The path ahead for the country and its people is just as costly and treacherous as long as it is being run by an elite that benefitted from re-tooling it for conflict
The conflict in Syria has devastated the country’s economy. Its gross domestic product plummeted to under one-third of its value in 2010.
Over the 12 years of fighting, estimates from the Syrian Centre for Policy Research put total economic losses at over $700bn, including the impact of missed opportunities caused by the war. That is more than 35 times greater than the nominal value of GDP for 2022.
The astronomical figure includes the impact on existing capital as well as the erosion in the creation of potential value. It represents the annihilation of decades’ worth of work to create prosperity. The process of rebuilding it will take generations.
These estimates are likely to be conservative since they depend on historical valuations rather than the actual value of replacement capital, which would follow prices and market conditions. Furthermore, they do not incorporate projected future losses resulting from war-induced economic and environmental damage.
The decline in economic output and the destruction or disruption of accumulated capital, including infrastructure and facilities, have been accompanied by profound economic disparities.
Unemployment and budget deficits soar
The decline in economic participation has sent unemployment over the 40% mark. Millions of individuals have lost their jobs, and decent job opportunities have become scarce. The general budget deficit has reached nearly 50% of GDP, primarily due to declining public revenues and deteriorating public spending, excluding military expenditure.
The decline in economic participation has sent unemployment over the 40% mark. Millions of individuals have lost their jobs, and decent job opportunities have become scarce.
Consequently, an unprecedented public debt has been incurred, exceeding 250% of 2022 GDP. That burdens future generations with decades of repayment.
The trade deficit has also surpassed 40% of GDP, exacerbated by a decrease in exports and increased reliance on imports. Consequently, the value of the Syrian pound has dramatically plummeted, currently standing at 8,500 per dollar compared to 47 pounds per dollar in 2010.
This devaluation has accompanied rampant inflation, with prices surging over 100 times by the end of 2022 in comparison to 2010. As a result, the purchasing power of Syrians has drastically diminished, with the majority of the population experiencing poverty and relying on humanitarian aid.
The factors of war persist
These catastrophic indicators signify an unparalleled economic collapse. But they are merely peripheral symptoms compared to the true losses incurred by the Syrian economy.
Most alarming is the transformation of much of its economic capacity into mechanisms of war, destruction, and injustice. What little remains of economic output and the accumulated wealth has been diverted to fuel the conflict, with military and security expenditures multiplying exponentially. The militarization of economic activity has become its cornerstone.
What is now labelled as added value in the economy is, in reality, a catalyst for economic and developmental devastation. This includes the exploitation of natural resources, public revenues, private wealth, and economic enterprises for the purpose of war profiteering and societal exploitation.
Activities accompanying the conflict, such as human trafficking, drug trafficking, smuggling, looting, levies, monopolies, and the exploitation of economic opportunities, have only made the situation worse.
Injustice and inequality
Injustice and inequality have permeated the fabric of Syrian society due to the war. It has resulted in the largest destruction of economic structures in contemporary history, while also redistributing wealth, opportunities, and resources in favour of a privileged war elite, exacerbating the profound depths of injustice.
Injustice and inequality have permeated the fabric of Syrian society resulting in the largest destruction of economic structures in contemporary history, while also redistributing wealth in favour of a privileged war elite, exacerbating the profound depths of injustice.
A new order of economic power has solidified, in which the vast majority of Syrians, who have lost their wealth, businesses, and opportunities, find themselves as the primary losers. This new configuration of wealth and economic activity will dominate the foreseeable future, perpetuating forces of despotism and dominance.
Despite all regions and communities suffering from economic collapse, economic destruction has applied disproportionately.
This 2013 pictures shows the destroyed Khaled bin Walid mosque in the al-Khalidiyah neighbourhood of the central Syrian city of Homs.
