Syrian President Bashar al-Assad's accusations to Lebanese banks of causing the economic crisis in Syria have opened the door to controversy over the interconnectedness of the economic crises in these two brotherly countries, starting from the history of the complex relationship between them, and the division of the Lebanese forces ’position on the Syrian regime between an ally and opposition.

The leaked video of Assad’s words that came a few days ago, during a tour of a trade fair in Damascus, caused a sensation by saying that the essence of the economic problem does not lie in the international blockade of Syria and the US "Caesar" law, but because of the money that the Syrians took to Lebanon and deposited them in Lebanese banks and then arose The last one to book it.

As for what is striking, it was Al-Assad's claim that the Syrians' deposits in Lebanese banks are estimated at between 20 and 42 billion US dollars, considering that this inconclusive figure is frightening in the Syrian economy.

Al-Assad's accusations come after Lebanese banks imposed tight restrictions on all their depositors since the end of 2019, as they imposed strict controls on withdrawing or transferring money abroad, at a time when the dollar’s ​​circulation in Lebanon exceeded the threshold of 7 thousand Lebanese pounds after it was 1515 pounds per dollar before the crisis. .

This is why the first problem raised by Al-Assad's accusations was what is the truth about the number of Syrian deposits in Lebanese banks, and why did Al-Assad show this gap in the estimate between 20 and 42 billion US dollars?

The path of the two crises

The former head of the Lebanese Banking Supervision Committee, Samir Hammoud, describes the numbers that Assad claimed as exaggerating, noting that before the banking crisis in Lebanon, the volume of deposits in Lebanon for non-residents until June 2019 did not exceed $ 37 billion, and of course not all of their owners Of the Syrian nationality.

After the crisis, the volume of non-resident deposits decreased from 37 to 28 billion USD.

At best, according to Hammoud, if the volume of Syrian deposits reaches 25% of the total deposits of non-residents in Lebanon, it will not exceed $ 6 billion out of the $ 37 billion before the start of the banking crisis in 2019.

Hammoud indicated - in a statement to Al-Jazeera Net - that most of the Syrian depositors in Lebanon have the characteristic of "individual depositor," meaning that their money was outside the circulation of financing the trade market in Syria and does not affect the Syrian trading in hard currencies.

He also explains that Lebanese banks have evaded their dealings with Syrian depositors since 2011, that is, with the outbreak of the war, for fear of being affected by the sanctions.

Hammoud believes that the Lebanese banks were the ones that suffered huge losses, as they had about 8 banks in Syria, but they left their ownership after the outbreak of the war there.

Crippled economy

On the Syrian level, Abdel Nasser Al-Jasem - a Syrian economic analyst and academic residing in Turkey - considers that linking Assad to the economic crisis in his country with the seizure of the money of Syrian depositors in Lebanon has nothing to do with the logic of the Syrian economy, because the economic crisis in Syria is not the result of only a year of the banking crisis. Lebanese, but entered its tenth year.

He said that the Syrian economy is almost disrupted in foreign trade, which affected the entry and exit of hard currencies.

Al-Jasem described - in a statement to Al-Jazeera Net - the words of al-Assad that he underestimates the minds of the Syrians in the areas under his control, and he must be asked in the opposite form - according to al-Jasem - why these deposits are already in Lebanese banks, and why do the Syrians put their money outside Syria?

Al-Jasem dates back to the eighties, and indicates that Syria at that time witnessed the largest deposit of Syrian businessmen in Lebanon, and that the amount of money that emigrated from Syria to Lebanon is huge, and there is no accurate figure, because part of these funds went in a black line or military and not legally. .

Al-Jasem pointed out that the Syrians used to joke that there were "sacks" of money heading towards Lebanon, and he mentioned that some numbers published by Syrian newspapers were talking about 50 billion dollars deposited in Lebanon.

Currency dealer preparing banknotes for the Syrian pound (Reuters)

What is the reason for the migration of Syrian money to Lebanon?

Al-Jasem considers that the financial and banking environment in Syria was a repulsive one, while Lebanon before its crisis had a good banking reputation, in addition to the history of the partnership that brought together Lebanese and Syrian businessmen, especially since Syria did not own private banks before 2003-2004, according to Al-Jasem.

