Ever since Idlib and its surrounding areas in northwestern Syria were cleared of local competition in 2018, it became clear that Hay’at Tahrir al-Sham (HTS) seeks to completely dominate the region’s economy, exercise the role of a commercial monopole, and control all economic sectors – most notably imports. Through its civilian arm and administrative facade, the Syrian Salvation Government (SSG), HTS has developed a number of strategies which aim to control the domestic trade market, enter into new economic domains, and increase the profits of its steadily growing companies. Restrictions on merchants have been imposed, notwithstanding a livelihood crisis that directly impacted the lives of civilians.

Those living under HTS control face hardships securing foodstuffs and household supplies which, whenever available, are sold at exorbitant prices. Residents and traders often mention the disparity between SSG-governed areas and those controlled by the Turkish-backed Syrian National Army (SNA) factions, where goods are available and affordable.

Separately from the SNA, the official Turkish-backed political entity is the Syrian Interim Government (SIG). In June 2020, after the exchange rate of the Syrian pound fell to around 5,000 to the US dollar, both the SIG and SSG imposed the Turkish lira as the official trading currency. Accordingly, pricing of goods and payment of wages has been pegged to the Turkish economy. This change swept HTS-controlled areas in Idlib and its countryside, parts of the western countryside of Aleppo, the northern countryside of Latakia, the SNA-controlled areas north of Aleppo such as Afrin, Azaz, al-Bab and Jarabulus, as well as areas in the northern countryside of Raqqa, and western Hasaka between the cities of Tal Abyad and Ras al-Ain.

Newfound Interest in the Domestic Market

HTS did not restrict trade activity with areas under SNA control, despite the crossings and checkpoints between the two regions. Since mid-2021, however, HTS has imposed tighter measures and began preventing free entry and exit of goods. HTS also launched several military campaigns, most prominently at the al-Ghazawiya crossing on 4 August 2021. Moreover, it penetrated deep into areas under SNA control in Afrin, attempting to stop the smuggling of fuel and foodstuffs.

Two main crossings link Idlib with the Aleppo countryside: al-Ghazawiya and Deir Ballut, both dedicated to commercial and passenger transit. HTS intensified its patrols and tightened its security grip over villages connecting to the northern Aleppo countryside, deploying more operatives of its Border Brigade along the strip. Moreover, it has ramped up its pursuit of smugglers, and prevented the entry of essential goods such as vegetables, fruits, and fuel, reaffirming its intention to isolate the areas under its control from those under the control of other rebels.

The most prominent reason for HTS’s desire to control the domestic economy seems to be financial. It has already lost many funding sources it had previously relied on, especially at crossings linking its own areas with regime-controlled ones in the Hama countryside – Morek and Qalaat al-Madiq – where it used to smuggle food and commodities. These sources have all dried up following the loss of large areas of the Hama, Idlib and Aleppo countryside to the regime.

Due to financial woes, HTS began expanding within the narrow economic circle in which it established numerous companies, taking over local commercial sectors in apparent coordination with the SSG.

Isolated Economic Zone

Having taken full control of Idlib and its surroundings, HTS has sought to strengthen the SSG governmental body it formed in 2017, securing a local economy isolated from the rest of Syria. Parts of this economy consist of institutions and ministries affiliated with the SSG, in addition to a network of individuals and companies connected to or managed by HTS leadership. Indeed, between 2018-20, HTS has established numerous companies and commercial enterprises in Idlib, helping them to monopolize the trade and import of Turkish goods entering through the Bab al-Hawa crossing in the northern Idlib countryside. To an extent, it has institutionalized its grip over the crossings connecting its own areas with those controlled by the regime or other opposition factions.

Signs of this policy first appeared when Watad Fuel monopolized the import and local distribution of fuels such as domestic gas, diesel, and gasoline, either from Turkey or from areas controlled by the Syrian Democratic Forces (SDF) in northeastern Syria. HTS has established numerous investment companies working across various fields, such as the Public Monetary Authority of the SSG, which controls the exchange market and extends support to HTS-owned investment projects. Other companies include Al-Raqi Contracting Company and Namaa Investments, which control construction projects, and Creative Inception (formerly Ebaa News Agency) which works under the close supervision of the SSG’s General Directorate of Information. While the management team of Creative Inception insist on the company’s independence, defectors such as Abu Yahya al-Shami, himself a former HTS leader, confirm its HTS affiliation. This further explains the company’s hegemony over advertising rights and road signs throughout Idlib.

