The Syrian administration has taken bold steps in an attempt to revitalise its beleaguered economy by simultaneously doubling the salaries in the public sector and curbing fuel subsidies. These declarations were promptly communicated after the Syrian pound plummeted to a historic low against the US dollar in the unofficial exchange arena.
This drop in the currency’s value has exacerbated hyperinflation, plunging a staggering 90% of Syrians below the poverty threshold. Recent economic pressures have led to infrequent demonstrations, even in areas traditionally supportive of the government.
Since the onset of civil unrest in 2011, following President Bashar al-Assad’s aggressive response to nonviolent calls for democratic reforms, Syria has been grievously impacted. The resultant civil conflict has claimed the lives of over half a million citizens.
Current figures suggest that a significant 70% of Syrians, equating to over 15 million people, are in dire need of humanitarian aid, with 12.1 million facing food scarcity.
Wednesday saw the introduction of presidential mandates, proclaiming a sweeping 100% salary and pension increment for public sector workers, armed forces members, and government affiliates. This marks the initial salary augmentation since December 2021.
These directives also formalised the standard minimum monthly wage, setting it at 185,940 Syrian pounds. This translates to £17.09 when converted at the official exchange rate, but is much lower when pegged to the prevailing unofficial rate. To contextualise, at the war’s commencement, the Syrian pound’s exchange rate to the dollar stood at 47:1.
Based on data from May, this adjusted wage would hardly suffice to purchase even one-third of the essential monthly groceries for a typical family of five, as per the World Food Programme’s estimates. Moreover, it would barely cover a mere tenth of a similar family’s most basic household expenses.
As inflation soars, vulnerable families grapple with escalating bills. The minimum household spend, according to the WFP, has surged by 62% since May 2022 and an astonishing 159% since September 2021.
In an accompanying overnight announcement, Syria’s commerce department publicised a complete withdrawal of petrol subsidies and a semi-withdrawal of fuel oil subsidies, effectively hiking the cost of both commodities.
The Prime Minister, Hussein Arnous, expressed last year that reductions in fuel subsidies would serve to alleviate the budget deficit and aid in stabilising the Syrian pound, benefiting impoverished families. Yet, financial experts highlight that the government’s inability to uphold these subsidies and indicate that the raise in public sector wages may inadvertently spur further inflation and currency depreciation. This could potentially nullify any economic advantages in the coming months.
Government officials attribute the grave economic plight and the struggles of everyday Syrians to the stringent US sanctions instated in 2019, which zero in on entities extending support to Assad’s regime. The US maintains that these measures exempt humanitarian assistance.
