Jordan border town feels impact of Syria violence 

(MENAFN - Arab News) In the tranquil border town of Ramtha, Jordan, the civil war being fought in neighboring Syria is never very far away.

Not only do the residents hear sounds of the gunbattles between the Syrian army and defectors in the nearby town of Deraa and cope with a swelling population of refugees, they are also feeling the impact of the plunging Syrian pound.

The 40 percent drop in value of the pound over the last year should be good news for Jordanian traders, enabling them to pay less for the goods they bring across the border. But it hasn't worked that way: The sharp depreciation of the currency has caused Syrian suppliers to cut back on the quality of the products they ship to Jordan and in many cases to cut off the supply altogether.

"The drop in the Syrian pound is a double-edged sword. While we could buy more Syrian products in theory, few products are available and the quality has been compromised," says Abu Ahmed, who runs a wholesale business in Ramtha, selling his Syria imports to retailers across Jordan.

"The sugar we used to get before the revolution is much better than what we get now. Many other products are no longer as good as they used to be a year ago," Ahmed told The Media Line.

It's traders like Ahmed who are feeling the impact now. But the plunging Syrian pound could spell even bigger trouble for Jordan in coming months by prolonging the civil war and driving more Syrian refugees over the border, which is already home to some 80,000 displaced Syrians.

That would add immeasurably to the pressures Jordan's King Abdallah, a key ally of the US in the Middle East, is feeling as he tries to balance growing pressure for political change with powerful interest groups determined to maintain the status quo amid stalling economic growth.

The pound remains under intense pressure in the face of international sanctions on the regime of Syrian President Bashar Assad. Despite an aggressive policy by the authorities in Damascus to shore up the currency, the pound currently trades at about 100 to the Jordanian dinar. Not long ago it was at 111, its lowest value in decades.

At those rates, traders like Abu Ahmed and thousands of others find it difficult to buy Syrian pounds from the local market. In downtown Amman, Jordan's hub of wholesale trade and main currency market, traders refuse to deal in the Syrian pounds. They point to the collapse of the Iraqi dinar after the 1990 sanctions against Saddam Hussein, which caused the Iraqi currency to take a nosedive and saddled them with losses of hundreds of millions.

Economists in Jordan say the kingdom has been hit hard, pointing out that bilateral trade has dropped by half over the past year.

According to Nael Al-Kabariti, president of Jordanian Chamber of Commerce, trade with Syria has also been hurt by political uncertainty and the rising cost of transportation.

The civil war has been raging with growing intensity for over a year, claiming more than 9,000 lives, according to the United Nations, and forcing more than 200,000 people to flee their homes.

On Thursday, the Syrian state news agency said four gunmen killed two colonels in the center of Aleppo. In the central province of Hama, rebels attacked an army truck and killed two soldiers. In other clashes around the country, opposition activists said security forces killed at least 11 civilians across the country.

"Jordanian businessmen are seeking alternative routes for their products going to Europe and seeking alternative sources for products coming from Syria," Al-Kabariti told the Media Line.

The drop in the pound could have the perverse effect of prolonging the fighting. The Assad regime has far more firepower and manpower at its command than the rebel forces, but opposition activists say diminishing reserves of foreign currency and a drop in the value of the pound will only make it harder for the government to pay the hundreds of thousands of soldiers and pro-government vigilante groups, known as Shabeeha. This denies the government from delivering a quick deadly blow to the insurrection as it juggles its dwindling funds.

Abu Mustafa, a Free Syrian Army leader from the southern city of Deraa and a former soldier who defected six months ago, contends that most of Assad's fighters are mercenaries. He points out that the Shabeeha groups are not only composed of Alawites loyal to the regime, but also poor Syrians who are fighting to earn a salary.

"If they no longer can pay for the Shabeeha, they will not be able to convince them to fight," Abu Mustafa, who asked to be identified only by his nom de guerre, told The Media Line in an interview on Skype. He says that traders close to the regime are feeling the squeeze of the sanctions and drop in the pound value.

Despite the pressure on the currency, the Syrian regime remains healthy financially by employing a variety of tactics to circumvent sanctions and maintain a reasonable pound rate. The Syrian authorities are rumored to have deposited billions of dollars in banks in Lebanon, Dubai, Iraq and other countries under the names of third parties.

As a result, many economists say it will be a long time before the Syrian regime feels the squeeze of the sanctions and the pound's depreciation, but only provided they can maintain control over declining rate. They say if the Syrian pound drops at the pace that the Iraqi dinar did in the 1990s, it will be very difficult to maintain a grip on the country for long.

In the meantime, the woes of ordinary Syrian citizens from the fighting are being compounded by the drop in purchasing power created by the plunging pound.

"The West wants to punish Assad by imposing sanctions on his regime, but they are also punishing the people. Citizens are suffering as a result of the sanctions and uncertainty in the pound value," says activist Islam Abdullah from the Syrian Media Center.

He says hundreds of Syrian families have chosen to flee to Jordan and other neighboring countries in search of food rather than for safety. In Jordan, they receive aid from non-government organizations and ordinary Jordanian citizens.

In a rundown apartment in east Amman, Syrian refugee Um Saleem lives with her three children and mother in law. The widowed 35-year-old used to work in the fields of Deraa to put bread on the table. But the pale looking woman says she was no longer able to provide for her family.

"I could no longer afford to buy basic food. People in my village were also suffering and the situation was only getting worse," she told The Media Line. "I didn't run from the bullets and sounds of gunshots. I fled to find food for my children."