Damascus – Traders in areas under the control of the Syrian regime are facing significant challenges to maintain their businesses in the face of economic and legal pressures that have persisted for years, prompting some to abandon their ventures and withdraw from the market to protect their capital.
Syrian markets are currently experiencing the worst commercial reality since the onset of the country’s economic crisis about 12 years ago. This situation is attributed to a stagnated buying and selling movement, a decline in the Syrians’ purchasing power, and restrictions imposed by economic laws on merchants.
Mohammed, a 47-year-old clothing merchant in Damascus’ Al-Hariqa market says, “These are tough times for traders in Damascus markets with a complete lack of sales activity.”
In his conversation with Al Jazeera Net, he added, “We cannot discuss a healthy trade without talking about a reasonable purchasing power of citizens. If the customer is unable to buy the product, no government solution will help traders.”
Mohammed identifies the “absence of purchasing power” among Syrians as the leading cause of stagnation in Damascus markets, especially since the average salaries of employees do not exceed 250,000 Syrian pounds (about $18), barely enough to buy the components for two or three meals.
The Damascus merchant points to another factor exacerbating the crisis: the rising prices of locally manufactured goods. He notes, “Factories are loading their products with all the added costs of electricity, fuel, and mostly expensive imported raw materials. This eats into the profit margin we set as merchants, which has become extremely thin compared to previous years.”
The Syrian markets are witnessing a commercial reality that is the worst since the beginning of the country’s economic crisis nearly 12 years ago (Al Jazeera).
Merchants in Damascus and other regime-controlled areas complain of high tax fees and annual financial costs imposed by the Ministry of Finance, sometimes exceeding two million Syrian pounds ($142) for some shops.
Adding to their woes is a roughly 150% increase in the price of commercial electricity since last September and the extreme difficulty in obtaining and dealing with foreign currencies due to stringent legal restrictions.
Mechanisms Hindering Trade and Driving Up Prices
Yasser Akrim, a member of the Damascus Chamber of Commerce’s board of directors, revealed the exit of more than 100,000 merchants from the Syrian trade sector, considering it a significant loss to the Syrian economy.
In his statements days ago, Akrim spoke of the absence of government support for the commercial sector, indicating that this support is barely noticeable compared to what is provided for the industrial sector, pointing out the adverse effects of this situation on the economy.
He added that out of 110,000 commercial registers recorded at the Ministry of Internal Trade and Consumer Protection in the regime’s government, only 7,000 were active and present in the Damascus Chamber of Commerce, attributing this commercial contraction to “the lack of clarity in commercial laws.”
Akrim stressed that the Syrian trader today is in “the worst condition due to the government’s lack of support and assistance in the required manner.”
Akrim had previously mentioned in an interview with local Sham FM radio in September that price control is impossible in the absence of an abundance of raw materials, high exchange rates, and soaring energy and fuel prices.
Meanwhile, Abu Yahya, a 52-year-old food merchant and warehouse owner in Damascus’ Al-Midan area, blames the rise in market prices on “ill-considered government policies.”
He told Al Jazeera Net, “As merchants, we can’t accurately determine the cost of imports due to fluctuating exchange rates and delays in the arrival of goods through the platform (a governmental mechanism to regulate the import of goods from abroad) by two to three months. This forces us to price goods higher than they might be to ensure we do not incur losses.”
Abu Yahya highlights that the slow operations of the import platform have exacerbated the crisis by “depriving the market of many goods and essential raw materials, leading to the inability of traders and factory owners to secure them, which sometimes forces them to close their shops and factories.”
Moreover, Mohammad Halak, a member of the Damascus Chamber of Commerce’s board of management, stated in a September interview with local Melody FM that there is no governmental mechanism to reduce or stabilize prices, noting that the price lists issued by the government do not match reality.
Halak confirmed that official government decisions, such as establishing the import platform and enacting the Consumer Protection Law, have hindered traders’ operations and led to higher prices.
A glimpse of Al-Asruniyya Market, which branches off from Al-Hamidiyah Market in Damascus capital (Al Jazeera).
Economists believe the import platform has impeded production by restricting the import process and financing of imports, limiting it to local exchange companies and the Central Bank. This has led to capital flight and, consequently, economic contraction.
The platform obliges traders to pay 50% of the value of imported goods to the Central Bank to obtain an import license, with the condition to pay the remaining amount within a month after the imported goods arrive. This arrangement causes traders additional losses and expenses with changing exchange rates, prompting them to hedge and hike prices, leading to more expensive goods in markets.
Inflation and Economic Losses
For the past 12 years, the Syrian economy has suffered from escalating crises due to the ongoing conflict in the country, with inflation reaching 156% in the year 2023 alone, according to Abdul Raouf Nahas, an economics professor at Aleppo University.
The Syrian pound has lost approximately 100% of its value during 2023, with the exchange rate of the dollar reaching 14,000 Syrian pounds in December compared to 7,000 at the beginning of the year.
A report by Human Rights Watch shows that the economic losses of the war in Syria have reached about $1.2 trillion by 2022, while 13.4 million Syrians need humanitarian assistance.
Losses of the oil sector alone are estimated at about $112 billion by the end of 2022, according to a statement by the Syrian regime’s Ministry of Foreign Affairs.
