Damascus feels effects of crippled economy

b_160_0_16777215_00_images_ara-damascus-gillespie.jpegDAMASCUS - The rows of sparkling 18-carat gold bangle bracelets have long since been removed from the cramped, tiny jewelry shops in the Salihiya neighborhood of Damascus. Many of the shops and travel agencies clustered in this popular shopping district are closed until further notice. Though more than 8.3 million tourists passed through Syria in 2010 generating 12 percent of the GDP, according to the Syrian Ministry of Tourism, this year, the streets of the Syrian capital tell a different story - of empty Internet cafes, deserted dining tables at popular restaurants and the cloud of fear and uncertainty that hangs over the city.

In the Christian neighborhoods of Bab Touma and Bab Sharqi, a haven for foreign students who rent rooms in the large homes hidden behind high walls, hardly a Westerner or even a foreigner can be found these days.

"The fact that foreigners are no longer coming is a big problem," said one Damascus resident, 28, an archaeologist who has family and friends in Bab Touma. "There are many people who live off the income from renting out accommodations."

Stores in Damascus are offering earlier-than-usual sales during Ramadan, which began Aug. 1, instead of after it to tempt customers into buying. At the Syrian national carrier, SyrianAir, "sales are down 80 percent," said one agent at the airline's Damascus office.

"We have very little work right now."

Inside Le Meridien Hotel, one of Damascus' five star establishments, the cafe was deserted on recent afternoon. The few that crossed the hotel's threshold were locals heading to the pool. Mostly, employees hung around, chatting together or watching the news on television.

A recent report in a local newspaper said that only 10 of the hotel's dozens of rooms were occupied.

"We're not doing much better than that, said one receptionist at the Samiramis Hotel, a four-star hotel in central Damascus. "No one staying here is in town as a tourist."

The British Council and the French Cultural Center, normally packed with young Syrians looking to learn foreign languages, have closed indefinitely, with Spain's Cervantes Institute considering following suit. Droves of tourists from Gulf countries such as Saudi Arabia and Kuwait usually come to Syria with their families to spend the summers. Not this year.

"You see the empty streets? There are no tourists," said an employee of a job-placement agency, 33. "Now, when you see one, you're surprised."

For their protection, Syrians interviewed for this article asked that their names and specific details about their lives not be published.

As the nationwide protests enter their fifth month, the economic losses across the board are taking a toll. "What is obvious is that if the country continues along this path, more and more people will turn against [the government]," said an accountant, 35, with a privately owned company.

It is a sentiment echoed by more than one dozen people interviewed for this article: The Syrian leadership's handling of protests "is making many people rethink their support for President Bashar al-Assad," said the job-placement agency employee.

"If the government responded [to protesters] in a more diplomatic way, people would maybe have more confidence in it," said an entrepreneur, 45, from the central Syrian city of Homs. "Instead, it only reacts by killing more and more people."

Still, by staying away from protests, the merchant class that forms the backbone of the Syrian economy appears to be betting that the government will prevail.

"Businessmen are very connected to the regime and have their own interests, which is why until now they are distancing themselves from the protests," said Khalil Harb, editor of the Arab affairs section of Lebanon's As-Safir newspaper, who regularly writes columns on the situation in Syria.

Others echo that sentiment.

"The regime has helped the rich to amass their wealth and now they, in return, are supporting the government to keep their fortunes intact," said one employee at a Damascus branch of a national bank.

Joshua Landis, head of the Center for Middle East Studies at the University of Oklahoma, who specializes on Syria, says many believe it is key to the success of the revolution that the merchant withdraw its support for Assad: "When we talk about them, we are really talking about Damascus and Aleppo, which have so far, not come out in terms of massive demonstrations," he said. "Activists want those two cities to go up in arms and vote with their feat because they believe that will turn the tide."

The problem is, he says, is that the merchant class has much to lose.

"They are fearful (of the regime) and also, they have a ton of money to lose," said Landis. "If the military collapses, there could be widespread chaos and looting, which they know will affect them directly."

"Besides, even those that might support the revolution, don't know exactly whom to support - there are no clear leaders or solid alternatives."

On a larger scale, foreign investors are staying away from Syria, and other projects in collaboration with Syrians are either on hold or canceled. The entrepreneur estimated that private-sector activity has dropped by at least 70 percent since the March uprising began.

"There is no work to be done," he said. "If we didn't have stores outside Syria, I don't know where my business would be right now."

While exact numbers on the situation are difficult to confirm, the Syrian economy, in a dire situation before the revolt started, shrunk 3 percent in the first few months of the uprising, according to the Economist's Intelligence Unit.

"It's the only figures we have but it is probably much worse than that," said Landis. "And Syria already had massive unemployment, widespread poverty and five years of drought that devastated certain areas before this started."

Analysts say Syrians are withdrawing money from banks, buying gold and doing what they can to transfer their funds out of the country - when they have savings at all: 32 percent of Syrians live on under $2 dollars a day, according to UN figures.

That is a situation that is expected to get worse, analysts say, as Western sanctions start to bite and economic activity continues to decline.

"The uprising has affected the economy drastically," said Walid Saffour, president of the London-based Syrian Human Rights Committee. "Many people do not go to work at the moment, and much of the industry has already stopped in Syria. Many Syria exports have already stopped, so the movement of money, the export and the import and the exchange of money is very, very limited at the moment."

Activists outside Syria are looking to apply economic pressure by boycotting companies supported by the government and calling for strikes.

"[But] we can't force people to go on strike for a long time because they have to eat and they have no other source of money," said Hozan Ibrahim, a spokesman from the Local Coordination Committees, a grassroots network that coordinates protests and reports on developments inside Syria.

Young Syrians themselves, notably fresh college graduates, are not finding work and gloomily predict dismal professional prospects if they stay in Syria.

"I am looking for work but everything is at a standstill," said one 31-year-old unemployed graduate in English Literature. "It's hardly a search at this point, more like a hobby - I have to continue looking but I know I won't find anything."

One 24-year-old Damascus resident recently graduated with a bachelor's degree in the telecommunications field and has been unable to find employment. He said he would like to leave Syria, a common sentiment among young graduates. Opportunities in Dubai and other Gulf countries pay more and offer the possibility of a career.

As the turmoil continues inside Syria, "the country will need a lot of time for the economic situation to return as it was before the protests began, which was not very good to begin with," he said.

The job-placement agency employee, agreed: "There are few job offers in Syria at the moment."

Business is so slow that she and her colleagues are now working from their homes and holding meetings at cafes. The bank employee says "many people" ask her whether they should withdraw their money from the bank:

"I tell them to keep it in the bank; even if the branch closes, their money would be safe in the bank."

Tension and fear are everywhere these days, she said, with only a small number of people who are against the regime demonstrating. The rest, she said, are afraid. She said she would be in the streets if she weren't afraid for her family.

The government is likely counting on that fear to keep the capital under control, many say.

"Damascus and Aleppo would have to join the protest movement to win the battle with the regime," the bank employee said.

For now, the two cities seem to be largely sitting out the large-scale demonstrations. Still, she believes that as the situation gets worse, people "will join the protesters." At the heart of this revolt, she says, is the lack of opportunities for Syrians. "

The poor have led this movement," she said. But when other social classes begin to get squeezed by the stagnant economy, "they too will join the protesters."

"When a single Syrian protests, it is the same as one thousand Europeans protesting because the harshness of the Syrian regime is lethal," said the bank employee. "Protesters know that when they leave the house, they may never return home."

Jabeen Bhatti and Ruby Russell contributed to this report.
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