Executive Summary:
Syria faces an unprecedented economic challenge in the post-war and post-authoritarian era. The crises of poverty, unemployment, and the collapse of the productive infrastructure are no longer merely consequences of armed conflict, but rather structural manifestations of a decades-long authoritarian rentier model that has undermined the state’s ability to plan, distribute, and motivate.
In this context, the paper raises a central question: How can the Syrian economy be rebuilt on the foundations of participatory production, redefining the relationship between state and society and establishing a new economic contract that transcends the logic of rents and aid, toward stable national development and promising regional connectivity, particularly with Gulf partners?
The paper adopts a comparative analytical approach, combining a deconstruction of the current Syrian economic reality with an exploration of transitional models from the experiences of countries emerging from economic authoritarianism (such as Georgia, Rwanda, and Tunisia).
It also presents a theoretical framework based on the concepts of “rentier rationality,” “transitional economy,” and “economic contract,” to understand possible approaches to establishing a post-authoritarian economy.
The paper is divided into eight sections, beginning with an analysis of the structure of the Syrian economy before and after the revolution, then presenting current development bottlenecks, before moving on to presenting the features of the new economy and its structural and participatory specifications.
The paper concludes with executive recommendations directed at the Syrian Ministry of Economy and Saudi investors in non-traditional sectors with strategic impact, and emphasizes the need to develop a transitional legal framework that ensures the feasibility and protection of investment.
The paper aims to provide decision-makers, researchers, and investors with a foundational vision for a productive and just Syrian economy, contributing to the stability of the transitional phase and rebuilding trust between the state, society, and regional capital.
General Introduction:
This paper comes in the context of a Syrian transitional moment that requires a radical review of the economic model that has governed the country for decades. Rentier, privileged, and distributive mentalities dominated state institutions and market mechanisms, preventing the emergence of a fair and stable productive structure.
The alliance between politics, security, and the economy, particularly in the first decade of the twenty-first century, has led to what can be described as a “closed clientelist economy,” unable to achieve sustainable development, create widespread job opportunities, or achieve regional and developmental justice.
With the outbreak of the revolution and the subsequent open war, the economic structure disintegrated beyond the manifestations of temporary collapse, reaching the core of the economic system itself, revealing its structural fragility and absolute reliance on centralized decision-making, unproductive budgets, and political clientelist relations. With the decline of the state’s role, the multiplicity of de facto authorities, and the prevalence of informal economic models, the economic question has become one of the fundamental entry points for understanding the possibility of re-establishing a new state, a productive society, and the legitimate relationship between them.
This paper seeks to provide a foundational analytical reading of the Syrian economic structure, linking the manifestations of the ongoing collapse with its institutional and mental roots. It then proposes theoretical and operational approaches for reshaping the Syrian economy within a potential political transitional phase.
The paper focuses on the concept of a “new economic contract” as an approach to transcending the logic of partial reform and toward building a foundational vision that links production, local empowerment, and regional connectivity, particularly with potential partners such as the Saudi investment sector.
Theoretical and Conceptual Framework:
This paper is based on three central concepts that are supposed to constitute an introduction to understanding the Syrian economic transformation: the “rentier mind,” the “transitional economy,” and the “economic contract.” These concepts are analytical tools that help deconstruct the existing economic structure and propose alternative models that are more applicable in a post-authoritarian context.
First, the concept of the “rentier mind” expresses a pattern of economic thinking and policies that undermines productivity and perpetuates dependence on the state as a resource distributor rather than an enabler.
In the Syrian context, the rentier mindset has been linked to a near-total reliance on oil rents, political rents (such as regional relations), and security rents (privileges linked to loyalty). This has led to the erosion of the market as a space for competition, transforming it into a field for clientelistic positioning.
This concept has been developed academically within the political economy literature in the Arab world, particularly by Hisham Sharabi, Gilbert Achcar, and Aziz Al-Azmeh.
Second, the concept of “transitional economy” refers to the phase that countries emerging from tyranny or war experience, where the relationship between economic actors and state institutions is reshaped.
