Syrians forced to sell heirlooms just to survive

Price of gold soars in Damascus as people lose their faith in the national currency and seek ways to protect their declining wealth

PUBLISHED : Tuesday, 13 November, 2012, 12:00am
UPDATED : Tuesday, 13 November, 2012, 3:01am

In a Damascus jewellery shop, the customer's jaw drops when he hears what he is being offered for his gold ring. Barely US$100. "Can't you do any better?" he asks timidly before accepting the deal.

After nearly 20 long months of conflict, many Syrians are now digging deep into their pockets, with many having to sell their jewellery - including family heirlooms - just to survive.

The conflict between government troops and the rebels may have brought the economy to a stalemate, but the gold market is experiencing an unprecedented frenzy.

For those who have lost their livelihood with the closing down or destruction of their workplace, selling off jewellery is an unwelcome but necessary option so they can feed their families.

For the rich, the precious metal represents a bulwark against the collapse of the Syrian pound.

According to Sonia Khanji, a member of the Damascus Chamber of Commerce, 30 per cent of small and medium enterprises in the country have now closed, throwing roughly a quarter of the workforce out of a job.

In the jewellery souk of Hariqa in the heart of the capital, one young woman tensely discusses the price of an enormous ring inherited from her grandmother. "I'll buy it for 55,000 Syrian pounds (HK$5,985) when you've made up your mind," says the prospective buyer. She goes on her way, convinced that his offer is too low. "She'll be back," he says, confidently. "It looks like she needs the cash."

Long accustomed to stable prices and currency, Syrians have seen rampant inflation reduce their purchasing power by a third since the revolt against the regime of President Bashar al-Assad broke out in March last year.

Damascus blames the economic woes on sanctions imposed by Europe and the US, which accuse the regime of conducting a bloody crackdown on its own people.

"The demand for jewellery has declined significantly over the past two years over the rising price of gold on the world market and the weakening of the Syrian pound," which has lost half its value against the dollar, according to jeweller Bassil Mdari.

Today, those who still have a steady income put their faith in gold.

"People prefer to buy gold or sterling ounces rather than trinkets," Mdari says, adding that people are hunkering down for a protracted period of unrest.

"People have lost faith in the national currency. Whenever new economic sanctions are announced, I notice that the rich flock to buy gold. They believe that acquiring the yellow metal offers security," said Michel, a jeweller.

Damascus industry professionals agree that the precious metal provides a form of saving that appreciates in times of political and economic uncertainty.

"To save money, people prefer gold. They fear a rising dollar and the fall of the Syrian pound, and gold is easier to transport if we need to leave quickly," said Hisham, a goldsmith on Abed Street in central Damascus.

He acknowledges that it is mostly the upper and middle classes who invest in gold, "as in most countries in the world".

The rise in the local price of gold shows no sign of abating, going up 265 Syrian pounds per gram in the past week alone, the government daily Al-Thawra reported on Sunday.

"Gold is on track to reach new heights," Georges Sarji, the head of a local jewellers' association, was quoted as saying.

He blamed the price rises on soaring international markets, but insisted that "the sales market is improving, despite the fact that Syrians continue to sell their gold".

According to Sarji, more than 45 kilograms of gold are now sold daily in Damascus - US$2.8 million dollars' worth. The price of an ounce of gold finished the week at US$1,739.04 on the international market.