Posted by Joshua on Wednesday, March 7th, 2012
The exchange rate of the Syrian Pound has reportedly plunged to the 103 range against the dollar at mid-day Wednesday, March 7th, 2012 in Damascus. This is a loss of over 50% since the beginning of the uprising. Over the last month, the pound has begun to weaken significantly which has received little attention. The 100 mark is an important psychological barrier.
Syrian businessmen are taking large losses. Most rely on account receivables when they sell their goods. This means that traders who have sold goods over the last half year in Syrian pounds are taking heavy losses when they are paid back.
One businessman I spoke to this morning reports that he sold three-hundred thousand dollars of car parts several months ago in Syrian pounds. He is to be paid at the end of this month. Due to the decline of the pound over this time period from 57 to 100 pounds per dollar, he will lose close to $150,000 dollars. This is a crushing blow to business.
No one is trading the Syrian pound today because its price is decreasing every hour. No one has any idea where this might end.
The Central Bank had continually threatened that it would punish black market speculators by intervening in support of the Syrian currency, but it has not actually done this over the last few months. People have come to understand that Central Bank threats are empty. Hence the currency is collapsing. The Central Bank has not committed its reserves to defend the pound.
Most of the savings of Syrians were in Syrian pounds because the Central Bank offered high interest rates compared to the more liquid currencies which were offering rates near zero. Syrians placed confidence in the pound because it had been stable for many years. The public has been hit hard by the decline of the pound. Most Syrians are losing their life savings. Many have neglected to move out of Syrian pounds because it is against the law and because they calculated that the political climate might improve.
People are talking about an impending resignation of the head of the Central Bank, Adib Mayaleh. There has been no official confirmation of this. One cannot be sure whether changing the head of the central bank would improve the situation, unless the Syrian leadership decides to support the pound with the country’s remaining reserves. [by Joshua Landis]
News Round Up follows
Demonstration in Abassiyiin, a Damascus downtown neighborhood adjoining the Christian district. The demo was hels in front of the “Lady of Damascus” church. A new policy is to hold demonstrations near churches to impress on Syria’s Christians that they will be losers if they continue to support the regime.
INSIGHT – military intervention in Syria, post withdrawal status of forces
On Monday February 27th, 2012, WikiLeaks began publishing The Global Intelligence Files, over five million e-mails from the Texas headquartered “global intelligence” company Stratfor.
Date 2011-12-07 00:49:18
A few points I wanted to highlight from meetings today —
I spent most of the afternoon at the Pentagon with the USAF strategic studies group – guys who spend their time trying to understand and explain to the USAF chief the big picture in areas where they’re operating in. It was just myself and four other guys at the Lieutenant Colonel level, including one French and one British representative who are liaising with the US currently out of DC.
They wanted to grill me on the strategic picture on Syria, so after that I got to grill them on the military picture. There is still a very low level of understanding of what is actually at stake in Syria, what’s the strategic interest there, the Turkish role, the Iranian role, etc. After a couple hours of talking, they said without saying that SOF teams (presumably from US, UK, France, Jordan, Turkey) are already on the ground focused on recce missions and training opposition forces. One Air Force intel guy (US) said very carefully that there isn’t much of a Free Syrian Army to train right now anyway, but all the operations being done now are being done out of ‘prudence.’ The way it was put to me was, ‘look at this way – the level of information known on Syrian OrBat this month is the best it’s been since 2001.’ They have been told to prepare contingencies and be ready to act within 2-3 months, but they still stress that this is all being done as contingency planning, not as a move toward escalation.
I kept pressing on the question of what these SOF teams would be working toward, and whether this would lead to an eventual air campaign to give a Syrian rebel group cover. They pretty quickly distanced themselves from that idea, saying that the idea ‘hypothetically’ is to commit guerrilla attacks, assassination campaigns, try to break the back of the Alawite forces, elicit collapse from within. There wouldn’t be a need for air cover, and they wouldn’t expect these Syrian rebels to be marching in columns anyway.
They emphasized how the air campaign in Syria makes Libya look like a piece of cake. Syrian air defenses are a lot more robust and are much denser, esp around Damascus and on the borders with Israel, Turkey. They are most worried about mobile air defenses, particularly the SA-17s that they’ve been getting recently. It’s still a doable mission, it’s just not an easy one.
The main base they would use is Cyprus, hands down. Brits and French would fly out of there. They kept stressing how much is stored at Cyprus and how much recce comes out of there. The group was split on whether Turkey would be involved, but said Turkey would be pretty critical to the mission to base stuff out of there. Even if Turkey had a political problem with Cyprus, they said there is no way the Brits and the French wouldn’t use Cyprus as their main air force base. Air Force Intel guy seems pretty convinced that the Turks won’t participate (he seemed pretty pissed at them.) There still seems to be a lot of confusion over what a military intervention involving an air campaign would be designed to achieve. It isn’t clear cut for them geographically like in Libya, and you can’t just create an NFZ over Homs, Hama region. This would entail a countrywide SEAD campaign lasting the duration of the war. They font believe air intervention would happen unless there was enough media attention on a massacre, like the Ghadafi move against Benghazi. They think the US would have a high tolerance for killings as long as it doesn’t reach that very public stage. They’re also questioning the skills of the Syrian forces that are operating the country’s air defenses currently and how significant the Iranian presence is there. Air Force Intel guy is most obsessed with the challenge of taking out Syria’s ballistic missile capabilities and chem weapons. With Israel right there and the regime facing an existential crisis, he sees that as a major complication to any military intervention.