In the comparative literature, various models have emerged: the “rapid market liberalization” model (as in Georgia) or the “gradual local empowerment” model (as in Rwanda). In the Syrian case, neither model can be replicated; rather, a hybrid approach must be created that takes into account the fragility of the state, the strength of local communities, and the nature of the existing administrative division. The transitional economy is not merely an intermediate stage, but rather a founding moment that redefines investment priorities, governance frameworks, and the logic of distribution.
Third, the concept of the “economic contract” is used as a foundational approach that goes beyond policy reform or technical reconstruction, toward constructing a comprehensive vision of the nature of the relationship between the state, society, and investors.The economic contract requires defining governing principles (such as fairness and transparency), mechanisms for participation, and means of oversight.
In cases such as South Africa and Tunisia, this contract represented an opportunity to rebalance social forces and pave the way for the gradual institutionalization of economic legitimacy. In the Syrian case, this concept is a necessity, not a luxury, as trust and stability cannot be restored without a new contractual vision that restores respect for production and ends the logic of privilege and clientelism.
Based on these concepts, this paper approaches the Syrian reality not as a case of temporary collapse, but rather as the embodiment of decades of institutional and economic stagnation. It explores how to overcome this by establishing a transitional economic contract that rebuilds the state and society on the basis of production and participation.
Analysis of the Current Syrian Economic Reality:
The Syrian economy before 2011 was characterized by a complex rentier structure, in which political and security rents were intertwined with patterns of monopolistic centralization and institutional clientelism. The so-called “economic liberalization” phase was merely a formal transition from central state rentierism to a new model of market rentierism linked to the political center. The real estate and service sectors became arenas for authoritarian positioning rather than tools for sustainable development.
This model failed to generate real job opportunities, create sectoral competitiveness, or achieve developmental justice among governorates.
Productive groups—peasants, craftsmen, and technical workers—were excluded in favor of privileged networks close to the authorities, resulting in widespread economic marginalization and a reluctance to participate in the production cycle.
With the outbreak of the war, the Syrian economy entered a phase of structural collapse, measured not only by the extent of destruction or losses, but also by the collapse of the logic governing the relationship between the state, the market, and society.
Productive infrastructure was destroyed across vast areas, massive waves of skilled and qualified migration occurred, and the state lost its ability to control the economic sphere due to the multiplicity of de facto authorities and the disintegration of public policies. Moreover, informal parallel economic models have emerged, ranging from the relief economy, local rents, smuggling networks, and closed crowdfunding models, deepening fragmentation and weakening the possibility of building a unified economic policy.
This reality cannot be understood as an emergency crisis; rather, it must be addressed as the long-term consequence of an unjust economic structure, lacking transparency, and isolated from productive society.
This characterization constitutes a necessary basis for transitioning to a new model that does not reproduce economic tyranny, but rather establishes a contractual, participatory relationship based on production, fair distribution, and the role of the state as an enabler rather than a distributor of privileges.
Analysis of the Current Syrian Economic Reality:
The Syrian economy before 2011 was a complex model of political and security rents, where privilege networks intertwined with monopoly and clientelist structures, in the near-total absence of competitive market mechanisms or institutional governance.
The “economic liberalization” phase of the first decade of the twenty-first century, as described by Gilbert Achcar, represented a transition from socialist rentierism to pseudo-liberal rentierism, without leading to the construction of an independent productive economy.
This rentier structure manifested itself in several forms:
- Sectoral concentration: Real estate and financial services sectors linked to the government dominated economic activity, while agriculture and manufacturing declined.
- Customer monopoly: Investment opportunities, licenses, and public contracts were tied to political and security loyalties, not feasibility or efficiency criteria.
- Disconnection from productive society: Peasants, craftsmen, and industrial workers were marginalized in favor of a rentier class linked to the political center.
- With the outbreak of the revolution, the Syrian economy entered a phase of systematic collapse. This collapse cannot be reduced to loss figures, but must be understood as a structure disintegrating on multiple levels:Disintegration of productive infrastructure: Widespread destruction of factories, irrigation networks, energy, and vital facilities.
