Beirut: Recent visitors from Aleppo have confirmed that the opposition “Local Council of Aleppo City” encouraged several state institutions in Syria’s north to use the Turkish lira instead of the Syrian pound as their chief means of exchange.
Aleppo’s Sharia Court, the Free Lawyers of Aleppo group, and the Union of Media Professionals, among others, started paying salaries in the Turkish currency, while the lira was freely accepted in most markets flooded with Turkish goods alongside the US dollar as well as the local currency.
The trend confirmed that an economic partition was under way even if various precedents existed in other war zones that did not mean such preferences were necessarily permanent.
Syria’s civil conflict entered its fifth year with few prospects for an end, with massive casualty figures and, equally devastating, a more or less systematic destruction of the country. The official currency, which was relatively stable at an exchange rate of 46 Syrian pounds for a single US dollar before the March 2011 protests, has swiftly decreased in value. According to the Central Bank of Syria, $1 (Dh3.67) was worth 240 Syrian pounds (Dh4.6) on July 9, though a dollar fetched 298 Syrian pounds on the Aleppo black market last Sunday. Given the devastation that the economy has suffered, the Syrian pound has witnessed sudden price fluctuations against foreign currencies, and was bound to suffer even more as the most recent escalation added to existing woes. Every effort by the Damascus Central Bank to shore up the sagging Syrian pound, including the addition into the market of $200 million donated by Iran in May 2015, failed to boost it. Similar initiatives in 2013 and 2014 produced no positive results as the pound lost more of its value.
Consequently, businesses that continued to use the Syrian currency to sell goods added a “war conversion premium,” which meant artificially high prices that added to the burden as consumers suffered from scarcities as far as basic food items were concerned. Given the absence of a state authority to monitor speculation and impose uniform prices, conditions deteriorated further earlier this year, which led many to fall back on the Turkish lira. Ironically, the Turkish currency was not completely stable either, and while it traded at the 2.57 against a US dollar exchange rate on May 15 — that is before the inconclusive parliamentary elections that resulted in a multi-pronged crisis — internal Turkish political schisms led to a slight devaluation to 2.75 for a dollar.
Despite this dilemma, the Turkish pound remains considerably more stable than its Syrian counterpart, which is why Aleppine businessmen convert their money from the Syrian pound to foreign currencies more or less on a nightly basis to limit their overall losses.
A few weeks ago, a “Committee for Replacing the Currency” sprung up in Aleppo, which was and still is Syria’s vital economic powerhouse, to devise a new mechanism that would replace the Syrian pound with the Turkish lira in opposition-controlled areas — Aleppo, Idlib, Hama and Homs provinces. It is unclear if Ankara stood behind the committee, which is allegedly a civil initiative sponsored by the Association of Syrian Economists. According to Ammar Saqar, one of the committee’s representatives who spoke with the press, “opposition factions agreed to the plan,” although details were scarce.
Whether the plan’s sole purpose was to switch to a currency slightly more stable that would benefit consumers or, more likely, intended to add economic pressure on the regime, were speculative. In the event, the reality on the ground was tangible, as most of the goods available in northern Syria are imported from Turkey that, without a doubt, required Ankara’s knowledge and cooperation. It remains to be determined whether the Turkish lira is yet another tool in Ankara’s hands. As of early this week, the Turkish Government refused to comment on news stories about the progressive switch, and no official statement was issued to clarify matters. Instead, Ankara delved into the necessity to establish a buffer zone that, without a doubt, aimed to bolster Ankara’s long-term position in Syria.