Turkey targets Syrian currency as sanctions bite

Turkish banknotes have been put into circulation through local branches of Turkey’s postal service operating in northern Syria. (Reuters)
Short Url
Updated 19 June 2020

Turkey targets Syrian currency as sanctions bite

  • Pouring liras into northern enclaves of Syria, Ankara hits Assad regime
  • The currency shift aimed at sidelining the Syrian pound by establishing a de facto Turkish lira zone will depend on support from the US

ANKARA: The Erdogan government has poured Turkish liras into northern enclaves of Syria under its military control ahead of fresh US sanctions under the Caesar Act targeting President Bashar Assad’s regime. 

Since early June, Turkish banknotes have been put into circulation through local branches of Turkey’s postal service operating in northern Syria, while public servants are also paid in Turkish currency, and fuel and basic food items are priced in lira. 

However, experts believe the currency shift aimed at sidelining the Syrian pound by establishing a de facto Turkish lira zone will depend on support from the US. 

Prof. Michael Tanchum, a senior fellow at the Austrian Institute for European and Security Policy, said the immediate aim of supplying Turkish lira to areas under its control is to minimize the negative economic impact of the Caesar Act’s sanctions, which kicked in on Wednesday. 

“However, the move helps to facilitate the payment of the Syrian National Army in Turkish lira, as the more widely the Turkish currency is used, the need to convert salaries into Syrian pounds to buy basic items becomes reduced,” he told Arab News. 

Hayat Tahrir Al-Sham (HTS), the extremist group controlling Idlib province, also began using Turkish liras. 

“The HTS-backed rebel government in Idlib province once contemplated switching to US dollars, but the scarcity of dollars — particularly as there is a global rush on dollars because of the COVID-19 pandemic — makes the lira an attractive alternative,” Tanchum said. 

Ankara has welcomed US sanctions in the hope it will lead to the collapse of the Assad regime. 

Tanchum said that if Ankara can create a Turkish lira zone in areas of Syria it dominates militarily, then Turkey will entrench its influence in Turkey for the long term. 

“For this to happen, the areas under Turkish control would have to generate more income from exports to Turkey. Currently, most of the sales of goods in Turkish-controlled areas are to areas under Syrian government control,” he said. 

However, Tanchum said that Turkey’s ability to circulate more of its currency depends ultimately on additional US dollars being made available to Ankara.  

“In that sense, a Turkish lira zone in Syria may require the tacit consent of Washington,” he said. 

Navvar Saban, an analyst at the Omran Center for Strategic Studies in Istanbul, said that putting Turkish liras into circulation in Syria is a precaution against economic fallout because of US sanctions. 

“That move was being examined even before the Caesar Act because the Syrian pound was in decline, along with economic problems and internal troubles between Assad and Syrian business people,” he told Arab News. 

Trade contacts between the Syrian regime and the rebels in opposition-held areas were also reduced, diminishing the amount of Syrian pounds. 

According to Saban, the move will also discourage selling dollars on the black market. 

Before the sanctions began, the Syrian currency lost almost 44 percent of its value, while food pries tripled in a year. 

“US dollars were in higher use in the opposition-held northwestern areas and its rate was higher before Turkish liras replaced it. But I don’t think that this move will sideline the Syrian pound, it is just a precaution for the moment,” Saban said. 

US Secretary of State Mike Pompeo recently said that the US pressure campaign was “in full cooperation with other like-minded countries.”

Turkey picks up the pieces after devastating quake

Updated 31 October 2020

Turkey picks up the pieces after devastating quake

  • Although the local residents are used to living with frequent tremors, the 7.0 magnitude quake on Friday evening was the biggest they had experienced

ANKARA: Canan Gullu was having coffee with her friends on her balcony when the quake struck. The head of the Ankara-based Women Associations of Turkey, she had decided to spend the weekend in her summer house in the coastal town of Seferihisar after sleepless nights spent helping victims of domestic violence in the capital.

The teacups fell on the ground, and they hid under a table until they feel safer.

“I felt the building shaking, then the house began moving toward the house next door. It was as if the ground was moving back and forth under our feet. We could barely stand,” Gullu told Arab News.

It was followed by a mini-tsunami that hit the district where she was living.

“I am now focusing on providing essential goods for the women living on the streets or whose buildings collapsed. It is the other face of poverty in Turkey,” Gullu said.

The powerful quake that hit Turkey’s western province of Izmir on Oct. 30 revealed the weak infrastructure of the country’s building stock. Although the local residents are used to living with frequent tremors, the 7.0 magnitude quake on Friday evening was the biggest they had experienced; it was as powerful as the 1999 earthquake near Istanbul when more than 17,000 people died.

The search and rescue operations continued on Saturday, with touching footages showing a mother and her three children as well as a cat and a dog being rescued 18 hours after being trapped under the debris of their building.

Turkish survivors continue to stay outside in the tents provided by the municipality for fear of aftershocks. Some hotel and restaurant owners offered free rooms and free dinners to the traumatized people.

To prevent traffic blocking rescue efforts, the authorities have banned vehicles entering the city center.

Friday’s quake killed more than 30 people in Turkey and the neighbouring Greek islands, although that figure was expected to rise. Almost 900 people were injured, with 243 under treatment and eight in intensive care, officials said.

Despite their diplomatic row over energy drilling operations in the waters of the eastern Mediterranean, Turkish and Greek officials exchanged solidarity messages on Twitter.

“Whatever our differences, these are times when our people need to stand together,” Greek Prime Minister Kyriakos Mitsotakis tweeted.

Many people were still waiting for news of relatives trapped under the debris.

Izmir is crossed by 17 different fault lines and has been prone to frequent tremors in the past. The quake resilience of the buildings in the city and unplanned urbanization have come under the spotlight, sparking criticism of the authorities.

The Turkish government issued a controversial zoning amnesty ahead of the general elections of 2018, resulting in 10 million illegally constructed buildings throughout the country.

These were eligible for legitimate deeds, with disastrous consequences during the quakes. Izmir tops the list for the number of illegal buildings that were “forgiven” by a government move to garner more votes.

Several buildings that benefited from that amnesty have collapsed over the years, killing dozens of people. Estimates say that one-fifth of the buildings in Istanbul could be completely destroyed in a quake with a magnitude of 7 or above.

In a past interview, Turkey’s famous contractor Ali Agaoglu, who was proud of selling massive residences to Arab clients, confessed that his company used sand from the Marmara Sea during their construction work. “If there is an earthquake in Istanbul, (the number of the dead and collapsed buildings will be so high that) the army won’t even be able to enter the city,” he said.

Turkey’s earthquake tax was also the subject of intense debate earlier this year with the quakes in eastern provinces of Elazig and Malatya, after President Recep Tayyip Erdogan said: “We spent it where it was meant to be spent. And after this, we do not have time to provide accountability for matters like this.”

Special taxes were levied in Turkey after the 1999 earthquake and were later made permanent. However, there is widespread skepticism about whether these taxes were spent on quake resilience or whether they only helped the state budget at that time.