Tag: bashar al-assad

Value of the Syrian Pound Hits an All-Time Low

As I have documented previously, the economic devastation and international sanctions that have accompanied Syria’s civil war have wreaked havoc on the country’s currency, the Syrian pound (SYP). In a desperate, wrong-headed attempt to save its troubled currency, the Assad regime has imposed harsh penalties for currency trading on the black-market. This strategy proved wildly unsuccessful when it was utilized by the Iran in October of 2012.

Indeed, as was the case in Iran, attempts to suppress currency exchange have sparked a panic – a run on the Syrian pound. As of 10 July 2013, the value of the Syrian pound on the black market has hit an all time low, with the current black-market exchange rate now sitting at 295.00 SYP/USD.

As the accompanying chart shows, this has sent the implied monthly inflation rate in Syria skyrocketing.

Yes, Syria’s implied monthly inflation rate is now 91.9%. This means that Syria has exceeded the threshold for hyperinflation (an inflation rate of 50% per month).  Only time will tell if this run on the Syrian pound will continue. But, for the time being, we can be sure that the Syrian pound will remain a troubled currency.

I have established a page to track current black-market exchange-rate and implied inflation data for the Syrian pound, as well as for troubled currencies in Iran, Argentina, North Korea, and Venezuela. For more, see: The Troubled Currencies Project.

Syria’s Annual Inflation Hits 200%

In an attempt to beat Western sanctions and halt the fall in the Syrian pound, the Assad regime – with the help of Iran, Russia, and China – has begun conducting all of its business in rials, roubles, and renminbi. This decision supplements other existing arrangements between Syria and its allies that are keeping the Syrian economy on life-support. These include transfers of $500 million per month in oil and an unlimited credit line with Tehran for food and oil-product imports.

According to Kadri Jamil, Syria’s prime minister for the economy, this life support is necessary because Syria’s devastated economy is the target of an elaborate plot, hatched by the U.S. and Britain, to “sink the Syrian pound.”

So, what about the sinking pound? As the accompanying chart shows, the Syrian pound has lost 66.2% of its value in the last twelve months.

The rout of the Syrian pound has been widely reported in the press.  But, Syria’s inflation problems that have accompanied the collapse of the pound have gone largely unreported.  That’s because, beyond the occasional bits of anecdotal evidence, there has been nothing to report by way of reliable economic data.

To fill that void, I employ standard techniques to estimate Syrian’s current inflation. Currently, Syria is experiencing an annual inflation rate of 200% (see the accompanying chart).

Indeed, Syria is experiencing a monthly inflation rate of 34%. To facilitate the monitoring of the quickly deteriorating situation in Syria, I am creating a resource which will allow readers to view up-to-date data on the Syrian pound and the country’s inflation problems. Soon, black-market exchange-rate data and ­inflation estimates for countries with troubled currencies like Syria will be made available via the “Troubled Currencies Project” – a joint Cato Institute-Johns Hopkins collaboration under my direction. In consequence, the days of Syria’s plunging pound and raging inflation being covered in a shroud of secrecy are soon coming to an end.

Our Astrategic Syria Debate

Only a terrifically secure country could have as poor and astrategic a debate about war as the one we’re having about taking sides in Syria’s civil war. 

Actually, we’re not having a debate about taking sides in Syria’s civil war. That’s the problem. We’re debating Syria as though it’s an engineering question—an electrical outage, or a bit of erosion in the backyard. Doing so removes the most vexing aspects of the issue, leading us to the delusion that military action can easily make things better. 

Too much of the discussion has focused on moral arguments and too little of it on the very real political problems beneath the war. Take the advocacy of Shadi Hamid of the Brookings Institution. As Hamid wrote of his thinking on Syria in January 2012, he was pro-intervention “emotionally, and from a purely moral perspective,” but had some nagging non-emotional, non-moral concerns: “I cannot say whether military intervention would work.” By June, though, the emotional and the moral took over, with Hamid declaring that it was “not the job of civilian think tanks” to figure out how military intervention would produce the desired outcome. 

Princeton’s Anne-Marie Slaughter, who until recently occupied George Kennan’s old office at the State Department, has similarly assumed away Syrian politics, making the case for intervention much easier. As she tweeted Sunday, “Suppose US goal in #Syria were simply to STOP THE KILLING. Forget who might/might not win down the line. What’s fastest/best way to do that?” 

