Posted by Joshua on Friday, March 9th, 2012
The Central Bank has managed to bring the Syrian pound back down into a manageable trading range. It had plunged to an exchange rate over 100 pounds to a dollar. It is now below 100 to a dollar. How did it do this?
Reports are that the central bank sold only 2 million dollars. Yes, only 2 million dollars in order to calm the market. One friend reported paying 113 pounds for a dollar in Aleppo on Wednesday 7 March. On Thursday morning, the pound had risen to a range between 89 and 91 per pound. Six hours later it hit 103. The rate was bouncing all over the place between 85 to 113 per dollar; there was no real price.
If the Central Bank can hold the price of the pound below 90 per dollar, it will be doing very well. That is where it really belonged before the revolution. Syria had been pursuing a suicidal strong-pound policy for years. The artificially high rate of 47 pounds to a dollar ignored imbalances in the economy. It undercut Syrian exports and inflated the cost of doing business in Syria, which has too many impediments and too few attractions for foreign investment.
Most important, however, was that the strong currency encouraged Syrians to buy foreign goods well beyond their means. In effect, the government was giving Syrians free foreign currency to buy cars and other goods that the country could ill afford. This made Syrians feel good, but it ignored the real costs. The strong currency ignored the decline of oil revenues. The government was ignoring its costs which were rising. The government needed to down size and let go of workers, but it refused to do so, preserving the bloated and inefficient public sector industries.
Government costs of expanding subsidies were also draining the treasury. Fuel and food subsidies were sky-rocketing with the growing population and rising commodity prices.
The government has cut its expenses by half in allowing the currency to fall to 89 pounds to a dollar.
Traditionally economic bubbles are followed by a fall of asset prices by roughly 45%. The Syria currency has fallen by 45%, should it stay at 89 pounds to a dollar. Of course, Syria is not going through a tradition economic bubble because it has a broad-based social revolution on its hands, but one should not ignore the economic causes of the Arab Spring. Economic failure underpinned this revolution.
If the Syrian revolution succeeds, it will be important for the revolutionary government not to repeat the bad economic choices of the Assad regime. Of course opposition parties have been almost silent on their economic prescriptions and plans, if they in fact have any. The cause of this silence is because most Syrians know precious little about economics, but more importantly opposition parities do not want to tell Syrians the bad news. They will have to cut government jobs and expenses.
If the Assad regime is forced to cut government jobs, stop subsidies, and allow the currency to trade at a more manageable rate, it will be blamed for the collapse. The new government will escape much of the blame for the terrible shape of the Syrian economy and will escape the necessity of imposing an austerity plan, which must be done by someone.
The new Egyptian parliament faces a gargantuan task in dealing with the economic troubles bequeathed it by Husni Mubarak. Few believe that it will be able to swiftly guide Egypt down the road of significant belt tightening and the rationalization of a public sector and monopoly industries that are not competitive.
The Syrian uprising is being driven largely by political factors, but one should not ignore the numbers. Ehasani, who has been writing for Syria Comment for over five years, has consistently warned us that Syria’s economic numbers do not add up. Eventually, reality would mug Syrians.
News Round Up below
Private sector’s hands tied as Syria sinks to its knees, by Michael Karam, Mar 8, 2012
Syria Opposition Leader Rejects Dialogue
By AP / ZEINA KARAM Friday, Mar. 09, 2012
(BEIRUT) — The leader of Syria’s main opposition group rejected calls Friday by U.N. envoy Kofi Annan for dialogue with President Bashar Assad’s government, saying they were pointless and unrealistic as the regime massacres its own people.
As the prospects for diplomacy faltered, Turkey’s state-run television TRT said two Syrian generals and a colonel defected to Turkey on Thursday.
If confirmed, the military defections would be significant as most army defectors so far have been low-level conscripts. On Thursday, Syria’s deputy oil minister announced his defection, making him the highest-ranking civilian official to join the opposition.
In a telephone interview from Paris, Burhan Ghalioun, who heads the opposition Syrian National Council, told The Associated Press that Annan already has disappointed the Syrian people…..