- Brain drain: A mass exodus of engineers, doctors, and specialists created a knowledge gap that is difficult to fill.
- Administrative and regional fragmentation: multiple de facto authorities and the absence of a unified national economic policy have led to the emergence of disconnected local economies, some based on relief, others on smuggling or military rents. In this context, it is impossible to talk about “reconstruction” without dismantling the rentier structure that preceded the war and redefining the relationship between the state and the economic community. The absence of an economic contract, a lack of transparency, and the persistence of a logic of privilege are among the most prominent obstacles to recovery. Comparative experiences, such as those in Rwanda after 1994, demonstrate that overcoming economic collapse is not achieved solely through injecting funds, but rather through rebuilding institutional trust and establishing a participatory national vision that links production, justice, and governance. In Georgia, dismantling corruption networks and freeing the market from political privileges represented a fundamental entry point for rebuilding the transitional economy. In the Syrian case, these conditions remain absent, making an analysis of the current economic reality a fundamental necessity to understand what must be overcome, not just what must be restored.
Post-War Development Bottlenecks: Structural and Policy Causes:
Despite the end of major military operations in Syria, development still faces structural and policy bottlenecks that prevent the transition to a stable, productive economy.
These bottlenecks are not only related to a lack of funding or physical destruction, but also stem from a profound flaw in the institutional structure, the absence of an economic contract, and the multiplicity of intervening actors, rendering development planning vulnerable to fragmentation and politicization.
First, the weakness of the productive infrastructure constitutes a fundamental obstacle. According to an ESCWA report issued in January 2020, more than 40% of industrial and agricultural facilities in Syria have been partially or completely destroyed, with a sharp decline in the state’s ability to provide electricity, water, and communications.
The February 2023 earthquake further exacerbated the damage in the northwest of the country, particularly in Idlib and Aleppo, where thousands of facilities were put out of service.
Second, there is the fragility of human capital.
Research estimates indicate that more than 60% of medical and educational personnel have left the country or are no longer employed, creating a knowledge gap that is difficult to fill in the short term. Youth unemployment has exceeded 50% in some areas, with no effective vocational training programs.
Third, there is a lack of accurate economic information. There is no unified national database on production, investment, or employment, making economic planning more speculative than scientific. A report by the Centre for Syrian Studies at St. Andrews noted that the multiplicity of actors controlling the ground has led to the emergence of “disjointed local economies,” some based on relief, others on military rents or smuggling, and this continues to this day.
Fourth, financing barriers and legal risks. Despite the lifting of some Western sanctions in May 2025, the legal environment remains unclear for investors, especially given the multiplicity of local authorities. A report issued by the Strategies Center indicated that more than 70% of Syrians depend on humanitarian aid, and that the poverty rate exceeded 90% by the end of 2024, making the local market unable to stimulate domestic demand.
Fifth, there is confusion between national priorities and relief or political projects. There is no national economic vision that defines priority sectors, and instead, scattered projects are implemented based on external funding or local interests.
Researcher Khaled Al-Turkawi pointed out that regional and urban planning are absent from most projects, limiting their ability to create economic integration between cities and regions.
Sixth, there is a multiplicity of international and local actors involved. United Nations organizations, Gulf entities, local actors, and military councils all propose development projects without institutional coordination, leading to conflicting objectives, duplication of implementation, and a lack of evaluation. This has begun to fade with the economic centralization in Damascus. In light of these bottlenecks, it is impossible to talk about “reconstruction” in the traditional sense. Rather, it is necessary to consider establishing a new economic contract that redefines the relationship between state and society and places development at the core of political and social legitimacy.
Foreseeing the Syrian Transitional Economy:
Given the structural collapse of the Syrian economy, recovery cannot be envisioned by restoring or renovating the previous model. Rather, a new economy must be established that transcends the logic of rents and privileges and redefines the relationship between the state, society, and the private sector.
This transitional economy is not built solely on financing or reconstruction, but rather on reshaping the governing logic of production, distribution, and participation.