In the import sector, Zajil Customs Clearance Company holds a significant market share in the transportation and food sectors. Recently, Zajil has become involved in domestic projects such as poultry farms and animal products, which are monopolized by the HTS-affiliated Yamama Poultry and Feed Company.

Ahmed Azzouz, an expert on the northern Syrian economy, attributed HTS’s desire to control and monopolize economic sectors to its dwindling finances. The earliest signs of this desire, he added, came when HTS took control of the fuel and import markets, and more recently the food market. This was done, Azzouz added, solely for revenue purposes. “The Salvation Government, like other de-facto authorities in Syria, seeks to monopolize sectors that generate quick profits rather than reform sectors that are crucial to governments. Education is currently in total collapse due to a lack of support, let alone manufacturing and agriculture.” As a government, the SSG “limits its role to regulating the fuel and domestic trade markets.”

Azzouz believes that “even if HTS reaps the desired and immediate benefits of these policies, it will still lose in the medium and longer terms. Previous experiences, including those of the regime, have proven that interference in economic affairs and policies of monopoly lead to economic collapse, with direct and disastrous consequences for livelihoods.”

Price Discrepancy Impacts Purchasing Power

During the last four months of 2021, HTS and its SSG government showed increased interest in the food market, the largest trading sector and source of investable capital in Idlib. They attempted to break into the market through subsidiaries, eliminating competitors and facilitating speculation such that powerful companies could control the prices of commodities and generate greater profits.

Both the Turkish-dominated Aleppo countryside and the HTS-dominated Idlib region suffered high inflation and increased costs of living. Increased global oil prices, coupled with high international shipping fees, let alone the food crisis resulting from the Russian invasion of Ukraine, have all contributed. Yet Idlib residents have consistently blamed HTS for the inflation and the unjustified price hike in their areas.

According to figures obtained by Al-Jumhuriya from the Ministry of Finance of the SIG, the inflation rate outside of HTS-dominated areas reached 32% during the first three months of 2022. By contrast, according to experts who spoke with Al-Jumhuriya, inflation rates in Idlib domestic markets have oscillated between 37-45% during the same period.

Idlib markets recently witnessed rapid hikes, especially since the start of Ramadan. Prices of various consumer goods such as sugar, oil, ghee, flour, agricultural products, as well as animal products including eggs, dairy, cheese, white and red meat, in addition to fuel and household gas, have all increased. Idlib also witnessed frequent shortages of many consumer goods, at a time when its inhabitants were already facing dire living conditions.

“Various types of goods and commodities are sold in the Aleppo countryside at a lower price than in Idlib,” said Abu Ahmed, a retailer in Idlib who spoke to Al-Jumhuriya. “This is despite the fact that both markets were hit during Ramadan and Eid al-Fitr.” The frustrated retailer gave examples: “The difference in the selling prices of fuel and gas sometimes reaches 5 Turkish liras. This applies to cigarettes, shisha tobacco, and foodstuffs like sugar, oil, ghee, and rice, with the price difference ranging between 2-5 Turkish liras. It has even affected the prices of some vegetables and fruits, when Idlib is supposedly self-sufficient.”

Such discrepancies are normal, Abu Ahmed asserted. “The absence of competition and the monopoly over the supply chain have led to a doubling of prices in Idlib.” On the other hand, “the Aleppo countryside is open to Turkey through various crossings such as al-Hamam in the Afrin countryside, Bab al-Salama in Azaz, al-Ra’i in al-Bab, and the Jarabulus crossing. Any trader or company can import all types of goods through these crossings. This increases both the volume of price competition and the supply of goods.”

ِA Boom in Smuggling

The price discrepancies led to a thriving smuggling economy between the Aleppo countryside and Idlib. The smuggled goods include fuel, refined Syrian gasoline, and tobacco. Often, poor children and women take to this dangerous task, crossing hills and rugged plains near the town of Atma, north of Idlib, in return for a maximum of 100 Turkish liras per operation (around 6 US dollars). This amount can hardly support a family for three days.

