The latest financial troubles come after the rapid depreciation of the Syrian pound in anticipation of a new wave of US sanctions expected to go into effect on Wednesday.
Updating the UN’s Security Council during a video conference, Pedersen reported a dire situation across Syria.
“I heard a new level of alarm at the dramatic collapse in economic conditions throughout the country,” said the envoy.
Already suffering prior to the depreciation of the pound, areas under the control of the regime, Kurds and pro-Turkish militias are all experiencing financial woes, the envoy said.
“The economic crisis is hitting every part of Syria, regardless of territorial control,” claimed Pederson. “Medicine is more expensive, and scarce. Food prices have skyrocketed and supply chains have been disrupted.”
The US is expected to implement a new wave of sanctions on Syria under the Caesar Act, which will target government officials and firms who do business with the state. Three other stages of the sanctions will be implemented by the end of August.
In an attempt to mitigate the effects of the tanking Syrian pound, Idlib’s Hayat Tahrir al-Sham-administered National Salvation Government is making moves to replace the local currency with the Turkish lira.
Before Syria spiraled into conflict in March 2011, one US dollar was worth around 45 pounds. However, the value of the Syrian pound has plummeted in recent months, crashing from nearly 1,200 per US dollar in January to now trading for up to almost 2,500 Syrian pounds per dollar in some off-market currency exchanges.
“In recent weeks, we have seen many Syrians begin to express new fears - even panic in some quarters. We have heard of shops and pharmacies forced to close, unable to cope with the recent volatility; of jobs being lost; of remittances drying up,” Pedersen told the Security Council.
In addition to essentials and medicine, farmers are struggling to profit off their agricultural produce as well.
Syria’s representative to the UN, Bashar al-Jaafari, also attended the video conference.
State-owned SANA news agency alleges that he accused the US of having "direct responsibility for the suffering of the Syrians."
Syrian President Bashar al-Assad sacked prime minister Imad Khamis on Thursday without a public explanation, replacing him with water minister Hussein Arnus.
Rare anti-regime protests have taken place in Assad-controlled areas like Suweida in June, with locals calling for the overthrow of the President.
According to a policy brief published Monday by the US-based think tank, the Center for Global Policy, the Syrian “regime is clearly struggling to fill its coffers and is unable to halt the country’s rapid economic decline.”
The US-based think tank’s research also says that, “the escalation of economic pressure on the government through the imposition of the Caesar Act this month will hinder cronies’ profiteering but also exacerbate the economic hardship Syrian civilians are facing,” reads the summary of the report prepared by Elizabeth Tsurkov.
“U.S. policymakers should present the Syrian leadership and its backers with steps short of regime change that could elicit a reduction in external economic pressures,” recommends the paper.
