Türkiye expected to play key role in Syria’s economic recovery

Türkiye is expected to play a pivotal role in rebuilding Syria's economy following the collapse of the Bashar Assad regime earlier this month.

Under 61 years of Baath Party rule, Syria's economic progress was severely hindered, leaving the country with deteriorated economic indicators and major challenges, including rampant inflation and a disrupted trade balance.

With its strategic location linking Asia, Europe and Africa, Syria is now poised for a potential economic recovery, particularly in trade.

Türkiye, one of the region's largest economies, imported $363.5 million worth of Syrian goods and exported $2 billion in products to the country last year.

Industry representatives highlight opportunities for increased trade cooperation between Türkiye and Syria, particularly in agriculture, construction and energy. Syria's 11 safe zones, with an additional zone planned for Idlib, also offer foreign investors the chance to establish companies with 100% equity in designated organized industrial areas.

- RECOVERY REQUIRES POLITICAL STABILITY, INTERNATIONAL SUPPORT

Ali Mamouri, a research fellow at Deakin University in Australia, told Anadolu that the road to Syria's reconstruction will be far from smooth in the short term.

"A new government would need to prioritize stabilization efforts to restore public confidence, attract foreign investments, and rebuild essential infrastructure. However, recovery will depend heavily on internal political cohesion, the support of international actors, and the region's response," he said.

Mamouri emphasized the need for the new government to develop a comprehensive recovery plan and take immediate measures to stabilize the national currency.

"The destruction of infrastructure has severely impacted the economy," he said. "Rebuilding roads, power plants and communication networks will be essential to revitalizing economic activity and creating jobs."

Mamouri highlighted that addressing humanitarian needs, including access to food, education and health care, is critical during the reconstruction process.

"While political and economic sanctions will likely remain in place for some time, Syria may need to negotiate with regional powers and international organizations for humanitarian assistance, loans and trade agreements," he said, adding that lifting sanctions should be the country's top priority moving forward.

He noted that Syria's oil and natural gas reserves could play a vital role in its recovery. However, years of civil war have significantly reduced production, necessitating substantial investments and stability to revive the energy sector.

He also pointed out the importance of rebuilding Syria's once-thriving agriculture sector, particularly in fertile regions near the Euphrates River.

Additionally, he suggested that tourism, bolstered by Syria's rich cultural heritage, could become another major revenue stream. Revitalizing industries like textiles and food processing could further boost employment and exports.

Mamouri added that Syria's strategic location enables it to serve as a key transit point in the East-West trade network, connecting Iraq, Jordan, Türkiye and Europe.

- TÜRKİYE'S ROLE IN REBUILDING SYRIA

Mamouri noted that Syria's 2023 budget, amounting to $5.88 billion or $256 per capita, is "less than one-quarter of its 2011 level," according to a UNICEF report.

"Syria's budget is currently in a dire situation, with limited revenue generation capacity due to the ongoing conflict, economic sanctions and widespread destruction of infrastructure," he said.

He said the International Monetary Fund (IMF) and the World Bank have not extended support to Syria because of the ongoing war and sanctions.

"If a new government is established, it will likely need to focus on mobilizing regional and international support for rebuilding and stimulating growth," he added.

Regarding Türkiye's involvement, Mamouri said its expertise in construction, infrastructure development and investment opportunities will be instrumental in Syria's recovery.

"Turkish companies could be involved in rebuilding Syria's infrastructure, including energy, transportation and telecommunications; additionally, Syria's potential involvement in Türkiye's plans for regional energy transit from Qatar to Europe. For example, Türkiye could benefit from increased trade and energy cooperation, providing a gateway for regional energy resources," he said.

- INTERNATIONAL AID CRUCIAL FOR SYRIA'S RECOVERY

Victor Tricaud, a senior analyst at the UK-based consultancy firm Control Risks, told Anadolu that Syria's economy has been in a state of severe crisis, particularly since 2019, and this instability is likely to persist in the coming months.

"The key determinant for an eventual recovery will be the provision of international aid and the lifting of sanctions -- or at least the introduction of exemptions -- to allow foreign capital to finance reconstruction," he said, noting that Syria's productivity has suffered under decades of authoritarian rule.

Tricaud said the most pressing challenge for the new government will be maintaining economic activity, including ensuring the continuity of public services and security.

He suggested that an interim government could re-establish tax collection mechanisms and reduce corruption, which would help generate significant revenue, especially from customs duties once borders reopen. State-owned enterprises could also contribute to stabilizing revenues.

"Provided that the transition remains orderly, that sanctions are rolled back or exemptions introduced, and that foreign economic assistance is mobilized, including from large multilateral development banks, regional entities that seek to participate in the reconstruction of Syria will likely benefit from access to large-scale infrastructure projects financed by development actors. Furthermore, foreign players will likely gain access to investment opportunities presenting high potential returns, given the country's significantly untapped economic potential after years of stymied economic growth," he added.