But forgetting who might win down the line waves off the central problem: the killing is happening for a political reason. Bashar al-Assad and his enemies are not engaged in wanton, nihilistic slaughter; they are struggling over political control of Syria. Any analysis that removes that basic fact from the discussion of how to “STOP THE KILLING” turns a complex political question into a technical, scientific project, creating the delusion that it can be readily fixed by the U.S. government. 

In fairness to Hamid and Slaughter, they are carrying the torch of a time-honored American tradition of foreign policy thinking. Historically, debates over foreign intervention in the United States have featured liberal analysts against realists and the military. In the 1950s, President Eisenhower reportedly had to admonish his activist Secretary of State John Foster Dulles to calm down: “Don’t do something, Foster, just stand there!” 

In the 1990s, apolitical liberal thinking on war reached its pinnacle. When Chairman of the Joint Chiefs of Staff Colin Powell expressed hesitation about the Clinton administration’s intervention ideas, Secretary of State Madeleine Albright lashed out: “What’s the point of having this superb military you’re always talking about if we can’t use it?” And President Clinton’s lack of understanding of war caused him to ruminate, accurately, to General Hugh Shelton that it would “scare the shit out of al Qaeda if suddenly a bunch of black ninjas rappelled out of helicopters into the middle of their camp.”

In the 1990s, realists like Richard Betts were warning Americans not to fall victim to the “delusion of impartial intervention.” Admonishing policymakers for their newfound enthusiasm for limited, ostensibly apolitical intervention, Betts reminded readers of a ground truth: “A war will not end until both sides agree who will control whatever is in dispute.” This is as true in Syria as it is anywhere. Alternatively, if analysts want to use the U.S. military to regime-change Assad, they have every obligation to explain how they intend to shepherd the country toward whatever political order they seek.

More honest hawkishness can be found at the Institute for the Study of War, whose recent paper advocating aiding the Syrian opposition admitted that politics matter

The goal behind U.S. support to the opposition should be to build a force on the ground that is committed to building a nonsectarian, stable Syria, with a government more likely to respect American interests. 

That outcome is presumably what all analysts urging intervention desire. The trick is to acknowledge the problems of connecting military means to our political desiderata. Anyone who doesn’t deal with the underlying political problems at stake is threatening to push the country into another ill-considered, potentially costly war.

WSJ Calls for No-Fly Zone in Syria, Acknowledges No-Fly Zone Isn’t Enough

It seems the Wall Street Journal editorial board has yet to identify a conflict in which the United States should not intervene. Today, they again call for U.S. military intervention in Syria and criticize President Obama for his inaction. Their main recommendation? Easy: set up a no-fly zone: 

The U.S. could boost its diplomatic leverage with the rebels and their regional allies by enforcing no-fly zones over portions of Syria. That would help prevent the regime from using its attack jets and helicopter gunships against civilian targets while allowing insurgents to consolidate and extend their territorial gains. It also means we could use limited force in a way that strengthens the hand of rebels we support at the expense of those we don’t. 

The key point here is that the Journal leaves open the possibility of using “limited force” to help the rebels. Indeed, this is what no-fly zones often become: precursors to additional involvement at a later date (think Iraq and Libya). I argued as much last week: 

If the no-fly zone fails to swiftly halt the violence, some will claim that preserving U.S. credibility requires an even deeper commitment. Or [no-fly zones] can just become a slippery slope in their own right. The ink was barely dry on the UN Security Council resolution authorizing a no-fly zone over Libya before the mission morphed into a no-drive zone on the ground, and then a major military operation to overthrow Qaddafi’s government. 

As a general rule, we shouldn’t send our military on feel-good missions that have little chance of success. And that is what no-fly zones are. They also have a clear political purpose, in this case to ensure that the opposition prevails over the Assad regime and its supporters. There is no such thing as an impartial intervention. 

In Libya, there wasn’t such an explicit call for a no-fly zone as a means to toppling Muammar Gaddafi. The UN resolution authorizing the no-fly zone did not include “regime change” as a goal, but that’s what it became. In Syria, a no-fly zone would be used explicitly for the purpose of toppling Bashar al-Assad’s regime. But if regime change is the goal, a no-fly zone will not do much to lead us there. They are security-theater, as Ben Friedman has pointed out: “No-fly zones commit us to winning wars but demonstrate our limited will to win them. That is why they are bad public policy.” 