Certain areas – including Aleppo, Idlib, Homs, Deir ez-Zor, Raqqa, and Daraa – have been subjected to comprehensive destruction, sieges, and unparalleled looting when compared to other regions and communities like Latakia, Tartus, Hama, and Hasakah. This has deepened injustices and economic disparities among Syrians.
Death toll and human cost
The human cost has been brutal, costing lives and destroying dignity, rights and freedoms. Conservative estimates put the death toll at 700,000, with millions more injured and disabled.
Syrians have been subjected to all forms of atrocities, including the deliberate targeting of civilians with both conventional and internationally prohibited weapons, sieges, torture, rape, and forced displacement, as part of a systematic policy of collective punishment.
In addition to the direct and devastating losses to human capital, millions of Syrians have been deprived of their right to health, education, and food security, plunging them into poverty. Poverty rates have soared to 90%, with extreme poverty becoming a defining characteristic for nearly half of Syria's population.
In addition to the devastating human losses, poverty rates have soared to 90%, with extreme poverty becoming a defining characteristic for nearly half of Syria's population.
Displacement and deprivation
The suffering endured by internally displaced persons and refugees has multiplied. They have lost their social and economic support systems, experienced family fragmentation, and witnessed various violations, particularly against women.
Most displaced individuals have been forced to endure inhumane conditions, leading to the squandering of their capabilities and rights.
Pupils walk towards a bus turned into a travelling classroom at a displacement camp in Jindayris in the rebel-held northwestern Syrian province of Aleppo on May 23, 2023.
Millions of families have been stripped of their sources of income and employment, pushing them into working under exploitative and inhumane conditions or engaging in activities directly or indirectly linked to the conflict economy, such as becoming combatants or participating in illegal endeavours like smuggling, arms trade, and drug trafficking.
The economy has suffered substantial losses in its capacities and capabilities, and that is likely to persist. Deprivation of education, decent housing, food security, and exposure to severe violations or involvement in the conflict represent long-term setbacks to development potential.
Social capital, another vital component of the economy, has experienced severe fractures. Trust among individuals has diminished, the sense of security has eroded, and shared values like solidarity, cooperation, and cross-regional and interethnic/interreligious volunteering have deteriorated.
Instances of violence against women, theft, vandalism, prejudice, and discrimination have escalated. These deepening divisions have occurred despite the commendable efforts made by civil society organisations and initiatives to bridge gaps and alleviate suffering.
However, the magnitude of the catastrophe has overwhelmed the capacities of these organisations and initiatives. The deterioration of social capital impacts the economy through the erosion of relationships between society and the economy, including declining trust, mobility, collaborative work, and solidarity.
Political authoritarianism lies at the root of the conflict in Syria. Throughout the conflict, the political authorities in Syria transformed the state into a vehicle of political tyranny, targeting society and dismantling economic components.
Syrian heir apparent Bashar al-Assad (R) waves after being proclaimed "leader of the party and of the people" by the ruling Baath party at the plenary session of the party congress in Damascus late 18 June 2000.
The priorities of the authorities shifted towards diverting all available resources to serve the conflict, which involved funding military and security operations and establishing incentive systems for those involved in the war.
This included institutionalising practices such as looting, levies, smuggling, exploitation of aid, and monopolising future import or investment opportunities.
In contrast, the economic components of regions, communities, and opposition forces were systematically destroyed through the demolition of infrastructure, properties, and facilities, as well as prolonged sieges that deprived them of access to public services, energy, and food.
Corruption
With the absence of the rule of law and rampant corruption, public services in areas controlled by the regime deteriorated significantly.
Economic policies remained unchanged even after military operations subsided. Instead, the elite continued to seize reconstruction projects, solidifying a wartime economy, while reducing support for essential goods. Unjust tax collection from the remaining investors in economic activities became a norm.
The economic system transformed into a tool for subjugating society. It became caught between the regime and non-state actors, resulting in political, social, and economic divisions.
