Ukraine rejects ultimatums as conflict escalates
DUBAI: When Samy packed his bags and left for Russia in 2018, he was convinced that better days were ahead. His hometown of Damascus was on its knees, crippled by nearly a decade of war and on the brink of its worst economic crisis in more than a century. There were precious few opportunities for him and other Syrian youth. Emigration seemed the best option.
The charm of Moscow lured. Samy, who gave only his first name, had seen the boasts of Russian soldiers in Syria and heard stories about their lives back home.
He had also seen firsthand how Russian President Vladimir Putin’s soldiers had helped secure the position of Bashar Assad, the Syrian ruler to whom his family remained loyal. Moscow was safe, he thought, and for a while it was a haven where he could save and send money home.
Then came the war in Ukraine. In the last fortnight, Samy’s world and the lives of other Syrians like him who thought they had found a safe place to start anew have spiraled out of joint. As the value of the ruble collapsed, his savings were wiped out, and with almost every sector of the economy under pressure, his job was soon in jeopardy.
An unprecedented global sanctions regime has paralyzed the Russian economy, suspended oil, wheat and commodity exports, forced Western companies to withdraw, isolated the country from the global financial system and sent its currency into free fall.
Economists predict that Russia will default within two months as credit lines and the economy itself grind to a halt. The Kremlin’s financiers are the declared target of sanctions. The flight of the oligarchs’ yachts across the Mediterranean, beyond the clutches of European states bent on seizing them, has been a source of amusement for many on the continent.
But the plight of regular Russians and the large community of Middle Eastern migrants who live among them has been largely overlooked. As the economy collapses, Samy and other Syrians living in Russia face the second major economic meltdown of their lives. And this one will probably be a lot worse than the first.
From his apartment in Moscow, Samy told Arab News: “I am facing a financial dilemma. I’ve considered taking all my money out of the bank, which isn’t even a lot, and keeping it hidden in my apartment. But then I start thinking, what if I get robbed?”
Not only Samy needs this money to survive. “I have a family in Damascus that depends on me. my parents are old They were among the lucky few who didn’t feel the need to over-ration their fuel to keep warm. I was so proud of myself that I could keep her warm. I fled one war only to end up in another.”
During the Cold War, the Soviet Union projected soft power in the Middle East and at various times maintained close ties with Egypt, Syria, southern Yemen and Algeria, as well as other secular Arab states.
In the post-Soviet era, the Russian Federation has visibly increased its political, diplomatic, military, and economic presence in the Middle East and North Africa since the early 2000s.
Under Putin’s leadership, Russia’s engagement with the Arab world has included intense energy diplomacy, growing grain exports, penetrating the regional arms market, and deploying forces in Syria in 2015 to prop up its key regional client, the Assad regime.
However, the outcome of the Ukraine war could deal a serious blow to Russia’s influence and standing in the Middle East. Pictures posted to social media last week showed long lines of Russian citizens queuing at ATMs to withdraw their savings or exchange what they had for dollars before the currency continued to depreciate.
Millions were also suddenly unable to shop using Apple Pay or Google Pay, both of which have been cut off by the US tech giants as more companies severed ties with Russia.
Russia’s central bank reacted to the currency crash by raising the key interest rate from 9.5 percent to 20 percent in order to prevent an inflationary spiral. But the banking and financial system simply cannot handle what amounts to a two-thirds freeze on its reserves.
Elvira Nabiullina, the bank’s governor, told staff in a video address that they are in an “extreme situation,” according to Reuters. As economist and author Anders Aslund put it in a tweet, “Putin destroyed the ruble.”
And yet the sanctions come. US President Joe Biden has moved to sever ties with many of Russia’s largest financial institutions, saying the measure “beyond anything we’ve ever done.”
The list included Russia’s largest bank, Sberbank, along with 25 of its subsidiaries, which account for a third of Russia’s financial assets. Biden also banned American companies from doing business with them and froze the assets of Russian oligarchs near the Kremlin.
Britain has capped the amount Russians can deposit in British banks. It has also excluded Russian banks from its financial system and frozen their assets.
The EU, meanwhile, aims to target 70 percent of Russia’s banking sector and state-owned companies and cut its imports of Russian gas by 66 percent by 2030. Ursula von der Leyen, President of the European Commission, said the continent will do no more to a “supplier who has explicitly threatened us”.
A long list of Western retailers, many motivated by threats of consumer boycotts, have decided to halt operations and close some of their stores in Russia. These include brands like H&M, Levis and IKEA.
In a sign that sanctions are already starting to hit supply chains, Russians have taken to Twitter to claim that some grocery stores in Moscow have limited the number of items they can buy at one time.
Meanwhile, in Syria, more than half of the country’s pre-war population has been displaced, either living elsewhere in the country or fleeing abroad. It is believed that those who settled in Russia were screened by both regimes. According to estimates by the Russian Interior Ministry, as of the end of October 2018, 9,100 Syrian citizens were living in the Russian Federation.
Moscow has remained a staunch ally of Assad since the 2015 military intervention, despite crippling sanctions and international condemnation of his regime.
Reports have surfaced in recent days of Syrian mercenaries traveling to Russia to fight in Ukraine. This comes at a time when Syria’s miserable economic situation is showing no signs of improvement.
In recent years, many wealthy Syrians have moved their money to Russia, which they felt was safer. Assad himself is said to have lost an estimated $10 billion when neighboring Lebanon’s currency collapsed. His losses in Syria are likely to be of a similar magnitude. Time will tell what the collapse of the ruble will cost him.
The average salary in Syria is 70,000 Syrian pounds per month, the equivalent of 20 US dollars. The United Nations World Food Program estimates that approximately 12.4 million Syrians are food insecure, while 1.4 million are severely food insecure. Electricity and fuel are also scarce.
Earlier this year, Assad declared a five-day public holiday to reduce fuel and energy consumption. Both are now extremely scarce, and a spike in oil prices brought on by the invasion of Ukraine and sanctions on Russia could even shut down travel across much of Syria, where the cost of filling a tank dwarfs what most people earn in a month.
For those like Samy who thought life would be better in an ally’s land, it’s more the same. “I’m beginning to think the Syrians are cursed,” he said.