As the Syrian Pound has taken a hammering against the US dollar and sanctions taking hold, Syrian President Bashar Al-Assad has announced changes to encourage citizens to purchase gold. Certainly a desperate measure but one you can understand and its economy and banking sector is falling apart and may be replicated elsewhere.
On Sunday, al-Assad issued Legislative Decree No. 53 “on exempting crude gold imports from the importation fees and the domestic costs according to the Law No. 35 for the year 2007”.
All custom duties and storage, insurance and administrative costs levied on gold imports will be replaced by a single fee of $100 per one kilogram, SANA said citing the presidential decree.
Gold bullion imports no longer require a special permit and travellers are allowed to bring gold bullion coins and bars with them into the country, the decree said.
The move is a sign of desperation due to the immense economic difficulties facing Syria as its economy is being suffocated through economic sanctions and the civil war.
The western economic and currency war has crippled Syria and the move is a desperate one by the regime to try to get much needed hard currency into Syria.
“Syria’s currency and foreign reserves have collapsed,” U.S. Secretary of State Hillary Clinton said in July, urging a further tightening of the financial vice. “Sanctions on oil alone have deprived Assad of billions of dollars in lost revenues, and his ability to finance his war grows more difficult by the day.”
The European Union began imposing sanctions in May 2011 on top of U.S. restrictions that date to 2004.
The Syrian pound has indeed fallen sharply in recent months from below 48 to the US dollar to 65.4 today or a loss of over 36% in the last 12 months.
As is being seen in Iran, the banking sector in Syria has largely been cut off from the global financial system by western sanctions.
Like Syria’s economy as a whole, its banking industry is severely damaged and some parts of it are close to stopping functioning.
Now that rebels have carried Syria’s civil war from remote villages to the capital and the commercial hub, a banking system that survived nearly 18 months of unrest faces its biggest test.
In most of the country, banks have barely managed to stay open but the spread of major fighting to Damascus last month, and now to Aleppo, Syria’s biggest city and top commercial centre, marks a new, more destructive period for the economy, putting banks under fresh pressure.
As was seen in Iraq, it is the people who suffer most from sanctions and economic and civil war and the Syrian people are indeed facing increasing hardships.
Hunger is a problem that is growing more acute by the day. As the prices of what little food is available soar, there are increasing signs of desperation among parents seeking to feed families.
Prices of fuel and medicine have also soared amid shortages compounding the misery of Syrians and leading to another humanitarian crisis.
Professor Nouriel Roubini and other financial experts have pointed out that “you cannot eat gold.”
However, people in nations suffering from currency and economic wars can testify as to how they can use gold in order to buy food, fuel and medicine for their families in difficult times.
Gold is, as it has done throughout history, protecting them and their families from the ravages of currency devaluation and economic collapse.