Erdogan introduces the Turkish lira into areas of Syria under his control to increase its influence

Turkey wants to extend its influence over areas of Syria that are already under its military control. Now it is trying to do so from the economic point of view, by introducing its currency into the enclaves in the north occupied by the army. The aim is to shore up the Syrian currency, the pound, before the new US sanctions under the Caesar Act are applied against President Bashar al-Asad, according to the online version of the daily Arab News. Since the beginning of this month, Turkish banknotes have been put into circulation through local branches of the Turkish postal service operating in northern Syria. Civil servants have already started to receive their salaries in Turkish currency and food and fuel are also starting to be exchanged in lira. 

Turkey's aim is to minimise the negative economic impact of the US sanctions, which came into force on Wednesday. "However, the measure helps to facilitate the payment of the Syrian National Army in Turkish liras, as the more Turkish currency is used, the more the need to convert salaries into Syrian pounds to buy commodities is reduced," Professor Michael Tanchum of the Austrian Institute for European and Security Policy told Arab News. Even the extremist group that controls the province of Idlib, Hayat Tahrir Al-Sham (HTS), has begun to use Turkish liras. 

"The HTS-backed rebel government in Idlib province also contemplated changing to US dollars, but the scarcity of this currency, due to the pandemic, makes the lira an attractive alternative," Tanchum said. Ankara has welcomed the US sanctions in the hope that they will lead to a collapse of the al-Assad regime. 

If Turkey succeeds in creating a Turkish lira zone in areas of Syria that it dominates militarily, then they will fall under its influence in the long term. "For this to happen, the territories under Turkish control would have to generate more export revenue to Ankara. At present, most sales of goods are still under the control of the Syrian government," Tanchum said, although he assured that Turkey's ability to get its currency more in circulation ultimately depends on making more US dollars available to Ankara. 

Navvar Saban, an analyst at the Omran Centre for Strategic Studies in Istanbul, says that putting Turkish lira into circulation in Syria is a precaution against the economic consequences of US sanctions. "This measure was being considered even before Caesar's Law because the Syrian pound was in decline, along with economic problems and internal problems between Al-Assad and Syrian businessmen," he told Arab News. 

Trade contacts between the Syrian regime and the rebels in the areas controlled by the opposition were also reduced, decreasing the amount of Syrian pounds. According to Saban, the measure will also discourage the sale of dollars on the black market. 

Before the sanctions began, the Syrian currency lost almost 44% of its value, while food prices tripled in one year. "US dollars were used more in the opposition-controlled areas of the Northwest and were higher before the Turkish lira replaced it. But I don't think that this measure will leave out the Syrian pound, it's just a precaution for the time being," said Saban.