Syria Adopts Banking Incentives Dismissed by Activists

Syria lowered banks’ required reserves to help spur the economy as part of its effort to contain protests that activists say have reached a “point of no return.”

“These measures are part of the repression campaign, as they are just words serving to contain the anger of the people,” Bourhan Ghalioun, director of the Center for Contemporary Oriental Studies at the Sorbonne in Paris, said in a telephone interview. “The protest will continue no matter what. They have reached a point of no return,” he said.

Syria has sent troops to quell demonstrations, inspired by popular revolts in Egypt and Tunisia, that have spread across the country and posed the most serious challenge to the 11-year rule of President Bashar Al-Assad. In response, Assad has ended an emergency rule that was in place from 1963 and pledged future political and economic reforms that have failed to halt the spread of demonstrations.

The central bank raised the rate banks pay for deposits by 2 percentage points and lowered the minimum reserve requirement for banks to 5 percent from 10 percent, the state-run Syrian Arab News Agency reported today. The bank eliminated some reserve requirements for funds intended for investment in industries such as tourism and small and medium-sized companies.

The decision “aims at supporting liquidity in the banking sector, encouraging savings, boosting the confidence of Syrian citizens in the Syrian pound and guaranteeing the value of their savings while creating a solid base of savings that helps in investing and funding development,” it said.

Economic Plight

“The measures reflect the seriousness of the economic situation, but they are also consistent with the regime’s efforts to manage its way through the crisis, with a combination of severe security crackdowns, political reforms and economic interventions,” David Butter, Middle East regional director for the Economist Intelligence Unit, said in e-mailed comments.

Dozens of tanks and personnel carriers were seen heading to the suburbs of the central city of Homs, Al Arabiya television said. More than 30 army personnel carriers, packed with soldiers and weapons, were also moving on the highway from Damascus to Daraa, the southern city where protests first erupted in Syria, according to the “Syrian Revolution 2011” Facebook page.

UN Pressure

United Nations Secretary-General Ban Ki-moon telephoned Assad today to press for an “immediate end to violence against and mass arrests of peaceful demonstrators in Syria, and for an independent investigation of all killings that happened during the protests, including the alleged killing of military and security officers,” the UN said in a statement.

Ban told Assad he should implement “all the reform measures announced by the Syrian Government, and emphasized the importance” of a “genuine inclusive dialogue and a comprehensive reform process,” the statement said. He expressed “deep concern at the humanitarian implications of the latest developments in a number of Syrian towns” and sought UN access “in order to assess the humanitarian needs of the affected civilian population.”

Assad indicated “willingness to consider such an assessment to Daraa,” the UN said.

A demonstration was under way at the Faculty of Economics at Damascus University today, activist Razan Zaitouneh said on her Facebook page. Zaitouneh published a statement issued by Damascus University students that denounced the “massacres, killings and detention of peaceful protesters in Syria.”

Student Demands

The students called for the lifting of the army siege on Daraa and other cities and for the protection of their right for peaceful demonstrations.

A total of 553 civilians and 105 army and security personnel have been killed since March 18, the Syrian Observatory for Human Rights said on its website today. Hundreds of people have been detained and referred to courts on charges of “harming the prestige of the state and inciting riots,” it said.

“There are more than 1,000 people detained since Friday, and some are dying under torture,” Ghalioun said. “We have information that Syrian authorities are going after a list of 5,000 people, but they will not succeed to quell the protests because the more they choose repression, the more there will be anger and revolt,” he said.

The U.S., the European Union and the United Nations Human Rights Council took actions April 29 against Assad’s government. President Barack Obama ordered a freeze on U.S. assets and other sanctions against three Syrian officials and agencies taking part in the government crackdown.

To contact the reporters on this story: Alaa Shahine in Dubai at asalha@bloomberg.net; Nayla Razzouk in Amman at nrazzouk2@bloomberg.net

To contact the editor responsible for this story: Andrew J. Barden at barden@bloomberg.net