Nevertheless, Al-Jasem confirms - according to what Samir Hammoud said - that a large part of the Syrian money did not migrate after the war, but rather before 2011, and that most of the Syrians ’money in Lebanon was individual and remained outside the circulation of the Syrian trade market.

Al-Jasem pointed out that the reality of the Syrian economic crisis worsened after the entry into force of the "Caesar Law", and that local production had eroded by more than 67%, meaning that the economic wheel became no longer functioning at more than 33%, and then the Syrian pound collapsed because the state was financing from its deficit. National currencies are printed without a balance, which diminishes their value.

On the other hand, a knowledgeable Lebanese economist - who will not be named - finds that the numbers claimed by Assad about the size of Syrians' deposits in Lebanon (between 20 and 42 billion dollars) may be realistic due to various factors.

The expert goes back to August 2019, when the Syrian security forces raided the "Al Bustan" Association, which was headed by Rami Makhlouf and then became operating under the supervision of Bashar Al-Assad, noting that the latter was trying to pressure his cousin to retrieve the money smuggled out of Syria, including those smuggled into Lebanon.

In the same month - also according to the expert - the dollar in Lebanon began to record the first rise in its levels between 1530 and 1540 pounds, as a result of the withdrawal of dollars from Syrian accounts in Lebanese banks in large quantities.

The expert attributes the huge deposits of Syrians in Lebanon and the interdependence of the crisis between them for various reasons, explaining some of them to Al-Jazeera Net as follows:

Syrian banking deposits in Lebanon are very old, dating back to the 1950s, and all the measures taken by Lebanese banks directly affect the banking relationship between Lebanon and Syria.

- Syrian deposits in Lebanese banks are large, and not all of them fall under the category of "non-resident deposits", because a large percentage of Syrian depositors either hold Lebanese nationality, put their money in the name of their Lebanese wives, or have deposits under the cover of the names of Lebanese entities.

Lebanon was the most important banking outlet for the Syrian economy, because the entry of hard currency into Syria makes the holder's control over it limited.

For example, if a Syrian merchant wanted to import to Syria, it would not be easy to obtain the dollar, so he would resort to transferring part of his money to Lebanon to benefit from banking secrecy and to facilitate his work, then transferring another part to Syria to acquit himself before the local authorities.

After withdrawing dollars from Lebanon became "not possible", the measure placed great pressure on the financial transaction system in Syria.

- The presence of nearly a million Syrian refugees in Lebanon was a major source of hard currency in Syria after the war, but the dollar crisis in Lebanon reduced the ability of Syrian refugees to transfer money, because they receive their low wages in Lebanese pounds, and they cannot buy dollars in Lebanon from the market. Parallel.

Smuggling and the distorted association

In reality, the turmoil of political relations between Lebanon and Syria goes beyond the complexity of economic relations to a point where it is difficult to break them, in banking, trade and smuggling.

Abdel Nasser Al-Jassem notes that after the Beirut Port explosion on August 4, 2020, the informal trade channels (smuggling) between them were greatly affected.

He describes the link between the economies of the two countries as a distorted one, because their relationship is based on impotence and not on real mutual support.

In the context, the Lebanese economic analyst and journalist Azza Hajj Hassan believes that the economic relationship between Lebanon and Syria is superior in the commercial sector over the banking.

She told Al-Jazeera Net that the two countries' trade has been active for decades at the level of food and consumer trade, whether through regulated trade or through the shadow trade (smuggling), but the volume of shadow trade has increased during the war as a result of the blockade on Syria.

Azza indicated that Syria is the only passage for Lebanon's overland trade, towards the Arab and Gulf countries.

Regarding the value of trade between the two countries, she stresses the difficulty of monitoring it, because most of it is not regulated and is not registered in the customs of the two countries.

She explained that during the scarcity of dollars in Lebanon, it became clear that there are huge sums and goods going from the Lebanese market towards Syria, "meaning smuggling of dollar-subsidized goods from the Banque du Liban, meaning the loss of goods and dollars together."

Observers expect that the repercussions of the Lebanese economic crisis on Syria will worsen in the event that the Central Bank of Lebanon raises its support for basic materials and fuel, which means that the prices of smuggled materials to Syria will double, and with it the crisis in the two countries will double.