Syria Tries To Rebuild A Functioning Economy After Years of Corrupt Dictatorship

0:00Today on State of the World, Syria works to rebuild a functioning economy after years of corrupt dictatorship.

0:12You're listening to State of the World from NPR, the day's most vital international stories, up close where they're happening. It's Tuesday, August 12th. I'm Christine Arismeth. Syria's economy was shattered by years of dictatorship and crushing trade sanctions. It's been given a boost by the U.S. lifting most sanctions to help out the new government that took control after toppling the dictatorship late last year. But as NPR's Jaina Raff reports from Damascus, it's going to take a lot to repair the damage.

0:49At a bank branch downtown, the machine counts a big stack of bills worth just a few dollars since the collapse of the Syrian currency over the past decade. There are only a few customers waiting in the glitzy lobby. Not because there isn't demand, but because there isn't enough cash circulating in the country. We stopped filling the ATMs with money because of the long lines, branch manager Amar Hamid tells us. One guy would come with 10 bank cards to withdraw all the money, and there would be nothing left for the others, he says. Withdrawals that are more than a few dollars require Hamid's approval and proof, like medical reports, of why the customers need the money.

1:34When the bank runs out of cash, it closes its stores for the day. It's part of a multi-layered financial crisis Syria is trying to emerge from, since opposition fighters toppled the regime late last year and formed a government. The causes include years of sweeping financial and economic sanctions on Syria, and a web of control and corruption under the previous regime. We sit down with Syria's new central bank governor, Abdul Qadir Hasriya. He's basically trying to reinvent Syria's financial system. He says a breakthrough was President Trump lifting sanctions which had isolated the country from the international banking system.

2:19This is very positive, but it takes some time. because for the banks outside Syria, they need time to digest, change these policies. Hasria left Canada to return to Syria. He has a lot to do, but for now, few tools to do it with. Yesterday I had a Zoom meeting. I was not able to log in because Zoom still, as Syria has its sanctions, we cannot use Zoom. Syria has made clear it wants to maintain control over its finances, rejecting World Bank and IMF loans, planning to issue bonds and treasury bills to finance spending instead. For now, Syrian financial markets are a lonely place. And this is the room that meant to have some events inside here.

3:09Suleiman Masouli, deputy head of the Damascus Stock Exchange, walks us through a huge echoing building just outside Damascus. The exchange reopened in June, but a fuel shortage makes it hard to get there. And while there's a lot of pent-up demand for the 21 companies with active listings on the exchange, there are almost no trades. And there are two big screens here with stock prices and what's trading, the amount that's been traded so far. In green letters, it says open, but the numbers aren't changing very much. In the case, no one wants to sell. So they are selling the minimum amount. He says it's because investors are holding stocks, expecting prices to rise.

3:56We look at the big board for several minutes until there's a trade. Yes, 166, now 167. So how much of a difference is that in dollars? Maybe 5 ,000. $5 ,000. In his office, he tells us that daily trades at the exchange normally total about$200 ,000. There would be more companies listed, he says, but under the Assad dictatorship, a lot of firms owned by regime insiders wanted to keep their business secret. Companies tend to avoid coming to the exchange because we have strict regulation regarding disclosure, for example. We need to disclose for everything in order to have transparency. In the row of desks, there's a single stockbroker talking on a landline.

4:42Nassif Zouhaib says he's come to the exchange because the phones aren't working at his firm's city office. He says the new government is restoring confidence in the stock market, but there's a bigger issue. Here we have the purchase orders and here the sales orders, he says. So it's just purchase orders. No one wants to sell. Because of the liquidity crisis, sellers can't access the proceeds of any sales. The money remains frozen in banks. So the list of buy orders keeps growing, waiting in a queue for whenever this current crisis is over. And cash starts moving again. Jayna Raff, NPR News, Damascus.

5:25That's the State of the World from NPR. Thanks for listening.