However, HTS shows no complacency in its pursuit of women and children smugglers. Last February, its forces killed Fatima Abdel Rahman, a 28-year-old widow displaced from the village of Sufuhun, south of Idlib, and mother of four orphaned children. She was directly targeted by HTS border guards near the Deir Ballut crossing for transporting a few liters of gasoline from Afrin to Idlib.

The smuggling of sugar also witnessed a remarkable boom in February and March 2022, following a sugar crisis at the beginning of the year. The price of one kilogram of sugar in Idlib reportedly exceeded 40 Turkish liras. After prices of vegetables and fruits increased in Idlib, and merchants started purchasing them from Afrin in the Aleppo countryside instead, HTS operatives entered the smuggling route and allowed the entry of small trucks loaded with goods in exchange for sums that varied according to the type and size of the controlled commodity. Red pepper and mallow, among the prohibited agricultural products, had to either be smuggled or paid for their entry at HTS checkpoints.

Further Restrictions

Instead of facilitating import, reducing or eliminating tariffs, and securing market needs to create competition that reflects positively on consumers, the GGS’s General Administration of Crossings closed all border crossings and points connecting it to SNA-controlled areas. Persisting from 1 April to 15 April, this measure confirms HTS’s increased interest in restricting commercial activity with the neighboring rebel-held areas despite the crisis of shortages.

HTS also raised taxes on goods imported through the Zajil Customs Clearance Company, itself run by Abu Abdurrahman Zarba, an influential financier within HTS. Zajil is located in the Bab al-Hawa crossing at the Turkish border, which leads many traders away from it. This deepens the problems facing the local market, and increases fears of HTS’s sway over food trade and markets. These fears are exacerbated by the HTS’s total domination over the financial sector and the import market, creating livelihood and economic crises by imposing its affiliated companies, entities, investment institutions, and loyal traders.

Abu Arab is a food trader in the city of Al-Dana in the northern Idlib countryside. He told Al-Jumhuriya that commodity price hikes and recurrent crises in the Idlib market are attributed to increased taxes and the monopoly of import activities by HTS-affiliated actors, in addition to the global trends of food and supply chain crises . According to Abu Arab, the supply market is currently “restricted to a network of traders and companies affiliated, directly or indirectly, with HTS and Zajil.” This monopoly “causes a scarcity of goods and aggravates an already high inflation rate, which in turn leads to price hikes, especially with the collapse of the Turkish lira and the global inflation following the war in Ukraine.”

Abu Arab considered the sugar crisis to be the gateway through which Zajil Company officially entered the food market. “Zajil took over supplying and distributing sugar following months of clampdown on traders and suppliers, in addition to raising tariffs in exchange for providing goods at lower prices.” Abu Arab also indicated that Zajil Company played a major role in “flooding the North with Iranian goods over the past few months, including dates, canned foods, legumes and baby formula, in addition to building materials such as marble, cement and iron.” Some of these goods come from the crossings that connect the Idlib countryside with either regime-controlled areas, SDF-controlled areas, or even Turkey. “The country of origin is often erased from these Iranian products,” Abu Arab noted, “due to public aversion but also to poor quality.”

According to a local report published by 7al.net, the revenues HTS earns from the Bab Al-Hawa crossing, the only official connection between the Idlib region and the outside world, “ranges between 2-3 million US dollars a month.” Such revenues are generated through customs duties on goods imported to the Idlib region, in addition to reselling fuel imported through the crossing inside Syria, an enterprise worth around 800,000 US dollars raked up by Watad Fuel.

Zajil Customs Clearance Company

A transportation and communications company in Idlib, Zajil expanded into customs clearance for used cars after Turkey allowed vehicles to enter Idlib. The number of businesses and traders working in this sector has increased ever since. In border towns in the northern Idlib countryside, the number of such businesses exceeded 200. Following the trade boom in food and building materials between northern Syria and Turkey, Zajil entered the market for food and imported goods.

