WEEKLY REPORT 4 – 10 December 2020 Key dynamics

Unrest in the northeast ...... 2

Turkish threats complicate fragile status quo in northeast ...... 2

Protest against Self-Administration, diminished fuel supply ...... 3

Winterization ...... 4

South Damascus residents struggle to stay warm ...... 4

Syrian pound ...... 5

Syrian government devalues exchange rate ...... 5

Finance and fuel in the northwest ...... 6

Northwest communities prefer lira to pound ...... 6

New fuel companies start trading in Syria’s northwest ...... 7

Cover photo: Protests in Al Sheetat, Deir-ez-Zor governorate, Dec 2020. . Source Orient News

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Unrest in the northeast Observers have debated the motivations behind the latest Russian demands. While one theory Continued Turkish threats suggests that Russia is using a recent escalation against Ain Issa complicate in hostilities between the Turkish-backed SNA fragile status quo in northeast and SDF to try and better cement government control in northeast Syria – potentially with a Tensions remain high along frontlines in view to getting the Self-Administration back northeast Syria following weeks of artillery around the negotiating table with Damascus in bombardments and clashes between the the future – the possibility remains that Russia is Turkish-backed Syrian National Army (SNA) and genuinely concerned about a looming Turkish- the Syrian Democratic Forces (SDF). led offensive on Ain Issa and is trying to intervene further to avoid that happening. The situation has grown more complicated in recent days. Turkey struck Syrian government The SDF has reportedly rejected the Russian positions in the countryside north of Tal Tamer proposals as they stand. (Tal Tamer subdistrict), days after pro- government forces deployed troops to the town. The M4 frontline Ain Issa is a highly strategic town along the M4 Russia seeking to benefit from highway, where Russia has maintained a small escalations...or contain them? base since US withdrawals in 2019. Territorial According to media reports, Russia this week gains by Turkish-backed groups along the M4 requested that the SDF hand over control of Ain could impact military and civilian traffic on the Issa to the Syrian government, days after strategic roadway and hamper fuel transfers Russian military officers met with SDF from Self-Administration to government-held representatives on 2 December in Tabaqa (Al- areas. Malikeyyeh subdistrict) and proposed localized power-sharing agreements in urban areas of While international humanitarian agencies northeast Syria including Ain Issa and Al- (which make up the lion’s share of the local Hasakeh. response) use alternative routes other than the M4, the work of local NGOs would also be Russia reportedly proposed that the SDF accept affected by escalating bombardments and a situation in Ain Issa like that in Quamishli city, clashes, and any coming changes in the status where the Syrian government has long quo along the M4. maintained a so-called ‘security square’ (consisting of government agencies and security Earlier this week, HAT published a situation branches) and the SDF controls all territory report assessing the likelihood of a Turkish- around it. backed operation north of Ain Issa, which can be found here.

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Protests against Self- reportedly had sent the Self-Administration Administration in Deir-ez-Zor several requests for increased fuel allocations, and to distribute it to different sectors such as after diminished fuel supplies agriculture and services.

A number of demonstrations broke out across The suspension in the distribution of fuel and eastern Deir-ez-Zor governorate as protestors diesel led to an increase in their prices on the demanded improvements in services, health and black market. fuel provision while denouncing a number of perceived corrupt Self-Administration policies. Deir-ez-Zor's diesel supply ranges from 10–15 Protests occurred across the towns of Eastern tanks per day, most of which is distributed for Jurdi (Thiban subdistrict), Kisreh, Himar Ali, and heating purposes, an amount that the Fuel Harmushiyeh (Kisreh subdistrict), Al Sheetat Committee considers to be insufficient to meet and Abu Hamam (Hajin subdistrict), where daily demands (which is estimated at 30–33 demonstrators blocked roads and burned tires. tanks per day). One reason for the decreased supply is thought to be the significant increase in Demands across the protests were uniform, smuggling of fuel from Self-Administration to where demonstrators, consisting of majority Syrian government-held areas. The Self- Arab population, denounced the work of local Administration had reportedly resumed cross- councils, accusing them of lack of basic service line trade of fuel to government-held areas after provision, corruption and clientelism. a 15 day suspension, possibly following Russian pressure to do so. Earlier last month, the Self-Administration- affiliated Deir-ez-Zor civil council had warned of Fuel shortages during the winter season are the possibility of local dissent if fuel and diesel likely to lead to poor living and humanitarian were not distributed to the local population. The conditions, particularly for families occupying Fuel Committee within the civil council informal living settlements, unfinished buildings

Table 1: Fuel price increase Deir-ez-Zor, October - December 2020

Fuel type October 15 (SYP per December 8 (SYP per Percentage increase liter) liter)

