Damascus, Syria David Rosenberg / The Med – Syria’s turmoil is showing signs of reaching the country’s kitchens as disruptions in transportation and trade sanctions are conspiring to shrink supplies and boost prices at a time when harvests are constrained by poor weather.

The United Nations Food and Agriculture Organization (FAO) has increased its estimate for Syria’s harvests slightly since it last officially published figures in October. But, Mario Zappacosta, economist at the FAO’s Global Information Early-Warning Systems (GIEWS), said the higher figure is unlikely to be enough to prevent a food crisis.

GIEWS now estimates the Syrian production of wheat and barley in the harvest that ended last August at about 4.2 million tons, which is up from slightly less than 4 million tons in its previous estimate. But that still leaves it below the average crop size of the previous five years. Worse still, getting the food to consumers is more difficult than ever as unrest snarls transportation and sanctions have raised the cost of fuel.

“We categorize it as a problem of access. Especially in urban areas that are affected by the security situation, it is very difficult to supply shops in the market. We can imagine a situation where there [farm] products are harvested and stored, but markets aren’t functioning,” Zappacosta told The Media Line.

Cereal crops provide the most important part of the Syrian diet and are the only ones monitored by GEIWS. But other foods, like fruits and vegetables, are even more likely to suffer from the transportation problem because they have such a short shelf life and cannot be stored for as long.

A food crisis would pose a significant challenge to the beleaguered regime of President Bashar Al-Assad, who is coping with international diplomatic and trade isolation, a contracting economy and an opposition more ready than in the past to use arms. The president has struggled to keep the economy afloat and Syrians content, raising deposit rates to support the currency and maintaining subsidies of basic goods at great cost to the treasury.

“All this is an indication to the business community that the Syrian government is floundering on how to cope with economic deterioration,” Ayesha Sabavala, an analyst who follows Syria for the Economist Intelligence Unit (EIU), told The Media Line. “A rapid decline in economy could also cause the army or people in the government to abandon support of Al-Assad. They might see support for him comes at too heavy a price.”

Some analysts say that the disruptions wrought by misguided farm policies and drought were a key factor in pushing Syrians into rebellion. The drought, which struck much of northern and eastern Syria after 2006, forced tens of thousands of farm families to migrate to camps on the outskirts of Syria’s cities in search of work.

The unrest, now in its 11th month, makes it difficult for aid workers and experts to fully assess the situation. GEIWS uses satellite images and uses estimates to arrive at its numbers for output and consumption, but like other organizations it has very little information about conditions inside the country.

Nevertheless, in its latest assessment of global food security, released Feb. 10, the U.N. World Food Program (WFP) put the number of people defined as “food insecure” at 1.4 million since March 2011, when the uprising began. Food insecurity is the most severe in “hotspots” like Homs, Hama, rural Damascus, Dera’a and Idlib, the WFP said.

The official Syrian SANA news agency said two weeks ago that the direct damage to the farm sector caused by what it called “armed terrorist groups” had reached 450 million Syrian pounds ($7.8 million). The General Organization for Consumer Products reported that food worth 250 million pounds ($4.3 million) was stolen from its warehouses in the Homs neighborhood of Baba Amr.

If it happens, crunch time for Al-Assad is likely to occur this spring. That is about the time that the 2011 harvest will have been depleted even if the entire crop reaches Syrian consumers, according to GIEWS estimates.

“In general, the country is not self-sufficient. Domestic production is enough for the first eight months after the harvest [in August] and imports start to take its place in May and June,” Zappacosta said.

GIEWS estimates the country will need to import about four million tons of cereals during the current marketing year, which is down from the 4.6 million tons it estimated in October. But Damascus will have trouble meeting even the smaller shortfall because of trade sanctions.

The European Union’s ban on Syrian oil imports, imposed last September, doesn’t include food. But analysts say it has strained the country’s finances and made traders wary about doing business with it. European traders told The Wall Street Journal last month that a risk premium of around $10 a metric ton was being imposed on all wheat supplied to Syria through the private sector.

Meanwhile, the pound has plunged more than 50 percent so that a dollar is now worth about 58 pounds on the official market and 71 pounds on the black market. Most of the depreciation occurred in the final two months of 2011.

All that has made it more expensive to buy food abroad. But the cost of trucking local produce to market and even the cost of growing it have both climbed. Syrian farmers are highly reliant on irrigation, but the pumps rely on every more costly fuel.

Even where there is food, sticker shock is the new norm for the urban consumer. Since the unrest broke out, the price of a 25-liter (6.6 gallon) bottle of cooking gas in Damascus has risen to anywhere between $8.70 and $14 from $4.30, according to IRIN, the news service of the U.N. Office for the Coordination of Humanitarian Affairs. A tray of 30 eggs has increased to between $5.20 and $6.90 from $3.10; and a kilo of potatoes to between $1 and $1.30 from 35 cents.

Syrian inflation is likely to touch 12% this year according to the EIU.