Zajil re-emerged during the sugar crisis, this time supplying sugar to the domestic market and establishing an import line from Turkey in return for considerable customs tariffs. This, however, caused a price discrepancy between Idlib, whereby a kilogram of sugar reached 42 Turkish liras, and the nearby SNA-controlled Aleppo countryside, where a kilogram of sugar remained at 13 Turkish liras. Zajil also took over the transportation sector, and monopolized the transit of goods through Bab al-Hawa to HTS-controlled areas. This made Zajil a parallel institution to the Customs Administration. Zajil also used the privileges of its chairman Mustafa Qadid, known as Abu Abdurrahman al-Zirbeh, an HTS commander and a close associate of its leader Abu Mohammad al-Julani. Qadid is in charge of financial decisions and ventures made by HTS in Idlib, as well as and the administration of domestic and external crossings, both of which facilitate his control over food trade. In addition to Zajil, which has branches in different parts of the HTS-controlled region, Qadid also manages Watad Fuel.

Malls and Exchanges

HTS opened two branches of City Mall, a large commercial project in Idlib city run by Abu Hafs Binnish, another crony in al-Jolani’s tight business circle with a capital estimated to exceed $1 million, according to the economist Abdurrahman Anis.

Furthermore, the SSG’s General Establishment for Cash Management and Consumer Protection controls the currency and exchange market in Idlib by obligating exchange offices to license their work and deposit registration fees in the Establishment’s bank account. The fees vary according to the reach of the exchange office, and they usually range between 1,500-3,000 US dollars per license, while larger companies are charged more than 30,000 US dollars.

Statement by the SSG’s Public Monetary Authority listing the licensed exchange offices

The General Establishment divided the 81 licensed companies into three categories according to strength, field of work, and reach. Category A includes around 20 companies working in cash transfers and transport of goods. Category B includes around 28 companies working in currency exchange and cash transfers, whether in Idlib and its countryside or in the Latakia countryside and western Aleppo countryside. Lastly, Category C includes around 33 local and single-branch exchange companies.

This is in addition to contracting and foreign investment. The General Establishment for Cash Management invests a capital estimated by some local economists (who asked to be anonymous) at “more than 15 million US dollars”, through subsidiaries such as Al-Raqi Contracting and Nama Investment. The largest shareholding company in Idlib, the latter subsidiary is run by Abu Ibrahim Salameh, an HTS commander and the second-in-command in al-Jolani’s narrow business circle.

Meat and Poultry Market

In addition to controlling food and cash, HTS has monopolized poultry and egg production. This represents one of the most significant food sectors for the population, especially since chicken is a cheap alternative to red meat. Two chicken breeding and distribution companies emerged in Idlib, the more prominent of which is Al Yamama Company. Owned by Idlib City Council’s head Khairuddin al-Sayed Issa, Al Yamama owns and operates most livestock farms in Idlib.

Over the past two years, Al Yamama has managed to break into the market and open many branches in the Idlib countryside. This occurred after its owner, a local politician, signed a commercial partnership with HTS that guaranteed him monopoly and acquisition of the chicken and feed supply chain.

The second company that emerged in this market is Almarai Company for Feed and Poultry. According to the website Iqtisad, Almarai was established by HTS as a competitor to Al Yamamah and a cover up of the latter’s monopoly over the poultry sector, especially following the increasing complaints by breeders who refused to partake in HTS’s economy.

The SSG “is carrying out the executive and administrative tasks for HTS,” noted the economist Abdurrahman Anis in his interview with Al-Jumhuriya. “Like a regular government agency, it collects data on the national accounts in its area of ​​influence. It then presents them to the decision-maker to facilitate the entrance of HTS-affiliated companies into various sectors with guaranteed success.”

“Tahrir al-Sham follows a war economy model with strict policies and goals,” Anis added. “These include consolidating the SSG and financially supporting it until a stable source of revenue is found using monopolistic business arms, thus expanding its military and political authority and backing it with economic power.” Anis indicated that HTS is promoting “a total disconnection between its areas of control and those under the Turkish-backed SIG, cutting off the road for the SIG and for traders to reach the Idlib market. This is how its monopoly is guaranteed… by preventing the entry of competing goods and commodities.” Anis considers HTS’s goal to be “less about reviving the rebel-held areas than about achieving its own partisan interests. Opening its markets would lead to a flooding of goods coming from different regions at competitive prices, which would gravely threaten its economic project.”

