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Assad regime ‘siphons millions in aid’ by manipulating Syria’s currency | Global development

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The Syrian government is siphoning off millions of dollars of foreign aid by forcing UN agencies to use a lower exchange rate, according to new research.

The Central Bank of Syria, which is sanctioned by the UK, US and EU, in effect made $60m (£44m) in 2020 by pocketing $0.51 of every aid dollar sent to Syria, making UN contracts one of the biggest money-making avenues for President Bashar al-Assad and his government, researchers from the Center for Strategic and International Studies (CSIS), the Operations & Policy Center thinktank and the Center for Operational Analysis and Research found.

Hit by new US sanctions and the collapse of the banking system in neighbouring Lebanon, cash-strapped Damascus is relying increasingly on unorthodox methods for raising funds – money either pocketed by officials in Damascus for their own personal wealth, or put towards the 10-year-old war effort.

Researchers analysed hundreds of UN contracts to procure goods and services for people living in government-held areas of Syria, where more than 90% of the population are living in poverty since the Syrian pound, or lira, crashed last year.

While the central bank’s official exchange rate has improved this year to SYP2,500 to the US dollar, the black market rate is SYP3,500. Legitimate traders and consumers prefer to use the black market rate, as they receive more Syrian pounds for foreign currency.

Since the UN is forced by the Syrian government to use the official rate, half of foreign aid money exchanged into Syrian pounds in 2020, when the rates were hugely divergent, was lost after being exchanged at the lower, official rate.

“This shows an incredibly systematic way of diverting aid before it even has a chance to be implemented or used on the ground,” said Natasha Hall, of the CSIS, a Washington-based thinktank that helped compile the research.

Syrian central bank staff stack wads of Syrian pounds in Damascus
Syrian central bank staff count SYR1,000 notes, featuring Hafez al-Assad, ex-president and father of Bashar, in 2010. The government makes millions exploiting the gap between the official and black market rate for the currency. Photograph: Hussein Malla/AP

“If the goal of sanctions overall is to deprive the regime of the resources to commit acts of violence against civilians and the goal of humanitarian aid is to reach people in need then we have this instance … where aid is at complete contradiction to those two stated goals.”

After 10 years of civil war in Syria, international donor fatigue, already seen in decreasing aid pledges, has turned to more overt political re-engagement with Assad’s regime.

Without the US playing a strong role in finding a political solution in Syria, which Washington still publicly advocates, Arab nations – including the US-allied Jordan, the United Arab Emirates, Saudi Arabia and Egypt – have recently restarted diplomatic talks, reopened borders for trade and signalled renewing economic cooperation.

The US allows Damascus to play a major role in funnelling Egyptian gas to Lebanon to power the country’s fuel-depleted power plants. Interpol allowed Syria to rejoin its network even as the fate of dissidents captured throughout the war remains unknown.

Examining 779 publicly available procurements for 2019 and 2020, listed on the UN Global Marketplace database, researchers found that up to $100m was lost in the exchange rate.

If salaries, cash-aid programmes and other funding streams not made public were included, the bank could be making hundreds of millions of dollars, according to researchers.

The funding has been channelled through various UN agencies – the Office for the Coordination of Humanitarian Affairs (OCHA); the World Food Programme; the UN Development Programme; the UNHCR; the Food and Agriculture Organisation; and Unicef.

The UN’s financial tracking system told the researchers it did not monitor the amount of money exchanged into Syrian pounds as “tracking such information was beyond the scope of their mission”.

More than 350,000 people have died in Syria over the past decade, and governments have donated on average $2.5bn a year to the UN’s Syria programmes since 2014.

In 2016, the UN was accused of aiding the regime by diverting billions of dollars in aid to government-held regions while leaving besieged areas without food and medicine.

Human Rights Watch (HRW) has warned that UN agencies and governments risked complicity in human rights violations in Syria if they did not ensure transparency and effective oversight.

Last year, the US announced an additional $700m in humanitarian assistance for Syria. The UK government has given £1.59bn in aid to Syria between February 2012 and June 2021.

A Foreign, Commonwealth and Development Office spokesperson said: “The UK does not provide any aid through the Assad regime … Robust processes are in place to ensure that our aid reaches those who need it most.”