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Damascus, Syria David Rosenberg (The Medi – As the Arab League agreed to go to the United Nations Security Council early this week with a resolution calling for Syrian President Bashar Al-Assad to step down, Russia was reportedly doing a major arms deal with the beleaguered regime.

The $550 million agreement to sell 36 Yak-130 combat aircraft will not do anything to tip the balance in favor of the Al-Assad regime, which has been engaged in a 10-month conflict with anti-government opposition. But Russia is almost certainly providing arms Damascus needs to hold back the rebels as well as mounting a diplomatic defense of its friend at the U.N.

In a rare glimpse into the Russia-Syria arms trade, a ship loaded with ammunition from Russia was briefly detained in Cyprus earlier this month before continuing its journey unmolested to the Syrian port of Tartus. Foreign Minister Sergey Lavrov has vowed that Russia will veto any sanctions as “unfair and counterproductive.”

“Syria is an important customer for the Russian military industry and the industry is quite keen to maintain the relationship,” Fyodor Lukyanov, editor-in-chief of the Moscow based foreign policy journal Russia in Global Affairs, told The Media Line. “Syria is one of the few remaining customers in the region and it hosts the only military base – a small one but still a base – that Russia still has outside its own borders.”

As the West – now joined by the Arab League – presses the Syrian president ever harder, Russia has emerged as his most important ally. Iran also backs the Damascus regime, but Tehran itself faces growing diplomatic isolation over its nuclear program and doesn’t wield a Security Council veto. China is opposed to Syrian sanctions, too, but analysts say it is likely to follow whatever line Moscow adopts.

Russia’s warm ties with Syria, and more exactly the Al-Assad family regime that has ruled the country four decades, starts with arms sales but it goes much deeper.

In the final two decades of the Cold War era, when the Soviet Union was a superpower competing for global influence with the U.S., Syria was its staunchest ally in the Middle East. Bashar Al-Assad’s father and predecessor Hafez armed his troops with Soviet weapons and advanced Moscow’s interests in the region.

With the collapse of communism and with Syria’s deteriorating economy, the relationship is not what it once was. But Russia maintains a naval base at Tartus and the two governments share a distrust of the West and its motives.

Indeed, the view from Moscow of what is happening in Syria is very different than the one in Washington or Brussels. Where the West sees events in Syria as a popular uprising against a repressive regime, Russia shares Damascus’ take, which sees the rebellion as conspiracy by the Gulf countries to bring down an ally of their foe Iran.

“Saudi Arabia, Qatar and others see this as an opportunity, as a chance to push back Iranian influence,” Lukyanov said. “From Russia’s point of view, it’s part of a geopolitical struggle between Iran and Saudi Arabia, where Syria is just a card.”

For policymakers in Moscow, the situation in Syria looks remarkably similar to the one in Libya last year, where another long-time friend, Muamar Al-Qaddafi, faced what was seen in the West as a popular rebellion against autocracy. Russia reluctantly agreed not to veto a U.N. decision to impose a no-fly zone over the country.

The resolution, as Russia’s leaders understood it, was to prevent Al-Qaddafi from killing civilians with aerial firepower. But the NATO forces that largely enforced the decision, Russians say, used it to level the playing field in the Libyan civil war to Al-Qaddafi’s disadvantage. Moscow lost a friend and customer for its arms and is now out of favor with the successor National Transitional Council.

Zvi Magen, a former Israeli ambassador to Russia, said Russia’s Syria policy is driven by memories of its Cold War rivalry with the U.S.

“There’s an element of business in the arms deals, but it’s mainly a political move to show the flag and to show support for Syria. It’s mainly a function of Russian relations with America than with the Syrian regime,” Magen told The Media Line.

For that reason – and because Moscow realizes that Al-Assad’s days are numbered – it may be prepared to make a deal with the U.S. over Syria, he added.

Nevertheless, analysts agree that the importance of the arms trade as a factor in Moscow’s calculations should not be overlooked. In an economy with few other industrial exports, Russia’s military industry is an important earner of foreign exchange and a powerful domestic political force.

The Voice of Russia radio’s website said in December without citing a source that Russian arms exports reached $11 billion last year, a three-fold increase from 2000. While the country’s biggest customers are India and China, the Middle East had been a growing market until the Arab Spring eliminated Al-Qaddafi and sanctions on Iran removed another customer. Syria alone, according to some estimates, accounted for 7 percent of all Russian arms sales in 2010.

A U.S. government study in 2009 estimated Russia’s share of the Middle East arms market grew to more than 15 percent in the 2005-2008 period, five percentage points more than in 2001-2004 as it offered more creative financing and payment options, counter-trade, offsets, debt-swapping, and, in some cases, licensing production locally.

Russia’s Interfax news agency reported in early December that Russia delivered $300 million of Yakhont anti-ship cruise missiles to Syria.

With numbers like that, it is no wonder that Sergey Chemezov, the head of the state arms export company Rosoboronexport, made clear he had no intention of halting business with Syria.

“There are no sanctions whatsoever regarding Syria,” he told Interfax on Wednesday. “If international sanctions are imposed by the U.N. Security Council, everything will change. And if there are no sanctions, why should we refuse to cooperate with this country? This is business after all.”

