Introduction:
In the context of the profound transformations that Syria has witnessed over the past five decades, economic identity has emerged as one of the essential keys to understanding the nature of power, governance patterns, and sources of political legitimacy. Just as political and constitutional identity expresses the form of the state and the citizen’s position within it, economic identity embodies the relationship between state and society in terms of production, distribution, and social justice.
It is not merely financial policies or development plans, but rather a national narrative that defines who owns, who works, and who decides.
Syria has undergone profound economic transformations, from the model of the welfare state under Hafez al-Assad, to attempts at selective economic liberalization under Bashar al-Assad, and then to the fragmentation of factions and local economies after 2011.
This trajectory was not merely a reflection of political events; rather, it was an active component of them, defining the position of every political and social actor in the complex Syrian landscape.
This paper raises a central question:
Does Syria today possess clear features of a national economic identity?
If the economic identity has been disintegrated by the conflict, can it be rebuilt after liberation, given the ongoing multiplicity of factions, foreign interventions, and societal fragmentation? What is the relationship between this identity and the reproduction of political and constitutional legitimacy in the future of Syria?
The paper seeks to analyze the transformations of Syria’s economic identity across four central stages, assess the extent of compatibility or conflict between various economic visions, and draw inspiration from the experiences of countries that have reshaped their economic identities to achieve a comprehensive renaissance. It adopts a comparative historical-economic approach that intersects with political and social analysis, is based on a critical review of contemporary economic visions, and an empirical analysis of international experiences such as those of South Korea, Rwanda, and Colombia.
Rebuilding Syria’s economic identity is not merely a technical or financial task; it is a national project that requires a comprehensive narrative, a new social contract, and economic councils that represent Syria’s diversity.
Hence, the importance of this study as an intellectual contribution to shaping the contours of this project.
Chapter One: Economic Identity during the Era of Assad the Elder (1970–2000)
With Hafez al-Assad’s rise to power in November 1970 through what became known as the Corrective Movement, Syria began a new phase of state restructuring. The political project centered around building a centralized authoritarian regime based on a triad: the Ba’ath Party, the army, and the security services. In this context, the economy was not merely a tool for development; it became a means of political control, gaining loyalty, and consolidating legitimacy.
This approach formed the foundation upon which Syria’s economic identity was built for subsequent decades.
Under Assad the Elder, the Syrian regime adopted a command economy model inspired by the Soviet experience. The state controlled the means of production, set prices, and directed investments. Banks, insurance companies, and major industries were nationalized, and government institutions were established to manage domestic and foreign trade. This model represented what is known in political literature as a “welfare state,” a state that relies on rent—whether from natural resources or foreign aid—to provide basic services to citizens in exchange for refraining from demanding political rights. In the Syrian case, oil rents were not the only source; political and security rents were also part of the state structure. The regime used public sector employment and widespread subsidies for basic commodities as means of ensuring popular loyalty and consolidating its legitimacy in the absence of genuine political representation.
Syrian researcher Abdul Razzaq Eid has pointed out that “the Ba’athist state was not a state of development, but rather a state of political resource distribution.”
Despite the Ba’athist rhetoric about an alliance between workers and peasants, actual economic policies reinforced regional disparities and consolidated the dominance of bureaucratic elites over the levers of the economy. Economic decision-making was centralized in the capital, Damascus, and rural and peripheral areas were excluded from effective participation in planning or balanced resource utilization.
This led to a development gap between the center and the periphery, which subsequently contributed to the exacerbation of social and political tensions. The regime also relied on public sector employment as a means of ensuring loyalty. The bureaucracy expanded dramatically, and job opportunities were linked to party affiliation or political loyalty. Economic support was also used to consolidate the regime’s legitimacy, especially during times of crisis, such as the 1980s, which saw the collapse of the Syrian pound and severe shortages of basic commodities.
Syrian economic researcher Dr. Samir Saifan described this period as “a political economy of loyalty, not of production.”
Syria experienced a stifling economic crisis in the 1980s, as a result of falling oil prices, declining Soviet support, and mismanagement of resources. This crisis led to a worsening fiscal deficit, an inflated administrative apparatus, and a decline in productivity.
The value of the Syrian pound fell more than 12-fold in a single decade, and the black market emerged as a de facto alternative to the formal economy.
Despite limited attempts at openness in the 1990s through Investment Law No. 10 of 1991, the economic structure remained paralyzed, unable to achieve sustainable development or create real job opportunities outside the public sector. A report issued by the Doha Center for Policy Studies indicated that “the Syrian economy in the 1980s was a crisis-ridden economy, based on denial, not reform” (Doha Center, 2016). At that stage, the Syrian state began to thrive on political rents rather than economic rents, where loyalty was more important than competence.
In the late 1990s, Syria began to witness a gradual shift in the power structure, paving the way for the transfer of power from Hafez al-Assad to his son, Bashar al-Assad, following the mysterious death of Bassel al-Assad. This shift was not merely a transfer of leadership; it represented a pivotal moment in the restructuring of the political system, as it moved from an authoritarian republican model to what is known in critical literature as “republicanism”—that is, a republic with a hereditary character.
The term “republicanism” is a linguistic construction combining “republic” and “monarchy.” It is used to describe regimes that adopt a republican form in terms of constitution and institutions, but exercise power in a hereditary manner, as in monarchies.
This term has become popular in Arab political writings since the turn of the millennium, particularly in describing regimes such as Syria, Egypt under Mubarak, and Libya under Gaddafi, where signs of political hereditary rule appeared despite the republican nature of the regime.
