The fall of the Assad regime in December 2024 reawaken hope for a better future for Syria. However, after only a few months, numerous challenges have emerged: territorial and political fragmentation, interference and occupation by foreign forces, sectarian tensions, and the absence of an inclusive and democratic political transition. These dynamics constitute obstacles to an economic recovery and reconstruction process, both of which are urgent and necessary.
More than half of Syrians remain displaced, either internally or abroad. 90% of the population lives below the poverty line, and according to the United Nations, 16.7 million people are in need of humanitarian assistance. Improving socioeconomic conditions is therefore crucial both for Syria's future and for the Syrian population to become more involved in the current political transition. Moreover, recovery and reconstruction will require international financial assistance.
The cost of rebuilding Syria is estimated to be between $250 billion and $400 billion. Foreign investment, however, remains hampered by the sanctions imposed on Syria and on Hayat Tahrir Sham (HTC). At the end of February 2025, the European Union and the United Kingdom suspended sanctions targeting certain Syrian sectors and institutions, but the extensive US sanctions remain the main obstacle. In January, the Biden administration eased restrictions on the energy sector and personal remittances. The new Trump administration, however, has yet to define a clear policy toward Syria or a position on sanctions.
Even without these restrictive measures, Syria faces deep structural economic problems that are slowing economic recovery and jeopardizing the future prospects of the reconstruction process.
The instability of the Syrian pound (SYP) poses another significant problem. In the aftermath of the fall of the Assad regime, its value on the black market skyrocketed due to the influx of foreign currency. However, the path to stabilizing the SYP is still long, which discourages investors seeking quick or medium-term returns. Furthermore, some regions in the northwest have been using the Turkish lira for several years to stabilize markets affected by the sharp depreciation of the SYP. The US dollar is also widely used in the country.
Syria's infrastructure and transportation networks remain severely damaged. Production costs are high, and severe shortages of essential goods and energy resources persist. Syria also suffers from a shortage of skilled labour, and it remains unclear if and when these skilled workers will return.
The private sector, consisting mainly of small and medium-sized enterprises with limited capacity, still requires significant modernization and restructuring after more than thirteen years of war and destruction. Public resources are also severely limited, further limiting investment opportunities in the economy. Syria's main oil resources are concentrated in the northeast of the country, currently under the control of the Kurdish-led Autonomous Administration of Northeast Syria (AANES). A recent agreement between the Syrian presidency and AANES is expected to facilitate Damascus's access to these resources. However, Syrian oil and natural gas production has continued to decline significantly since 2011. Before Assad's fall, Syria was largely supplied with oil by Iran, but this support has since ceased.
With the continued rise in the cost of living and the devaluation of the SYP, Syrians have become increasingly dependent on remittances. The volume of these remittances exceeds both foreign direct investment in Syria, which has been minimal since 2011, and humanitarian aid, which has averaged over $2 billion annually in recent years.
At the same time, the government's economic direction and decisions, which go beyond its temporary mandate and impose or promote its economic vision as a model for the future of Syria, are consolidating and accelerating the implementation of a neoliberal model, accompanied by austerity measures. This policy primarily favours the interests of the business classes. HTC head Ahmad al-Sharaa and his ministers have indeed held numerous meetings with Syrian businessmen, both inside and outside the country, to present their economic visions and listen to their demands, with the aim of satisfying their interests. Moreover, there are consistent signs that HTS is accelerating the privatization process and implementing austerity measures in the country.
Regarding austerity measures, many decisions have already been made. The price of subsidized bread was increased from 400 SYP (for 1,100 grams) to 4,000 SYP (initially for 1,500 grams, later reduced to 1,200 grams). In the following months, the end of bread subsidies was announced, as part of market liberalization. Electricity Minister stated that the government planned to gradually reduce, or even eliminate, electricity subsidies. Currently, the public electricity supply in the country’s main cities does not exceed two hours per day.
At the same time, the price of a subsidized domestic gas bottle was increased from 25,000 SYP ($2.10) to 150,000 SYP ($12.50), which has serious repercussions for families. In addition, the Minister of Economy and Foreign Trade announced the dismissal of a quarter to a third of the state workforce, which corresponds to employees who were receiving salaries without working. Currently, there is no estimate of the total number of dismissed workers, while some employees are on paid leave for three months while awaiting clarification of their actual employment status.
At the end of January 2025, Damascus reduced customs duties on more than 260 Turkish products. Turkish exports to Syria in the first quarter of this year amounted to approximately $508 million, a 31.2% increase compared to the same period in 2024 (nearly $387 million), according to the Turkish Ministry of Trade. Syrian and Turkish officials have also expressed their willingness to reopen negotiations on the 2005 Syria-Türkiye Free Trade Agreement, suspended since 2011, with the aim of expanding economic cooperation. However, this could have a negative impact on Syrian domestic production, particularly in the manufacturing and agricultural sectors, which could struggle to compete with Turkish imports. The previous agreement, concluded in 2005, had devastating effects on local industry, leading to the closure of many factories, particularly in the suburbs of major cities.
In conclusion, Syria faces critical socio-economic challenges. In this context, social and economic problems must be addressed quickly to improve living conditions and the population's ability to participate in political life during the transition period. However, the new government's economic and political orientation, characterized by a desire for increased liberalization, privatization, austerity, and reduced subsidies, will only increase social inequality, impoverishment, the concentration of wealth in the hands of a minority, and the lack of productive development, all of which being at the root of the 2011 popular uprising.