The post 2011 SOFA with Iraq is still being negotiated. These guys were hoping that during Biden’s visit that he would announce a deal with Maliki, but no such luck. They are gambling on the idea that the Iraqis remember the iran-iraq war and that maliki is not going to want to face the threat of Iranian jets entering Iraqi air space. They say that most US fighter jets are already out of Iraq and transferred to Kuwait. They explained that’s the beauty of the air force, the base in Kuwait is just a hop, skip and jump away from their bases in Europe, ie. very easy to rapidly build up when they need to. They don’t seem concerned about the US ability to restructure its forces to send a message to Iran. They gave the example of the USS Enterprise that was supposed to be out of commission already and got extended another couple years to send to the gulf. When the US withdraws, we’ll have at least 2 carriers in the gulf out of centcom and one carrier in the Med out of EuCom. I asked if the build-up in Kuwait and the carrier deployments are going to be enough to send a message to Iran that the US isn’t going anywhere. They responded that Iran will get the message if they read the Centcom Web Site. STarting Jan. 1 expect them to be publishing all over the place where the US is building up.
Another concern they have about an operation in Syria is whether Iran could impede operations out of Balad air force base in Iraq.
The French representative was of the opinion that Syria won’t be a libya-type situation in that France would be gung-ho about going in. Not in an election year. The UK rep also emphasized UK reluctance but said that the renegotiation of the EU treaty undermines the UK role and that UK would be looking for ways to reassert itself on the continent ( i don’t really think a Syria campaign is the way to do that.) UK guy mentioned as an aside that the air force base commander at Cyprus got switched out from a maintenance guy to a guy that flew Raptors, ie someone that understands what it means to start dropping bombs. He joked that it was probably a coincidence.
Fearful of a nuclear Iran? The real WMD nightmare is Syria:
Charles P. Blair of the Federation of American Scientists has a rather frightening article about what he feels is the real WMD threat: Syria.
By Charles P. Blair | 1 March 2012
- Syria has one of the largest and most sophisticated chemical weapons programs in the world and may also possess offensive biological weapons.
- Longstanding terrorist groups and newly arrived Al Qaeda-affiliated fighters from Iraq have been active in Syria during that country’s recent insurgency.
- The United States and regional powers — including Saudi Arabia and Iran — need to start planning now to keep Syria’s WMD out of terrorist hands if the Assad regime falls.
As possible military action against Iran’s suspected nuclear weapons program looms large in the public arena, far more international concern should be directed toward Syria and its weapons of mass destruction. When the Syrian uprising began more than a year ago, few predicted the regime of President Bashar al-Assad would ever teeter toward collapse. Now, though, the demise of Damascus’s current leadership appears inevitable, and Syria’s revolution will likely be an unpredictable, protracted, and grim affair…..
Syria ‘Will Get Worse Before It Gets Better,’ U.S. General Says
By Tony Capaccio, 2012-03-06
March 6 (Bloomberg) — The conflict in Syria “will get worse before it gets better,” General James Mattis, head of the U.S. Central Command, said today. Syria’s President Bashar al-Assad will be in power “for some time,” Mattis said in testimony before the Senate Armed Services Committee. The Marine Corps general also said Iran has a “full-throated” effort to back Assad….
Will there be a Kremlin U-turn on Syria?
Mar 06, 2012
By Sami Moubayed
Whenever the world seemed to start caving in around them, Syrian politicians have leaned on the Russians for support. Moscow, both now and during the Soviet era, has always been Syria’s “security blanket”. Syrian leaders, however, have almost equally misjudged how far Russia was willing to go to help them.
In 1956, then-president Shukri al-Quwatli visited Moscow seeking Russian support for Egypt in the infamous Suez War. He roared at the Kremlin: “Syria wants you to send in that big Red Army that defeated [Adolf] Hitler!”
A few years earlier, president Husni al-Za’im threatened at a press conference: “If the Americans continue to provoke me, I will extend my hand to the Russians. Yes, I will do that. I will go to Moscow and let a Third World War erupt from right over here, from Damascus!”
Today, 63 years later, there are many in Damascus who, like Husni al-Za’im, wrongly believe that Moscow would indeed ignite a “Third World War” for the sake of Syria.
Exclusive Channel 4 News footage shows medical staff torturing patients in their beds at the military hospital in Homs. Tuesday, March 06, 2012
Is the Wind Turning in Favor of Assad?
March 6, 2012 by Jacques Neriah, Col. (ret.) Dr. Jacques Neriah, a special analyst for the Middle East at the Jerusalem Center for Public Affairs, was formerly Foreign Policy Advisor to Prime Minister Yitzhak Rabin and Deputy Head for Assessment of Israeli Military Intelligence.
The Baba Amro district of Homs may now become the turning point in the year-long bloody battle between opposition forces and Syrian President Bashar Assad’s regime.