Fuel (Mazout) 150 - 180 450 150 - 200 %

Petrol Type A 250 - 300 600 100 - 140 %

Petrol Type B 300 - 350 800 130 - 165 %

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and IDP camps across the northeast. This is system, and now black market prices have further exacerbated as many may not be skyrocketed by 214% reaching 1,100 SYP equipped with winterization aid, winter clothing, ($1.52) per liter and 67% reaching 25,000 SYP blankets and other seasonal necessities. The ($9.29) per canister respectively since early recurrence of these protests as civilians across September (as shown in Figure 1), making them the governorate make identical calls for basic unaffordable for an already cash-strapped service provision and transparency in population. governance demonstrate a lack of trust in local governance, pointing to the likelihood of these Heating alternatives become protests continuing if local communities feel inaccessible or too expensive their demands are not being met. With diesel and gas largely unavailable, residents Winterization are also finding it difficult to procure alternative heating materials. The price of firewood has South Damascus residents increased by 157%, reaching 180,000 SYP ($67) struggling to stay warm as per tonne, again making it unaffordable for winter sets in citizens. Additionally, the use of electric heaters has increasingly become impractical due to South Damascus has been hard-hit by the fuel limited electricity supply – four hours per day – crisis and poor service provision, issues which and volatile currents which damage electric have been affecting most Syrian government- appliances. held areas. As winter sets in over the Syrian capital, local communities, including those in South Damascus residents resorting to South Damascus, are developing a number of unhealthy alternatives improvised measures to keep warm in a The unaffordability and/or unavailability of the reflection of the poor socio-economic above mentioned heating sources have forced conditions. residents to rely on more unorthodox heating On 2 December, local sources stated that South sources. Due to the high price of firewood, Damascus residents have faced difficulties residents have resorted to using old or finding adequate sources of heating for the destroyed wooden furniture, sometimes winter. Residents who previously used diesel including wooden chairs and tables taken from and, to a lesser extent, gas canisters have found classrooms in local schools. Old clothes and parts inadequate supply to meet their demands, as a of destroyed plastic tanks have also been used. result of the ongoing fuel crisis in government- Residents have gone as far as burning fertilizer, held areas. Both diesel and gas canisters have mixed with water and hay, highlighting their become more difficult to procure at the official desperation for heating during the cold winter price through the government’s smart card months.

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Figure 1: Black market prices of diesel and gas canisters in South Damascus

These heating methods put residents at risk of Syrian pound developing respiratory illnesses due to the emissions emanating from them, which could Syrian government devalues create further medical problems among the local exchange rate for conscription community in the future. exemption payments

Local sources have added that the Syrian On 1 December, the Syrian Central Bank issued government has not distributed diesel to a special US dollar official exchange rate (shown residents and that humanitarian organizations in in Figure 2) for conscription exemption the area have neither provided fuel assistance payments – payments paid by military age males nor firewood, which they distributed last winter. who have valid cases for being exempt from With the Syrian government unable to provide conscription. The new special exchange rate is proper public services and the fuel crisis reportedly 2,550 SYP per USD, 104% more than continuing to drag on, it is likely that residents the official exchange rate of 1,250 SYP per USD will continue to be forced to rely on unorthodox and closer to the black market exchange rate of and sometimes dangerous heating methods to 2,690 SYP per USD (as of 9 December). cope with low temperatures.

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The special exchange rate is applicable to Syrian With the Syrian pound devaluing further, the nationals conscripted for military service inside economy in decline, and the government unable Syria, required to pay $3,000, for exemption. The to sufficiently provide basic services such as special exchange rate, however, does not apply bread and fuel, it is possible that the government to Syrian nationals living outside the country will officially devalue the Syrian pound further, who have to pay an $8,000 exemption payment by unifying all exchange rates at 2,550 SYP per in foreign currency (as they cannot exchange USD or more in the short to medium-term. money at the Central Bank.) Finance and fuel in the northeast Despite devalued Turkish lira, northwest communities prefer currency to Syrian pound

Residents across the northwest have increasingly been adopting the use of the Turkish lira in recent months. The lira is now being used widely throughout the economy, for goods (including basic commodities such as bread and fuel) and services (including salary payments and household utilities), and government fees and Figure 2: Central Bank decision to issue a special taxes (including zakat). Military groups across exchange rate for conscription exemption. the northwest have been receiving salaries in lira Prelude to another Syrian Pound since the beginning of 2019. devaluation? In Syrian Salvation Government (SSG)-held areas, as a means to mitigate the economic crisis The Syrian government’s introduction of a and the depreciation of the SYP, the SSG made special exchange is yet another stage in the the decision to solely trade in Turkish lira on 14 continued devaluation of the Syrian pound. For June 2020. Later that year, on 27 July, the Syrian example, on 6 February, the Central Bank issued Salvation Government (SSG) issued Decree No. a special exchange rate of 700 SYP per USD for 24 banning the trade of the Syrian pound in SSG- money transfers coming into Syria, in addition to held areas, with the exception of specifically imports of 41 different types of goods, while designated hawala and money transfer keeping the official exchange rate of 434 SYP per companies, and only in coordination with the USD. Four months later, the Central Bank Public Monetary Authority. Although some devalued the currency to 1,250 SYP per USD on citizens may still be in possession of Syrian 17 June, unifying all exchange rates. pounds, it is no longer officially in circulation

