Sanctions, Covid-19 and economic collapse: What is the future of international aid to Syria?

Sanctions, Covid-19 and economic collapse: What is the future of international aid to Syria?
As global donors hold a virtual meeting to pledge funds for Syria's humanitarian crisis, aid workers warn operating in the war-torn country is becoming increasingly challenging.
6 min read
30 June, 2020
Economic devastation and food insecurity loom over Syria. [Getty]
Syria is tackling an unprecedented crisis that puts millions at risk of starvation, while humanitarian actors in the country fear mounting challenges will stall much-needed assistance programs.

Economic devastation and food insecurity loom over Syria. With 11 million people estimated to be in dire need of assistance, international donors are being urged to ensure the funds they provide are timely and flexible.

On top of an ongoing conflict in its tenth year, Syria is juggling a whole set of other challenges – the coronavirus pandemic, a deteriorating economy now hit by US-sanctions, depreciation of the local currency and inflation of the prices of goods – all of which make it a challenging place for humanitarian workers to operate in.

Funds pledged during Tuesday's Brussels IV conference for Syria should respond to the needs of the Syrian people, all the while ensuring flexibility in case funding channels get disrupted as an indirect result of new US sanctions or budgets need to be adjusted to respond to more urgent needs.

Caesar Act sanctions on Syria exclude humanitarian assistance, but NGOs are still bracing for impact, fearing over-compliance from banks could block all money transfers to Syria as a form of de-risking. 

 11 million Syrians need some form of assistance. [Getty]
"Our biggest concern is over-compliance with the banking sector in terms of what that might mean for our operations in the future," Matthew Hemsley, Oxfam's Damascus-based Syria Policy and Communications Advisor said in an online press briefing ahead of the conference.

"In the past we've had issues of paying suppliers where transfer routes have stopped suddenly. That puts pressure on local businesses and local people in terms of money they're receiving," Hemsley said.

The international NGO operates in Damascus, Aleppo and Deir az-Zour. Its briefing on Monday tackled some of the funding gaps and challenges that Oxfam and other organisations working in Syria want donors to address.

In a public statement with six other organisations, Oxfam has said that unless funding and humanitarian access are increased, many Syrians, including refugees hosted by neighbouring countries, will be pushed to the brink of starvation.
US sanctions on Syria exclude humanitarian assistance, but NGOs are still bracing for impact, fearing over-compliance from banks could block all money transfers

The fourth edition of the Brussels conference, titled "Supporting the future of Syria and the region", is expecting to secure $3.8 billion from governments and donors to fund humanitarian work carried out by the UN and other partner organisations within Syria.

The conference is also aiming to secure around $6 billion to aid refugees that are being hosted by other countries, including Lebanon, Turkey and Jordan.

The money will go towards food, shelter, health services and protection Syrians need, according to the United Nations, which is co-chairing the conference with the European Union.

There are also regional challenges to delivering aid to Syria's population. 

As Syria's regime does not allow international aid operations in opposition-controlled areas, organisations in northeastern Syria may soon get their funding cut off while a UN Security council resolution for cross-border aid is set to expire on 10 July.

Last week, UN Secretary-General Antonio Guterres spoke in favour of an extension, which is backed by Germany and Belgium, while Russia and China oppose such a decision citing "infringement" on Syria's national sovereignty.

The Syrian regime's obstructions in blocking cross-border aid operations in the northeast has created an imbalance within Syrian regions, jeopardising the right to health of two million people, according to Human Rights Watch.

For this year's conference, instead of funnelling most of the money to the UN and partners, donors are encouraged to provide direct funding to NGOs operating cross-border in north-east Syria.

Read more: Syria facing 'unprecedented' hunger crisis amid coronavirus outbreak: UN [Getty]

Organisations in regime-controlled areas also face difficulties in securing funds, as governments such as Germany exclusively give money to a UN pooled fund, which then manages the money and distributes it locally. 

"What we get told is that it's a political decision. The response considering Damascus is very UN-centric ... It feels like [shunning] states are handing responsibility over to the UN," Hemsley told The New Arab.

"If we can access the money, it's only through UN agencies," the Syria advisor said, claiming the process limits certain opportunities within Oxfam's response.

Before any donated money goes to organisations, funds also have to pass through official channels, which will slash a good chunk of the money that reaches Syria due to a disparity between the offered exchange rate and the actual market-rate value of the Syrian pound.

While the currency depreciation in the unofficial market has somewhat stabilised at around 2,500 against the US dollar, the recently increased official dollar exchange rate set by the central bank is 1,256 Syrian pounds.

This means funds in foreign currency wired to Syria through official channels are slashed by nearly fifty percent, and could be further devalued by the time the money is secured and handed over.

"In some cases we are losing over half of our grant value as we exchange it to Syrian pounds. That's also a concern in terms of the viability of some of the operations," Hemsley said. "At the end of the day, it means that there's a risk that people could receive less assistance."

Funds wired to Syria through official channels are slashed by nearly fifty percent, and could be further devalued by the time the money is secured and handed over

Those not adhering to official channels can face hefty fines and up to seven years of imprisonment. 

Funds not only have to increase to cover the financial leakage resulting from the transfer and conversion, but should also allow some flexibility.

The Brussels conference is aiming to secure nearly
$9.8 billion [Getty]

This year, humanitarian actors have had to divert some of the money allocated for existing humanitarian programmes to respond to public health emergencies such as the Covid-19 outbreak. This has led to funding shortfalls, which has heightened the need for flexible funding.

Oxfam, for example, had to cancel some of its support programs benefiting farmers and helping food production inside Syria to instead fund an emergency response through water, sanitisation and hygiene (WASH) programs in terms of Covid-19 prevention, according to Hemsley.

In addition to WASH initiatives, Oxfam also provides assistance in areas of food security and livelihood. While direct handouts are easier to fund, the international community is hesitant to pour money into infrastructural repairs.

"Most donors want to avoid anything that looks like a reconstruction of Syria," Hemsley said. 

The hesitance to fund basic infrastructure projects in government-controlled areas stems from concerns that projects would also serve to benefit the regime.

However, the political decision may be getting in the way of providing much-needed sustainable aid, in turn contributing to increasing dependence on aid in Syria.

While Syria is facing food shortages, Hemsley said that even a waterline repair project which would help some thirty farmers irrigate their land and improve food security would dissuade donors.

"We don't want to create aid dependent organisations. There's definitely a risk that if we're not willing to reconstruct this basic infrastructure, then we risk making Syria more dependent on foreign aid," he said.

Previous conferences have collected good amounts from donors, even if the full target wasn't reached, and would continue to donate, Hemsley said, if humanitarian needs are made clear. 

But with many countries struggling with their own economies in the aftermath of the first-wave of the coronavirus outbreak, there is no telling when donor fatigue will set in.

Gasia Ohanes is a journalist with The New Arab.

Follow her on Twitter: @GasiaOhanes