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Syrian President Bashar al-Assad’s accusations to Lebanese banks of causing the economic crisis in Syria have opened the door to debate on the interconnectedness of economic crises in these two sister countries, based on the history of the complex relationship between them. and the division of the position of the Lebanese forces on the Syrian regime between an ally and an opposition.
The leaked video of al-Assad’s words that arrived a few days ago, during a tour of a trade fair in Damascus, caused a sensation by saying that the essence of the economic problem is not in the international blockade of Syria and the “Caesar” law. But because of the money that the Syrians brought to Lebanon and deposited in Lebanese banks and then came up. The last to reserve it.
As for what was striking, was Al-Assad’s claim that Syrian deposits in Lebanese banks are estimated at between 20 and 42 billion US dollars, considering that this unfinished figure is scary in the Syrian economy.
The Al-Assad accusations come after Lebanese banks imposed strict restrictions on all their depositors since late 2019, as they imposed strict controls on the withdrawal of funds or their transfer abroad, at a time when transactions in dollars in Lebanon exceeded the threshold of 7 thousand Lebanese pounds after 1515 pounds per dollar before the crisis. .
That is why the first issue raised by Al-Assad’s accusations was what is the truth about the amount of Syrian deposits in Lebanese banks, and why did Al-Assad show this gap in the estimate between 20 and 42 billion of US dollars?
The path of the two crises
The former head of the Lebanese Banking Supervision Committee, Samir Hammoud, describes the figures that Assad claimed as exaggerated, noting that before the banking crisis in Lebanon, the volume of deposits in Lebanon for non-residents until June 2019 did not exceed the $ 37 billion and, of course, not all of its owners. Of Syrian nationality. After the crisis, the volume of non-resident deposits decreased from $ 37 billion to $ 28 billion.
In the best case, according to Hammoud, if the volume of Syrian deposits reached 25% of the total deposits of non-residents in Lebanon, it will not exceed 6,000 million dollars of the 37,000 million dollars before the start of the crisis banking in 2019.
Hammoud indicated, in a statement to Al-Jazeera Net, that the majority of Syrian depositors in Lebanon have the characteristic of “individual depositor”, which means that their money was out of circulation to finance the commercial market in Syria and it did not affect Syrian hard currency trading.
He also explains that Lebanese banks have been circumventing their dealings with Syrian depositors since 2011, that is, with the outbreak of war, for fear of being affected by sanctions.
Hammoud believes that Lebanese banks have suffered huge losses as they had around 8 banks in Syria, but left their property after the outbreak of war there.
Crippled economy
At the Syrian level, Abdel Nasser Al-Jasem – a Syrian economic analyst and academic based in Turkey – considers that linking Assad with the economic crisis in his country with the seizure of money from Syrian depositors in Lebanon has nothing to do with the logic of the Syrian economy, because the economic crisis in Syria is not the result of just one year of the era of the banking crisis. Lebanese, but entered its 10th year.
He said that the Syrian economy is almost disrupted in foreign trade, which affected the entry and exit of hard currencies.
Al-Jasem described, in a statement to Al-Jazeera Net, al-Assad’s words that he underestimates the minds of Syrians in the areas under his control, and should be asked in the opposite way, according to al-Jasem, ¿ Why are these deposits already in Lebanese banks and why do Syrians put their money outside Syria?
Al-Jasem dates back to the 1980s, and indicates that Syria at that time witnessed the largest deposit of Syrian businessmen in Lebanon, and that the amount of money that emigrated from Syria to Lebanon is huge, and there is no precise figure. , because part of that money was on a black or military line and not legally. .
Al-Jasem pointed out that Syrians used to joke that there were “sacks” of money headed for Lebanon, and mentioned that some numbers published by Syrian newspapers spoke of $ 50 billion deposited in Lebanon.
Currency trader preparing banknotes for the Syrian pound (Reuters)What is the reason for the migration of Syrian money to Lebanon?
Al-Jasem considers the financial and banking environment in Syria to be repulsive, while Lebanon before its crisis had a good banking reputation, in addition to the history of the partnership that brought together Lebanese and Syrian businessmen, especially since Syria did not own banks. private before 2003-2004, according to Al-Jasem.
