Economic studies
Syrian Arab Republic

Syrian Arab Republic

Population 18.3 million
GDP per capita n/a
E
Country risk assessment
E
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Synthesis

STRENGTHS

  • Strategic geographical location
  • Energy transit country
  • Oil potential

WEAKNESSES

  • Civil war since 2011 has caused 400,000 deaths and the destruction of much of the country’s infrastructure
  • Divided territory, under the sway of different groups
  • Oil production has been reduced to zero

RISK ASSESSMENT

Heading towards an end to the war

After eight years of civil war, the Syrian conflict has entered a new phase. Since the fall of Aleppo in 2016, the balance of power has reversed, and the Bashar El Assad regime – which a portion of the Syrian population rebelled against in 2011 – has retaken much of the country. Other participants have joined the confrontation between the regime and the Free Syrian Army. On the one hand, Russia, Iran and Hezbollah are providing the military and logistical support needed to keep the Damascus regime in place, while on the other, an international coalition of Western and Arab countries has formed to curb the expansion of radical Islamist groups (al Nosra and Daesh) in Syria and Iraq. Although the small jihadist groups have been defeated, coalition forces remain present in the Kurdish-held areas east of the Euphrates, and some Islamist militias continue to be active in the desert areas of southern Syria.

Turkey, which shares a land border with Syria, has intervened several times in the conflict to protect its borders and interests in the region. In particular, it wants to make sure that the end of the war does not lead to the creation of a Kurdish state. The regime’s recapture of the Idlib region would be the last act of the war in Syria. While a Russian-backed offensive by the regime seemed imminent in September 2018, it was called off after an agreement was reached between Russia and Turkey. Following the request by Ankara, which feared an influx of refugees at its border, the agreement between Russia and Turkey aims to create a demilitarised zone in the region. At the same time, the announcement of the withdrawal of American troops from Syria in December could also reshuffle the cards. While the region was controlled by the Syrian Democratic Forces (SDF) and the Kurdish People's Protection Units (YPG), the American presence in and around Manijb helped to contain Turkey's ambitions in this area, which was perceived as a threat by the Turkish authorities. Turkish Foreign Minister Mevlüt Çavuşoğlu announced in December 2018 that Turkish troops were about to cross the Euphrates into Syrian territory. As a result, although the end of the conflict appears to be in sight, it is therefore to foresee a return to stability in the region.

In October 2018, the Istanbul Summit brought together members of the Astana peace process (Russia, Turkey and Iran) and part of the contact group (France and Germany). Although the parties remain deeply divided, particularly about the role of Bashar al-Assad and the future of the Kurdish regions in the north-east, the summit resulted in a joint declaration reiterating the need to initiate joint actions and engage in a political process in Syria. Decided at the peace conference in Sochi in January 2018, the political solution to the Syrian crisis is supposed to result in the establishment of a commission to draft a new constitution under the auspices of the United Nations. However, the constitutional committee responsible for giving Syria a new constitution has been slow to be set up, partly because the regime is dragging its heels.

 

A difficult and controversial reconstruction process

The return of several provinces to the Bashar Al-Assad regime is expected to trigger a recovery for the Syrian economy, which remains badly weakened by eight years of conflict. Syrian GDP decreased by nearly 60% during the 2010/16 period, according to World Bank estimates. Much of the infrastructure was destroyed during the fighting. Syrian industry has shrivelled up, while economic sanctions make it difficult to access financing. Bashar El Assad's regime has been under US and European sanctions since 2011, but it can count on China's support in addition to that of its main allies. Despite the support of Russia and Iran, the country still has considerable needs. The Economic and Social Commission for Western Asia (ESCWA) has estimated the total cost of Syrian reconstruction at USD 388 billion. While some European countries, including Germany, would be willing to participate in the financing, they are making their assistance conditional on the establishment of an inclusive political process. Another limitation to the reconstruction process is the lack of human resources. Eight years of war have taken a severe human toll. The number of deaths directly related to the conflict is estimated at between 400,000 (United Nations, April 2016) and 470,000 (Syrian Centre for Policy Research, February 2016). More than 6.1 million people, including 2.5 million children, have been displaced, and 5.6 million are officially registered as refugees (UNHCR, September 2018). The issue of refugee return remains central to the success of the peace process. While countries hosting large numbers of Syrians would be in favour of facilitating their return, the regime continues to send conflicting signals. Announcements made by the government are intended to be reassuring and support a return of displaced persons. However, since 2012, the government has used a property law, Decree 66, to seize the property of displaced persons. The regime also seems to be using reconstruction as a means to reshape Syria’s demographics.

 

Last update: February 2019

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