The long-run viability of Syria will depend on economic recovery, it will not be decided by military victory on whichever side.
After chemical attacks and expectations of US intervention, analysis of the Syrian conflict focuses more than ever on sectarian divides and outside interference. On a tactical level pundits exchange the names of brigades and features of weapons systems. Even the ideological preferences of thugs are likely to attract more attention than a basic question: what do Syrians eat? How do they cope in a war economy and what does their food security tell us about the prospects of reconstruction and the long-run viability of Syria?
Syria’s economy was in dire straits long before the war. Since 2008 Syria’s petroleum balance has turned negative. Imports of petroleum products like diesel have exceeded the value of declining crude exports ever since. The regime’s plan B was to increase production of natural gas and establish itself as an energy transit hub, but in the current security situation this seems like a flight of fancy. The war has aggravated the problem as crude production has plummeted and the EU has sanctioned Syrian oil exports.
While the oil front crumbled, agriculture did not fare better. Syria’s overextended security state faced a fiscal crisis in the 1990s caused by inefficiencies, low oil prices and reduced opportunities for external rent acquisition after the end of the Cold War. To address a chronic fiscal deficit the regime introduced austerity measures and tried to mobilize national and international private capital. Economic liberalization in Syria’s crony capitalism meant granting urban clients and military-security networks privileged access to resources. Agricultural support schemes were dismantled and small-scale farmers were left behind, vulnerable to the epic drought from 2006 to 2011. Whole villages migrated to cities in the west and put a strain on the social fabric, while the regime had neither the will nor the capacity to cope with the crisis in an equitable way. State institutions hollowed out, as privatization had not been accompanied by adequate taxation. Inequalities and malnutrition increased. By 2010, well before the war, the UN estimated that 3.7 million Syrians suffered from food insecurity. It was this disenfranchised rural constituency that turned against the regime first. The Syrian uprising started in villages and mid-sized towns like Deraa and Deir al-Zor, only later the conflict would reach big cities like Aleppo and Damascus.
In 2012/13 rainfalls have improved, but production remains low as the planted area has declined and farmers cannot afford diesel anymore to pump water for irrigation. Infrastructure and supply schemes are in disrepair. Less than a third of the government’s wheat collection centers are up and running. The picture is even bleaker for flourmills, bakeries and yeast factories. With 2.4 million tons the wheat harvest will be way below its average of the preceding decade when it exceeded 4 million tons. The government continues to subsidize bread, but the amount it can make available at the reduced price is far below demand, even in the areas it still controls.
If one goes to the bus terminal in Beirut one would not guess that Syria is torn by civil war. One can get tickets to every major city, even to Qamishli at the border triangle with Turkey and Iraq. This means that the bus driver has to pass through government, rebel, and Kurdish territories alike, knowing who to bribe at every checkpoint. Commercial transaction costs have evidently soared. Like any war, the Syrian conflict is a tax on the economy and bankrupts the currency. The Syrian pound has lost half of its value against the dollar over the last year. As a stop gap solution Syria can trade in local currency with its allies Iran and Russia, but the purchasing power of ordinary people has fallen dramatically, even of those who still receive salaries and have not lost their livelihoods.
The coping strategies of Syrians start to resemble those of people in countries that have witnessed historic famines like Ethiopia. Households cut back on meat, fruits and dairy products, and concentrate their diets on cereals. Some of them had to sell livestock and other vital assets, indicating severe distress. As a result the price of wheat flour has doubled in real terms over the last year, while that of livestock has fallen. Livestock exports have increased from poverty-stricken Syria to neighbouring countries like Jordan and Lebanon where prices are higher.
Without food imports and food aid Syria would face famine today. The World Food Program (WFP) and its Syrian partner institutions like the Syrian Arab Red Crescent (SARC) expect to provide food assistance to 4 million Syrians by October, up from currently 2.5 million. Food is delivered to government and rebel areas alike. Logistics are organized mainly via the ports of Tartus and Beirut as the route via Jordan is only sporadically open and borders with Turkey and Iraq mainly closed. In addition, there are two million Syrian refugees in neighbouring countries who are in need of assistance, which brings the total to six million, more than a quarter of the Syrian population. Tiny Lebanon has borne the brunt of Syria’s refugee crisis. Officially it has absorbed over 700,000 people, but the number might be higher as the UNHCR has a registration queue and many cases remain unreported. The Lebanese government is increasingly worried about the costs and effects on its own political stability.
Syria requires 1.5 million tons of wheat imports in 2013/14. The WFP estimates to provide 378,000 tons; the remainder of more than one million tons will need to come from commercial imports. Food is exempted from sanction regimes, but financial transactions are not. The regime struggles to find takers for its food tenders as sellers are shunning the risk of payment delays from frozen foreign accounts.
Hard currency is sorely needed, yet with sanctions and its ailing oil sector, what can Syria export? Until recently it still sold some phosphates, but tourism has collapsed and Syria was not an attractive investment destination for industries even before the current crisis.
This leaves many Syrians with savings, foreign aid and remittances of relatives to procure their goods of daily needs, unless they can rely on theft, ransom and political transfer payments from abroad. Economies of looting can become a permanent feature of a country as Somalia has shown. As the government is exhausting its currency reserves and cannot fulfill vital economic functions like food provision any more, entrepreneurs of violence are taking over. Warlordization could accelerate.
If this scenario is to be avoided a political solution to end the conflict would need to be found fast, followed by an inclusive reconstruction effort that avoids the cronyism of the 2000s. Agriculture would need to be a focal point of such efforts. With over 40 percent Syria has one of the highest shares of rural population in the Middle East and the absorption capacity of its cities will remain limited. Improved water management, more sustainable cultivation practices, negotiations with Turkey over water rights along the Euphrates and climate change adaptation would need to be part and parcel of such endeavours. In the end the long-run viability of Syria will depend on economic recovery, it will not be decided by the military victory of whatever side.