Syria central bank report gives rare glimpse into wartime finances

Reuters

* Former minister says numbers are "dramatic"

* Conflict devastated much of Syria's economy

* Government stopped publishing figures after crisis

By Alexander Dziadosz

BEIRUT, Oct 1 (Reuters) - Syria's foreign reserves crashedby more than a third in the year to the end of 2011, figurespublished by the central bank showed, giving a rare glimpse intothe war-stricken country's finances.

An undated report on Syria's central bank website showedforeign reserves fell to about 158 billion Syrian pounds at theend of 2011 from around 242 billion a year earlier - the mostup-to-date figures published since the crisis started.

The figures were converted to pounds at an old official ratethe report listed as 11.2 pounds to the dollar, vastly differentfrom the current unofficial rate of around 167 to the dollar.

While the numbers are too old to indicate Syria's currentreserve levels, they suggest reserves were dropping at a rapidpace even during the conflict's early days when fighting wasrelatively limited.

Economists estimated foreign reserves at about $16-18billion before the crisis, when Syria was earning some $2.5billion a year from oil exports. Most of the oil revenues driedup in late 2011 when the European Union imposed sanctions onSyrian crude purchases.

Damascus stopped giving monthly figures shortly after theuprising started in March 2011 and it was not immediately clearexactly when or why the new report had been published.

Abdallah al-Dardari, a U.N. economist and former Syrianminister, said the published figures showed the strain thecrisis had put on government finances, although it wasimpossible to draw conclusions about current reserves.

"If by the end of 2011, the country had lost 35 percent offoreign reserves, one can then only imagine and try to speculatewhat would be the impact by the end of 2013," he said at aconference in Beirut.

"By any standard it would be a very dramatic impact," addedDardari, who was President Bashar al-Assad's deputy primeminister for economic affairs for six years until shortly afterthe uprising started in March 2011.

The figure for the central bank's reserves included assetssuch as cash and deposits, which it put at about 130 billionpounds, special drawing rights of about 4.8 billion pounds andgold worth about 1.4 billion pounds.

The report also put the foreign assets of public banks ataround 217 billion pounds at the end of 2011, down from about261 billion at the end of 2010.

The central bank couldn't be reached for comment.

Syria's conflict has devastated major sectors of theeconomy, including industry in the cities of Aleppo and Homs,and foreign currency earners such as oil exports and tourism.

U.S. and European financial sanctions imposed after thecrackdown have since made it harder to import fuel and wheat.

But Syria has received extensive support from its ally Iran, including billions of dollars in credit facilities to buy oilproducts, to help shore up its finances.

The government has also taken measures to stop dollarisationof the economy, including threatening traders who price goods inforeign currency with up to 10 years in jail.

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