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The biggest threat to Syria's President Bashar al-Assad might soon be the country's failing economy.
The country’s fledgling stock market, which opened in March 2009 and lists only 21 companies, including many Syrian and Lebanese banks, has plunged from its peak value of $3.068 billion on Dec. 26 last year to a low of around $1.752 billion on Sept. 19.
Some of Syria’s wealthiest businessmen have thus seen about $1.3 billion of their wealth destroyed by the evaporation of confidence in the country's economy triggered by the uprising and crackdown.
“Investors are looking for any signal of a positive change in market sentiment. It’s the herd mentality right now,” said a Syrian businessman who asked to remain anonymous, explaining the small rally on the stock market that took place on Sept. 21, after the announcement of a $40.8 million Syrian Sovereign Fund.
Investors hoped the Fund would pump money into their much depleted exchange, which since mid-August has been open for trading only three days a week.
“The really well established merchants can probably afford to hunker down and weather the storm, but I think a group to watch are the ‘new’ merchant class — those who really benefited from the last five years of economic opening up, those who invested in the stock market for example,” a Western diplomat in Damascus told GlobalPost.
“They must be feeling the pressure much more. … My sense at the moment is that they still support the regime and hope that Assad is still a reformer. But if the regime starts really reversing those economic moves, I wonder where they will come out then.”
Abdul Ghani Attar, the 32-year-old vice-president of Attar Group, a Syrian conglomerate with investments in hotels, finance and pharmaceuticals, told AFP economic activity had all but ceased in Syria up until June, in the early months of the uprising. It had now resumed, but around 40 percent down from last year.
“Shops are shuttered, some restaurants are only opening at weekends, and it’s now become normal when you ask businessmen how things are going for them to say that only being down 20 percent is good,” said an economic analyst based in Damascus.
Foreign direct investment has also taken a pounding. Qatar was reported to have been threatened with the loss of $6 billion of investments in Syria as the regime lashed out at what it called biased coverage of the uprising by the Qatari-financed Al Jazeera network.
Tourism, which accounts for 12 percent of GDP and 11 percent of employment and is a crucial foreign currency earner for the isolated Assad regime, has been decimated this year.
“Normally at this time of year almost all the rooms are booked by European, American and Australian tourists,” said Abu Elias, a 60-year-old hotel manager in Aleppo’s Christian district.
“I have been waiting all year for the season but today I have 40 rooms and only five are booked: One Russian and four Syrians. I’ve lost two thirds of my income and have been paying my 70 staff half wages. But within a month I will have to close.”
Since Syria does not keep reliable statistics, few observers of Syria’s economy would hazard a guess at the jobs lost since the uprising began.
The only published statistics come from Sham Life, which said that more than 41,000 private-sector employees had lost their jobs nationally between January and mid-May. (Under one of Syria’s still Soviet-era laws, public sector employees cannot be directly laid off, except by a written decree from the prime minister.)
Those figures, however accurate or not, inevitably mask a much larger impact on jobs, said the Western diplomat, as thousands of businesses are believed, like Abu Elias, to be paying their staff wages even though income has dried up.
In a country with strong social bonds of kinship and community, many business owners interviewed said they would only lay off staff as a last resort. “One of my workers has 10 children, so I paid him his full salary even though he worked only half a month. I consider this money as charity,” said Abu Elias.
Sitting amid his empty restaurant opposite Aleppo’s grand Citadel, Ammar, a 35-year-old Kurdish waiter from a village outside of the city, said he feared there would soon be nobody to bail him out when the inevitable occurred.
“I’ve worked here for 10 years and this is the worst for me,” he said. “Four of my colleagues lost their jobs and I heard the owner will sack more. There are no foreign, no Turkish and no Arab tourists. I don’t even see many Syrians from other provinces.”
Ammar said his monthly salary of $143 used to be supplemented two or three times by tips from customers, helping him provide for his wife, four children and elderly father.
Now tips barely cover his transport costs and the soaring price of cigarettes from the one indicator that has yet to have fully impacted the economy but which analysts say is the regime’s ticking time bomb: inflation.
Ammar’s packet of cigarettes now costs him $1.53, up from $1 two months ago. The sugar in his tea has also gone up, almost tripling from $0.51 per kilo to $1.43 in just three months.
For now, at least, this kind of spiraling inflation remains the exception.
But what began overwhelmingly as a political uprising — protest banners adorned with calls for freedom from oppression, not an end to policies of market liberalisation — may soon, say observers, begin to turn on the economic costs of repressing it.
“Now we get less income, but we pay more for life’s costs,” said Ammar. “Usually, the young, rich people come here to smoke water pipes and spend hours playing cards. Now I see few of them because they don’t want to spend money.”
On Thursdays, khamisat, Mufid still goes around to some of his retailers in Aleppo, collecting payments for old orders. But with his factory closed down and workers laid off, he now spends empty days at home.
“I watch the news, and feel angry,” he said.
A GlobalPost journalist in Syria contributed reporting for this story.