Federation of Euro-Asian Stock Exchanges
Syrian Arab Republic
82
The World Bank estimates the cumulative GDP loss from 2011 to 2016 at $226 billion. Reconstruction in areas controlled by the regime will cost an estimated $390 billion and is expected to accelerate in 2020. Russian and Iranian businesses will secure key infrastructure and energy investment deals but will have to compete with Gulf businesses as well as businesses from China and India.
Economic policy has focused on protecting the regime and maintaining the military’s fighting capacity. Government spending has been driven by the regime’s political concerns and the need to protect its own interests. Budget revenue from oil and taxes has severely diminished. Faced with limited financial resources and ongoing international sanctions, the regime continues to rely partly on Iranian financial support and Russian loans. Resolution of the ongoing conflict is necessary for the business climate to recover. Before the war, the business environment lacked transparency and efficiency. Functioning labor markets are limited to specific parts of the country and subject to heavy state interference and control. The 22 percent 2019 budget increase was caused mostly by higher subsidies for wheat and flour, which left little spending room for other government priorities.
Political instability, exacerbated by the ongoing civil war and mounting security threats, is a significant impediment to trade and investment. The Assad regime’s brutality and economic mismanagement have caused the near collapse of the economy. The financial infrastructure has been significantly degraded by unstable political and economic conditions. Severely limited access to financing impedes any meaningful private business development.
Economic Outlook