Syria Faces a Major Challenge in Rebuilding its Economy after a Decade of Crisis

More than ten years of civil unrest and governance problems continue to have a significant impact on Syria's political and economic environment in 2024. The country's Chief of State was recently overthrown, signalling a dramatic change in politics while also underscoring the immense challenges that lie ahead. With 90% of the people living in extreme poverty, Syria's economy is in ruins as a result of Bashar Al-Assad's prolonged leadership. The 27% rise in poverty since 2009 has made food insecurity and humanitarian crises worse.

Humanitarian Crisis

With 12.9 million people struggling with inadequate food and 2.6 million experiencing extreme scarcity, food insecurity has become one of Syria's most concerning problems. Millions are in desperate need due to the failure of international humanitarian efforts. With 7,000 schools destroyed or damaged and 2 million students forced out of school due to the civil war, the chaos also affects education. A third of those who can attend cannot finish basic school due to poor instruction and language challenges.

Agriculture plays a pivotal role in Syria's economy, contributing 26% of GDP in 2021 and employing 15.5% of the population. Syria's leading exports in 2022 were nuts ($43.8M), raw cotton ($34.2M), pure olive oil ($140M), and spice seeds ($29.1M), which were mostly bound for Turkey ($226M), Kuwait ($114M), and Lebanon ($107M). Agriculture had a major role in the country's economy.

Syria ranked 164th in the world in terms of total exports, of which $771 million were made up largely of agricultural exports. Syrian imports totalled $4.7 billion, including $200 million for wheat flour and $145 million for seed oils, resulting in a negative trade balance. In 2022, the overall export value dropped from $835 million in 2017 to $771 million, underlining issues including decreased productivity and financial limitations. Limited resources and ongoing conflict are obstacles to the agriculture sector's full potential.

Additionally, the oil industry, formerly a vital component of Syria's economy, has suffered greatly as a result of the country's ongoing instability. Syria's crude oil production peaked in 2002 at 677.00K barrels per day (bbl/d), up from 578.83K barrels per day (bbl/d) in 1999. However, production fell steadily, reaching 401.00K barrels per day by 2009 and then falling much lower after 2011. Production fell to 25.00K bbl/d by 2016. With output at 39.98K bbl/d in 2023, the trend is still bleak despite a modest improvement between 2019 and 2021.

Control over oil deposits has also changed as a result of the conflict. The majority of reserves are currently under the control of Kurdish-led Syrian Democratic Forces, who use the oil only for their own needs. All of Syria's oil is currently utilized locally, and its exports have completely stopped. 90% of Syria's crude oil exports prior to the crisis went to Europe, with Germany receiving a sizable share. The current situation shows the devastating impact of infrastructural destruction and political instability on this important sector.

Challenges

Reduced harvests and economic challenges have caused setbacks for the primary export products. Syria's economy is still unstable and will need significant foreign investment and support to revive. The overthrow of the Assad regime has not brought immediate relief. Since 2011, Syria's GDP decreased by more than 85%, from $67.5 billion in 2011 to $9 billion in 2023.

The manufacturing, services and agricultural sectors made up the economy's core, despite facing substantial challenges. These sectors comprised 43.27%, 28.91%, and 27.82% of the GDP in 2021, respectively. To lift economic sanctions, Syria, one of the most severely banned countries, must first regain the confidence of the international community. According to economists, it may take approximately ten years for the region to stabilize and another twenty years for its GDP to return to what it was before 2011. Recovery is nevertheless hindered by political instability, infrastructural damage from conflicts, and insufficient funding.

Rebuilding infrastructure, promoting political stability, and reviving important economic sectors will all need to be part of Syria's recovery process. The necessity for focused investments and reforms in these sectors is made clear by the nation's reliance on agriculture and textile. At the same time, increasing output and resolving control over oil reserves may offer much-needed economic relief.

Given that millions of Syrians still experience poverty, food insecurity, and difficulties in their schooling, humanitarian aid is still a top priority. To overcome its political and economic obstacles and provide the groundwork for long-term stability and development, Syria will need to implement both internal reforms and cooperative international measures.