By Oliver Holmes
BEIRUT (Reuters) - While Syria's economy as a whole has been crippled by violent unrest, there are some people for whom the uprising has created business opportunities.
Take building contractor Ahmed, who asked to be identified only by his first name for fear of arrest. He has been artfully building unlicensed, small-scale housing while the authorities are distracted with the more pressing task of quelling a revolt.
"Yes, yes, I exploit the revolution. The government is preoccupied," the 48-year-old said from his home in Aleppo, Syria's northern, sprawling merchant city of 2.5 million people. "I used to do some covert building before, but now I'm fairly public about it," the entrepreneur added.
President Bashar al-Assad's forces have killed more than 8,000 people in his drive to crush the year-long uprising, according to the United Nations, with his troops fanning out around the country to try to stamp out the opposition.
Opportunistic builders, loan sharks and black market importers have all done well from the revolt, Syrians say.
Urban residents say security firms, selling closed-circuit television cameras and thick steel doors to fretful Syrians who want to beef up home safety, have also seen a boom in sales.
Jihad Yazigi, a Damascus-based economist and editor of the English-language Syria Report, said that in the early days of the revolt Syrians saw that inflation would become a threat - the value of the Syrian pound against the dollar has roughly halved since the unrest started. They therefore sought to buy property or build on existing land holdings as an investment.
This strategy appears to have worked, with house values remaining fairly strong in areas not directly caught up in the fighting.
"We saw a lot of illegal building in the first few months of the revolution, not only because people were afraid of inflation but because many people had plans to build but they didn't have licences," Yazigi told Reuters over the telephone from Damascus.
He said authorities had since clamped down on illegal building in the capital, while cement and steel prices have risen sharply, making construction more expensive. But in other parts of Syria, the building boom appears to have continued.
For Syrian men, owning one's own property is often a prerequisite to getting married; high demand has driven up house prices. For Syrian fathers, slyly adding a floor or two to the family home is often cheaper than buying apartments for sons.
Other entrepreneurs have taken advantage of the chaos in the country's banking sector, which is reeling from economic sanctions and falling foreign currency reserves; Western and some Arab countries have banned imports of Syrian oil and cut financial ties with Syrian banks, among other steps. Syria's bank deposits have shrunk almost a third since the unrest began.
Few banks are willing to sell scarce foreign currency, for which demand grows as the Syrian pound weakens, and bazaar-based currency traders selling dollars in the central markets of Damascus have profited from panic buying.
Bank loans appear nearly impossible to acquire, creating opportunities for unlicensed loan sharks.
Ali, 34, works for his father, a struggling farmer who has been trying to keep the family business alive but has been refused loans from both state-owned and private banks.
"My father ended up borrowing money from a loan shark," Ali said, adding that the loan was a three-month advance at 50 percent interest, with a 25 percent surcharge for late payment.
"I was so surprised at how organized it was, and how he had official papers. Everyone is having to take out these loans now and the lenders are working openly while the police are distracted."
In an effort to preserve foreign currency reserves, the government has increased customs tariffs on some imports to prevent currency from leaving the country. Syrians who are in need of foreign-manufactured goods, such as medical drugs, have been forced to look to the black market.
Lama, a 25-year-old pharmacist in the capital, says there has been a marked increase in the trade of black market drugs.
"We have been forced at the pharmacy to deal with smugglers. Medicine is not something that can be postponed. If we don't boost our supplies using illegal means then customers, especially those with chronic diseases, will try to get smuggled medicine themselves."
And as queues to obtain heating oil and petrol lengthen and the government raises the official prices of fuel, city residents increasingly head to the flourishing black market.
Issa, a mid-twenties student in Damascus, said he had noticed a change of business practice in the petrol station where he works part-time.
"As fuel prices rise, my boss has hired more people to walk along the queue of cars waiting for petrol. When they see people give up waiting and drive off, they stop them and ask if they want to buy fuel at a higher price," Issa said.
"The queues are so long that people are willing to pay extortionate prices."
Some Syrian manufacturing companies have managed to exploit the diplomatic turmoil and Assad's bitter attitude towards past allies who have turned against him because of his violent crackdown on the democracy movement.
Turkey was once one of Syria's closest allies, but late last year Ankara imposed sanctions and Assad retaliated in December by scrapping a free trade agreement with Turkey. This caused prices of imports into Syria to soar - a boon for some local manufacturers.
A Western diplomat in Beirut said that for many Syrian businesses, the collapse of the free trade agreement had been a huge help. Although it may not offset all the other negatives which have come with the crisis, at least Syrian manufacturers no longer have to compete with cheaper, and possibly higher-quality, Turkish imports, the diplomat said.
Damascus economist Yazigi agrees. "When the free trade agreement was suspended, we saw a boom in local manufacturing. Syrian textiles, furniture and food products are selling well," he said. "The cheap Syrian pound has even allowed some firms to export products to Iraq."
However, many people in Syria believe that the general economic crisis is so severe that even the most savvy entrepreneurs are probably only breaking even. The government has not provided figures for how the unrest has affected gross domestic product, but Yazigi estimated the economy may have shrunk 15 percent last year and could shrink a further 15 percent or more this year.
The government has warned citizens of the possibility of wider energy rationing, blaming terrorists for the sabotage of power plants, in what economists and business leaders say is an effort to conserve scarce fuel. The Syrian government says these "armed terrorists" have killed more than 2,000 soldiers and police during the unrest.
And as the value of the Syrian pound has plummeted, the cost of living has sky-rocketed. Many Syrians are unable to buy anything but the bare essentials. The official inflation rate was 15 percent in January; some basic goods such as sugar, butter, vegetable oil and eggs have risen in price by as much as 100 percent.
"It may be true that Syrian businesses have less foreign competition, but if Syrians are not even buying products and everything costs double, what does it matter either way," a Damascus resident said.
"You do what you can, but everyone is still suffering."
(Editing by Andrew Torchia)
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