Rebuilding the Syrian Economy: Strategies and Opportunities

Introduction:

After years of ongoing conflict, the Syrian economy faces immense challenges that demand effective strategies for reconstruction and development. This study analyzes the economic challenges hindering Syria’s rebuilding efforts, focusing on available opportunities and possible strategies to achieve sustainable economic growth. By examining key factors, including destroyed infrastructure, population displacement, and political and social challenges, the study aims to provide a comprehensive and integrated vision for transforming these challenges into opportunities for revitalizing the Syrian economy.

Reports indicate that approximately 30% of Syria’s infrastructure has been damaged or completely destroyed during the years of conflict. According to the UNHCR, over 6.6 million people are internally displaced in Syria, with an additional 5.6 million Syrian refugees abroad. Moreover, Syria’s GDP has declined by more than 60% since the start of the conflict in 2011. Unemployment rates have soared to around 50%, reflecting significant challenges in the Syrian labor market, leaving over 80% of the population living below the poverty line, further complicating reconstruction and development efforts.

On Assessing the Economic Damage in Syria After the Conflict and Its Impact on Various Sectors:

The conflict in Syria has caused significant economic damage affecting multiple sectors, including:

1. Infrastructure: Syria’s infrastructure has suffered extensive destruction, with the cost of damage in six major cities estimated at approximately $41 billion in 2021 prices. This includes the destruction of roads, bridges, electricity networks, and water and sanitation systems.
2. Agricultural Sector: The agricultural sector was among the hardest hit, with many farmers losing their lands and equipment. This led to a substantial decline in agricultural production and an increased reliance on food imports.
3. Industry: Industrial facilities were destroyed or ceased operations due to the fighting, resulting in a significant drop in industrial production and the loss of numerous jobs.
4. Education: Many schools and universities were damaged, impacting the quality and accessibility of education. Estimates indicate that approximately 2.4 million Syrian children are out of the education system due to the conflict.
5. Health: Hospitals and healthcare facilities suffered destruction or damage, leading to deteriorated healthcare services and increased rates of disease and mortality.
6. GDP: As mentioned earlier, Syria’s GDP has declined by more than 60% since the beginning of the conflict, reflecting the scale of the severe economic deterioration.

This damage will require significant efforts for reconstruction and development, with a focus on effective strategies to achieve economic and social stability in the country.

Reconstruction Strategies and Possible Financing:

Rebuilding the Syrian economy after years of conflict requires comprehensive and integrated strategies, along with diverse funding sources. The most important of these possible strategies are:

1. Rebuilding Infrastructure: Focus must be placed on reconstructing basic infrastructure such as roads, bridges, electricity grids, and water and sewage systems. This can be achieved through collaboration with international organizations and donor countries, as well as encouraging private investments in infrastructure projects.
2. Stimulating the Agricultural Sector: The agricultural sector is one of the most important economic sectors in Syria. This sector can be enhanced by providing support to farmers, improving irrigation systems, and supplying seeds and agricultural equipment. This will contribute to achieving food security and increasing agricultural productivity.
3. Encouraging Foreign and Local Investment: An attractive investment environment must be created by improving laws and regulations, offering tax incentives, and facilitating company establishment procedures. Syrians abroad can play a significant role in this context by investing their money and expertise in rebuilding the economy.
4. Diversifying Funding Sources: Reconstruction projects can be financed through international loans, foreign aid, and private investments. Additionally, sovereign funds can be established to manage natural resources like oil and gas in a transparent and sustainable manner.
5. Reforming the Education and Health Systems: Schools and hospitals must be rebuilt, and basic services provided to the population. This will improve the quality of life and increase economic productivity in the long term.
6. Enhancing Governance and Transparency: Combating corruption and enhancing transparency in resource and project management are essential. This can be achieved by establishing independent oversight institutions and implementing strict anti-corruption laws.
7. Leveraging Geographic Location: Syria can benefit from its strategic geographic location to boost regional and international trade. Developing ports and transportation networks can transform Syria into a logistical hub in the region.

We see that these strategies require international and local cooperation, as well as continuous efforts to achieve stability and sustainable economic growth in Syria.

The Role of International Aid and Foreign Investments:

International aid and foreign investments play a vital role in reforming the Syrian economy after the conflict.

