Syrians have for years saved their US dollar salary in cash. This year they were finally able able to deposit their money for safekeeping in the spare bank account of a friend. Now, however, they are restricted from access to their savings, even as they work under the ever-present threat of deportation and hopes to emigrate.
A Syrian industrialist based in Damascus working in the healthcare field says he has been unable to make payments from his Lebanese accounts while abroad.
“I can’t even use my credit cards to pay my bills here from my own money,” he told Asia Times from Europe.
With Syria under a near-total US sanctions regime since August 2011, Syrian nationals are reliant on neighboring Lebanon and its banking system to conduct international transactions.
The situation in Lebanon, the businessman said, is thus “double devastating to Syrians and the Syrian economy.”
“The Syrians were already at the end of their ropes and Lebanon was the only outlet to the outside world left to them. Whatever money they had left was in Lebanese banks and their business was conducted through Lebanon,” he said.
To have a US dollar account in Beirut, just a few hours’ drive from their pariah-state, was long viewed as a safe haven for savings.
That refuge now appears more as a cage, with growing anxiety among depositors as to when and whether they will ever be able to recover their wealth in full.
The value of the Syrian pound has meanwhile plummeted, as the scale of Lebanon’s dire financial straits and dollar crunch has been laid bare, going from 500-550 Syrian pounds to the dollar to 750-1,000 SYP to USD in recent days.
Uprising exposes crisis
From the start, the outpouring of rage on the Lebanese streets on October 17 sparked anxiety in the financial sector, with private banks shuttering their doors the following morning, reopening only in bursts in the weeks that followed.
A key goal was to prevent a panicked run on dollars, as the Lebanese pound’s longstanding 1,507.5 peg to the dollar – already in doubt in the months leading up to the protests – faced new pressure.
Banks, left to their own devices, imposed a hodgepodge of de facto capital controls, treating accounts on a case-by-case-basis. The dollar bleed continued.
In the past six months alone, Lebanese have withdrawn at least $3 billion dollars from the banks, the head of the Association of Banks in Lebanon admitted in an interview with Reuters late last month.
Lebanon’s political elites have meanwhile failed to respond to the demands of the street, which is seeking a total overhaul of a system they believe has failed them, as opposed to a reshuffle of the same factions and faces.
Over the past week alone, three Lebanese men – at least two of them fathers with children – have committed suicide over an inability to provide for their families or pay debts.
“How many more suicides do you need,” was a ubiquitous protest sign slogan on Wednesday evening, as protesters closed a central highway in rejection of a cabinet reformulation with the same political factions.
Banque du Liban on Thursday ordered commercial banks to lower interest rates on foreign currency deposits to a maximum of 5%, pledging half of that interest would be paid by the central bank itself – a move criticized by some economists as shielding banks, but not depositors.
Syrian ‘billions’ stuck
While it is impossible to pinpoint a figure on the deposits of Syrian nationals in Lebanon, a Syrian banking source told Asia Times they likely account for “billions” of dollars. He spoke on condition of anonymity as he was not authorized by his employer to speak to the media.
The Lebanese banking sector does not publish statistics on sources of deposits – only distinguishing between resident and non-resident bank accounts, according to Nassib Ghobril, chief economist at Lebanon’s Byblos Bank Group.
“Non-resident deposits were $35.5 billion at the end of October and accounted for 21% of total deposits,” he told Asia Times.
While the majority of those deposits can be assumed to belong to the vast Lebanese diaspora – convinced over a span of decades that even rival political factions agreed on the necessity of a stable banking sector – many also belong to Syrian nationals.
Non-resident accounts in Lebanon include Syrians doubling up, with friends and family members often asked to hold savings for others who do not possess a valid residency.
One of those people is a young Syrian professional in Beirut, who – barred from obtaining a work permit (granted to Syrians for menial labor, not white-collar jobs) – was unable to open his own bank account.
Instead, for years he has saved his US dollar salary in cash. This year, he was finally able able to deposit his money for safekeeping in the spare bank account of a friend. Now, however, he has restricted access to his savings, even as he works under the ever-present threat of deportation and hopes to emigrate.
He spoke to Asia Times on condition of anonymity as he is not authorized to work in Lebanon.
Another Syrian national, working for a foreign humanitarian organization in Beirut for three years, says that not only his savings but also his parents’ savings are now at the mercy of the Lebanese financial system.
One week ago, and with his landlord demanding dollars for the rent, he was only permitted to withdraw $300 from his bank branch. The rest, he was compelled to accept in Lebanese pounds, despite his account being in dollars.
He said the bank teller informed him that the withdrawal limit was fluctuating by the day, from a maximum of $1,000 to as little as nothing. “If you come tomorrow maybe you can’t withdraw any,” he was told.
From there, he had to go outside the bank to convert the local currency to dollars. Officially, the exchange rate was now 1,550 Lebanese pounds to the dollar. But on the market, the rate had hit 1,800 pounds to the dollar (topping 2,000 LBP to USD at the time of publication) meaning he would have to incur a loss if his landlord refused to budge on the dollar demand.
This time, he said, his landlord relented.
The bigger problem, however, was that he had been planning to empty his account.
“I was planning to go back to Syria in two months, so I need to have my savings, because I may be staying in Syria for a while not working,” he said.
Now, like so many other Syrians and Lebanese, he is struggling to decide whether to keep withdrawing Lebanese currency and convert at a loss, or wait and risk a further devaluation or potentially being locked out of his savings.
“Everyone has started to be afraid,” he said.
Also read: Lebanon on edge as economic crisis laid bare