Comparative experiences show that post-conflict countries have succeeded when they adopted participatory production models and placed development at the heart of the new political contract.
In Rwanda, after the 1994 genocide, the government launched a comprehensive national vision (Vision 2020), which focused on empowering the private sector, developing infrastructure, and improving the business environment. This led to economic growth exceeding 7% annually over two decades, a 40% reduction in poverty, and significant improvements in education and health indicators. In Georgia, dismantling corruption networks and freeing the market from political privileges was a key step toward rebuilding the economy after the revolution. Administrative procedures were simplified and partnerships between the state and investors were activated, leading to rapid growth in the services and technology sectors and significant improvements in governance and transparency indicators. In the Syrian case, these experiences can be inspired, not replicated, by adopting a transitional economic model based on
- Empowering the civil and cooperative sector: By supporting local councils, productive associations, and community initiatives, this will create a flexible grassroots economy capable of transcending state centralization.
- Investing in vital non-traditional sectors: such as renewable energy, smart agriculture, technical education, and knowledge-based industries, which are sectors that Syria enjoys a comparative advantage in, particularly in the north and east.
- Redefining the role of the state: To be empowering, transparent, and participatory, by building independent institutions for planning, evaluation, and accountability, free from the logic of central control.
- Smart regional connectivity: Especially with the Gulf states, which is taking place today, as we see it, through logistical, educational, and technical projects that transform Syria into an economic hub between the Mediterranean and the Gulf, reintegrating it into the regional market. This vision is not presented as an ideal vision, but rather as a scalable foundational framework that takes into account the specificities of the Syrian situation and draws on the lessons of countries that have successfully transformed a moment of collapse into a foundational opportunity.
Foundations of a New Economic Contract in Syria:
In the context of the search for a genuine economic transition, it is not enough to change policies or introduce reform programs. Rather, the relationship between the state and the economic community must be fundamentally rebuilt through what can be described as a “new economic contract.” This contract requires defining the principles governing the production and distribution system, establishing mechanisms for community participation and oversight, and redefining the role of the state as an enabler rather than a guardian of privileges.
First, defining the founding principles. The Syrian economic contract must be based on three main pillars:
- Distributive justice: ensuring access to resources for marginalized groups and restoring balance between the centers and the peripheries.
- Economic transparency: by publishing information, indicators, and statistics related to spending and production, and subjecting them to open review.
- Community participation: involving local stakeholders, chambers of commerce, unions, and local councils in setting development priorities, avoiding excessive centralizatio
Second, build independent institutions for planning and evaluation. The transition from a rentier to a productive economy is impossible without institutions capable of managing economic knowledge, analyzing feasibility, and monitoring implementation. It is proposed to establish a “Syrian Council for Transitional Economic Planning,” independent of the executive authority, comprising domestic and international experts. This Council will develop short- and medium-term plans and evaluate national performance without political bias.
Third, integrate universities and research centers into policy formulation. Academic institutions should become constituent rather than advisory actors, through direct working agreements with the Ministry of Economy, provincial councils, and major investment projects. Education programs should be restructured to serve priority sectors, and economic research should be linked to actual, rather than hypothetical, needs.
Fourth, activate Syrian diaspora networks as a source of knowledge and funding, as Syrians abroad represent an overlooked strategic resource, whether in terms of technical expertise, capital, or the ability to build bridges with international actors. It is proposed to establish a “Syrian Economic Diaspora Authority,” which would work in coordination with diplomatic missions and relevant ministries and oversee financial transfers, knowledge partnerships, and technology incubation projects.
Fifth, reengineering the relationship between the state and the market.
The new state must shift from its role as a guardian to that of a catalyst: overseeing the development of the legal environment, providing incentives, monitoring performance, and leaving the initiative to the civil and commercial sectors. A “Community Productive Partnership” law will be developed, regulating the relationship between local capital, the state, and society, preventing monopoly and encouraging diversity and individual initiative.
This proposed economic contract is not the end of the road, but rather its beginning; it serves as a foundational basis upon which new economic institutions and practices can be built, transforming Syria from a conflict economy to an economy of contract, community, and production.
