Will everyone share in Syria’s economic recovery?
The easing of international sanctions marks a potential inflection point for Syria’s economy. With reintegration into global financial systems on the horizon, opportunities for recovery are growing — but so too are the potential disparities.
Early indicators suggest some uneven gains. Liberalised markets without regulation risk undermining traditional and local industries, while access to capital remains limited for many inside Syria.
Those who stayed may find themselves locked out of opportunities more accessible to diaspora investors and regional actors.
Sustainable recovery will require more than foreign investment. It demands a specific targeted economic policy:
✔️ Protection for domestic producers
✔️ Equitable access to credit
✔️ Investment in high-potential sectors
✔️ Inclusive frameworks for reconstruction
Recovery should be not only fast, but fair too.
Mohammad Bin Salman, Donald Trump, and Ahmed Al-Shara’a meet for the first time.
As news of President Trump’s announcement that he would lift economic sanctions on Syria spread through the country, Syrians took to the streets to celebrate with flags, music and car horns that same evening. The significance of such an announcement was almost overwhelming: finally, Syria might reintegrate into a global financial system which in theory ought to extend opportunities for economic recovery to all corners of a war-torn, exhausted country where 90% of the population now live under the poverty line. Similar announcements by the EU to lift some sanctions in the last few days, prior announcements from the UK in a similar vein, in addition to Gulf countries paying Syria’s arrears to the World Bank to allow eligibility for loans, are all considerable enabling factors for economic recovery and opportunity.
However, despite these positive developments, many Syrians - especially in former regime-held areas - currently feel greater economic disadvantage than under the Assad regime’s protectionist and highly controlled economic regulation. The sudden flooding of former regime-held areas with cheaper products from Turkey facilitated via Idlib traders – who have had access to Turkish manufactured goods and infrastructure for years - has made businessmen in Damascus who relied on local products until December 2024 unable to compete (particularly in food and textiles).
Meeting between Ahmad Al-Shara’a, Donald Trump, and Mohammad Bin Salman (Source: Forbes).
As a sign of further economic disparity, only in former regime-held areas do people wait for hours outside ATMs to see if the electricity will come on for an hour for them to collect public sector salaries or pensions to be barely able to afford food for the month. These thousands of individuals may try different ATMs every day, and not only hope for electricity, but also cash to be available in a liquidity crisis. Public sector workers in Idlib, where electricity is 24/7 and guaranteed through Turkish connections, may receive their salaries through a financial app instead.
The new transitional government has adopted a free market approach with an almost total liberalization of economic policies. The lack of import and export tariffs or any economic regulations to protect Syrian production is unlikely to support the return of high potential economic sectors, such as agriculture and textiles, which once were key drivers of Syria’s economy and are vital for lifting rural areas out of poverty. Some Syrians also fear a “boomtown” situation where unregulated real estate investment and urban planning result in a chaotic and ugly expansion upwards and outwards across city skylines, to the detriment of residents and the natural environment.
Thousands of Syrian celebrate in central Damascus during first Friday prayers since Assad's fall (Source: AP)
Concurrent to these concerns, many expect that those who chose – or had no choice – to stay in Syria rather than flee or risk a form of dangerous migration, will not have the same capital and cash to invest like their diaspora counterparts with EU residency and euros in their bank accounts, having to watch opportunity pass them by. This is especially evident in neighbourhoods in the suburbs of Damascus where some rebuilding and recovery has begun of individual residences with access to funds from abroad, while others lie derelict, their owners still camping out far from the capital and unable to return to a house with a collapsed roof and no electricity or water. Rebuilding with international aid donations is still a long way off with no clear process for reclaiming property.
“We’re not ready for such free market economics after years of economic control, we don’t know how to cope with such rapid change.”
Concurrent to these concerns, many expect that those who chose – or had no choice – to stay in Syria rather than flee or risk a form of dangerous migration, will not have the same capital and cash to invest like their diaspora counterparts with EU residency and euros in their bank accounts, having to watch opportunity pass them by. This is especially evident in neighbourhoods in the suburbs of Damascus where some rebuilding and recovery has begun of individual residences with access to funds from abroad, while others lie derelict, their owners still camping out far from the capital and unable to return to a house with a collapsed roof and no electricity or water. Rebuilding with international aid donations is still a long way off with no clear process for reclaiming property.
“My house in Ghouta has been destroyed for years. I think it will take around 15,000 USD to restore it but there is no way to raise that kind of money as a taxi driver.”
Ghouta (Source: ARK)
Regional investment and trade with businessmen across the Gulf, Turkey, Iraq will provide opportunities to breathe new life into old trade relations and routes, and across different sectors. However, these still risk not only allowing regional influence by hostile actors under the guise of economic investment, but may also still undercut preferential trade conditions for Syrian businesses.
There are always winners and losers in war, but Syria (for the most part) is now transitioning to a new phase of recovery that has the potential to even the playing field after years of a war economy and varying economic experiences for territories under the control of different administrations.
Now that sanctions being lifted is on the horizon, equity in economic recovery will partly depend on whether the transitional government can rapidly develop protections for Syrian businesses, agree trade agreements, incentivize high potential economic sectors, and ensure access to credit for economically disadvantaged households and communities in different areas of the country.