Rebuilding Syria’s Economy: Can Stability Return After War?

 

Rebuilding Syria’s Economy: Can Stability Return After War?

A Nation in Economic Ruin

Syria’s new leadership inherits an economy ravaged by over a decade of war and international sanctions. Inflation has soared, and the Syrian pound has lost much of its value. In 2010, the Central Bank of Syria held $17 billion in reserves, but today, it has dwindled to just $200 million. As a result, the country faces a dire economic and humanitarian crisis, with millions lacking access to basic necessities.

Challenges for the Caretaker Government

The new government, led by Tahrir al-Sham (HTS), faces the monumental task of rebuilding amidst limited resources. Food insecurity affects 13.1 million Syrians, and the remnants of corruption and cronyism under the Assad regime still linger. To signal reform, HTS has appointed Maysaa Sabrine, Syria’s first female Central Bank governor, and plans to modernize the tax system and improve public sector salaries. Despite these efforts, addressing the legacy of war, including the destroyed infrastructure and the pervasive poverty affecting 90% of the population, remains a daunting challenge.

War and Sanctions: A Double Blow

Before the civil war, Syria had a diversified and steadily growing economy fueled by natural resources, agriculture, and tourism. However, the war decimated this foundation. From 2010 to 2021, GDP shrank by 54%, and sanctions further crippled economic resilience by cutting Syria off from global markets. The Assad regime relied on support from Russia and Iran, incurring significant debts while losing control over critical resources like oil and phosphate deposits.

Path to Economic Recovery

Experts suggest that reviving agriculture and basic industries like textiles could provide immediate relief. Long-term recovery, however, hinges on access to foreign capital and advanced technology. To facilitate this, the caretaker government has reopened the Nasib border crossing with Jordan and resumed oil supplies, aiming to stabilize trade and energy distribution.

International Engagement and the Role of Turkiye

Efforts to rebuild the economy depend significantly on international support. The United States has signaled a willingness to engage with Syria’s new leadership, removing a $10 million bounty on HTS leader Ahmed al-Shara and initiating discussions about relaxing financial restrictions. Meanwhile, Turkiye, which has a strong presence in opposition-controlled areas, has expressed interest in contributing to Syria’s reconstruction, particularly in the energy and construction sectors.

Energy: A Crucial Pillar for Reconstruction

Syria’s energy sector, once a major contributor to the economy, is currently under the control of the US-backed Syrian Democratic Forces (SDF). Recovering these resources is vital for reconstruction, which is estimated to cost between $250 billion and $400 billion. Turkiye’s proposal to develop Syria’s natural gas and oil infrastructure could be a stepping stone, but analysts stress that only the easing of international sanctions can unlock the country’s full economic potential.

The Road Ahead

The challenges to rebuilding Syria are immense, from reclaiming lost resources to fostering international cooperation. While initiatives by the caretaker government and external actors like Turkiye offer hope, true stability will require a combination of domestic reform, foreign investment, and global support. Whether Syria can overcome these hurdles and restore its economic vitality remains to be seen, but the foundations are being laid for a long and arduous recovery process.

(Inputs from  Aljazeera News )