However, Al-Jasem confirms – according to Samir Hammoud – that a large part of Syrian money did not migrate after the war but before 2011, and that most of the Syrian money in Lebanon was individual and remained out of circulation. of the Syrian commercial market.
Al-Jasem noted that the reality of the Syrian economic crisis worsened after the entry into force of the “Caesar Law”, and that local production had eroded by more than 67%, which means that the economic wheel stopped working. by more than 33%, and then the Syrian pound collapsed because the state was financing its deficit. National currencies are printed without a balance, which reduces the size of their value.
On the other hand, a knowledgeable Lebanese economist, who will not be named, finds that the figures claimed by Assad on the size of Syrian deposits in Lebanon (between 20 and 42 billion dollars) may be realistic due to several factors.
The expert dates back to August 2019, when Syrian security forces raided the “Al Bustan” Association, which was led by Rami Makhlouf and then began operating under the supervision of Bashar Al-Assad, noting that the latter was dealing with of pressuring his cousin to recover the money smuggled out of Syria, including those smuggled into Lebanon.
In the same month – also according to the expert – the dollar in Lebanon began to register the first rise in its levels between 1530 and 1540 pounds, as a result of the withdrawal of dollars from Syrian accounts in Lebanese banks in large quantities.
The expert attributes the huge deposits of Syrians in Lebanon and the interdependence of the crisis between them for various reasons, explaining some of them to Al-Jazeera Net as follows:
Syrian bank deposits in Lebanon are very old, dating back to the 1950s, and all measures taken by Lebanese banks directly affect the banking relationship between Lebanon and Syria.
– Syrian deposits in Lebanese banks are large and not all fall into the category of “non-resident deposits”, because a large percentage of Syrian depositors have Lebanese nationality, put their money in the name of their Lebanese wives or have deposits on behalf of Lebanese entities.
Lebanon was the most important bank outlet for the Syrian economy, because the entry of hard currency into Syria limits the holder’s control over it. For example, if a Syrian merchant wanted to import into Syria, it would not be easy to get the dollar, so he would resort to transferring part of his money to Lebanon to benefit from bank secrecy and facilitate his work, and then transfer another part to Syria to get by. before local authorities.
And after withdrawing dollars from Lebanon became “impossible”, the move put great pressure on the financial transaction system in Syria.
– The presence of almost a million Syrian refugees in Lebanon was an important source of hard currency in Syria after the war, but the dollar crisis in Lebanon reduced the ability of Syrian refugees to transfer money, because they receive their low wages in Lebanese pounds and cannot buy Lebanese dollars on the market. Parallel.
Smuggling and distorted association
In reality, the turmoil in Lebanese-Syrian political relations goes beyond the complexity of economic relations to a point where it is difficult to unravel them, including banking, trade and smuggling.
Abdel Nasser Al-Jassem notes that after the Beirut port explosion on August 4, 2020, the informal trade channels (smuggling) between them were severely affected. He describes the link between the economies of the two countries as distorted, because their relationship is based on powerlessness and not on real mutual support.
In the context, Lebanese economic analyst and journalist Azza Hajj Hassan believes that the economic relationship between Lebanon and Syria is superior in the commercial sector to the banking sector.
She told Al-Jazeera Net that the two countries’ trade has been active for decades at the level of food and consumer trade, either through regulated trade or shadow trade (smuggling), but the volume of the Shadow trade has increased during the war as a result of the blockade of Syria.
Azza indicated that Syria is the only step for land trade from Lebanon, to the Arab and Gulf countries. Regarding the value of trade between the two countries, he emphasizes the difficulty of monitoring it, because most of it is not regulated and is not registered in the customs of the two countries.
He explained that during the dollar shortage in Lebanon, it became clear that there are huge sums and goods going from the Lebanese market to Syria, “that is, the smuggling of dollar-subsidized goods from the Banque du Liban, that is, the loss of goods and dollars together. “
Observers expect the repercussions of the Lebanese economic crisis in Syria to worsen if the Lebanese Central Bank increases its support for basic materials and fuel, which means that the prices of materials smuggled into Syria will double and With this, the crisis in the two countries will double.
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