The Syrian merchant and his relationship with the state between decline and renewal

Introduction:

In the classical economic literature, the trader is seen as an actor within the market, not power; however, the Syrian experience from independence in 1946 to the present day shows a different pattern where the trader plays a dual role, economically and politically, as a structural partner in the production of legitimacy and the distribution of power.
Since the Ottoman era, a special model of “sacred urban capitalism” emerged in Syria, in which the merchant merged with the religious and social fabric, before becoming, in the post-independence period, the center of economic and political equilibrium within the nascent republican system.
This role was not limited to finance or trade, but extended to shaping the executive and legislative branches and influencing macroeconomic decision-making, as early alliances with the National Bloc, private banking councils, and the like showed.

With the development of military coups and the shift in the structure of the government towards solid centralization, the Syrian merchant maintained his position, albeit in shifting formulas, ranging from security containment to symbolic employment, culminating in the era of Hafez al-Assad, where the relationship with merchants was reshaped according to the principle of “loyalty in exchange for economic influence,” before the country moved to the stage of “kin capitalism” under the rule of Assad Jr. This led to the explosion of traditional balances within the political market.

This paper attempts to read the role of the Syrian merchant in the production of power and its balances, not only from a political economy perspective, but by tracing the symbolic, class, and ideological narratives that shaped the merchant’s position between society and the state, shedding light on networked relationships and sometimes ambiguous associations, all the way to the merchants’ interactions in the post-liberation phase, as a potential return to the public space, not only as a market, but as a political force that threatens or supports the legitimacy of the new state.

First axis: The Syrian merchant as an institutionalized actor between the market and the state before independence (pre-1946)

In the formative stages of the Syrian state, specifically during the Ottoman and French periods, the Syrian merchant was not just a component of the economic cycle, but a pillar of the social structure and a functional partner in the production of local sovereignty and the management of the public sphere.
This historical role can only be understood by recalling the location of the market in major Syrian cities as a sphere of power distribution, and recognizing the organic intertwining of commerce, endowment, and religion.
In Damascus, for example, major merchants held positions that went beyond commercial finance. They were often endowment holders and major financiers of Sharia schools, such as the Asaliya School, the Sulaymaniyya School, and others, and even contributed to the construction of mosques, hospitals, and public bakeries. Names such as al-Midani and al-Ajlani were recorded in official endowment records as permanent partners in shaping the civic and spiritual life of the city, leading the merchant to be metaphorically known as the “uncrowned leader” of Damascus.
In Aleppo, the al-Shammas and al-Jabri families contributed to the funding of the educational movement through the Syrian Education Society and had a role in managing relations with the city’s governor directly, especially during the periods of financial turmoil that affected the Ottoman Empire at the end of the nineteenth century.
A number of them have been involved in managing zakat funds and community funding, making the relationship between the merchant and the state a dual functional relationship: economic-legal.
With the entry of the French Mandate in 1920, the colonizer did not succeed in completely dismantling this local network, but was forced to negotiate with it as the only medium capable of policing the city and producing internal legitimacy.
In this context, merchants began to support the national movement economically; the most prominent example of this was the 1936 strike called by the National Bloc to protest against French taxes. The strike lasted 60 days and was fully funded by large Damascene and Halabi merchants, as described in the memoirs of Jamil Mardam Bey and Fares al-Khoury, as well as the memoirs of Jamil Mardam Bey and Fares al-Khoury.
During the strike, merchants paid the salaries of suspended employees and workers, funded national newspapers such as Al-Jeel Al-Jadid and Al-Ayyam, and organized collective kitchens in the al-Midan neighborhood and Saroja market, effectively making them an economic resistance class capable of disrupting the colonial function in the cities without resorting to revolutionary violence.
This is a classic example of what has been called “networked capitalism with political double duty” in the cities of the Arab Mashreq.