The Endgame in Syria

Eventually, Syrian president Bashar-al Assad will fall from power. When that will happen has been the subject of much speculation. Appearing on NPR’s On Point, CBS News foreign correspondent Clarissa Ward, who won a 2012 Peabody Award for her reporting on the Syrian uprising, had this to say about ”the endgame and the final chapter and the final countdown” and all the other clichés we have been hearing:

[T]he reality on the ground is that the regime still has some fight left in it. They are still militarily far superior to rebel forces. Rebel forces are still desperately lacking the heavy weaponry they would need to seriously take on the regime militarily. They are still not a cohesive fighting force with a clear command structure. There is still almost no coordination among the various rebel groups. So I think it’s a little early to talk about the final countdown. But certainly what we’ve seen transpiring in Damascus over the past few days … I think it is a turning point. We have opened a new chapter even if it’s not the final chapter in this.

Whither the Assad Regime?

The bombing of Syria’s national security headquarters, which killed key figures in the government, is evidence of expanding instability, but not of a regime on the verge of collapse. The attack and others like it have not significantly altered the Syrian uprising’s most enduring challenge: the inability of its fragmented opposition to congeal. This challenge, coupled with the rebellion’s lack of an inclusive vision for Syria’s minorities, and the troubling developments today, should give proponents of intervention pause.

America, Russia, Turkey, and the Gulf Arab states have all called on Syria’s fractured opposition to unify. A commitment to inclusion today could break down tomorrow, and such divisions could set the stage for an even bloodier ethno-sectarian civil war in a post-Assad Syria. Discord persists despite rebel attacks on regime officials and security forces. In fact, conflicting reports about the most recent bombing in Damascus—whether it was carried out by the Free Syrian Army, which claimed responsibility, or a cabinet member’s personal bodyguard—points to the difficulty of discerning the exact nature of the opposition.

Islamists, for instance, seem intent on hijacking the struggle for a democratic Syria. In May, the Washington Post’s Karen DeYoung and Liz Sly reported that despite U.S. hopes that minorities would unite under the Sunni-led Syrian National Congress, Syria’s Christians, Kurds, Druze, and Alawite sect, “All have resisted what they say is the group’s domination by the Muslim Brotherhood.”

That same month, Pentagon spokesperson Navy Captain John Kirby told reporters that defense officials believe “al-Qaida has some presence inside Syria and interest in fomenting violence in Syria.” He added, “We do not believe they share the goals of the Syrian opposition or that they are even embraced by the opposition … The sense that we get is that it is primarily members of [al-Qaida in Iraq] that are migrating into Syria.”

Similarly, U.S. Director of National Intelligence James Clapper warned earlier this year that al Qaeda-aligned forces coming from neighboring Iraq—a country that the United States occupied for nearly a decade—had carried out explosions in Damascus:

The two bombings in Damascus in December … and then the two additional bombings in Aleppo, both of which were targeted against security and intelligence buildings … had all the earmarks of an al Qaeda-like attack.  So we believe that al Qaeda in Iraq is extending its reach into Syria.

Rather than exercise restraint, the rise of Syria’s Islamists has encouraged Washington to intervene. Last month, the New York Times reported that U.S. officials had ordered a small number of C.I.A. officers to help funnel “automatic rifles, rocket-propelled grenades, ammunition and some antitank weapons,” across the Turkish border through intermediaries in Syria who include the Muslim Brotherhood, all paid for by Turkey, Saudi Arabia and Qatar. The justification was to keep weapons out of the hands of al Qaeda-allied groups, which is not reassuring. The most infamous instance of planners in Washington assisting the arming of rebels was in the 1980s in Afghanistan—a country that years later turned into an al Qaeda sanctuary.

The Syrian opposition’s failure to unite, combined with the ascendance of Islamists and al Qaeda-linked jihadists, complicates, among other things, the Western response to the Assad regime’s continued massacre of its people. For now, these divisions will prove more damaging to the Syrian uprising than the uprising’s attacks on the regime’s iron-fist.

Intervention in Libya and Syria Isn’t Humanitarian or Liberal

Proponents of foreign military intervention in Libya argued that giving air support to rebels there would spread liberalism and save Libyan lives. But the success of that revolution has thus far delivered political chaos destructive to both ends. That result is worth noting as backers of the Libya intervention offer it as a model for aiding Syrian rebels in the name of similar goals.