Hall said there was a “reticence” about investigating how much aid had been diverted. She said donors were well aware of the problem. “I think it is about [them] choosing certain battles to fight. It’s just not clear to me that any battles are being fought when it comes to aid in Syrian government-held areas today,” she said.

“There’s really no way for us, as independent consultants, to know the full extent of how aid is spent inside the country … We just wanted to flag that, even through this limited portal to understanding how much is spent, it’s already tens of millions of dollars which is hoarded.”

She believes the UN should negotiate a preferential exchange rate with the Syrian government – – to at least reduce the amount siphoned off.

Sara Kayyali, of HRW, said “there was no due diligence in terms of human rights” within UN procurement to avoid bankrolling Syria.

“This should be a wake-up call to the UN … they need to revise the way they provide aid and revise how they consider their obligations to respect human rights in light of this, because it’s difficult to justify this idea that hundreds of millions of dollars are going to an abusive state apparatus,” she said.

Danielle Moylan, a spokesperson for the UN agencies mentioned, said: “The UN welcomes all independent scrutiny of humanitarian operations in Syria. Our foremost priority has, and always will be, assisting the people in need in Syria, guided by humanitarian principles, accountability to the affected populations, transparency, efficiency and effectiveness.

“The majority of UN’s procurement for our humanitarian response in Syria is made in international and regional markets and therefore not affected by the Syrian exchange rate. Otherwise, as is the case in any country, the UN in Syria is required to use the official exchange rate,” Moylan said.

“In the past, the UN and humanitarian partners have negotiated a ‘preferential’ exchange rate for humanitarian operations [and] continues to engage the Central Bank of Syria on the issue of ‘preferential’ exchange rates.”

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Lives lost at Europe’s borders and Afghan MPs in exile: human rights this fortnight – in pictures

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A roundup of the struggle for human rights and freedoms, from Mexico to Manila

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Belgium tightens Covid rules as health system ‘is cracking’

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Belgium has introduced new measures to curb the surge of Covid-19 infections in the country, following the third emergency meeting of federal and regional governments in three weeks.

“The autumn wave is much heavier than was estimated,” Belgian prime minister Alexander De Croo said on Friday (3 December).

“The infection rates are among the highest in Europe and the pressure in healthcare has become unsustainable,” he also said, arguing that new measures are necessary because “the system is cracking”.

One item on the agenda that proved to be divisive was the closure of schools – a move supported by experts and the federal government but opposed by regional governments.

Belgium’s so-called concertation committee of federal and regional governments finally decided to keep schools open, but it impose a longer, three-week, Christmas holiday for primary and pre-primary education. The holiday will now run from 20 December to 10 January.

According to Flemish prime minister Jan Jambon, this extra week will be used to administer the booster shot to the teachers.

And until the school holiday, a class will go until quarantine after two cases of Covid-19 are detected (previously three cases). Additionally, all extracurricular activities will be barred.

Children from the age of six upwards will also have to wear a face mask at school and all other places where its use is compulsory. And parents have been advised to test their children regularly.

For this coming weekend, indoor events with more than 4,000 attendees will be cancelled. From Monday, this will apply to all with more than 200 attendees.

Events with fewer than 200 people inside will still be allowed under the current criteria – that everyone needs to have a corona pass, be seated and wear a face mask.

Museums and cinemas would remain open, but with a capacity limit of 200 people per room.

The committee also decided that restaurants and bars can continue to remain open until 11PM, as it is currently the case – although experts had asked to close them at 8PM.

This new package of measures has already been criticised by representatives of the cultural sector, who argued that the restrictions do not target the source of the problem.

“Instead of fighting the virus, we are fighting culture. Bars open, but culture [events] only 200 people. Who are we fooling?,” said Michael De Cock, director of the Koninklijke Vlaamse Schouwburg [Royal Flemish Theatre].

There is also no restrictions for private social life in the so-called “contact bubbles” – despite this also being recommended it by experts. Nevertheless, there is a recommendation to limit contacts as much as possible.

At work, there are no new measures, as the committee previously announced that teleworking is mandatory at least four days a week.

Intensive-care cases expected to peak next week

An average of 318 Covid-19 patients were hospitalised each day in Belgium this week – which represents an increase of four percent compared with the previous week.

There are currently 3,707 people hospitalised in the country, of which 821 are in intensive care.