Burhan Ghalioun of the Syrian National Council dismissed such talk as naive. “My fear is that, like other international envoys before him, the aim is to waste a month or two of pointless mediation efforts,” he said. He added: “Any political solution will not succeed if it is not accompanied by military pressure on the regime.” Ghalioun also criticized Annan for not putting the blame for the violence squarely on the regime.
Following yesterday’s defection of a senior oil ministry official, Turkish television today reported that two Syrian generals and a colonel had defected to Turkey.
Islamism and the Syrian uprising
Posted By Nir Rosen
Thursday, March 8, 2012
James Clapper, the United States Director of National Intelligence, warned last month of al Qaeda taking advantage of the growing conflict in Syria. The Syrian regime and its supporters frequently claim that the opposition is dominated by al Qaeda-linked extremists. Opposition supporters often counter that the uprising is completely secular. But months of reporting on the ground in Syria revealed that the truth is more complex.
Syria’s uprising is not a secular one. Most participants are devout Muslims inspired by Islam. By virtue of Syria’s demography most of the opposition is Sunni Muslim and often come from conservative areas. The death of the Arab left means religion has assumed a greater role in daily life throughout the Middle East. A minority is secular and another minority is comprised of ideological Islamists. The majority is made of religious-minded people with little ideology, like most Syrians. They are not fighting to defend secularism (nor is the regime) but they are also not fighting to establish a theocracy. But as the conflict grinds on, Islam is playing an increasing role in the uprising.
Mosques became central to Syria’s demonstrations as early as March 2011 and influenced the uprising’s trajectory, with religion becoming increasingly more important. Often activists described how they had “corrected themselves” after the uprising started. Martyrs became important to a generation that had only seen martyrs on television from Iraq, Palestine, and Lebanon. “People got more religious,” one activist in Damascus’s Barzeh neighborhood explained, “they got closer to death, you could be a martyr so people who drank or went out at night corrected themselves.” Some Arab satellite news stations have also contributed to the dominance of Islamists by interviewing more of them and focusing on them as opposed to more secular opposition figures or intellectuals. In Daraa activists complained that satellite networks were marginalizing prominent leftists….
Syria’s Alawite activists stuck in the middle – By Nir Rosen
Despite fears of sectarianism if the regime falls, some in the Alawite minority are speaking out against Assad.
Journalist Nir Rosen recently spent two months in Syria. As well as meeting members of various communities across the country – supporters of the country’s rulers and of the opposition alike – he spent time with armed resistance groups in Homs, Idlib, Deraa, and Damascus suburbs. He also travelled extensively around the country last year, documenting his experiences for Al Jazeera – including articles about the Alawite community.
The Syrian opposition has been stepping up efforts to get religious minorities involved in the year-old uprising. The exiled opposition Syrian National Council (SNC) recently issued a statement announcing that it “extends [a] hand to the Alawite community”, the sect which President Bashar al-Assad belongs to.
Although a minority, Alawites dominate Syria’s various security agencies, its army’s officer corps and key positions in the government. Western backers of the SNC and opponents of the regime often say the Damascus leadership will only fall when the Alawite community is persuaded to abandon it.
An older Sunni opposition intellectual who spent time in prison before and during the current uprising agreed with this analysis when I spoke to him in Damascus. “The system will fall only when Alawites believe they are headed in the wrong direction,” he said, adding that “Alawite intellectuals must realise that if they want to live in this country, they must be against the regime and with the revolution.”
Historically, Alawites have played a prominent role in the opposition. But in the ongoing uprising, there are few prominent Alawite voices. Many members of the community fear they will be marginalised if the Sunni majority gains power. Given their experiences of oppression before the Baath party took over in 1963, some statements by the opposition have only encouraged their fears.
When Maamun Homsi, a prominent exiled opposition figure, gave a rant threatening to exterminate all Alawites, he was not condemned by the SNC. Homsi urged the “despicable Alawites” to either renounce Assad, “or Syria will become your graveyard”. Shortly after his remarks, I spoke to a senior Western diplomat with influence over the SNC. He was outraged and urged SNC President Burhan Ghalioun to condemn the statement.
A recent SNC statement, urging communal tolerance, seems to be a response to pressure from American and European backers of the SNC.
