Ousted Assad regime leaves Syria, economy in ruins

By Zeynep Duyar

Syria’s collapsed regime of Bashar al-Assad left the country and its economy in ruins, turning it into a den for terrorist organizations and illegal activity.

The country suffered from displacement and uncountable deaths, while its capital stock and economic activities were plagued by the civil war and international sanctions, as the country’s production, foreign trade, and foreign exchange earnings plummeted. Its economic indicators, budget balances, and exchange rates have also been destabilized.

Syria’s gross domestic product (GDP) is estimated to have halved in 2010-2020 and the country’s dependence on imported goods soared, including staple food products, and its local industrial and agricultural production collapsed, according to various sources, such as the World Bank, the UN, the International Monetary Fund (IMF), and the World Gold Council.

Syria’s GDP is estimated to have been $37.1 billion in 2022, $39.5 billion in 2023, and $29.3 billion in 2024—a stark difference from $60 billion in 2010, before the civil war.

The country’s GDP per capita declined from $2,800 in 2010 to $2,100 in 2022 and 2023, and it is estimated to fall further towards $1,600 by the end of the year.

At the same time, the overthrown regime’s revenues fell 35% year-on-year in real terms in 2023 versus 2022, and 85% compared to the pre-civil-war period, before 2010.

- Oil production, exports down

Meanwhile, Syria, once the largest oil exporter in the Eastern Mediterranean, lost its key position in oil production and oil exports as a result of the capture of oil-rich regions by non-regime forces. Syria’s oil production of 383,000 barrels per day before the civil war dropped to 90,000 barrels per day last year.

Syria ran a foreign trade deficit of between $7 billion to $10 billion annually from 2007 to 2011 but the country’s foreign trade declined rapidly as the unrest that started in March 2011 grew into a full-blown civil war, which resulted in international sanctions, and consequently, the country’s foreign trade volume fell from $29 billion in 2010 to $4 billion in 2023.

Syria ranked 176th in the world last year with its exports reaching $650 million and 163rd in the world with imports totaling $3.4 billion.

The country’s most important exports were olive oil, calcium phosphate, cotton, spices, canned vegetables, cast iron scrap, shelled fruits, and wheat, while its imports were sunflower oil, wheat flour, petroleum, animal feed, rice, sugar, cement, tea, electricity, and construction iron.

Syria’s rapidly growing population reached 22 million in 1990-2011 and recent estimates show the population stands at 18.5 million.

Meanwhile, the civil war in the country led to serious losses in employment, as the unemployment rate is estimated to have reached 57%.

- Depreciating currency, rising inflation

The Syrian pound depreciated 270 times against the US dollar in 2011-2023, which further fueled inflation, while inflation reached 64% in 2022 and 141% in 2023. Inflation projections show it is estimated to be at 95.1% by the end of this year and 69.4% in 2025.

Syria used to be one of the prominent countries in the Middle East in gold and oil reserves, with an estimated gold reserves of 25.8 tons in 2011, and although this figure is estimated to have remained relatively the same after the civil war and the fall of the regime, there is reportedly no reliable data to be found on the country’s foreign exchange reserves.

Meanwhile, the largest oil and gas fields in the country are occupied by the PKK/YPG terrorist organization. The organizations operating in gas and oil-rich areas, which are concentrated in the northeast, are estimated to have extracted at least 150,000 barrels on a daily basis.

Despite the Caesar Act imposed by the US on Syria, which sanctioned Assad for war crimes against Syrians under the first Trump administration, the PKK/YPG is reported to have sold most of its crude and processed oil to the regime, and its annual income from the oil sold to the Assad regime and Northern Iraq is estimated to have exceeded $1.2 billion.

Prior to the civil war, Syria was one of the most dynamic markets in the Middle East and the steps towards the transition to a free market economy and rising oil reserves triggered rapid growth in the country’s economy, creating business opportunities for foreign firms and investments, as the booming oil and gas industry and infrastructure projects made Syria an attractive market, though the conflict, starting in 2011, put a pause to foreign direct investments.

Syria has 11 safe zones, and in these designated zones, foreigners can establish companies and projects in line with incentives and five-year tax exemptions.

- Agriculture badly hit

However, the decline in all sectors of Syria also hit its agriculture, as the cultivated land in the country fell 25% versus the pre-civil-war period. The World Bank reported that the access of farmers to seeds, fertilizers, fuel, and machinery spare parts, which are needed to grow crops, became increasingly more difficult, resulting in diminishing agricultural production.

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 reported that the drug business is estimated to have yielded a revenue of up to $5.6 billion in 2020-2023, while those involved in the Captagon sales are said to have profited $1.8 billion per year.

*Writing by Emir Yildirim