Economic Emergency Declared in Syria

According to all reports, Syria is facing significant economic challenges. The country suffers from a significant weakness in purchasing power, obvious and severe inflation, and a rise in prices beyond the level of inflation, coupled with a lack of supply and production. According to the World Bank report, the Syrian economy is suffering from the effects of conflict, rising input costs, and water scarcity, which limits crop production. Additionally, fuel shortages could weaken manufacturing and disrupt transportation and services, prompting Adam Abdelmoula, the UN Resident Coordinator for Humanitarian Affairs in Syria, last Friday to appeal for more than $4 billion in lifesaving aid for over 10 million Syrians, stating that the country’s largely forgotten crisis remains “one of the deadliest civilian crises in the world.”
The risks to growth prospects are significant and tend to be negative, as recurrent climate shocks can severely affect crops and agricultural livelihoods. Moreover, the ongoing war in Ukraine has led to rising prices of basic commodities, negatively affecting Syria as a country that imports food and energy.

Tragic Reality:
According to the latest data and reports, the Syrian economy faces significant challenges in 2024, including:

• Budget: Syria’s budget for 2024 was estimated at 35.5 trillion Syrian pounds, representing a significant nominal increase compared to the 2023 budget of 16.5 trillion Syrian pounds. However, the real value (in US dollars) of the 2024 budget has decreased from $5.52 billion in 2023 to $3.1 billion in 2024.
• Inflation: Inflation reached 156%, leading to a deterioration in the purchasing power of the Syrian pound.
• Poverty: Statistics estimate that 96% of Syrians live below the poverty line.
• Unemployment: The rate reached 13.5%.
• Government Spending: The Syrian regime’s government spending reached 283,360 million Syrian pounds.
• Investment Spending: Investment spending amounted to 9,000 billion Syrian pounds.

Our economic office previously stated that one of the main problems in the region is food insecurity, meaning the insufficiency of essential food supplies. This problem has grown after the World Food Programme cut food aid in half, affecting more than two million Syrians in the region. Additionally, food price inflation, coupled with the collapse of the Turkish and Syrian currencies, widespread unemployment, and a lack of job opportunities, have led to a decline in Syrians’ purchasing power, especially among camp residents who live in the worst economic conditions. The Response Coordination Group operating in northwest Syria reported that “since the beginning of 2023, the rate of humanitarian response in Syria has been steadily decreasing, with a deficit rate exceeding 70%, leading to very high deficit rates next year, opening the door to high levels of poverty and hunger in the region, alongside an increasing unemployment rate due to the lack of real job opportunities for civilians.”

The second stage of problems faced by northern Syria includes a heavy reliance on imports and a decline in food production, with 79% of families depending on humanitarian aid to meet their needs, while the rest have only one person working at the minimum wage level. This has affected the local economy, especially agriculture, which suffers from the consequences of imported materials and the effects of war.

The third problem lies in the inequality between areas governed by the Salvation Government and those under the Interim Government, as well as the inequality between cities and rural areas. This has led to urban bias and neglect of the agricultural sector in rural areas, resulting in reduced cultivated areas.

Reports such as the World Bank’s, which spoke about a 3.2% contraction in real GDP in 2023 after a 3.5% decline in 2022, and a report from DW that pointed out the Syrian economy lost two-thirds of its capacity over ten years of crisis, underscore the need for Syria to declare an economic emergency. This declaration requires international coordination and cooperation through the following steps:

1. A precise assessment of the economic situation in Syria, including data collection and analysis from reliable sources.
2. Coordination between concerned countries and international organizations such as the United Nations, the International Monetary Fund, and the World Bank.
3. The international community must decide on declaring an economic emergency, which includes defining the actions and policies to be taken.
4. Implementation of the defined measures and policies, including providing economic assistance or imposing sanctions or more professionally regulating markets.
5. Monitoring and evaluating the economic situation in Syria after implementation to assess the effectiveness of the measures and policies taken.

Conclusion:
It’s worth noting that declaring an economic emergency can have significant impacts on Syria’s economy and society. Therefore, it should be done carefully and based on a precise assessment of the situation. Thus, the Syrian Future Movement recommends that the international community prioritize Syria’s economic situation, going beyond early recovery projects. We presented a vision for this in the research and studies section of the political office yesterday, considering the economic window as a help in applying the West Germany model through a political solution from the economic side. This could help Syrians achieve a political solution that the Syrian regime obstructs, preventing Syrians from leaving their country in search of opportunities in neighboring countries or Western nations. It would also aid the host community that has borne the brunt of the Syrian refugee crisis in ensuring a real, voluntary, and safe return of refugees to their country after achieving relative economic stability.

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

References:

• The United Nations appeals for $4 billion in aid for Syria (syria.tv)
• Analysis: The state of the Syrian economy ten years into the crisis – DW – 2021/3/14
• Syrian Economy Observatory, Winter 2022 / 2023 (albankaldawli.org)
• Predictions on the Syrian economy indicators during 2024 (syria.tv)
• In 2024 .. The Syrian economy without visions and vague features | Syrian Democratic Council (m-syria-d.com)
• Syria’s 2024 budget: “Unreal increase and apparent rise of 115% against an actual decline to $3.1 billion” | B2B-SY
• Syria: 2024 budget reflects the depth of the economic crisis | Majalla Magazine (majalla.com)
• Syria – Economic Indicators (tradingeconomics.com)
• Syria’s economy a decade into the war.. Solutions remain absent | Sky News Arabia (skynewsarabia.com)
• Syrian Economy Observatory, Winter 2022 / 2023 (albankaldawli.org)
• The weak economic infrastructure in northern Syria (reality and solutions) – Syrian Future Movement (sfuturem.org)