“Although the number of infections is very high, the number of deaths in our country is lower than in comparable countries, and that is due to the high vaccination coverage,” said de Croo.

“Getting vaccinated is an act of solidarity,” he added.

More than 75 percent of the Belgian population is fully-vaccinated, and over a million people have received a booster shot.

For his part, Belgian virologist Steven Van Gucht said on Friday that the number of Covid-19 patients on the intensive care units of the country’s hospitals are expected to peak next week.

“It is unclear whether we can then expect a rapid fall or whether the figures will remain at that high level,” he also said, according to VRT news.

The highest number of new Covid-19 infections (25,574) during this fourth wave was recorded on Monday 22 November.

But new measures will make coronavirus figures fall more quickly, relieving the pressure on the health care sector, Van Gucht said.

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India’s ‘pencil village’ counts the cost of Covid school closures | Global development

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School closures in India during the pandemic have left their mark on more than the children who have seen delays to their learning. In one Kashmiri village the impact has been catastrophic on employment.

Pick up a pencil anywhere across India and it is likely to come from the poplar trees of Ukhoo.

This village, with an abundance of trees, about 10 miles south of Srinagar city in Kashmir’s Pulwama district, supplies more than 90% of the wood used by India’s pencil manufacturers, which export to more than 150 countries.

Before Covid, more than 2,500 people worked in the village’s 17 pencil factories and the industry supported about 250 families.

But, after nearly two years of school closures and a dramatic drop in demand for the village’s products, factory owners reduced their workforce by more than half.

Workers were dismissed without pay, while many of those who kept their jobs had migrated from other parts of India, and were cheaper to employ. Now the village and its workforce are waiting eagerly for the market to revive.

Rajesh Kumar, 26, from Bihar, has worked in Ukhoo for seven years. Like other migrant workers, he lives in a room on the factory premises and works 10- to 12-hour shifts. During lockdown last year, the factory owner provided food and accommodation when production shutdown for about three months. He is one of the luckier ones to be back working now.

“I hope the pencil demand increases and these factories are full of workers again, as many of our friends and people from our villages find work [here] and are able to make a living,” says Kumar.

Poplar logs outside a pencil slate factory, Ukhoo
Factory owners have had to lay off half of their workers during the pandemic. Photograph: Adil Abbas

Farooq Ahmed Wani, 27, from the city of Jammu, has worked as a machine operator in Ukhoo for the past five years.

“We are hoping that schools reopen throughout the country so that there is more demand for pencils in the market,” he says in an optimistic tone. “Then these factories can employ more young people and more migrants can also get some work here.”

Pencil wala Gaon, or “pencil village”, attracted the attention of India’s prime minister, Narendra Modi. In his monthly radio programme, Mann Ki Baat, last year he said the district was an example of how to reduce the country’s dependency on imports. “Once upon a time we used to import wood for pencils from abroad but now our Pulwama is making the country self-sufficient in the field of pencil making,” Modi said.

90% of the wood used in pencils manufactured in India comes from Ukhoo.
Ukhoo supplies 90% of the wood used in pencils manufactured in India. Photograph: Vincent Lecomte/Gamma-Rapho/Getty

A recent ministry of home affairs report said that the village would be developed as a “special zone” for manufacturing. “Now the whole country would be supplied finished pencils, manufactured completely in Pulwama,” the report noted. But the pandemic has shown how overreliance on one product in a region brings its own problems.

A migrant worker trims a plank of poplar wood at a pencil slate factory
A migrant worker trims timber at a pencil factory. The factories attract workers from several states. Photograph: Adil Abbas

Abrar Ahmed, a unit supervisor at one of Ukhoo’s factories, says everyone has suffered. “Even the sawdust from woodcutting machines is usually taken by the local villagers who then sell it to poultry farms and for other purposes in the village.”

Manzoor Ahmad Allaie owns one of the biggest factories in Ukhoo.

“We are only doing about 30% to 40% [of normal levels of] business now because of the Covid lockdown impact from last year, which means we produce about only 80 bags of pencil slats a day,” says Allaie. “Earlier we could produce about 300 pencil slat bags [a day] in the factory, which were transported out of Kashmir.”

He is eagerly looking forward to India’s schools fully reopening. It has been a hard two years for the pencil villagers, he says.

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