Within the framework of political sociology, this period can be read as a moment of fusion between the civil economy and symbolic sovereignty, where the concept of “market” was not separate from the concept of “identity”, nor “profit” from “collective loyalty”, making the Syrian merchant at the founding of the republic later on occupy a negotiating position unlike that of Western economies.
Thus, understanding the structure of the Syrian state since independence cannot be isolated from the foundational role played by the merchant, not only as a financier, but also as a producer of legitimacy and an implicit partner in shaping the political and social space.
The city was run by the market, the market was run by the merchant, and the merchant was not only an economic actor, but a symbolic and institutional actor in his own right.

Axis II: From nascent republics to coups The business class between institutionalized partnership and political exposure (1946-1963)

After independence in 1946, Syria entered the era of republican state-building with high national aspirations, led by civil, parliamentary, and commercial elites who tried to overcome the legacy of the Ottoman and French mandates toward modern, sovereign institutions.
It was natural for the merchant class to find its place within this dynamic, especially since it had already played central political and economic roles in supporting the national movement.
Prominent business families such as Al-Ajlani, Al-Midani, Al-Bakri, Al-Qabbani, and Al-Sharbati emerged during this period, which owned private banks such as the Bank of Syria and the Gulf and the Bank of the Nation, and some of their members held ministerial positions such as economy, trade, and finance, in addition to seats in the Constituent Assembly and the House of Representatives.
The chambers of commerce in Damascus and Aleppo acted as economic councils that participated with the authorities in drawing up ration and financial policies and supervising commercial movement, especially in the importation of wheat, sugar, and iron.
But this partnership began to unravel as the military’s role in political life escalated, beginning with Hosni al-Zaim’s coup in March 1949, the first military coup in the history of the modern Syrian state.
The leader summoned a number of merchants to the General Staff building to discuss “controlling the market.” This was documented in the diary of then Prime Minister Jamil Mardam Bey, who noted that the leader asked them to “lend money to the state to finance the reorganization of the army.” This was the first violation of the contractual relationship between the state and the market.
The political turmoil continued, and with each coup (Sami al-Hinnawi and then Adib al-Shishakli), the merchant was repeatedly used as leverage, sometimes to normalize the market, and sometimes to finance fleeting political deals, such as supporting political campaigns in the countryside in exchange for not nationalizing property.
During this period, there was a clear contraction in private industrial investment. Factory construction fell from 17% in 1950 to 9% in 1953, a sign of a loss of confidence in institutional stability, especially after the passage of confiscation laws under the pretext of anti-trust.

Raymond Hinnebusch calls this the “political exposure of the business elite.” No longer able to secure their interests through parliamentary representation or trade associations, they are threatened with losing their influence in coups, and have changed from partners to potential targets of restriction and nationalization.
This exposure led to the beginning of an internal rift in the merchant class, as some Damascene merchants began to shift to the “neutral capitalist” model and move away from political involvement, in contrast to a rising class of merchants associated with nationalist or populist currents.

At the end of that era, with the rise of the Baathist movement, the country had already entered the phase of what is known as the “dismantling of the traditional market.” General trade and imports became politically managed, and there was talk of nationalizing large enterprises, prompting some business families to migrate to Beirut and Amman, such as the Nabulsi family, which moved its entire industrial investments to Jordan in 1962.

At the sociological level, this stage can be characterized as a transition from the “representative urban bourgeoisie” model to a “managed economy”, where the merchant no longer deals with the state as an institution, but rather with power as a volatile and employable tool, which later paved the way for the nationalization of the market and the liquidation of the influence of the traditional merchant class.

Third axis: The Baath Party and the Deconstruction of the Historical Market: From Symbolic Control to Institutionalized Containment (1963-1970)

When the Baath Party came to power in the March 8, 1963 coup, the Syrian economy began a new trajectory based on the concepts of Arab socialism and central planning. This transformation was not limited to changing policies, but included the re-engineering of the commercial class itself, stripping it of its historical functions as an intermediary between the market and the state, in favor of new actors with party and security loyalties.
From the beginning of 1965, a large-scale nationalization of commercial and industrial enterprises was announced, including dozens of banks and companies, including the Syrian and Gulf Bank and the Qabbani Food Industries Company, as reported in the Official Gazette No. 34, dated June 2, 1965.
This nationalization was not just an economic policy, but a tool to dismantle a commercial class that had always been an independent weight independent of power, and replace it with a new elite linked to the party decision centers.