Advocates of both interventions underestimate coercion’s contribution to political order. Autocratic rule in these countries is partially a consequence of state weakness—the absence of strong liberal norms, government institutions, and nationalism. By helping to remove the levers of coercion in places like Libya and Syria, we risk producing anarchy—continual civil war or long-lived violent disorder. Either outcome would likely worsen suffering through widespread murder, a collapse of sanitation and health services, and stunted economic growth conducive to well-being. And the most promising paths to new of forms of unity and order in these states are illiberal: religious rule, war, or new autocrats. The humanitarian and liberal cases for these interventions are unconvincing.

Aside from Qaddafi’s fall, U.S. leaders gave three primary rationales for military intervention Libya (I repeatedly criticized them last spring). One was to show other dictators that the international community would not tolerate the violent suppression of dissenters. That reverse domino theory has obviously failed. If Qaddafi’s fate taught neighboring leaders like Bashar al-Assad anything, it is to brutally nip opposition movements in the bud before they coalesce, attract foreign arms and air support, and kill you, or, if you’re lucky, ship you off to the Hague.

The second rationale was the establishment of liberal democracy. But Libya, like Syria, lacks the traditional building blocks of liberal democracy. And history suggests that foreign military intervention impedes democratization. Whether or not it manages to hold elections, Libya seems unlikely to become a truly liberal state any time soon. As with Syria, any path to that outcome is likely to be long and bloody.

Meanwhile, Libya’s revolution has destabilized Mali. Qaddafi’s fall pushed hundreds of Tuareg tribesmen that fought on his side back to their native Mali, where they promptly reignited an old insurgency. Malian military officers, citing their government’s insufficient vigor against the rebels, mounted a coup, overthrowing democracy that had lasted over twenty years. Thus far, the military intervention in Libya has reduced the number of democracies by one.

The most widely cited rationale for helping Libya’s rebels was to save civilians from the regime. Along with many commentators, President Obama and his aides insisted that Qaddafi promised to slaughter civilians in towns that his forces were poised to retake last March. Thus, intervention saved hundreds of thousands of lives. A minor problem with this claim is that Qaddafi’s speeches actually threatened rebel fighters, not civilians, and he explicitly exempted those rebels that put down arms. More importantly, if Qaddafi intended to massacre civilians, his forces had ample opportunity to do it. They did commit war crimes, using force indiscriminately and executing and torturing prisoners. But the sort of wholesale slaughter that the Obama administration warned of did not occur—maybe because the regime’s forces lacked the organization needed for systematic slaughter.

The limited nature of the regime’s brutality does not itself invalidate humanitarian concerns. It might be worthwhile to stop even a historically mild suppression of rebellion if the cost of doing so is low enough. The trouble with the humanitarian argument for intervention in Libya is instead that the intervention and the chaos it produced may ultimately cause more suffering than the atrocities it prevented. Libya’s rebel leaders have thus far failed to resurrect central authority. Hundreds of militias police cities and occasionally battle. There are many credible reports that militias have unlawfully detained thousands of regime supporters, executed others, driven mistrusted communities from their homes, and engaged in widespread torture.

The looting of Libya’s weapons stockpiles is also likely to contribute to Libya’s misery, in part by arming the militias that obstruct central authority. The weapons depots reportedly included thousands of man-portable air-defense systems (MANPADS), some of which may still work. It is worth noting that the widely-reported claim that Libya lost 20,000 MANPADS appears exaggerated. That figure comes from Senate testimony last spring by the head of Africa Command, who did not substantiate it (my two requests to Africa’s Command PR people for information on this claim were ignored). A State Department official recently gave the same figure before essentially admitting that we have no idea what the right figure is.

No one can say with certainty whether Libya’s anarchy will produce more suffering than a Qaddafi victory would have. But that argument is plausible. Autocracies tend to serve human well-being better than chaos. That does not make it inherently immoral to help overthrow despots. It simply suggests that such interventions, whether or not they are moral or wise, do not deserve the adjective “humanitarian.”

The same goes for Syria. One need not support its brutal rulers to agree that their fall, like Gaddafi’s, is likely to produce extended illiberal chaos or another set of autocrats. I don’t know what the right U.S. policy is toward the crisis in Syria. But I doubt any policy exists that can avoid sacrificing one of our hopes for another.

Cross-posted from the Skeptics at the National Interest.