civil War Creates 'Mosaic' Economy


The Syrian economy has crumbled into a disjointed patchwork as civil war rages in the country, forcing some people to subsist through looting while others collect ransoms and civil servants continue to pay taxes and receive state salaries.

"Twenty-one months into the revolt -- with large swathes of territory slipping from government control -- we can no longer speak of just one Syrian economy," said Jihad Yazigi, director of the Syria Report economic website. "Now we have a mosaic of economies."

While some estimates put Syrian annual inflation at 40 percent in August, the reality varies enormously from areas still under control of the regime in Damascus to those which have fallen into rebel hands.

In the rebel-held Old City in Homs, located in central Syria and besieged by government troops for the past six months, hundreds of families live in abject poverty and survive on insurgent handouts, activists say.

"We don't use money, there is no use for it here. There is nothing we can buy, and no goods come from outside the area," said Abu Bilal, an anti-regime activist in Homs.

"We have to make do with what we have here," the activist told Agence France Presse via e-mail, adding that to survive residents took food from shops that have been abandoned in the Old City.

Once a week, on Thursday, activists give food handouts to residents. "We distribute free tea, sugar, bulgur, rice, oil and suet," said Abu Bilal. "There are no fresh vegetables or meat, and very little medicine is left."

In government-controlled Damascus, life is totally different.

Fruits and vegetables from all over Syria, and even goods imported from Egypt and Jordan are available in the Souk al-Hal market in the eastern part of the capital, although prices have doubled.

The deadly conflict has not stymied agriculture throughout Syria, where farmers still harvest olives in the north and till the land in other parts of the country.

Syrian exports to neighboring Lebanon and Iraq have not stopped either.

A Lebanese poultry merchant said he received regular shipments of eggs and chicken from the Homs region, and vegetable stalls in Baghdad are stacked with Syrian produce.

Syrian industry is in a sorry state, however.

"Most factories have closed down because of the security situation or lack of fuel," said a member of the Chamber of Industry in Aleppo, Syria's second city and its economic hub.

In many parts of Syria, a parallel war economy is booming meanwhile.

Several months ago, the so-called Sunni Market was born in the Homs district of Nozha, home to a majority of Alawites, who belong to the same religious community as President Bashar Assad.

"Goods looted from houses owned by families who fled Sunni neighborhoods when the army took over are sold for a song," said a Homs resident who spoke on condition of anonymity.

"The shabiha (pro-regime militia) also 'sell' streets," he said. "By selling I mean they make people pay to allow them to go and loot abandoned homes," he explained.

But what goes around often comes around and in rebel-held areas of northern Syria, the houses of people believed to be shabiha are also pillaged and cars once-owned by alleged regime supporters are sold on the underground market, an AFP journalist said.

Kidnappings have flourished in some areas, according to Fouad, an activist from Aleppo who nonetheless added that "the amount of the ransoms has dropped because most businessmen have fled the area."

Syria's war economy also thrives on smuggling that has risen along the Turkish border since the rebels seized several frontier posts.

And truckers stopped at checkpoints manned by soldiers or rebels must pay a "road tax to ensure safe passage," according to Abdel Karim, who runs a transport company in Aleppo.

Since September, the Syrian pound has dropped on the unofficial market from 70 to 90 per dollar but it remains the currency of reference in the war-torn country, where dollars and Turkish lira also trade hands.

The government still collects taxes in areas under its control, and state employees are paid regularly, even those who live in rebel-held areas.

"In Aleppo, a plane transports funds to the central bank, and the money is distributed to all the commercial banks," said Samer, who works at a state-run bank in the city. "This allows state employees to pick up their salaries."

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