Anis explained that the SSG does supply the market with necessary goods, and that it has “caused many economic and livelihood crises as a result of its considerable dependence on a group of cronies, which is all too reminiscent of the Syrian regime.” The most important similarities between the two, according to Anis, are “undermining the private sector, restricting traders on behalf of persons and institutions loyal to the authority, tightening the government’s grip by controlling the market, issuing decisions to ban exports, and allowing only the imports of affiliated parties to meet market needs – all in order to ensure the continuity of absolute power and accruing monopolistic profits.”

“This will not last long,” according to Anis. “There is massive inflation, popular discontent, and an absence of clear planning. HTS also relies on loyalty and trust at the expense of efficiency and effectiveness. The very structure of the institutions it commands, which monopolize and utilize power, makes them fertile grounds for corruption, which in fact afflicts all of the SSG.”

Prospects for Rebel-Held Areas

The policies adopted by HTS lead to many negative impacts, such as banning the export of agricultural products, preventing the streamlining of trade, and imposing customs duties on goods. But its unilateral hold over commerce has other impacts beyond its controlled areas. “HTS’s economic policies,” the economist Yahya al-Sayed Omar explained to Al-Jumhuriya, “directly affect Turkish-dominated areas in northwest Syria, and indirectly other adjacent areas.”

“From a political and military point of view,” according to al-Sayed Omar, “it is possible to isolate the HTS-controlled areas from the rest of northern Syria. But economically it is not possible. The overlap of economic activities is linked to demographic overlap, and any economic policies pursued by HTS, positive or negative, will affect the entirety of north Syria. Customs tariffs between HTS areas and the rest of the north are a negative phenomenon that hinders economic and commercial activity in the entire region.”

Al-Sayed Omar said that “HTS wants to take over sectors such as exchange, fuel, imports and trade to strengthen its political and military control, since political and military control cannot be secured without financial cover.” Yet its decision to ban exports “negatively affects farmers in its own areas of control, where production is mostly agricultural. It reduces the avenues available for selling produced goods, and thus impacts northern Syria in general by causing a shortage of supplies. It also leads to the emergence of isolated economic zones, thus hindering any possible future economic growth.”

The population fears the catastrophic consequences of HTS’s policies and the monopoly its business arm holds over the production and movement of goods, as well as the waves of inflation they caused. Dozens of traders feel threatened with bankruptcy and loss of capital in the domestic market. This risks a cascade effect on the broader economy, as departure of traders and the lack of competition could double unemployment rates and cause hundreds of workers, farmers, and owners of transport vehicles to lose their livelihoods.

Monopolistic practices transform societies, especially those that already suffer from deep crises such as Idlib. They make them pockets of consumption without production, ravaged by unemployment and high costs of living. This will affect the monopolists in the medium term, since purchasing power will decrease as a result of the widening gap between revenue and spending, especially since the income of the daily-laborer in HTS-controlled areas hardly averages 30 Turkish liras (2 US dollars, according to the current exchange market rates).

In February 2021, the Syria Response Coordination Group (SRCG), a monitoring and evaluation non-profit, published the findings of a survey conducted in northern Syria. Unemployment rates increased to a whopping 78-80% of northwestern Syrian population, excluding day-laborers. The findings presented by the SRCG team indicated that only 11% of those surveyed were in the job market.

It is likely that the current unemployment rate is higher than it was last year, especially after HTS tightened its grip on the vital commercial sectors in Idlib and monopolized even the transportation and distribution of goods to store owners. Then came the collapse of the Turkish lira against the US dollar, with the huge losses it caused to traders from all classes. The agricultural sector, an essential source of income for the majority of the population in the Idlib region, has also been affected by climate conditions, as well as the inaction of the de facto authorities in providing medicines and agricultural supplies.

The economic policies pursued by HTS answer part of the question that preoccupies the residents of northwestern Syria regarding the deterioration of their livelihoods. As for the second part of the question, the answer is found in the failure of its opponent, the SIG, and its equally devastating approach to economic and development management.