Assad War Funding Problems Catching Up

Assad War Funding Problems Catching Up

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In an earlier Blog we titled “March 2013: The Assad Cliff?“, we made the case that based on Assad’s past use of government reserves to fund his war, his regime should be out of cash by March of 2013. Assad war funding problems catching up to his war machine.

The regime has two immediate obligations it cannot survive without fulfilling.

The obligation to budget and fund the various branches of the government and the obligation to pay for the war Assad has chosen to wage against his people. The latter obligation is divided into two major parts to include weapon purchases and their maintenance as well as paying the soldiers fighting in the field.

Even though the Assad regime controls fewer territories than six months ago, the obligation to sustain a working government in Damascus remains substantial, especially when the regime goes out of its way to show it remains in control of that government.

It is highly likely that Iran is funding the tens of thousands of foreign terrorists of Hezbollah and the IRGC fighting with Assad. These fighters are paid to sit in barracks or to terrorize the Lebanese and the Iranian people anyway, but the obligations to their families when they come back in coffins must be a burden on Hezbollah and Iran, which in my opinion is undermining their hold onto power.

Both Russia and Iran have historically provided the Assad regime with immense credit lines to purchase their weapon systems and it should not be a surprise if this policy remains in effect today. Given how the war is going, someone at the Kremlin must know Russia is throwing good money into a sinking hole. Yet, the Kremlin under Putin, more interested in correcting history than pragmatic behavior, continues to support the regime.

As for Iran, the ideology of the Mullahs does not permit them the luxury to analyze a return on an investment using currency as its anchor. Their analysis considers loss of life the investment and the less life their enemies have, the higher their returns are. Assad war funding problems catching up with him.

Add the loss of oil revenues from the oil fields –the rebels and the Kurds control those fields in the North today– and it becomes obvious unless Iran funds Assad substantially and continuously, he will not be able to sustain his war. Assad’s burn rate since the uprising approximated $1bn a month, which provides a brush stroke of the burden Iran must sustain. Of course, any cash infusion by Iran does not include the credit lines needed to replenish lost weapons.

In light of the above burn rate needed, consider these facts as well.

Between January 15, 2013 and February 1, 2013, the Syrian Lira plunged from 70.63 per $1 to 75.01 (Chart). That is a decline of 6.2%. Since the uprising two years ago, the Syrian Lira lost over 50% of its value (48 Lira to 75 Lira for each $1 Dollar).

This is nothing compared to the Iranian Rial. The one probably funding the Syrian civil war.

On February 14, 2013, Iran’s currency plunged from 12,274 Rial per $1 Dollar to 18,420 Rial per $1 Dollar (Chart). That is a straight dive of 50% of its value in one day. If Iran is funding the Assad regime, which seems the most logical conclusion, it means its liability just increased by 50% in one day.

Both Syria and Iran are strapped financially and both may be on the verge of collapse. Assad days are numbered because the Assad war funding problems catching up real fast.

This short period of Iranian hegemony and Assad terror should be a lesson to all other Muslim countries whose foolish leaders combine stupidity and ambition into one degenerate vision with the aim of defeating the West.

We cannot defeat civilizations in control of the global economies. The only way to defeat those civilizations is to provide opportunities to our children to compete with those civilizations in sciences, arts, humanities, rule of law, freedom, and respects for human rights and the rights of women.

This is how we can lift ourselves to be equals. We compete with the West, instead of terrorizing the West for not treating our civilization as an equal when we have not earned our way to equality.

Learn from India to learn how to earn respect and advance the cause of your people.

Assad War Funding Problems Catching Up


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