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Money transfer and hawala offices can no longer New fuel companies start deal, exchange or receive Syrian currency, and trading in Syria’s northwest every office that does so is subject to financial fines by the SSG. Over the past two weeks, the northwest has witnessed the opening of two fuel stations by Similarly, in Syrian Interim Government (SIG) new players in the market; the Al-Shahba areas in northern Aleppo, the use of the Turkish Petroleum and KAF Trade companies. On 5 lira was slowly introduced into the economy December, Al-Shahba Petroleum announced the after the Turkish-backed Euphrates Shield opening of its first fuel station in the town of Kafr operation in 2018. Its use increased as Turkey Karmin (Atareb subdistrict) in the western expanded control over local administrative countryside of Aleppo. A week earlier, on 30 bodies, including the Free Police, and began November, the KAF Trade Company also paying military and civil (teachers and judges) announced the opening of its first fuel station in salaries through the national post and telegraph Sarmada (Dana subdistrict). The two companies directorate of Turkey, the Posta ve Telgraf have stated that their fuel is imported – directly Teş kilatı (PTT). Additionally, in December 2019, from Turkey for the former and from Europe for a number of local councils in northern Aleppo the latter – indicating that they are independent issued decisions banning the circulation of the of the Hayat Tahrir al-Sham (HTS)-affiliated 2,000 SYP note, in a step towards totally WATAD fuel company, which has enjoyed a removing the currency from the market. complete monopoly over the northwest’s fuel Currently, both currencies can be used, however market since it was established in 2018. the majority of the population trades in Turkish lira. According to local sources, Al-Shahba Petroleum is a new company managed by Ammar Taqal from With the devaluation of the Syrian pound from Aleppo, and is owned by traders from Kafr October 2019, the population welcomed the use Karmin; KAF Trade Company, meanwhile, was of the lira, as they saw it as an answer to rampant established in December 2019 to import and inflation. There is now little doubt that the distribute fuel to pre-approved stations. KAF is economy in the northwest is becoming managed by Mohammad Kayali, from Hazano increasingly intertwined with that of Turkey: a (Maaret Tamsrin subdistrict), while its clear example of this is the lira’s devaluation in ownership remains unclear. Some reports October 2020, which directly led to an increase suggest the company is owned by HTS in the price of basic goods and fuel in Syria’s commander Abu Abdulrahman Zurba, who also northwest. Despite this, local sources confirm owns WATAD. that residents continue to prefer dealing with the lira due to its perceived stability in On its establishment, the KAF Trade Company comparison with the Syrian pound. exclusively sold benzene and diesel imported from Europe, however since opening its new fuel

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station this has been expanded to include locally The published price lists of each of the three refined diesel from the WATAD-owned market companies show that the difference in cost of in Termanin (Dana subdistrict). Al-Shahba fuel is very slight. This reduces competition Petroleum will also be selling local fuel, in between them, and means minimal benefit to addition to gas cylinders imported from Turkey residents of the northwest. A widespread (and and filled at the station. unverified) rumor among local communities, spread through social media, maintains that the The prices of the fuel in the three fuel companies two new companies are simply rebranded parts in the northwest have been published (see Table of WATAD, established to increase HTS’ reach 2), using Turkish lira per liter. within local markets in the northwest.

Table 2: Published fuel prices, WATAD, Al-Shahba Petroleum and KAF Trade, Dec 2020

Fuel Type WATAD (TRY per liter) KAF Trade (TRY per Al-Shahba Petroleum liter) (TRY per liter)

European benzene 4.76 4.75 4.74

European diesel 4.80 4.78 4.79

Locally refined diesel 3.95 3.93 3.93 first

Locally refined diesel 3.69 n\a 3.67 second

Gas Cylinder 73.5 n\a 73.0

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CONTACT Nicholas Bodanac Humanitarian Access Team [email protected]

The Humanitarian Access Team (HAT) was established in Beirut in March 2015 in response to the collective challenges facing the remote humanitarian response in Syria. Successful humanitarian and development interventions require a nuanced and objective understanding of the human ecosystems in which these interventions occur. To this end, the HAT’s most important function is to collect, triangulate, synthesize, analyze and operationalize disparate data and information. Since 2015, HAT analysis has provided a forward-looking template for international interventions in Syria, and facilitated an increasingly nimble, adaptive, integrated, and ultimately impactful international response to the Syrian conflict.