Why are Syrian goods prices in Lebanon cheaper than in Syria?

“Made in Syria” exhibition held in the Lebanese capital, Beirut - September 6, 2023 (Al-Thawra newspaper)

“Made in Syria” exhibition held in the Lebanese capital, Beirut - September 6, 2023 (Al-Thawra newspaper)

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Enab Baladi – Muhammed Fansa

A video circulated on social media from the “Made in Syria” exhibition held in the Lebanese capital raised the astonishment of many Syrians as a result of the low prices of Syrian products displayed at the exhibition compared to the prices in Syria.

On August 24, the Syrian Products Exhibition opened in the southern suburb of Beirut and continued until September 2, where a variety of food, electronic, and clothing products were displayed.

Batoul Abdullah, Lebanese journalist, streamed a video from inside the exhibition, in which she asked the owners of the products about their prices, and it turned out that the value of most of the products is the same or cheaper than their counterparts in Syria.

An example of the prices of these products is a 250-gram box of Syrian “Kharta” yerba mate, which is sold for 100,000 Lebanese pounds, which is equivalent to about one dollar, with the buyer receiving a gift, while the price in some Syrian areas reaches 17,000 Syrian pounds. This is equivalent to $1.22 at the black market exchange rate.

Also, a two-kilogram box of jam reached 200,000 Lebanese pounds (about $2), a price equivalent to its price in Syria. The difference was clear between the price of a kilo of “Basmati” rice at the exhibition, which reached 130,000 Lebanese pounds, or less than a dollar and a half, while its price in Syrian markets is close to 40,000 Syrian pounds, or about three dollars.

As for clothing, one of the sellers participating in the exhibition told Abdullah that the price of a pair of jeans of the first type is about $12, stressing that they offer cheaper prices than in Syria.

The trading rate of the Syrian pound against $1 ​​reached 13,750 on September 13, according to the S-P Today currency website.

Smuggling, Theft

Many Syrians re-shared the video on social media, denouncing at the same time the setting of prices that are supposed to be cheaper than in importing countries.

Media professionals asked about the reasons for these differences in prices, while professors in economics faculties in Syrian universities remained silent in presenting the phenomenon without commenting on it.

The state-run newspaper al-Thawra published a report on September 6 about the success of the exhibition and the participants’ achievement of “large sales,” as it was met with “great acceptance by the Lebanese consumer in terms of quality and price,” while the same was not the case with the “Made in Syria” exhibition that was held in Damascus on August.

Enab Baladi found out that most Syrian products in Lebanon are equivalent to or cheaper than their counterparts in Syria after asking several Syrians residing in Lebanon about the prices of Syrian products in comparison with the prices in Syria.

Economic expert Khaled Turkawi said this situation is related and linked to many reasons, most importantly the military and security checkpoints spread across regime-controlled areas, goods looting, and the spread of the theft of cars and warehouses, which most are being sold in Lebanon at low prices.

On the other hand, Turkawi told Enab Baladi that many of the most famous Syrian products are now produced outside Syria in countries such as Lebanon, Jordan, and Turkey.

Among the examples presented by the expert is the presence of the basic “Aldurra” factory for food products in Jordan, as well as many coffee producers.

This has made Syrian products in Syria products imported from abroad so that their price is higher than the price of the producing country outside Syria.

Lebanese economic analyst Khaled Abu Shaqra told Enab Baladi that logic assumes that all prices of exported goods are more expensive in the importing countries than in the countries of origin because customs duties, taxes, internal consumption fees, and transportation fares are included.

According to Abu Shaqra, there are two reasons for the discrepancy in Syrian products prices between the two countries.

First, the Syrian merchants resort to selling their products at a higher price than their real price, taking advantage of the “lack of competition” due to “economic sanctions that make it difficult to import many Syrian products.”

This prompts traders to “monopolize and raise prices” on the basis of the lack of competition in reducing the price for export.

The second reason is that many Syrian goods are smuggled into Lebanon through legal crossings without customs notice or through illegal crossings without any customs duties or additional costs.

Yasser Akreem, member of the Board of Directors of the Damascus Chamber of Commerce, told the pro-regime al-Watan newspaper that the regime’s government is responsible for creating crises and rising prices.

“The decision not to allow the import of some goods, including vegetable oil, for any merchants who wish, and to limit them to specific people, is a very negative matter,” pointing to the intervention of the Syrian Trading Company in the matter of import.

On the other hand, Syrian products are sold in Lebanon at cheaper prices due to the presence of competition from their Lebanese counterparts. Syrian exporters are helped by exempting products from paying customs duties, except for low entry fees of up to 3%, and the cost of transportation is “very low” between the two countries due to the close distance, according to the Lebanese analyst.

The Vice President of the Consumer Protection Association in Damascus and its countryside, Maher al-Azaat, said in November 2022 that the prices of materials in Syrian markets are higher than in neighboring countries.

Al-Azaat added that the Ministry of Internal Trade did not have an influential and important role in securing all materials, especially basic ones such as sugar and oil, stressing that the “black market” and monopoly still exist.

Lebanese farmer is affected

The head of the Association of Farmers and Peasants of the Bekaa region in Lebanon, Ibrahim al-Tarshishi, revealed that illegal smuggling of vegetables and fruits from Syria to Lebanon continues in large quantities, indicating that this has a negative impact on Lebanese farmers.

Al-Tarshishi told the Russian Sputnik agency in August that “illegal smuggling operations continue between Syria and Lebanon, especially in the agricultural field, negatively affecting the Lebanese farmer and eliminating all his hopes of making a profit or even recovering the cost of production.”

Al-Tarshishi added that smuggled crops are sold cheaper in Lebanon than in Syrian markets, with the aim of “hitting Lebanese farmers,” and that the instability of the exchange rate in Syria prompted smugglers to exploit the economic situation and achieve “large and quick” gains.

Lebanese analyst Abu Shaqra expected that Syrian products are directed to a specific segment of the Lebanese located in certain areas as a “service” to them as a result of “Lebanon’s relations” with the regime’s government, so there will be an interest in lowering prices to support this community.

 

 

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