Ousted Assad regime leaves behind devastated economy

By Emre Gurkan Abay

MOSCOW (AA) – The Bashar al-Assad regime in Syria has presided over a devastated economy, worsened by a civil war that began in 2011. Economic recovery remains a distant goal amid ongoing challenges, including widespread poverty, declining production, and regional instability.

The overthrown Assad regime saw Syria’s gross domestic product (GDP) shrink over 85% in 2011-2023 to $9 billion, and it is expected to contract by another 1.5% this year. Syria’s private consumption plummeted and 69% of Syrians, around 14.5 million people, are affected by poverty since 2022, according to data from the World Bank.

One in every four Syrians is facing extreme poverty, which has worsened by the devastating impact of the February 2023 earthquake.

- Significant decline in energy production

The Assad regime’s policies led to a significant decline in energy production, as Syria’s oil production dropped from 383,000 barrels per day before the civil war to 90,000 barrels per day last year. The regime also reportedly allowed the terrorist organization PKK/YPG to occupy some regions by depriving itself of oil revenues.

Syria, once the largest oil exporter in the Eastern Mediterranean, was reduced to an oil importer due to sharp declines in production. Syria’s oil imports, mainly from Iran, nearly doubled from 2020 to 2023, and now imports account for almost half of domestic oil production.

- Agriculture production down

The Syrian economy’s decline was also reflected in agriculture, as cultivated land reduced by 25% compared to the pre-civil war era.

Syria’s exports fell 89% to less than $1 billion compared to the beginning of the civil war, and imports declined 81% to $3.2 billion.

The World Bank said that farmers' access to seeds, fertilizers, fuel, and machinery spare parts, which are needed to grow crops, became increasingly difficult, resulting in diminishing agricultural production.

Meanwhile, the Syrian pound depreciated against the dollar 270 times in 2011-2023, which further fueled inflation.

The Assad regime’s fiscal revenues fell 35% year-on-year in real terms in 2023 and 85% since the pre-conflict levels in 2010.

The regime decided to reduce its expenditures by 87% in 2023 compared to 2010 to balance the budget. The regime also passed a bill for budget savings to the people, tightening government subsidy programs, reducing the share of subsidies in the state budget from 42% to 19% on an annual basis in 2023, leading to increased prices of subsidized gas, oil, and medicine in August 2023.

- Major producer, seller of Captagon drug

Moreover, Syria became a major producer and seller of the highly addictive Captagon drug, a brand name for the prohibited psycho-stimulant fenethylline, reportedly with the influence of the PKK/YPG. The World Bank estimates that the drug business yielded revenue of up to $5.6 billion in 2020-2023, while “actors” involved in the Captagon sales are said to have profited $1.8 billion per year, which is almost double Syria’s revenue from legal exports.

Some studies say that the Assad family is estimated to have accumulated a fortune of $1 billion to $2 billion while the public is faced with extreme poverty, while it is believed that the Assad family’s wealth is hidden in multiple overseas bank accounts.

Images circling online of inside the Assad family’s residence, the People’s Palace in Damascus, reportedly showed the overthrown president’s luxury vehicles and other luxury lifestyle items and personal effects.

Experts say that Syria’s economic recovery after the Assad regime will begin with the support of countries in the region, such as Türkiye.

*Writing by Emir Yildirim in Istanbul