Nevertheless, Magen said, Russia is careful not to sell Damascus weapons like S-300 surface-to-air missiles that could alter the regional balance of power.

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Damascus, Syria David Rosenberg – Faced with growing pressure at home and abroad to end his crackdown on opposition protestors, Syrian president Bashar Al-Assad struck a more conciliatory and compromising tone in an address to the nation on Monday.

In his third such speech since unrest broke out in the middle of March, Al-Assad conceded that the nation suffered serious problems that exposed it to protests. He said the government was ready to listen to the Syrian “street” and proposed a formal national dialogue.

“We in a position of responsibility have to listen to them,” Al-Assad said in remarks broadcast live from Damascus University. “The patriotic elements have expressed their demands. They aren’t connected with any external force. They want to participate. They want justice. They don’t want to be marginalized.”

The president’s speech may have been directed at leaders overseas as much as at Syrians. European foreign ministers were due to meet on Monday to discuss Syria, as pressure grows for foreign powers to act. Syrian security forces have killed some 1,300 civilians, according to the Syrian Observatory for Human Rights. Nearly 10,000 refugees have fled to Turkey, provoking a diplomatic crisis with Ankara.

While the plan was short on details, Al-Assad offered to begin a formal national dialogue that would lead to the creation of political parties alongside his Baath Party, which now has a monopoly on political life. It would prepare proposals for a freer press and possibly a new constitution for the country. He promised parliamentary elections in August and a reform package by September.

Al-Assad also addressed the country’s economy, which has been paralyzed by strikes and protests. But he offered no proposals for economic reform, except for national dialogue on the matter.

“The most dangerous thing we face in the next stage is the weakness or collapse of the Syrian economy and a large part of the problem is psychological,” Al-Assad said. “We cannot allow depression and fear to defeat us.”

While the Syrian leader struck a more muted tone than in his previous addresses, analysts and opposition leaders said it didn’t go nearly far enough.

“I don’t see this speech as anything new or significant. It was a deeply disappointing speech. This isn’t the man to conduct any significant dialogue,” Salman Sheikh, director of the Brookings Doha Center, a Qatar-based think tank, told The Media Line.

Assad did acknowledge the grievances of ordinary Syrians, but he framed them as part of a conspiracy and blamed the protestors for stunting Syria’s economic development. “It would have been a real miss if he didn’t acknowledge any of the people’s grievances,” Sheikh said.

Shortly after the 75-minute address was over, protesters took to the streets of Damascus’ suburbs and several cities, activists told Reuters news agency. “No to dialogue with murderers,” 300 protesters chanted in the suburb of Irbin, a witness told Reuters by telephone.

“A national dialogue cannot happen when one side refuses to talk about the REAL issues and REAL situation,” said a Syrian activist based in Beirut who blogs under the name Malath Aumran. “We are on the 98th day of protest today and the Bashar is still in denial.”

Even as he admitted Syrians had real grievances, Al-Assad returned to the themes of foreign conspiracies and religious extremism that had been the focus of earlier addresses. Nevertheless, he termed the number of alleged terrorists “very few” albeit “very influential.” He signaled that he was prepared to share blame with the opposition for the deaths and chaos over the last three months.

“Imposing peace and security doesn’t justify killing people,” Al-Assad said. “Legitimate demands don’t create an excuse for people to create chaos.”

“It’s hard to interpret what this all means, because it was difficult to understand what Al-Assad was pitching. He just didn’t sell it, and we don’t know who is supposed to big part of this national dialogue,” Issandr El-Amrani, an Egyptian journalist wrote on the highly regarded The Arabist blog site. “It still feels too half-hearted.”

Syria can count on few influential friends, short of Iran and Turkey, the latter of whom had worked hard to improve ties with Syria over the last several years as part of its drive for improved diplomatic and commercial relations with the Middle East. But the strategy has run aground as Al-Assad has used violence to put down mass protests.

On Sunday, Ersat Hurmuzlu, an adviser to Turkish President Abdullah Gul, told the Dubai-based Al-Arabiya television channel that Turkey would be watching closely what Al-Assad and warned him he had little time left to save his regime by implementing reforms.

“The demands in this field will be for a positive response to these issues within a short period that does not exceed a week,” Hurmuzlu said.

Al-Assad, however, can still count on Russia and perhaps China to save him the embarrassment of a United Nations Security Council resolution condemning his actions. While several European countries have submitted a draft resolution, Russian President Dmitry Medvedev, whose country has veto power in the council, indicated he wouldn’t support it.

At home, however, there was little evidence that either the crackdown or appeals for stability and reform were working for the Syrian leader. On Sunday, opposition groups, which until now have operated as an assortment of independent and private efforts, announced they were setting up a “National Council” to coordinate the rebellion against the regime.

“We announce the creation of a National Council to lead the Syrian revolution, comprising all communities and representatives of national political forces inside and outside Syria,” reporters near the Turkish-Syrian border were told by Jamil Saib, a spokesperson, on Sunday.

With reporting by David E. Miller

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