Syria is facing the risk of a famine for the first time in its modern history. This is the conclusion reached by a study conducted by the United Nations Economic and Social Commission for Western Asia (ESCWA). The question is: Why have matters been allowed to go so far that a warning of this magnitude has been issued by an international body? Is the internal armed conflict alone capable of creating economic and social conditions to push the country towards famine?
I would suggest that the conflict is a key factor but not the sole factor after just a few short years. The complex situation has been created by challenging internal conditions and confused (and confusing) external influences.
There is also an element overlooked by the media; economic sanctions. These have not changed any of the political and security conditions but have affected millions of ordinary Syrians as the money in their pockets has lost its purchasing power.
The World Bank believes that the crisis has created a difficult situation for the national economy, which has most likely shrunk, according to some estimates, by about 4 per cent in 2011, 30 per cent in 2012, and about 7 per cent in the first quarter of 2013. The total losses of the Syrian economy amount to $103 billion, as of June 2013; the country's debt has reached about $34 billion. The losses in 2011 were estimated at about $12.5 billion, $50 billion in 2012, over $23 billion in the first quarter of 2013, and over $17 billion in its second quarter.
The GDP remained dependent on oil and agriculture; oil provided about 20 per cent of the government's revenues, and constituted about 35 per cent of the total exports in 2010. However, total exports have declined to $7 million in 2011, after reaching $14 million in 2010.
The oil sector has been affected the most by the economic sanctions and its decline in production and export has had a great impact on Syria's economy. As of September 24, 2011, the European Union imposed a ban on new investment in the Syrian oil sector, and then imposed a ban on the export of equipment for the sector as well as on the purchase of oil.
The EU also added the General Petroleum Corporation, which oversees the oil trade and drilling, to its blacklist. This led to the suspension of the work of European companies inside the country in the field of drilling and production, and prevented companies from signing any contracts or making new investments. Moreover, the United States, Canada and other Western countries imposed similar sanctions on the Syrian oil sector and financial institutions.
Due to the pressure of the sanctions, oil production dropped to an average of 31,500 barrels a day during the first nine months of 2013, which is 80 per cent less than production 2 years ago, when it reached 378,000 barrels. The amount of oil exported peaked at over 140,000 barrels a day, most of which was sent to Europe. Furthermore, the production of natural gas dropped from 30 million cubic metres to 15 million cubic metres a day.
In the same context there has been a decline in the domestic dependence on locally produced oil. Syria used to consume about 240,000 barrels a day, all of which was refined in Homs and Banias. The reason for the decline is the loss of official control over the oil facilities in the north-eastern regions of the country, as well as the disconnection of supply lines.
The country's total losses in the oil sector are estimated at about $13 billion as of August 2013. Originally, the oil sector generated about $4 billion a year and provided most of the locally consumed petroleum products, especially petrol and diesel fuel.
Due to these developments, the price of petrol rose to SYP100 per litre, compared to SYP40 in early 2011; the price of diesel rose to SYP65, compared to SYP 20 in 2011. As a result, it is now difficult for citizens to provide fuel for heating, and some have resorted to using wood instead and are cutting down fruit trees, causing a combination of economic, environmental and health damage.
The energy crisis has even reflected on the agricultural sector, which had already been impacted negatively by economic sanctions. Agricultural is important in terms of its significance to the local economy, as it contributes about 20 per cent of the GDP. Around 36 per cent of Syrian territory is arable, and the Hasakah province is ranked first in the country in terms of cultivated land, with 1.2 million hectares under cultivation; this is followed by Aleppo with 1.1 million hectares, Idlib with 356,000 hectares and Homs with 304,000 hectares.
This area of cultivated land has made the country a major citrus exporter in the Middle East, as well as a producer and exporter of many different agricultural products. However, many farmers have been forced to leave their land or have been unable to care for it, causing a drop in production. In addition, the fuel shortage for pumps has reduced the volume of irrigation water reaching a number of areas. On top of that, the economic sanctions have affected grain imports. Syria consumes about 8 million tonnes of grain a year, almost half of which is imported.
Although food is not included in the sanctions, the decline in the country's monetary reserves and the suspension of financial transactions between foreign banks and the public sector has made the importing of various commodities a complex and sometimes precarious matter.
In October last year, Syria's General Foreign Trade Organisation re-proposed two tenders to import rice and sugar after several attempts that started in June. The organisation also proposed a tender to buy 276,000 tonnes of sugar and another for 135,000 tonnes of rice. Syria has requested permission to pay for the food purchases from frozen bank accounts abroad, but the government's request has still not been approved.
If oil and agriculture have seen varying degrees of damage, the most obvious result of the pressure on the national economy is the fact that the national currency has lost more than half its value in the past two years. Last July the exchange rate was over SYP300 to the dollar; it is now around SYP150. The official exchange rate dropped by about 180 per cent between March 2011 and July 2013, and about 65 per cent in the first half of 2013 alone.
The net result of all of this is an unprecedented level of inflation. According to official figures, the inflation rate was about 300 per cent in March 2013, compared to 190.49 per cent in March 2012. The data shows that the consumer price index had risen in April 2013 by approximately 212 per cent in comparison with March 2011, and by about 161 per cent since April 2012. The highest recorded level was last May, at 319.98 per cent, and the annual inflation rate reached 68.03 per cent in May 2012. The indicators vary significantly amongst the difference provinces, as Aleppo has the highest prices, while Damascus is at the bottom of the index.
The rise in prices not only reflects a financial problem but also a social problem. There is a special classification adopted by the United Nations Development Programme which concludes that over half of the Syrian people are officially "poor".
Regardless of the nature of the analytical tools used to reach this conclusion, the hard truth of the matter is that the people are experiencing a shift in the standard of living, and these people in the affected areas and towns are suffering from the severity of the conditions experienced by the country as a whole. Also, those who are internally displaced due to the fighting, estimated at about four million people, are also living below the poverty line. They are not only classified as poor, but also as eligible for humanitarian aid in all forms.
Whatever the approaches used for measurement and analysis, we are certain that we are facing growing challenges. It is essential not only to count the number of people who are needy or affected but also to provide them with the means for recovery and avoid approaches that prevent this.
The views expressed in this article belong to the author and do not necessarily reflect the editorial policy of Middle East Monitor.