January 2025

Ayanangsha Maitra

◉ EMPTYING THE SMOKE from his mouth after a drag of his Marlboro cigarette, Mohammed Jalali, the $140-a-month salaried Prime Minister under Bashar al-Assad, asserted the Kurdish-oriented news outlet Rudaw that it was not the tumultuous 13-year war that ended the 54-year-old Al-Assad regime, but rather poverty and corruption. Ministers were receiving only $70 a month under Bashar Al-Assad’s autocracy, while government workers were paid a mere $20, creating an unbearable struggle for everyday life. A lightning rebel offensive in the dawn of December 8 changed the course of Syria’s fate, filling millions with euphoria and optimism. On the dawn of December 8, 2024,  Syrians were surprised to learn that their president of 24 years had sought refuge in Russia, which granted asylum to Assad and his family members. Two days after Assad’s departure, at current leader Al-Sharaa’s order, the Malboro loyalist and academia professional Mohammed Jalali  transferred the authority to Mohammed Bashir, establishing an interim government set to last until March 2025.

 

Ministry and the Men of Matches

Syria is now ruled by a hung power of multiple hardliners, drawing experiences from military warfare. De facto leader of the present time, Ahmed al-Sharaa, better known by his nom de guerre Abu Mohammed al-Jolani, leader of Hayat Tahrir al-Sham (HTS) and the dominant force in the rebel alliance, spearheaded the lightning offensive that toppled Bashar al-Assad’s regime . An engineering graduate and gas industry veteran, Mohammed al-Bashir, is the man of his choice to install as interim Prime Minister. Sharaa’s general, Murhaf Abu Qasra,  is appointed to head the Defense Ministry. Once a hardcore Islamist leader, Ahmed al-Sharaa has rizzed several  Western and Arab state-leaders or diplomats. In less than a month, the HTS-led government has established formal diplomatic relations with nearly 30 countries.

Test & Trials ahead Sharaa

Spiraling inflation, a plummeting currency, and, moreover, crippling fuel shortages present the new government with its most pressing challenges, in addition to the need to restore stability and facilitate the return of millions of refugees.

Typically, a regime change leads to a currency devaluation, but Syria’s situation is an exception. Following Assad’s downfall, the country saw an influx of dollars—not only from areas that had previously been under rebel control, but also from the surge of foreign entities and organizations entering Syria.

Economy, Life & Consumption

Syria’s economic crisis, already dire before the onset of civil war in 2011, has worsened tragically. The World Bank’s 2022 data estimated the country’s economy at just $23.63 billion. The economic squeeze has been exacerbated by a stream of interconnected crises, including regional instability, international sanctions, domestic mismanagement, and of course the last devastating earthquake.  The humanitarian crisis in Syria is staggering, with over 16 million Syrians—roughly 70% of the population—now in urgent need of assistance. Nearly 90% of the population lives under poverty.

In the year 2024, World Food Programme (WFP) has provided aid to over 1 million individuals in Syria. In 2023, prior to funding cuts that led to the suspension of its General Food Assistance program, WFP was supporting 5.5 million people. Looking ahead, the organization is seeking US$250 million to help 2.8 million people in 2025. 

Syria’s Reincarnation

In the wake of World War I, the Ottoman Empire gave way to a new order, and France, was entrusted with a mandate over the northern expanse of the former Ottoman province of Syria. For nearly three decades, French rule sought to reshape the land, its people, and its governance, until, in 1946, Syria achieved her long-sought independence. In 1958, amidst a wave of pan-Arab fervor, the country entered into an ambitious alliance with Egypt, forming the short-lived United Arab Republic (UAR). But the two divorced from the union ultimately in 1961.

 

Syria’s social fabric is a mosaic, with Arabs comprising around 50% of the population, followed by significant minorities including Alawites at approximately 15%, Kurds at 10%, Levantine, and others. Under Sharaa, Syria got  her pace faster and several humanitarian agencies and western authorities are expected to come.

 

 

                                                     ◉ In an interview with COGGS, Giorgio Cafiero, CEO of Gulf State Analytics and Adjunct Professor of Georgetown University opined that policymakers in Washington are excited that Syria is now drifting apart from Iran but how they will rule it remains a concern for them. UN Special Envoy for Syria Geir O Pedersen – while briefing to the Security Council on 8 January 2025, mentioned political transition as unclear. “We are ready to work with the caretaker authorities on how the nascent and important ideas and steps so far articulated and initiated could be developed towards a credible and inclusive political transition,” he stated further.

 

 

Before the civil war escalated in 2011, Syria was exporting 380,000 barrels per day (bpd) of oil, a key source of hard-currency revenue. However, this revenue stream vanished after the war broke out. Syria’s economic decline accelerated in 2019 when Lebanon, historically a vital economic partner, entered its own financial collapse. The once-robust economic ties between the two nations—spanning trade, banking, and remittances—disintegrated, depriving Syria of a crucial lifeline. In response, the current Syrian government introduced multiple exchange rates in a desperate attempt to regulate foreign currency flows and protect the remaining hard currency reserves.

