Turkey: Inflation casts shadow on Syrians’ remittances
Enab Baladi – Hussam al-Mahmoud
“I used to transfer between 1000 and 1500 Turkish liras under normal conditions, but now I must transfer up to 2000”.
This is how Ayham, a young Syrian man residing in Istanbul, describes how he was affected by the economic inflation that Turkey is experiencing, which has skyrocketed prices and greatly devalued the Turkish lira.
Considering that Syrians in various countries of the world, especially in Turkey, which hosts more than 3.5 million Syrian refugees, constitute an economic and financial feeding line for many Syrian families in regime-controlled areas, the current inflation in Turkey has somehow reached Syria through the impact of inflation on remittances.
Ayham clarified that the Eid period also constitutes an exception in terms of the amount of remittance he sends his family in Syria. In cases and occasions of this type, the figure rises to approximately 4000 Turkish liras, at the expense of many obligations and expenses paid by the young man, such as house rent, living costs, and other expenses.
Regime-held areas with their shabby economy are a black hole for remittances sent from abroad, in light of high living costs there and high prices for various products and goods, as opposed to a fall in the value of fixed government employees’ wages and pensions of about 15 to 25 US dollars, with the value of the Syrian pound depreciating against the US dollar.
“The price of everything has gone up for my family as well, so I think their expenditure is now less and more uncomfortable, even though the remittance is now bigger,” Ayham said, expressing the inconsistency of the amounts he transfers to his family with the purchasing value of those financial transfers.
Figures are losing value
The head of the Syrian Commission on Financial Markets and Securities (SCFMS) of the Syrian regime’s government, Abed Fadela, stressed the difficulty of estimating the volume of Syrian remittances sent from abroad in the absence of official figures of the value of remittances reaching Syria, as well as the existence of remittances sent in “black,” i.e., through intermediaries, and not through companies, who receive the amount from the first party to hand it over to the other party by hand without passing by the regime’s financial portal.
According to Fadela’s interview with the al-Watan newspaper on 5 July, “semi-official” estimates indicate that the average value of remittances sent to regime-controlled areas ranges between 5 million and 7 million US dollars per day, adding that the expansion of the number and distribution of Syrians abroad, and the transfer of many remittances outside official channels hamper the accurate estimation of total remittance values.
Fadela estimated that about one-third of residents in regime-held areas rely mainly on external remittances, which usually rise in conjunction with holidays and other social occasions.
Syrian workers fighting on two economic fronts found themselves caught between a financial crisis in their country of residence, which affected the value of their salaries and how they spent it in the face of depreciation of the local currency, price hikes and soaring rent expenses, and the lack of alignment of wage increases to price frenzy on the one hand, and the already precarious economic situation in Syria, which requires an increase in the volume of remittances sent back home in Syria.
Professor in banking and financial sciences, Firas Shaabo, assured Enab Baladi that the global economic inflation, and the local inflation in Turkey that has affected the value of the Turkish lira, have inevitably reflected negatively on the issue of financial transfer to the country of origin for the Syrians.
Shaabo attributed this to the low value of the transfer and the purchasing value of the transferred amount. The increase in salaries did not cover higher prices, which is normal since higher salaries can not cover higher costs in different countries.
The state of economic inflation adversely affects those with “inflexible” fixed salaries, which do not rise in line with prices. At the same time, he noted that the Syrian worker barely receives the minimum wage, which is 5,500 Turkish liras, as approved by the Turkish president, Recep Tayyip Erdogan, on 1 July.
According to the Turkish Statistical Institute, Turkey’s annual inflation index rose to 73.50 percent, marking the highest rate reached in nearly 24 years, according to a statement issued on 3 June.
All these circumstances are reflected in the volume of remittances to Syria, according to Shaabo, who stresses that the impact, in this case, includes quantity and value. If in the past, a person sent 500 Turkish liras to Syria, with the increase in prices, the amount fell to 200 liras. However, these 200 liras depreciated inside Syria due to the deteriorating situation of the local Turkish currency, which means a decrease in the value and the amount wired.
According to the professor in financial and banking sciences, the hardest hit is the northern Syrian regions and the areas that rely mainly on remittances.
According to a United Nations Security Council briefing by Assistant Secretary-General Joyce Msuya on 25 February, Syrians need humanitarian assistance more than ever, considering that 14.6 million Syrians will rely on assistance this year, up 9 percent over 2021 and 32 percent over 2020, according to UN statistics. This ranks Syria among the world’s most food insecure countries.
During the Eid period, the requirements and needs of different Syrian families abound in connection with social rituals and cultural and religious heritage. However, the current situation has left many ceremonial manifestations absent due to the circumstances.
On 5 July, the Spiritual Leadership of the Druze in Syria called on the people, through a statement published by its media office, to limit the rituals of Eid al-Adha for this year to religious rites and rituals in their locations, in recognition of the deteriorating living situations and the compelling conditions the country is experiencing, according to the statement.
The markets of the Syrian capital Damascus also recorded a decline in their pre-Eid al-Adha commercial movement compared to the movement that preceded Eid al-Fitr last year by 50 to 60 percent, according to the local newspaper al-Watan on 5 July, quoting the Vice President of the Consumer Protection Association in Damascus and its countryside, Maher al-Azaat. The latter attributed the movement’s decline to the soaring prices of materials on the one hand and the difficulties faced by countryside residents in reaching the city as a result of the current transportation crisis on the other.
On the 6th of the same month, the Chairman of the Board of Directors of the Artisan Association for the Industry of Ice Cream, Sweets, and Beverages, Bassam Kalaji, stated that a large proportion of citizens residing in regime-controlled areas refrained from buying sweets because they were unable to secure their basic necessities, let alone buy sweets, according to a report by the state-owned Tishreen newspaper at the time.
Kalaji revealed that the percentage of daily sweets shops’ sales is only 20 percent of what was recorded in previous Eid seasons, resulting in a number of sweets kitchens leaving work in this sector.
Kalaji justified the increase in sweets prices by the hikes in prices of raw materials used in their manufacture.
In addition, estimates show a projected rise in fruit prices since the Eid al-Adha of about 10 percent due to higher demand than vegetables, according to the local newspaper al-Watan quoting a member of the Committee of Dealers and Exporters of Vegetables and Fruits in Damascus, Mohammad al-Akkad.
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