“The regime has tried, since the beginning of the revolution, to fragment Syrian society and drive a wedge within mixed communities by dividing cities along military and security lines,” the February 26 statement said. “The Alawites remain an important component of Syria, and will continue to enjoy the same rights as other citizens as we build one nation of Christians, Muslims, and other sects. The regime will not be successful in pitting us against one another.”….
OP-ED CONTRIBUTOR: The Perils of Piecemeal Intervention
The New York Times: By JONATHAN TEPPERMAN, March 8, 2012
In Syria, we should go in big or stay home….
let’s not pretend that half-measures are preferable. Choosing policies just because they are cheap, gratifying and politically palatable is rarely a good idea, especially when they could well make matters worse. Those of us unwilling to tolerate more slaughter in Syria must confront the true nature of the military choices facing us.
We must now accept the hard facts and make an honest decision about what standing up for our interests and values will entail. If that means a major armed intervention, we should do it, but with no illusions.
Jonathan Tepperman is the managing editor of Foreign Affairs magazine.
Out of Syria’s Carnage: A Survivor’s Testimony of Bab Amr’s Last Stand
Time.comBy VIVIENNE WALT | Time.com
….At that instant, a rocket exploded at the front of the building, killing Colvin and Ochlik instantly. The space was filled with dust. In the chaos, Daniels heard Bouvier scream, “William, William! I can’t move!” Her left leg was crooked. He pulled her out by the shoulders. She was bleeding heavily. Carrying his colleague, Daniels staggered to the doorway. As he glanced down, he saw his friend Ochlik, just 28, lifeless on the floor. “Edith,” he gasped to Bouvier, “Rémi is not with us anymore.”
DAMASCUS, March 8 (Xinhua) — Armed groups fired Rocket- Propelled grenades (RPGs) at a civilian bus in central Hama province Wednesday, killing six people instantly, state-run SANA news agency reported Thursday….
The opposition to the Syrian National Council (SNC) can be predicated on several factors, primarily relating to matters of credibility, consistency, and honesty.
The Syrian National Council has already lied to the Syrian people repeatedly. There are many examples that can be summarized below.
a. It started as a movement that strictly adhered to non-violent struggle and now it has a military council to coordinate the violent overthrow of the regime by force (and this without in any way detracting from the right of the Syrian people—and all other Arab people—to overthrow by any means necessary the regime under which they live and suffer). Worse, the SNC now wants violence to be done by Syrians and by whoever else (Israelis too?) interested in overthrowing the regime.
b. The SNC first categorically rejected any political preferences in the Lebanese political conflict. Burhan Ghalyun famously said: keep us out of your conflicts in Lebanon. Now, the SNC is a close ally of the March 14 movement and it has issued political statements in support of this Hariri movement.
c. The SNC said it strictly opposed foreign intervention while it now begs for foreign intervention from any side—preferably allies of the US and Israel.
d. The SNC leadership said on a few occasions that the percentage of the Ikhwan in the SNC is no more than twenty percent. Yet, Ghalyun in several private meetings (including an off-the-record session with an Arab journalist) complained about Ikhwan domination of the SNC and said that he would not agree to serve as another Mahmud Jibril…..
The NeoCon Propaganda Machine Pushing “Regime Change” in Syria – Counterpunch – by AISLING BYRNE
“War with Iran is already here,” wrote a leading Israeli commentator recently, describing “the combination of covert warfare and international pressure” being applied to Iran.
Although not mentioned, the “strategic prize” of the first stage of this war on Iran is Syria; the first campaign in a much wider sectarian power-bid. “Other than the collapse of the Islamic Republic itself,” Saudi King Abdullah was reported to have said last summer, “nothing would weaken Iran more than losing Syria.”
By December, senior United States officials were explicit about their regime change agenda for Syria: Tom Donilon, the US National Security Adviser, explained that the “end of the [President Bashar al-] Assad regime would constitute Iran’s greatest setback in the region yet – a strategic blow that will further shift the balance of power in the region against Iran.”
Shortly before, a key official in terms of operationalizing this policy, Under Secretary of State for the Near East Jeffrey Feltman, had stated at a congressional hearing that the US would “relentlessly pursue our two-track strategy of supporting the opposition and diplomatically and financially strangling the [Syrian] regime until that outcome is achieved”.