• First: International Aid, International organizations have provided substantial humanitarian assistance to Syrians, including food, shelter, and healthcare. This aid has been essential in alleviating the suffering of war-affected populations. Additionally, international aid contributes to the reconstruction of destroyed infrastructure, such as schools, hospitals, and roads, enhancing the country’s capacity for economic recovery.
• Second: Foreign Investments, Foreign investments can contribute to stimulating economic growth by creating new job opportunities and increasing productivity, which helps improve the standard of living for the local population. They also contribute to transferring technology and technical knowledge to Syria, thereby enhancing the capabilities of various sectors such as industry and agriculture.
• Third: Challenges, Political stability and the existence of a secure and stable political environment, along with the lifting of sanctions imposed on Syria, are necessary as they hinder the flow of investments and aid.

Overall, international aid and foreign investments can play a pivotal role in rebuilding the Syrian economy, provided that the appropriate political and security conditions are in place.

Challenges Facing the Economy:

Syria faces numerous internal and external economic challenges following the end of the conflict between us and Bashar al-Assad’s regime. These challenges are divided into two types:

Type 1: Internal Challenges:

1. War Losses: The cost of the conflict in Syria is estimated at over $500 billion, leading to the destruction of the country’s economic and social infrastructure. Industrial production has decreased by 70% due to the destruction of factories and infrastructure, and agricultural production has fallen by 60% due to the destruction of farmland and water shortages.
2. Inflation and Currency Collapse: Inflation rates have risen to over 200%, leading to higher prices for basic goods and a decline in citizens’ purchasing power. The Syrian pound has lost more than 90% of its value since the beginning of the conflict.
3. Corruption and Mismanagement: Syria ranks high on global corruption indexes, which negatively affects investments and economic growth.
4. Type 2: External Challenges:
5. Economic Sanctions: The United States and the European Union have imposed economic sanctions on Syria, restricting trade and foreign investments.
6. Reconstruction: The cost of rebuilding Syria is estimated at over $400 billion, a significant challenge given the lack of funding and international support.

We believe that these challenges, along with others, require significant efforts from both the Syrian government and the international community to achieve economic stability and rebuild the country.

Opportunities for Future Economic Growth:

Despite the significant challenges facing the Syrian economy, there are some opportunities for economic growth in the future:

1. Reconstruction: The cost of rebuilding Syria is estimated at over $400 billion, opening the door to substantial investment opportunities in construction and infrastructure sectors. Reconstruction projects could contribute to creating thousands of job opportunities, helping reduce unemployment rates and improving the living standards of the local population.
2. Agriculture: Investments in agricultural technology and improved water resource management can contribute to increased agricultural productivity, enhancing food security and reducing dependency on imports. Additionally, Syria can leverage its geographical location to export agricultural products to regional and international markets, boosting economic revenues.
3. Energy: Investment in renewable energy projects, such as solar and wind power, can reduce reliance on fossil fuels and improve environmental sustainability. Exploiting Syria’s oil and gas resources could also help enhance economic revenues and provide the necessary energy for reconstruction.
4. Tourism: The rehabilitation of historical and natural tourist sites can contribute to attracting tourists and increasing tourism revenues. Syria can also capitalize on its rich history and diverse culture to promote cultural and religious tourism, further boosting the local economy.
5. Technology and Innovation: Foreign investments can help transfer technology and technical knowledge to Syria, enhancing the capabilities of various sectors such as industry and agriculture. Supporting entrepreneurship and innovation can also contribute to creating new job opportunities and stimulating economic growth.

Conclusion:

In conclusion, it can be said that the Syrian economy stands on the threshold of a new phase filled with challenges and opportunities following the end of the Assad era. This phase requires intensive efforts to rebuild the destroyed infrastructure, restore productive sectors, and improve the living standards of the population. Despite the significant difficulties, there are promising opportunities that can be exploited, such as leveraging skilled human resources, attracting Arab and international investments, and effectively managing oil resources.

Achieving political and economic stability will be the key to success in this phase, as it requires the formulation of clear and transparent economic policies, creating an attractive investment environment, and promoting social justice and sustainable development. With these efforts, Syria can overcome the consequences of war and build a bright future for its future generations.

We emphasize here the recommendations mentioned in the previous study published on our official website, titled Technological Sanctions on Syria: The Silent Disease.

Economic Office
Research Team
Research and Studies Department
Studies
Syrian Future Movement

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