The impact of displacement from Lebanon to Syria on the Syrian regime’s economy

The Arab region in general, and Syria and Lebanon in particular, are witnessing dramatic transformations that have significantly impacted their economic and social conditions. The mass displacement of Lebanese to Syria due to Israeli shelling on Lebanon, along with the displacement of more than a million Lebanese and Syrians from their homes, according to the Lebanese government, has exacerbated the situation in Lebanon. This represents a new development that adds further complexity to the economic landscape of the Syrian regime.

Situation Analysis:

• Pressure on Resources:
  • 1- Infrastructure: The Syrian infrastructure, which was already suffering from significant deterioration due to the war, will face additional pressure due to the influx of large numbers of Syrian and Lebanese displaced from Lebanon. This could exacerbate problems related to water, electricity, sanitation, and housing. More than 40% of the infrastructure has been damaged since the end of major battles in 2020, leading to a loss of approximately $65 billion, with the poverty rate reaching 86% among Syrians, who number around 22 million.
  • 2- Basic Services: The need for basic services such as healthcare and education will increase, putting more pressure on the limited government budget of the Syrian regime. The budget for 2024 for the Syrian regime’s government amounts to approximately $2.526 billion, while it was about $3.6 billion in 2023.
• Unemployment and Low Wages:
  • 1- The influx of Lebanese labor may lead to an increase in unemployment rates among Syrians, especially given the lack of opportunities for most Lebanese to return to their country, even if the war in Lebanon ends soon, due to the extensive destruction. This could exacerbate social and security issues.
  • 2- Competition for job opportunities may drive wages down, negatively impacting the standard of living for both Syrians and Lebanese.
• Inflation and Rising Prices:
  • An increase in demand for basic goods and services may lead to rising prices, further exacerbating citizens’ suffering and reducing their purchasing power. Prices for all goods and food items in Syria saw significant increases, exceeding 200%, between 2023 and 2024.
• Reliance on Aid:
  • The Syrian regime may become more reliant on international aid to meet humanitarian and economic needs, which diminishes its economic sovereignty and makes it more susceptible to external influences.
• Limited Economic Opportunities:
  • Despite the challenges, the influx of displaced individuals may create new economic opportunities, such as increased demand for certain goods and services. However, these opportunities are limited compared to the significant challenges facing the Syrian economy.

Impacts on the Syrian Regime:

1. Increased Pressures: The Syrian regime faces increasing pressure to provide essential services for the displaced Lebanese, which may weaken its legitimacy and lead to social protests. The Syrian economy under the Assad regime is on the verge of collapse, which threatens either an outbreak of revolution or widespread famine, as nearly 90% of the Syrian population now lives below the poverty line, according to UN data.
2. Challenges in Crisis Management: The regime may find it difficult to manage the economic crisis resulting from the influx of displaced individuals, especially given the economic sanctions imposed on it.
3. Opportunities for Closer Ties with Lebanon: The regime may seek to exploit the crisis to strengthen relations with Lebanon and position itself as an ally in confronting the Lebanese economic crisis.

Future Estimates:
It is difficult to accurately predict the future impacts of Lebanese displacement to Syria; however, it is expected that this crisis will continue to significantly affect the already struggling economy of the Syrian regime in the medium and long term.

Conclusions:
The Lebanese displacement to Syria represents a new challenge added to the multiple crises facing the Syrian economy. This displacement is expected to exacerbate economic and social problems in areas under the Syrian regime’s control and place additional pressures on it.

Recommendations:

1. The international community should provide the necessary financial and humanitarian support to help Syria and Lebanon cope with this crisis in a manner that prevents the Syrian regime from exploiting it to revive itself and from interfering in Lebanon again.
2. The Syrian regime must take urgent measures to address the economic crisis, provide basic services for the displaced, and work towards achieving security stability. Prior to that, it must focus on finding a political solution in Syria, as this is the optimal solution to the economic collapse. It should also seek to benefit from the open door to normalization with Turkey and the Arab League initiative, which may not be present in the future.
3. The Lebanese government should work on a political solution to the conflict with Israel and focus on revitalizing reconstruction projects to facilitate the return of displaced Lebanese to their homes, encouraging their safe return to their homeland.

Finally: This assessment is based on currently available information, and conditions and developments on the ground may change; therefore, further analysis should be conducted.

Jacqueline K. Al-Shami
Economic Office
Articles
Research and Studies Department
Syrian Future Movement (SFM)