Nearly 10 years after the beginning of the uprising turned into a war with multiple regional and international actors involved, the Syrian regime controls almost 70 percent of Syrian territory thanks to the political, economic, and military assistance provided by its allies, Russia and Iran. Damascus however faces huge socioeconomic challenges, which are far from being overcome.
The severity of the war’s impact on the economy is reflected in the decline of the GDP from USD 60.2 billion in 2010 to around USD 21.6 billion in 2019, while total accumulated economic loss during the conflict by the end of 2019 is estimated to reach 530.1 billion USD. The Lebanese financial crisis since 2019 and the COVID-19 pandemic have further magnified the country's socio-economic problems, with the level of poverty estimated to have been over 85 percent even before COVID-19 erupted in Syria. In February 2021, the UN World Food Program estimated the number of Syrians suffering from food insecurity is 12.4 million, or nearly 60 percent of the population.
The dramatic depreciation of the SYP, which accelerated in the end of 2019, led to a dramatic erosion of purchasing power in Syria. The costs of the basic consumption basket for a family of five in Damascus increased from 380,000 SYP in January 2020 to 732,000 SYP in December 2020. In comparison, the average monthly wage was in the range of 80,000-100,000 SYP (between USD 32 and USD 40) in the public sector, and around 120,000 to 150,000 SYP (between USD 48 and USD 60) in the private sector
In this context, remittances sent from abroad to Syrians within the country have become a key element of support for the livelihood of large sectors of the society since 2011. About 70 percent of Syrian families are dependent on foreign remittances for their livelihoods, according to a survey conducted in January 2021. Wages have indeed become less and less determinant in the production of wealth in Syria throughout the years. The share of wages in the national income was estimated at around 20 percent, while profits and rents represented the remaining 80 percent in July 2020.
More generally, the governmental policies have been even more unable and unwilling to tackle the growing socio-economic problems faced by the great majority of the population, while favouring instead a small privileged and elite minority connected to the regime. The regime’s socioeconomic policies are likely to exacerbate social, economic and regional inequalities throughout the country.
The economic policy of the Syrian government is tied to the patrimonial nature of the Damascus regime, which was strengthened during the war, and has evident consequences on the socio-economic and societal structures of the country. In recent years, this approach has fostered an overdevelopment of the trade and services sector and has fuelled various forms of speculative investment, especially in real estate, accompanied by a rentier management of resources (including non-natural resources) and corruption. The Syrian economy has been transformed into a quasi-exclusively consumption one. These policies reflect the significant political and economic influence of business networks close to the inner circles of the regime, and are mostly active in trade, real estate and service sectors.
This is accompanied with an increased economic isolation as the country suffers from important sanctions, especially with the US Caesar Bill, preventing or at least making very difficult foreign investments in the country, but also hampering the work of humanitarian organizations and increasing the suffering for the popular classes of the country. In this context, no major changes are to be expected from the new US administration regarding Washington’s policy towards Syria and therefore the pressure to maintain the isolation on the country will most probably remain in the next few years. On their side, Russia and Iran lack the financial and economic capacities to invest massively in Syria in order to boost national production and reconstruction. At the same time, Syria is much more dependent on the outside world than prior to 2011, and more precisely its two allies, Moscow and Tehran, for key products and commodities (oil and wheat).
An economic recovery seems very difficult in the near- mid future. Quite on the opposite, what is being witnessed is further weakening and under-developing of productive sectors, further impoverishing large sectors of the society, and leading to massive rates of unemployment and underemployment, associated with extremely high rates of migration among young graduates and also a lack of work opportunities for former and / or current fighters and militiamen. This has resulted in increasing frustrations among the Syrian population, which have materialized through criticisms expressed on social media and small protests against the continuous deterioration of the country’s economy and government’s policies.
However, these signs of dissent and criticisms do not automatically transform into political opportunities, especially after nearly 10 years of a brutal conflict. They also remain highly rooted in particular local regions, with no connections whatsoever between each other. The absence of a structured, independent, democratic, and inclusive Syrian political opposition which could appeal to the various popular classes makes it difficult for diverse segments of the population to coalesce and challenge the regime anew on a national scale.
While the regime’s survival has been somewhat guarantied, mainly as a result of the support of its foreign allies, the ability of Damascus to maintain a form of passive hegemony over large sectors of the population is far from achieved. This nourishes a situation of continuous instability, which will most probably be sustained in the near to mid future.