More than 14 years of war and economic mismanagement have left Syria in a state of economic collapse, with widespread infrastructure destruction, soaring unemployment, and a crippled industrial sector. The fall of the Assad regime last year brought hope for reconstruction, but the new Syrian Caretaker Government (SCG) faces significant hurdles, including international sanctions, an exodus of skilled labor, and economic stagnation that continues to impact the quality of life and refugee returns.
An Economy Gutted by War
A recent report by the United Nations Economic and Social Commission for Western Asia (ESCWA) and the United Nations Conference on Trade and Development (UNCTAD) painted a grim picture of Syria’s economic situation. Since 2011, Syria’s gross domestic product (GDP) has contracted by 64%, and the Syrian pound has lost two-thirds of its value in 2023 alone, leading to an inflation rate of 40% in 2024. More than 16.7 million Syrians are in need of humanitarian assistance, while 90% of the population lives below the poverty line, according to the UN report.
“The humanitarian situation is catastrophic,” ESCWA Executive Secretary Rola Dashti said, warning that without immediate reforms, economic stagnation and permanent poverty will persist.
Key sectors of the economy, such as agriculture, manufacturing, and services, have been severely impacted by the war and sanctions imposed during the Assad era. Infrastructure, including power plants, water facilities, and transportation networks, remains in disrepair, making economic activity difficult and deterring foreign investment.
SCG Efforts
In an attempt to stabilize the economy, the SCG has taken several steps to address economic challenges and attract investment. The government recently announced plans to raise public sector wages, with the average monthly salary now standing at around 300,000 Syrian pounds (approximately $119). However, with inflation soaring and purchasing power dwindling, many Syrians continue to struggle to afford basic necessities.
The government has also been negotiating with European and Arab countries to ease sanctions and encourage foreign investment. Recent diplomatic efforts have focused on securing the release of frozen Syrian assets abroad, with British officials currently discussing the transfer of $68.3 million in Assad-linked funds held in a London bank to the new Syrian authorities.
Ian Overton, director of the London-based Action Against Armed Violence (AOAV), has called for these funds to be used for reconstruction efforts. “The UK must ensure that these assets are repurposed to benefit the Syrian people and aid in rebuilding the devastated economy,” Overton said.
The SCG has also signed an agreement with Jordan to reopen the Nassib-Jaber free trade zone, a critical step in boosting trade and reviving economic ties with neighboring countries. The deal includes extending border crossing hours and reducing transit fees, which are expected to facilitate the movement of goods and attract investments.
Hindrances to Recovery & Reconstruction
Despite these efforts, the road to economic recovery is fraught with obstacles. The lack of basic services, such as electricity, water, and healthcare, continues to delay the return of displaced Syrians and refugees. Many who have visited Syria to assess the possibility of returning cite the lack of job opportunities and services as a major deterrent.
Malek al-Aziz, a Syrian who fled to Germany in 2015, recently returned for a visit to his hometown but found the situation still challenging. “Returning now is difficult for any family that has built a life abroad,” he told Syria TV. “The infrastructure is weak, and there are no job prospects yet.”
International Support
International support will be crucial in addressing Syria’s economic stagnation and facilitating reconstruction. The International Monetary Fund (IMF) has signaled its readiness to assist Syria once conditions allow, with spokeswoman Julie Kozack emphasizing the need for comprehensive global support.
While the European Union has maintained sanctions on Syria, discussions at the upcoming Brussels Conference could lead to a partial easing of restrictions, particularly in the energy and transport sectors. EU foreign policy chief Kaya Kallas stated that any sanctions relief would be “gradual and reversible,” contingent on the SCG’s progress in governance reforms.
The UN report suggested that with the right policies and international backing, Syria could achieve GDP growth of 13% annually until 2030. However, restoring pre-war economic levels could take until 2036, and reaching a GDP per capita of $5,000 may require a decade of aggressive reforms and investment. For now, Syrians both at home and abroad continue to wait and watch, hoping that their homeland can emerge from economic ruin and reclaim its place in the region.