What we are seeing in Syria is a deliberate and calculated campaign to bring down the Assad government so as to replace it with a regime “more compatible” with US interests in the region…..
Syrian Kurds Flee Into Iraqi Refugee Limbo – By: Jack Healy | The New York Times
- This report provides detailed information on Syria’s armed opposition movement, highlighting where structure exists within the movement and where Syria’s rebels lack organization. This report does not advocate for or against the policy of arming the Syrian opposition.
- Secretary of Defense Leon Panetta testified before the Senate Armed Services Committee on March 7, 2012 about issues that were restraining the United States from supporting the armed opposition in Syria. “It is not clear what constitutes the Syrian armed opposition – there has been no single unifying military alternative that can be recognized, appointed, or contacted,” he said.
- The armed Syrian opposition is identifiable, organized, and capable, even if it is not unified. The Free Syrian Army (FSA), nominally headquartered in Turkey, thus functions more as an umbrella organization than a traditional military chain of command.
- Three of Syria’s most effective militias maintain direct ties to the Free Syrian Army. They include The Khalid bin Walid Brigade near Homs; the Harmoush Battalion in the northern Jebel al-Zawiya mountains; and the Omari Battalion in the southern Hawran plain, the name used by locals for the agricultural plateau that comprises Syria’s Dera’a province. Appendix 1 lists biographical details of the insurgent leaders affiliated with many effective fighting units. Appendix 2 provides an order of battle for the armed opposition groups by province.
- Other large and capable rebel groups do not maintain such a close relationship with the FSA headquarters in Turkey, but nevertheless refer to themselves as members of the Free Syrian Army.
- Despite the regime’s assault on Homs in February 2012, the insurgency remains capable. The rebels who withdrew from the Baba Amr neighborhood of Homs at the beginning of March 2012 have demonstrated the tactical wherewithal to retreat in order to preserve combat power.
- The Assad regime escalated attacks against the rebels after they defended Zabadani against the Army’s offensive. The affront was probably significant in itself, and the Assad regime could not allow the rebels to hold terrain against the Army. But Zabadani is also vitally important to the regime and to Iran because the city serves as the Iranian Revolutionary Guard Corps – Qods Force logistical hub for supplying Lebanese Hezbollah.
- The Assad regime is likely to continue its strategy of disproportionate force in an attempt to end the uprising as quickly as possible. Indiscriminate artillery fire allows the regime to raise cost of dissent while preserving its increasingly stretched maneuver force.
- The rebels’ resiliency will make the Assad regime’s endurance difficult, but the external support to his regime makes predictions of his imminent fall premature. The Syrian regime has not yet demonstrated the capacity to conduct enough large, simultaneous, or successive operations in multiple urban areas to suppress the insurgency. But it is possible that the technical and material support that Iran and Russia are providing will enable the regime to increase its span of control and its ability to fight insurgents in multiple locales without culminating.
- The rebels will have to rely on external lines of supply to replenish their arms and ammunition if they are to continue eroding the regime’s control.
- The emergence of al-Qaeda-linked terrorist cells working against the regime poses risks to the United States and a challenge to those calling for material support of the armed opposition.
- As the militias continue to face overwhelming regime firepower the likelihood of their radicalization may increase. Moreover, the indigenous rebels may turn to al-Qaeda for high-end weaponry and spectacular tactics as the regime’s escalation leaves the rebels with no proportionate response, as occurred in Iraq in 2005-2006. Developing relations with armed opposition leaders and recognizing specific rebel organizations may help to deter this dangerous trend.
- It is imperative that the United States distinguish between the expatriate political opposition and the armed opposition against the Assad regime on the ground in Syria.
- American objectives in Syria are to hasten the fall of the Assad regime; to contain the regional spillover generated by the ongoing conflict; and to gain influence over the state and armed forces that emerge in Assad’s wake.
- Therefore, the United States must consider developing relations with critical elements of Syria’s armed opposition movement in order to achieve shared objectives, and to manage the consequences should the Assad regime fall or the conflict protract.