Policy Recommendations:
At the conclusion of this paper, after analyzing the structural reality of the Syrian economy, anticipating the features of the transitional phase, and following consultation and discussion conducted by the Economic Office team of the Syrian Future Movement, we present these practical recommendations directed at key actors capable of influencing the course of economic reconstruction: the Syrian Ministry of Economy and Saudi investors, as a qualified regional partner to contribute to the new foundation, as stated by Saudi officials. These recommendations are not presented as a ready-made program, but rather as a preliminary framework that can be developed and adapted according to future political and economic changes.
First, Recommendations for the Syrian Ministry of Economy:
- Develop an integrated transitional economic framework that transcends the mentality of temporary incentives or rent distribution, and embraces long-term production planning that links agricultural and industrial sector priorities with training, technical education, and local employment policies.
- Establish an independent unit for economic feasibility analysis, directly linked to the Prime Minister’s Office, managed through a transparent methodology, and leveraging the expertise of Syrians residing and living in the diaspora to ensure economic decision-making is independent of political privileges.
- Launching a unified national platform for open economic data, including public contracts, production indicators, the budget, and sector performance, will enhance transparency and rebuild trust between the state, society, and investors.
- Activate institutional partnerships with universities and research centers through executive contracts that place them within economic policy-making teams, rather than merely as advisors, thus linking academic knowledge with actual planning needs.
Second, recommendations for Saudi investors:
- Review investment opportunities in non-traditional sectors that are appropriate for the post-war context, such as solar and wind energy, smart agriculture, technical education, and resource recycling. The northern regions, along with the interior, the capital, and the coast, are considered candidates for this due to their relative stability and vibrant youth markets.
- Establish productive partnerships with local cooperative councils, enabling decentralized, low-cost investment models with direct social impact and contributing to building sustainable relationships with the local community.
- Support microfinance projects and technology incubation centers, particularly in small cities and rural suburbs, to create a flexible production environment and achieve social and economic returns simultaneously.
- Push toward the development of a unified investment legal framework, implemented by the transitional government in agreement with Gulf authorities, that includes capital guarantees, dispute resolution mechanisms, and clarity of administrative responsibilities, thus encouraging the injection of long-term Saudi institutional capital.
- Investing in projects that connect Syria and the Gulf geographically, through ports and land routes, e-commerce platforms, and digital education, would transform Syria into an economic corridor between the Gulf and the Mediterranean, reintegrating it into the regional market. These recommendations aim to transform the transitional phase into a moment of genuine establishment, not merely overcoming the crisis. They cannot be achieved without clear political will, a transparent planning vision, and a regional partnership based on production, not aid.
Conclusion:
The current Syrian situation represents an exceptional opportunity to rethink the nature of the national economy, not as a technical recovery tool, but rather as a foundational lever for a new social contract that reconstructs the relationship between state and society based on production, justice, and participation. The paper demonstrates that the Syrian economy, as designed and operated for decades, has been subject to a rentier security mentality that excludes efficiency and reproduces privileges. The war did not create the collapse, but rather deepened it and exposed its structural fragility.
In contrast, this paper seeks to demonstrate that reconstruction does not begin with physical reconstruction, but rather with dismantling the mental and institutional structure of rentierism and establishing a productive logic that links distributive justice, informational transparency, and effective community participation.
We have presented a foundational model based on an analysis of international experiences, adapted to the Syrian context, that takes into account local complexity and proposes a gradual construction of planning, evaluation, and accountability institutions. Specific recommendations were also directed to both the Syrian Ministry of Economy, as the primary bearer of founding responsibility, and to Saudi investors, as a regional partner capable of playing an influential role in launching a new production cycle that integrates the local with the regional, and the societal with the institutional.
The new economic contract is not merely a government program or a partisan vision, but rather a comprehensive national vision that establishes a future worthy of post-war Syria and transcends the logic of crisis toward building a state based on productive legitimacy, societal integration, institutional openness to regional partnerships, and knowledge development.
Economic Office
Research Team
Study
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