European and US sanctions have started to affect the Syrian economy, but they may take a long time to undermine the regime, writes Bassel Oudat in Damascus Before the Syrian uprising began in mid-March, the Syrian regime would not have expected that it could be the target of Western sanctions, and when the first mild sanctions were imposed they were mostly brushed off, being described as part of a campaign to discredit the country. Europe and the US have imposed economic, political and other sanctions against the regime since the protests started, aiming to isolate it internationally and to dry up its sources of funding. Such sanctions have sent a message to Damascus that the world will not remain silent about the violence being used to crush the protests in the country. In mid-May, the EU banned arms exports to Syria and blacklisted 13 Syrian officials, including Maher Al-Assad, brother of Syrian President Bashar Al-Assad and commander of the Republican Guard. Also on the blacklist was Rami Makhlouf, Al-Assad's cousin, who has extensive business interests in Syria and is chief of the country's intelligence services. The sanctions froze such individuals' assets and banned them from travelling to Europe. On 23 May, the EU imposed sanctions against Al-Assad himself, as well as against nine other Syrian officials and Al-Assad family members, because of "the continuous violent campaign" against the people of Syria. On 22 June, the EU expanded the sanctions to include four agencies connected to the Syrian military and a further seven individuals, including three Iranians believed to be participating in suppressing the opposition. On 2 August, the EU announced a fourth round of sanctions against the Syrian regime to include five more individuals banned from travelling and subject to an asset freeze, including Al-Assad's uncle and the Syrian minister of defence. On 2 September, the EU halted trade with Syria, as well as the importation of Syrian oil. A further four individuals were targeted by sanctions, as were three more agencies. EU member states buy 95 per cent of Syria's oil exports, which represent 25-30 per cent of the country's revenues. On 24 September, EU governments banned European companies from investing in the Syrian oil industry and added further organisations to the sanctions list, including the main telephone company in Syria, Syrtel, and the Al-Shams Holding Company, both of which are owned by the president's cousin. The sanctions also included the privately-owned Al-Duniya satellite channel, owned by businessmen close to the president's brother, accused by the opposition of playing a major role in putting down the demonstrations. Also included were three construction and investment firms connected to the Syrian army, as well as the Syrian ministers of information and justice. The delivery of Syrian banknotes printed in the EU was halted. Two months after the start of the uprising in the country, the EU froze all economic and training projects with Syria, while the European Investment Bank stopped funding infrastructure projects. So far, the number of firms and blacklisted individuals affected by the European sanctions has reached 20 and 60, respectively. In parallel to the EU sanctions, the US has also imposed its own sanctions against Syrian individuals and entities believed to be playing a role in suppressing the protests and killing civilians. On 29 April, Washington blacklisted the Syrian head of intelligence, Maher Al-Assad, as well as his cousin, who is head of intelligence in the southern city of Deraa where the protest movement started. The US sanctions included freezing the assets and banning the travel of figures close to the regime. On 18 May, President Al-Assad was added to the Washington blacklist in an attempt to pressure him into making political reforms. The vice-president, prime minister, ministers of interior and defence, chief of military police and director of political police were also targeted. On 19 August, the US banned the import of oil products originating in Syria and blacklisted another set of Syrian firms, most prominently the state-owned Public Institute for Oil, which has a monopoly over the country's oil and gas production. The largest commercial bank in Syria was targeted, as was the largest telephone company, both of which were banned from trading with the US. At the end of August, further sanctions were announced, with the Syrian foreign minister, presidential adviser, and ambassador to Lebanon being blacklisted. Syrian banks in Lebanon were also targeted. Canada, Australia and Switzerland have also imposed sanctions against Damascus. Turkey has prevented military equipment heading for Syria crossing its airspace or territorial waters, and it has declared that it is prepared to impose further sanctions against the country. Qatar has frozen several big investment projects in Syria. Syrian officials have brushed off the effects of the European and US sanctions, with the country's official media claiming that they will be ineffective and that Syria will look to Asia and Africa for support. Syria will sell its oil to Russia and China and receive aid from Iran, the media said. However, the effects of the EU and US sanctions have been manifesting themselves in tangible ways across the Syrian economy. Prices have rocketed over the past few months and tourism has been obliterated, two million Syrians relying on the latter sector, which represents 12 per cent of the economy. At the same time, trade with Europe amounting to $12 billion a year, has noticeably dropped. Oil exports are paralysed, and economic sources say that Syria is having difficulty selling its oil and that the banks are not financing its sale. Russian companies registered on the New York Stock Exchange do not want to risk buying Syrian oil for fear of going against the US-imposed sanctions. The Syrian government is losing an estimated $7 million a day as a result of Europe's stopping buying Syrian oil, while oil companies like Total, Shell and others are preparing to close their operations in the country. The Syrian government has been unable to buy fuel on international markets, and it is looking for partners to trade crude oil with as a way of circumventing the sanctions. Another indicator of the economic ramifications of the sanctions has been the International Monetary Fund's estimate some days ago that the Syrian economy will shrink by two per cent this year, having earlier predicted that it would grow by three per cent. Last week, the Syrian government froze investment projects and postponed the signing of new contracts, in order to streamline spending while focusing on important existing projects. At the same time, it banned the import of non-essential merchandise, including cars and products bearing a tariff higher than five per cent "in order to protect the national economy" and "preserve the country's reserves from foreign intervention." International credit card services such as Visa and MasterCard are no longer available in Syria, and Switzerland has announced it has frozen nearly $50 million in assets belonging to blacklisted Syrian officials. Observers believe that before the year's end, Syria will be forced to seek foreign aid to keep its economy afloat and pay the salaries of the estimated two million government employees. While analysts say that the international sanctions have started seriously to affect the Syrian economy, it will take a long time for them critically to undermine the regime or end its campaign against the protesters, an estimated 3,400 of whom have died as a result of the regime's crackdown since the protests started six months ago.