Non-state actors failed to establish democratic structures as security and military forces dominated, perpetrating widespread violations through military operations, politicising identities, and distorting administrative and organisational structures.
The focus shifted to the economics of the conflict, with military spending taking priority, natural resources being exploited, levies imposed, goods and investment opportunities monopolised, and a reliance on humanitarian aid and the roles of civil society organisations.
Foreign dependence
Local political forces increasingly became dependent on regional and international powers for support. External powers – such as Russia and Iran supporting the regime, Turkey and Gulf countries supporting the opposition, and the United States supporting the Kurdish self-administration – directly intervened in decision-making processes, including economic priorities.
Foreign powers began monopolising sectors or economic resources in exchange for political and military support, ensuring their long-term influence in Syria.
The increase in foreign influence in the economy correlated with a decline in the political power of forces targeting societal support in the areas they controlled, further weakening them politically and depriving communities of basic necessities.
Dependency extended beyond the foreign powers directly involved in the conflict, with a growing reliance on international and domestic humanitarian aid, which accounted for approximately one-third of the GDP in 2022.
The design and implementation of humanitarian aid by international organisations had an impact on civil society organisations, with most focusing on relief and service provision, neglecting developmental aspects or institution-building.
This increasing reliance on aid continued year after year without strategies for building sustainable developmental and economic components.
Syria's dependency on humanitarian aid from international organisations had an impact on civil society organisations, with most focusing on relief and service provision, neglecting developmental aspects or institution-building
Sanctions
The sanctions imposed by Western countries played a significant role in exacerbating economic challenges for investors, workers, and families in Syria. The sanctions contributed to rising costs and complicated transportation and financial operations, impacting those unrelated to the conflict's elite.
They hindered maintenance and restoration operations for some public and private facilities. The elite presiding over the conflict exploited issues related to sanctions for political and economic gain, monopolising illicit financial transfers or engaging in non-compliant imports.
A grim reality has been created by the ongoing institutional and systemic decay resulting from the conflict, coupled with the exploitation of wealth and power by external and local political forces.
The unimaginable injustices experienced by Syrians have led to a deep sense of hopelessness regarding the prospects of achieving political, social, and economic transformation beyond the war.
Such a transformation would entail the establishment of democratic, participatory, solidarity-based, and fair social structures.
Normalisation and regression
The willingness of certain authorities in the region, including Arab and Turkish governments, to engage with the regime and allow its return to the Arab League, exemplifies the regression witnessed in the region. As does the lack of any formal explanation to their allies or citizens regarding their involvement or withdrawal from wars, or their support or opposition to specific political forces.
The sanctions imposed by Western countries played a significant role in exacerbating economic challenges and contributed to rising costs, impacting Syria's non-elite.
Tyranny in Syria becomes entrenched with this wider normalisation, despite the ongoing violations and the exploitation of the communication revolution to promote division and subjugation rather than solidarity and liberation.
While the conflict persists along with the components that led to it, building trust becomes a monumental challenge, for economic governance, the rule of law, justice and even official statistics and data as well as government plans and policies.
The magnitude of the losses, both tangible and intangible, is immense. Moreover, conflict forces continue to shift their strategies from exploitation during armed conflict to the exploitation of the conflict's outcomes.
This approach is often touted as political realism. It is, in fact, an unrealistic choice. It fails to guarantee stability, sustainability, or peace. Instead, it perpetuates forms of conflict that are even more harrowing.
Evaluating the cost of reconstruction requires a nuanced understanding of the context or a hypothetical trajectory of the conflict.
In the current scenario being promoted, directing billions towards hypothetical reconstruction would likely result in wastage, economic deterioration, further reinforcement of inequality and injustice, and continued exploitation.
Regrettably, political forces in the region boast about their tyrannical nature, military interventions, and economic policies that are based on exploitation and marginalisation. These factors further darken the prospects of altering Syria's economic trajectory.
