Economic Sanctions On Syria Could Tip The Balance

A suffering economy alone won't topple Bashar al-Assad's regime, but Arab sanctions would help drive it to negotiations

By Samir Seifan

Arab League secretary-general Nabil Alarabi. The Arab League has suspended Syria's membership. Photograph: Sabri Elmhedwi/EPA

The Arab League's decision to suspend Syria's membership also includes the threat of economic sanctions. The resolution did not specify what those punishments might be, and it will probably be left to each Arab state to decide individually.

The toughest Arab sanctions may halt imports of non-oil products from Syria, which form a large part of the country's exports. In addition, sanctions against dealing with Syrian banks will close the last channel with the international banking network. This would prevent the Syrian government and businesses opening letters of credit or making international bank transactions.

Arab economic sanctions will be added to other economic sanctions imposed by the US and the EU on Syria, which have had a significant impact on the economic situation – particularly the decision to stop buying Syrian crude oil.

The regime is unable to find buyers for around 140,000 barrels of crude oil per day and the Syrian state treasury is losing around $5bn a year at today's oil prices. Syria was using this revenue to pay for imports and this loss is largely reflected in the availability of petroleum products in the market – especially diesel for heating in the coming winter. It is also reflected in the inability of the state to reimburse Shell and Total for their shares in oil and gas production.

These economic difficulties are adding to the difficult situation that has accumulated over the past seven months: governmental projects are stopped, private investment is stopped, capital has fled abroad, the tourism sector (which was making 12% of GDP) is close to zero, industrial production has shrunk and demobilised part of its workforce, agriculture is affected heavily due to the vast army operations, the market is shrinking, exports are reduced by half, unemployment has increased to around 25% and prices have risen due to a lack of many goods. All this is having a negative impact on the capabilities of the government and on standards of living for the majority of citizens.

The question is: can this difficult economic situation topple Bashar al-Assad's regime? Will it strengthen the opposition as people blame the Assad regime for deteriorating conditions, or will it push more Syrians to blame opposition demonstrators for "creating the unrest"?

They accuse the opposition because they are tired and want this situation to end soon. Many among the non-Sunni minorities are nervous about the future – especially sectarian conflict – and continue to support the regime, not out of love but out of fear.

Despite differing positions, though, many Syrians want regime change and are willing to bear the cost of change. It is likely that several million Syrians would take to the streets calling for regime change if the police and army withdrew from cities and towns (as proposed by the Arab League). Syrians believe that the Assad regime has closed the door of the future and they need to reopen it.

The difficult economic situation means the regime has ceased to be a source of benefits for the groups that are loyal to it. Instead, it is becoming a source of economic crises, unrest and trouble. This will continue as long as Assad regime is in power. Economic sanctions in general have sent a message to the business community to distance itself from the Assad regime. The whole economic situation could be a major reason for increased resentment, contributing to the regime's fall.

However, the nature of the crisis is more political than economic and some Syrians are still convinced by the regime's stories about plots and conspiracies. The same conditions of fear are dominating the Allawite ruling minority and pushing them to support Assad regime. The regime is playing a lot of games to stir up this fear.

But the balance is not on the side of the regime. The opposition is now calling for expanding civil disobedience, general strikes and closing markets. The economy will play a significant role in tightening the political situation around the regime.

The economy may contribute towards pushing the regime into accepting negotiations with the opposition for a peaceful transfer of power; if not, the international community will have to take the initiative. Either way, Syrians are not going back.

The difficult economic situation alone will not topple the Assad regime but it will constitute a very important component of the regime-toppling process.

-This commentary was published in The Guardian on 14/11/2011
- Samir Seifan is a Syrian economist