Politically, the Baath leadership saw traditional commercial capitalism as a cultural extension of reactionary thought and elitist liberalism that needed to be dissolved in favor of the “economy of the masses,” according to statements by the party’s Third Congress in 1966.
Traders were categorized as “committed patriots” and “reactionary exploiters.” This opened the way for measures such as seizing property, restricting import licenses, and even banning them from trading without a party license, as happened with the Agha Khan family in Aleppo, who were denied the registration of a manufacturing company after they refused to join a party trade union.

In Damascus, the traditional network of balance between the merchant, the mosque and the endowment collapsed. Dozens of endowment shops were closed after the endowment was merged with the Ministry of Social Affairs, weakening the role of merchants in funding charitable and educational activities.
Chambers of commerce began to transform from independent professional councils into quasi-security arms of the executive branch. In 1968, only members of the Arab Socialist Union were allowed to run for the presidency of the Damascus Chamber of Commerce, according to an October 17 report in al-Thawra newspaper.
Economically, these policies created a bottleneck in commercial supply chains, as nationalized companies were not compensated with a level of management equivalent to what they were under private sector management, leading to shortages of basic commodities, especially in 1967-1969, as shown in an internally published Ministry of Supply report in 1970, which revealed that sugar and tea distribution rates decreased by 37% in popular markets.

As a result, a large number of aggrieved merchants began to emigrate abroad, especially to Lebanon and Jordan. In one year (1966), the Syrian consul in Beirut registered requests to open commercial branches for 15 Syrian companies, most of which had been nationalized or restricted. This hemorrhaging of social and financial capital weakened the internal market, but did not eliminate the cultural function of the Syrian merchant, who continued to be seen in society as a bearer of economic experiences and traditions that had been forcibly absent.

Structurally, this phase broke the symbolic autonomy of the merchant and turned him into a functional subordinate in a system of administrative centralization in which trade and state bureaucracy merged. The distinction between the “productive merchant” and the “authorized merchant” also began to emerge, with the former excluded and the latter elevated according to considerations of political loyalty rather than economic efficiency.

The Baath not only destroyed the market, but also redefined it, transforming the trader from a “sovereign partner” to a “political employee,” a watershed moment in the history of the Syrian economy, the effects of which are still being felt today.

Fourth axis: Hafez al-Assad and the domestication of the Syrian market: Engineering Loyalty and Dismantling Commercial Independence (1970-2000)

After Hafez al-Assad came to power in November 1970 through the so-called “Corrective Movement,” there was no real reconciliation between the state and the market in Syria. Rather, a process of re-engineering the relationship began based on domesticating the trader and transforming him from an independent social partner to a functional tool within a closed authoritarian structure.
At first, the authority abandoned the tools of direct nationalization that characterized the early Baath era, but it did not retreat from the logic of control; rather, it rebuilt the political economy on the basis of commercial security control, where the market was managed not by supply and demand factors, but by measures of loyalty and dependence.
This is what Patrick Seale described as a “closed economy in favor of authoritarian stability.”
During this period, a hybrid commercial class emerged, including merchants who were contained within security arrangements, some of whom were granted privileges in exchange for political silence and symbolic participation in state projects.
Some of the most notable names include:

• Abdulrahman al-Attar, head of the Syrian Red Crescent for nearly three decades and owner of a string of hotels, factories and commercial agency companies, such as Sony and IBM.
  He contributed to the import of basic foodstuffs in the 1980s and enjoyed a balanced functional relationship with the authorities, without overt confrontation.
• Fares al-Shihabi later emerged as head of the Aleppo Chamber of Industry, but his industrial roots go back to the late 1980s.
  It was associated with the pharmaceutical sector and officially subsidized industrial clusters, an example of the “state-accepted industrial” model.
• The Dabbaghs were known in the leather sector and were associated with active foreign trade in the 1980s, especially with Australia, according to a 1982 Ministry of Economy archive (File No. 17/B, unpublished).
  Their direct connection to the presidential palace has not been proven, but they have moved within a politically controlled business climate.

