An economist's role in the fall of Syria's government

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0:11This is The Indicator from Planet Money. I'm Darian Woods. On Sunday, half a century of the Assad family ruling Syria came to an end. Syria's brutal 13-year civil war that led to this moment had many players. And today we want to put a spotlight on one of them, an economist. It's like a dream. Honestly, it's like a dream. Today on the show, the story of one Syrian exile who made a real contribution to the resistance while on the other side of the world. He tells us how lines of computer code and spreadsheets can help bring down a long-standing dictatorship.

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1:39When you were here at the New Zealand Treasury. Yes, but now we meet professionally again, but this time to talk about the Syrian economy, which is all over the news right now because of what's just happened. Indeed, exactly. I mean, the past 10 days or so have been insane. Very, yeah, momentous. We chatted about all the events that led Karam to where he is today, on the front lines of Syrian research and advocacy. Karam grew up in Aleppo, which is one of Syria's two big cities. And after studying his economics degree, he got involved in anti-government protests. This was in 2011, when the Arab Spring was awakening pro-democracy movements all over the Arab world.

2:25Karam didn't tell his family, though. We try to avoid and tell our loved ones about these protests, and also, I mean, mainly to ensure their safety. So I remember actually in one of the protests in Aleppo, we were shouting people demand the downfall of the regime. The most liberating moment, I think, in my life. The feeling is so exceptional. It's liberating. And I remember actually someone tapping me on the shoulder and saying, hey, Abu Adib, as in like that's my nickname. And I turned my head and then I saw it was my brother. So it turns out he was also protesting, but we were not telling each other.

3:09My sister was also protesting. I came to realize this later on. The protests were met with heavy crackdowns by the Assad government. And as rebel groups gained a foothold, Syria descended into civil war. In 2012, Karim's father told him he should leave the country for his safety, especially given his activism. Karim flew to Malaysia, then to New Zealand, where he studied for his economics PhD and was granted asylum. That's about the same time that I met you, when you were working at the New Zealand Treasury, working on the economic policy problems of a high-income, peaceful country. How was that for you?

3:49Yeah, it was like working on another planet. It's a completely different context. But after working there for three and a half years, I just couldn't deal with the guilt that I can do something for Syria and I should do it. So how could a young economist on the other side of the planet possibly make a difference in one of the bloodiest conflicts of recent memory? Karim put all his time into working on Syrian issues. He hired analysts and open-source intelligence experts to help out. He started looking into how countries were using economic tools to pressure Syria, and he found some pretty major flaws, like in how humanitarian aid money was leaking to the Assad regime.

4:35Like a lot of troubled economies, Syria has two exchange rates, the official exchange rate, according to the government, and the black market exchange rate, which is basically determined by supply and demand. In Syria, the government was claiming the Syrian pound was worth more than it actually was. So anyone wanting to buy Syrian pounds would need to pay the central bank more than those pounds were actually worth. And in 2021, when Karam was looking at the Syrian central bank's website, he saw a footnote that said that this inflated exchange rate was used for foreign aid. And I was like, this is unbelievable.

5:12I mean, the level of stealing is just mind-boggling. Yeah, so let's break down how this played out. Let's say I'm a UN agency working in Syria and I want to rebuild a school. I need to pay a local construction company in Syrian pounds. And to do that legally, I need to use the official exchange rate. I exchange a million dollars at a bank for Syrian pounds, But I get way less Syrian pounds than I would have if I'd used the black market exchange rate. And by Karim's calculations, maybe$500 ,000 of that million would have been eaten up through that money exchange. Who gets to keep all that extra money?

5:50The Assad government. So basically it's a kind of levy on humanitarian aid. And that is the aid that is paid by Assad's enemies, basically. It's predominantly Western countries. Karim Roja report, the problem got picked up by The Guardian, Nusepe, and from there it snowballed. It just went viral, you know, all over. We got members of U.S. Congress to sign a letter to President Biden to put pressure. There were parliamentary questions in Europe. The U.S., Germany, the U.K., and some other countries put pressure on the U.N., telling them, look, we are providing these funds. You talk to the central bank, they either accept it or it aid will be withheld.

6:33And yeah, the Central Bank of Syria reached a point after resisting for so long, you know, they agreed to close the gap. Did you and your team celebrate at all? Actually, we did celebrate. You can go on Twitter and see I was over the moon when it happened. Of course, a lot of remote work requires digital celebrations. Karam estimates this action stopped about$65 million a year going into Assad's coffers and funding its army. Which in the context of the tens of billions of dollars in aid or military support given by countries like Iran is small. But it was one victory over a range of fronts trying to bring down Assad.

7:16Other economic analysis that Karam worked on involved reviewing who the aid agencies were contracting with. He was horrified to learn a lot of people who had committed some grave crimes were receiving these contracts. In one case, a militia group tied to Iran that had destroyed a city was allegedly being paid to rebuild it. We just showed that 31 % of UN procurements from Syria actually come from sanctioned individuals, you know? So that is basically Western governments funding the Syrian government with one hand and sanctioning it with the other simultaneously. His analysis led to more scrutiny of these contracts.

7:59But not all of Karim's efforts have had happy results. To support his accountability work, he relied on people inside Syria. About seven months ago, he learned two of them had been arrested, one of them on some pretty serious charges related to his work with Karim. I mean, I think that was truly the ugliest nightmare in my entire life, you know, when he was arrested and I couldn't sleep. This man was kept in the notorious Saydnaya prison, where tens of thousands of people have been tortured and executed. He was sentenced to death. His execution date was set for the end of this month. And so that meant that with the downfall of the Assad regime, Karim was relieved to learn this man was among the people leaving Seydnaya prison just a few days ago.

8:52It feels like it's magic, you know. I mean, we've been waiting for 54 years, you know, for this regime, and it just collapsed at exactly the right moment. The right moment that saved his contact from death. Karim spoke to him soon after. When he was out and we had a call on WhatsApp, I just started crying immediately. I couldn't believe my eyes, you know, that he's out. And while Karam is overjoyed, he's reserving his judgment about whatever government gets formed next. In the meantime, he will keep writing reports, he'll keep scrutinizing the numbers, because who knows what impact that might have.

9:37This episode was produced by Cooper Katz-McKim with engineering by Neil Tivolt. It was fact-checked by Cyril Juarez. Cake & Cannon edits the show and The Indicator is a production of NPR.