In the Syrian case, the groundwork for this shift began after the death of Bassel al-Assad in 1994, when a new government was summoned. Bashar al-Assad was released from Britain and rehabilitated politically and militarily. The constitution was then amended in 2000 to lower the minimum age for the president from 40 to 34, commensurate with Bashar’s age at the time. Many researchers consider this amendment a founding moment for the Syrian Republic, as power was inherited within a formal republican framework, without a real transfer of power or competitive elections.
The Harmoon Center for Studies addressed this shift in a study titled “Syria’s Constitutional and Institutional Development,” noting that the Third Republic—the Ba’ath Republic—witnessed a gradual shift toward political inheritance, which contributed to the weakening of institutions, the consolidation of individual power, and the marginalization of political and civil life.
Understanding this shift is essential for analyzing the economic identity under Bashar al-Assad, as new economic policies were linked to the rise of a business class linked to power and the decline of the traditional welfare state, in favor of a selective neoliberal model that served the reproduction of power more than serving society.
Chapter Two: Economic Identity under Bashar al-Assad (2000–2011)
With Bashar al-Assad’s assumption of power in July 2000, Syria entered a new phase of reshaping its economic identity, accompanied by a reformist discourse focused on openness, administrative modernization, and the promotion of the private sector.
It initially appeared that the regime sought to move beyond the patronage model prevalent under Hafez al-Assad in favor of a more liberal model, one that would keep pace with global transformations following the fall of the Soviet bloc.
However, these transformations remained limited and distorted, as they were not based on genuine institutional reform, but rather on the redistribution of economic influence within the same power network.
At the turn of the millennium, the Syrian regime launched a series of economic measures described as steps toward a “social market economy,” a term used to mitigate the transition from a command economy to a free market. Foreign investment was opened, private banks and insurance companies were established, trade laws were amended, and the role of the private sector was expanded in some sectors, such as tourism and services. However, this openness remained limited and did not include vital sectors such as energy, telecommunications, or agriculture. Nor was it accompanied by genuine administrative or legal reform, which made the investment environment unstable and vulnerable to security and political interference.
Researcher Alaa Al-Khatib noted that “the economic growth that occurred in Syria between 2000 and 2007 was not the result of superior domestic policies, but rather a reflection of the global growth wave following the liberalization of international trade.”
One of the most prominent features of the economic identity under Bashar al-Assad was the rise of a new class of businessmen directly linked to the regime, known in the media as the “economic cartel.” These individuals were granted extensive privileges in the fields of trade, contracting, banking, and telecommunications in exchange for their political loyalty and role in supporting the regime.
Rami Makhlouf, the president’s cousin, became a symbol of this class, controlling vast sectors of the Syrian economy, including the telecommunications company Syriatel and numerous investment companies.
This model was not liberal in the true sense; rather, it was a form of “clientel capitalism,” where economic opportunities are distributed based on loyalty, not competence or competition.
The Harmoon Center has described this model as an “economy of power,” where market tools are used to consolidate control, not to liberate it.
Despite relative economic growth in some years, the development infrastructure remained weak, unemployment problems, especially among young people, were not addressed, and productive sectors such as agriculture and industry were not developed. Rural areas remained marginalized and did not benefit from economic openness, which deepened the gap between the center and the periphery.
Syria’s average economic growth between 2000 and 2007 was approximately 4.8%, lower than that of neighboring countries such as Jordan (6.6%) and Turkey (5.4%). This demonstrates that growth was not exceptional, but rather part of a regional wave that did not translate into equitable or sustainable development.
Despite the official rhetoric promoting “economic reform,” the reality remained far from it. Oversight institutions were not activated, nor was structural corruption combated. Instead, it was used as a tool to control the economic elite.
A report by the Economic News Agency indicated that “promises of reform were not translated into real policies, but rather remained tools to beautify the regime’s image domestically and internationally.”
Labor unions and civil society organizations also remained subject to political control, preventing the emergence of an independent economic community capable of holding the regime to account or proposing development alternatives.
Looking at the period between 2000 and 2007, it can be said that the Syrian economy experienced a period of remarkable growth, driven by a series of reforms and a gradual opening to the global market.
This is an expanded overview of this phase of economic growth in Syria (2000–2007):
- Growth Rates and Financial Improvement:
- The economic growth rate in 2007 reached approximately 6.2%, one of the highest rates in the region at the time.
- The external debt ratio decreased to 17.2% of GDP, reflecting improved management of financial resources.
- Development of Trade and Investment:
- Exports doubled from $5.1 billion in 2004 to $12.4 billion in 2007, driven by rising oil prices and expanding textile exports.
- Foreign direct investment increased from $600 million in 2000 to $787 million in 2007, as a result of simplified procedures and economic openness.
- Structural and Institutional Reforms:
- The country witnessed the opening of private banks and insurance companies, and the foundation stone was laid for the Damascus Stock Exchange.
- Import restrictions were eased and customs duties were reduced, enhancing market flexibility.
This phase of economic growth was not just about numbers; it was an expression of the state and society’s ability to overcome obstacles and adopt reform policies. What is striking, however, is that this growth was not sustainable, as indicators quickly declined due to the political and social challenges that followed.
This underscores the importance of what the transitional phase must strive for today. Just as trust between investors and the state was key to growth during that period, trust among members of society is now key to reconstruction.