Instead of being independent platforms for trading, the chambers of commerce have become tools for political management of the market, where security-backed electoral lists are imposed. Although there are no official documents confirming this trend, testimonies from former traders and local articles confirmed that the elections of the Damascus Chamber of Commerce in 1985 were subject to understandings with the authority.
Legally and politically, the merchant was stripped of legislative representation. The number of MPs with business backgrounds dropped from 19 in 1971 to less than 6 by the 1994 session, according to the archives of the Ministry of People’s Assembly Affairs, showing the authority’s desire to monopolize the public sphere and take the economy out of the political sphere.

Economically, the Assad regime relied on the “exclusive agencies” system to grant some families import privileges in areas such as Peljek glass, building materials, and electrical appliances, but without transparency or competition, creating a legalized monopoly within an administratively dependent market, making the trader in this context not a free economic actor, but an unofficial employee in the service of the sovereignty system, surrounded by security control and restrictive legislation.
While official rhetoric began to open up to a “social market economy” in the late 1990s in preparation for Bashar al-Assad’s succession, the Syrian business bourgeoisie was not rehabilitated, and relations remained based on adaptation and employment rather than partnership or mutual trust.

The Syrian market under Assad Sr. was transformed from a space for civil negotiation into a tool of centralized political control, and the Syrian merchant was defined not by his competence or history, but by his compliance with the logic of power, in a closed model that would later pave the way for the monopoly economy under Assad Jr.

Fifth axis: Crony Capitalism under Bashar al-Assad: The Market in the Grip of Authoritarian Privilege (2000-2011)

Bashar al-Assad’s inheritance of power in 2000 was not so much the beginning of a new era as it was the continuation of a centralized process that eliminated the market as a competitive sphere, only to remake it as a loyal tool within a network of authoritarian privileges. Although the oath of office speech at the time promised a gradual opening through what was called a “social market economy,” the practical application revealed the formation of a closed monopoly model that gradually centered around specific figures, most notably Rami Makhlouf, the president’s cousin, who became a symbol of crony capitalism.
From the early years, Makhlouf began controlling vital sectors:

• He obtained the concession to operate Syria’s first mobile telecommunications company, Syriatel, in a monopolistic manner, where competition was limited to MTN Syria under highly restrictive regulatory conditions.
• The Al-Sham Group has expanded into importing and distributing, especially food and pharmaceuticals, amid a lack of transparency in government contracts.
• His name has been associated with a number of brokerage companies on the Damascus Stock Exchange, according to periodic reports issued by the exchange, without revealing the nature of the overlapping ownership.
  These privileges were not the result of economic competition, but of a network of kinship with the executive authority and the security services, creating a pattern of economy based not on the productive trader, but on the “protected monopolist.”
  The effects on the market have been enormous.
  1- Traditional traders such as Al-Sharbati and Al-Qutli, who have been known for their import business since the 1950s, have faced administrative restrictions by withdrawing customs licenses or restricting their participation in tenders, as indicated in articles published by Syria News in 2010, although no official documents were published directly.
  2- The Damascus Chamber of Commerce has become a formal platform; in the 2009 session, there were testimonies in the Syrian Economic newspaper about the imposition of lists of candidates supported by official bodies, without real competition, indicating the transformation of the chamber from a professional representative to an administrative arm.
  3- Privileges in catering and exclusive agencies were granted to members of the inner circle, such as car parts, cement and glass agencies, under undeclared contracts, according to the analysis of local and international research centers, although without full documentation.