Since the onset of the civil war in 2011, Syria’s dependence on oil imports has grown sharply, primarily relying on Iran to meet its dwindling domestic consumption needs. The country’s demand for oil has plummeted from 305,000 barrels per day (b/d) in 2010 to a mere 163,000 b/d in 2024, reflecting the profound toll the conflict has taken on Syria’s economy. Once a relatively self-sufficient producer, Syria’s oil output has drastically fallen from nearly 400,000 b/d before the war to just around 20,000 b/d today. Iraq could not supply because of Washington’s red-eye.

Syria’s oil infrastructure has also been severely impacted by the ongoing conflict. The country operates two refineries, one in Banias with a capacity of 120,000 b/d and another in Homs, capable of processing 107,100 b/d. However, due to extensive damage and a sharp decline in demand since the war’s eruption, both refineries are functioning far below their potential. As a result, Syria has become increasingly reliant on external sources, particularly Iran, to sustain its oil supply. Iran alone owed around $30 billion for its continued support. Reportage indicates that the new Syrian government has no intention of settling the debts incurred during the Assad era. Instead, it has asserted that Iran owes Syria $300 billion for the damage caused by its forces in the country.

Syria’s financial system remains precariously fragile. Current foreign currency reserves are very little, with only about $200 million held in the central bank, along with 26 tonnes of gold, which, at current market rates, is worth roughly $2.2 billion, according to Reuters. However, the country faces a massive shortage of liquidity due to severe sanctions and the freezing of Syrian assets abroad. Western governments, seeking to pressure the Assad regime, have frozen hundreds of millions of dollars in assets in countries ranging from Switzerland to the UK. According to Swiss authorities, around 99 million Swiss francs ($112 million) in Syrian assets are currently frozen in Switzerland, while the Syria Report newsletter estimated the UK holds some $205.76 million in frozen Syrian funds, as reported by Reuters.

Beyond the issue of frozen assets, the broader trade picture remains grim. The Syrian economy has been hit by a catastrophic collapse in both exports and imports. Exports, once a major source of revenue, have plunged from $18.4 billion in 2010 to just $1.8 billion in 2021. This is largely due to the destruction of oil fields, electricity, finance mechanism, supply chain, loss of tourist income, and the disruptions caused by ongoing conflict. At the same time, Syria’s imports—especially vital food and fuel—have remained a key economic burden. Despite falling imports overall, from $22.7 billion in 2010 to $6.5 billion in 2021, the country still struggles with shortages in basic goods, as the state remains heavily reliant on imported fuel and food, with limited foreign exchange to cover these costs. Inflation rates are astronomical, with the Syrian pound plummeting against the dollar, and unemployment has skyrocketed.  Al Sharaa’s swift transition and reformist approach are promising signs, yet these two aspects remain under scrutiny, and are not entirely free from suspicion. Economic recovery is  nearly impossible without significant international investment and support. 

While the international community’s sanctions were intended to pressure the Assad regime, those sanctions have had a catastrophic effect on the general population. Syria’s economy, in its current state, has become one of the most isolated and impoverished in the world. As international support remains scarce and reconstruction efforts stalled, the country’s future depends on the nature, style and module of the leadership.

Russia’s role as a key wheat supplier has been impacted by the departure of Bashar al-Assad, and the US has shown little interest in re-engaging diplomatically with Damascus, especially with its embassy operations suspended since 2012. Meanwhile, Turkey, Qatar and Saudi Arabia have expressed a willingness to provide energy assistance. Ankara will be a partner in reconstruction too. The status of HTS, considered a “foreign terrorist organization” by the EU, Turkey, and the US, continues to be a contentious issue, with Syrian officials like Sharaa urging the West to reconsider its designation. As the scenes in Damascus changes fast, with the region hosting diverse ethnic groups, both the US and the EU have signaled they will wait to see the policies of the new Syrian government before making decisions.

Syria faces urgent needs for investment and comprehensive restructuring across her financial, banking, energy and alternative energy, and transportation sectors. Private sector is the enabling factor of socio-economics.  Beijing’s cautious approach and calculated steps focused on loans for infrastructure without the involvement of the US, EU, or Gulf states, will redifine the diplomacy in the region and the geo-economics in broader sense. Syria has been reborn multiple times throughout its history, but now is the moment to build a promised future for its compatriots—bringing home the 15 million displaced individuals to reclaim their sense of belonging. As the Sharaa-led hung power seeks to rebuild Syria, it stands at a crossroads, where new alliances may form and long-standing bilateral relationships may be renegotiated. Damascus under Sharaa- the man of the moment, exploring the “wisdom of Idlib” and the shifting regional realities, will likely pave a path shaped by these changing factors. The extent of the incumbent’s inclusivity, the nature of its accommodation, and the type of liberal market it will embrace—these are questions that spark both curiosity and concern. Yet, above all, Syria must finally be a place for Syrians.

 

[ Cover illustration : COGGS ]