The fall of the Assad regime on December 8, 2024, has marked a pivotal moment in Syria’s history. With the collapse of decades-long authoritarian rule, Syria faces the monumental challenge of rebuilding its economy, which has been decimated by war, corruption, sanctions, and mismanagement. The new administration has taken initial steps toward economic reform, including privatization, currency stabilization, and fostering foreign investment. However, achieving sustainable recovery demands comprehensive planning, addressing systemic issues, and leveraging international cooperation.
Privatization: A Double-Edged Sword
Privatization has emerged as a cornerstone of the new administration’s economic strategy. Syrian Foreign Minister Asaad al-Shibani highlighted plans to privatize state-owned assets such as oil, cotton, and furniture factories, and to invite foreign investments in infrastructure, including ports, airports, and railways. This shift represents a departure from the socialist policies of the Assad regime and is intended to stimulate growth and attract much-needed capital.
Economists have debated the merits and risks of privatization. Ibrahim al-Adi and Mohammad Kousa underscore the potential benefits, such as reducing the financial burden on the state treasury, increasing efficiency, and generating jobs and revenue. Al-Adi draws parallels to Germany’s post-Berlin Wall privatization, where public sector assets were sold at symbolic prices to incentivize private investment while safeguarding jobs. Kousa emphasizes the importance of aligning privatization with Syria’s long-term economic vision, whether through outright sales, public-private partnerships, or participatory management.
However, critics caution against hasty or poorly regulated privatization. Iyad al-Jaafari warns that without governance, transparency, and accountability, privatization risks replicating the cronyism of the Assad regime, creating a new authoritarian oligarchy. Past failures, such as Russia’s rushed privatization in the 1990s, illustrate how unchecked reforms can exacerbate inequality and undermine public trust. A gradual, well-regulated approach, as seen in Asian high-performing economies, could strike a balance between public and private ownership while ensuring stability and equitable growth.
Currency Stabilization and Market Challenges
One of the new government’s notable achievements is the stabilization of the Syrian pound, which has appreciated by 20–30% against the dollar due to exchange rate liberalization and the introduction of the Turkish lira and dollar as parallel currencies. This stabilization has led to a 10–25% reduction in the prices of essential goods such as oil, sugar, rice, and potatoes.
Despite these improvements, market activity remains sluggish. The delayed return of government institutions and public sector enterprises, combined with widespread insecurity, looting, and infrastructure damage, continues to hinder economic recovery. Rising transportation costs due to energy shortages further exacerbate the situation, and many state and former military employees remain unpaid, straining household purchasing power.
Structural and Systemic Challenges
Syria’s economic devastation is staggering. GDP has plummeted by over 76% since 2011, falling from $64.4 billion in 2010 to just $14.5 billion in 2023. Infrastructure, particularly in industrial hubs like Aleppo, lies in ruins, with reconstruction costs estimated at $400 billion. Per capita income has collapsed to less than $30 per month, compared to $200–400 pre-2011, while 90% of Syrians live in extreme poverty.
The public sector, long the backbone of Syria’s economy, is riddled with inefficiency, corruption, and overstaffing. According to economist Majed al-Mustafa, staffing levels exceed actual needs by over 400%, and mismanagement has turned many public enterprises into loss-making entities. Addressing these inefficiencies will require legal and administrative reforms, transparent privatization processes, and efforts to attract domestic and foreign investors.
The Role of International Cooperation
Syria’s economic recovery hinges on international support. Historically, Syria’s economy was deeply intertwined with Western markets, with two-thirds of its trade in 2011 conducted with Turkey and European Union countries like Germany, France, and Italy. Today, Syria remains economically oriented toward the West, with limited ties to Russia and Iran, despite their political and military support for the Assad regime.
Reconstruction efforts will likely rely on partnerships with Turkey, the European Union, and Gulf Arab states. Turkey’s expertise in construction and consumer industries positions it as a key player, though its financial constraints limit its ability to fund large-scale projects. Gulf states could provide long-term loans for infrastructure rebuilding, while European nations, leveraging advanced technologies and expertise, could modernize Syria’s infrastructure. Companies like Siemens, ThyssenKrupp, and Lafarge are well-suited to contribute to this effort.
Davos 2025: A Platform for Syria’s Revival
The 2025 World Economic Forum in Davos offers Syria a rare opportunity to present its economic vision to the global community. For the first time, a session is dedicated to discussing Syria’s priorities, chaired by Foreign Minister al-Shibani. The government is expected to emphasize the importance of lifting Western sanctions, which remain a significant obstacle to reconstruction and foreign investment. Representatives will likely underscore Syria’s commitment to democracy, human rights, and pluralism as preconditions for international support.
Western officials visiting Damascus have consistently linked their assistance to a political transition that ensures inclusivity, power-sharing, and respect for human rights. These conditions underscore the interconnectedness of economic recovery and political reform in Syria’s path forward.
Conclusion
Revitalizing Syria’s economy requires a multifaceted approach that balances privatization, governance, and international cooperation. While the new government’s initiatives—currency stabilization, tariff reductions, and energy agreements—are steps in the right direction, the scale of Syria’s challenges demands coordinated efforts on a global scale. A transparent and inclusive reconstruction process, coupled with long-term partnerships with regional and international stakeholders, offers the best chance to rebuild a resilient and equitable Syrian economy.