Economically, what can be described as a “hierarchical monopoly” managed from the top has crystallized. Trade has become subject to security clearances, imports go through political channels, and financing is regulated by personal relationships with the presidential palace, not market tools.
Even the proclaimed concept of a “social market economy” has been discredited, as it remains a rhetoric without independent oversight mechanisms or empowered competition boards.
Instead of restoring the national trader as an active constituent, he was replaced by a businessman with a political, not commercial, function.

In the end, the period from 2000 to 2011 was a period of systematic exclusion of the productive trader and empowerment of monopoly capitalism based on loyalty and kinship, causing the Syrian economy to lose its structural balance and paving the way for subsequent collapses under the conflict and war.

The sixth axis: The Syrian Merchant in Wartime (2011-2023): From economic actor to mediator in the structure of collapse

With the transformation of Syria into a multi-party conflict zone since 2011, state institutions retreated, the traditional economic environment fragmented, the market was divided between conflicting spheres of influence, and the role of the institutionalized trader diminished to be replaced by a new model of the gray economic intermediary, moving according to the logic of necessity rather than the rules of the modern market.
In northern Syria, especially through the Bab al-Hawa crossing, data from the United Nations Office for the Coordination of Humanitarian Affairs (OCHA) indicated that dozens of aid delivery missions were carried out, some under the supervision of international organizations, but the actual logistical management on the ground was often handled by local merchants with distribution networks and means of transportation, making them an integral part of both the humanitarian and economic system.

With the decline in the capacity of official banks and the loss of value of the Syrian pound, traders have become a link between expatriates and the interior through unofficial remittance networks operating from Beirut, Dubai, and Gaziantep.
A World Bank report (2020) emphasized that Syrian remittances exceeded $2.1 billion, mostly through non-governmental channels, reflecting the critical role of the trader in maintaining livelihood networks and civil stability.

Within areas under the control of the defunct Assad regime, a pattern of traders linked to energy and food import deals from allied countries has developed.
In a Chatham House (2019) report on Russian and Iranian economic influence, references were made to Syrian-Russian business councils that worked on the supply of electricity and cement.
The US Treasury Department (2019) imposed sanctions on Samer al-Fawz for his role in running companies such as Aman Holding and his involvement in projects on confiscated land.
In some Damascus neighborhoods, such as Sheikh Saad, local newspapers reported on the activity of commercial families who organized food distribution during the crisis, amid an almost complete lack of official support.
A video report published by the Syrian newspaper Al-Watan (2021) showed the efforts of neighborhood merchants in funding “collective kitchens,” indicating the transformation of the merchant into a quasi-administrative social actor, playing an organizational role that was historically not his prerogative.

In Syrian opposition areas, authorities such as the Salvation Government in Idlib have imposed new tax regulation and sometimes conditions for business licenses, while the Autonomous Administration in the northeast has adopted socialist-communitarian economic models that restrict competition.
This sharp division has made the Syrian trader move within a space of conflicting references, losing him legal stability and making him more susceptible to political framing than market regulation.

As a result, the Syrian trader was transformed from a partner in the state to an intermediary in the collapse, carrying the burden of distribution, insurance, and guarantee, without legal protection or institutional representation.

In this landscape, the market is no longer just an economic sphere, but a social contingency structure in which commerce moves as a synonym for survival rather than a sign of sovereignty.

The seventh axis: The Syrian Merchant in a Time of Transformation: From symbolic beautification to the test of representation in the next state (2025 and beyond)

In light of the political efforts to formulate a new identity for the Syrian state after years of war, the discussion of civil and economic actors, led by the Syrian merchant, has returned to take a symbolic place in the discursive landscape, but without full institutional clarity on whether this return represents true reconciliation or a functional embellishment in the narrative of recovery.
On July 3, 2025, the Syrian Ministry of Information announced the launch of the national visual identity, with wide official participation.
In his speech, President Ahmad al-Sharaa spoke of the importance of civil society actors in restoring the economy, noting that “the new phase is mobilizing the productive elements of society,” a broad reference that includes the trader as a historical component of the Syrian market.

However, these gestures – despite their political symbolism – have not yet been accompanied by any legal or institutional change that would restore the trader’s representative or organizational status, nor have clear frameworks to ensure the integrity of economic participation, mechanisms to reform chambers of commerce, or the conditions of commercial work under a new constitutional umbrella been announced.
In March 2025, a draft constitutional declaration was handed to President al-Sharaa. It provides for a five-year transitional period, including the separation of powers and the establishment of a constitutional commission and an independent electoral commission.
Although some provisions of the draft have been circulating in the media, including the formation of a “consultative economic council,” the nature of this council, the mechanism for selecting its members, and the extent of merchant representation in it have not yet been officially published, making talk of the merchant’s return to the political decision-making circle an estimate rather than an institutionalized reality.

In order for the state to move beyond a symbolic invocation of the merchant and reach a structural shift in its relationship with him, we believe that the transition needs to:

1- Reforming the Chambers of Commerce Law to ensure the independence of candidacy and election away from tutelage.
2- Dismantling the networks of privileges and monopolies that have accumulated since the turn of the millennium.
3) Modernizing competition, customs and finance laws to allow for fair private sector growth.
4- Integrating economic actors in the formulation of policies through real deliberative platforms, not formal consultations.
Without these steps, the merchant will remain a mere image bearer in the “designed stability” scene, rather than a productive partner in building the republic.

Yes, the importance of restoring the trader lies not in reproducing a traditional pattern, but in formulating a new model so that he becomes an independent civic actor, participates in decision-making outside the networks of kinship and monopoly, and restores the market’s bargaining and sovereignty power.
Then, and only then, does the trader go from survivalist to partner in the state, from bearer of necessities to bearer of economic and social legitimacy.

Conclusion: The Syrian trader between the memory of sovereignty and the question of future representation:

Since the early twentieth century, the Syrian merchant has been one of the pillars of the balance between the state and society, not only as an economic actor, but also as a symbolic component that carries the memory of cities and establishes the idea of the market as an independent negotiating space.

However, this role gradually eroded as political systems became centralized and then closed, until by the end of the twentieth century, the merchant became a functional subordinate, whose authority was determined by loyalty rather than competence.

In wartime, this role was not reclaimed, but reconfigured within a logic of necessity and survival, as the merchant moved as an intermediary between society and authority, between home and abroad, and between popular demand and political restriction.

This has created a gray economic landscape, where commerce intersects with emergency, and survival with lawlessness.

In an exceptional scene on July 2, 2025, at the gates of the Damascus Chamber of Commerce, the voice of merchants echoed an unprecedented chant: “Syria’s merchants are a red line.”
A chant that redrew the fault lines between the market and the authority, and opened the door to a deep political question: Is the merchant still a functional number in the state’s equation, or has he become a partner who rejects marginalization and possesses the tools of protest?
This scene constituted a watershed moment in the relationship between the state and the merchant, and restored his symbolic and economic status as an actor that can no longer be ignored.

With the emergence of a new identity discourse and a transitional constitutional formula in 2025, the merchant is once again at the forefront, but with a central question: does he return as a real structural component, or is he only summoned to embellish the state’s narrative?

This paper, in its seven axes, does not provide a ready-made answer, but rather sketches the contours of an upcoming sovereignty test, in which the restoration of the trader depends on a sincere legislative will and bold institutional reform that recognizes that the market is not an administrative annex, but a partner in the production of sovereignty.

If the Syrian state succeeds in dismantling monopoly networks, rebuilding chambers of commerce as independent representative institutions, and enabling the merchant to regain his historical role as a negotiator rather than a follower, the market can be transformed from an implicit field to a declared sovereign space, restoring the merchant’s position as a guardian of value and a leader in the manufacture of economic and civic life.

Only then does the Syrian merchant become not just a party to the narrative of the coming republic, but one of its true creators.

Office of the Presidency
Economic Office
Dr. Zaher Badrani
Research

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