Syria remains under the repressive leadership of the regime of Bashar al-Assad. The regime’s behaviour makes it impossible for security sector governance to be reformed in Syria in any meaningful way while the regime remains in power. This is partly due to the atrocities committed by the regime apparatus, including the military, and partly due to the conflict’s entrenchment of a regime status quo resembling a politico-military business enterprise, where the regime’s armed and non-armed profiteers—from military officers to civil servants and business cronies—serve their own political, security, and economic interests rather than the national interest.
The Syrian conflict has played a significant role in the deterioration of the Syrian economy generally and the economics of Syrian security sector governance specifically. Since the beginning of the conflict in 2011, the Syrian currency has been devalued, the GDP has lost around 65% of its value, and more than 60% of Syrians have come to face hunger. Meanwhile, illicit economic activities in Syria are rampant, leading in the media to the labelling of Syria as a “narco-state”. The Syrian military is part of this picture. Although the army has persisted as a state institution, it is de facto fragmented into different groups—such as the Fourth Armoured Division under the leadership of Bashar al-Assad’s brother Maher, the Fifth Corps, the 25th Special Mission Forces Division, the Syrian Republican Guard, and the Third Armoured Division—which pursue their own economic objectives, and in some cases have external donors (such as Russia in the cases of the Fifth Corps and the 25th Division). The Syrian Arab Army’s dire economic situation, involvement of officers in illicit economic activities, as well as the rise of the above-mentioned armed groups, present long-term challenges to security sector governance, which the Syrian state will face whenever a settlement to the conflict is found.
While any peace settlement for Syria is bound to include a Security Sector Reform (SSR) component, SSR in Syria will be difficult. The military, security and even civil state institutions have been engaging in atrocities that mean the scale and cost of needed reforms are substantial. The networks of armed groups and war profiteers permeating Syrian regions have entrenched economic interests in the conflict that they will not readily give up. And despite the flow of revenue into Syria from illicit trade, this revenue is not being used to fund Syrian state institutions like the military.
The Syrian military’s pre-conflict revenue sources
Before the Syrian conflict, the Syrian military was mainly funded through the Ministry of Defence, but this funding masked corruption and cronyism that persist till today. In addition to paying salaries, the Ministry offers soldiers, veterans and families of “martyrs” (the Syrian state’s term for fallen soldiers) benefits through a number of opaque companies and establishments it owns. There is significant overlap between the functions of those establishments, which makes it harder to track their spending. The Social Military Establishment manufactures and sells consumer goods to the military at affordable prices, manages housing, and offers concessionary car loans. Housing is also offered through the Military Housing Establishment and food and medicine through the Productive Projects Administration. The Defence Plants Establishment manufactures and supplies military equipment like uniforms and tents but also civilian products like water pumps and electricity meters. The Association of War Veterans and War Victims offers wide ranging benefits from financial aid to health care to housing.
Despite these incentives, corruption among officers and soldiers has been prevalent since before the war: individuals would abuse their institutional privileges to extract money from ordinary people or businesses or to engage in profitable yet unethical business transactions. The setup of the Ministry of Defence companies itself also permits cronyism. The Ministry of Defence does not publish the budgets of its companies, while some of them have monopolies among state-owned establishments over the supply of military goods, including supplying gas masks, military beds, and uniforms to the army. Other Ministry of Defence companies have quasi-monopolies over contracts for projects for other state-owned institutions, such as road construction and agriculture projects. According to the Syria Report, “These companies also serve the interests of many high-ranking officials and regime figures who make money by acting as middlemen or suppliers and sub-contractors” for such projects. The Syrian conflict has allowed these profiteers to flourish.
The Syrian military’s economic situation during the conflict
The Syrian conflict has increased state military spending at a time—since the beginning of the conflict—when Syrian state finances have shrunk but this spending increase is not benefitting the soldiers. The extent of the damage to state finances is unknown because the Syrian state stopped publishing a figure for military spending in its annual budget. What is known is that the Syrian pound has depreciated in value significantly since the conflict began (from 47 pounds to the US dollar in 2011 to 2512 pounds to the dollar in the official April 2021 devaluation). Despite rises in army and civil service salaries, a typical salary for a Syrian soldier in Deir Ezzor was reported to be 27,000 Syrian pounds in January 2022, equivalent to around 10 USD, which puts soldiers below the poverty line (the average salary in Syria was reported to be 90,000 Syrian pounds or $29 at the time of the currency devaluation of April 2021). In Deir Ezzor, some Syrian soldiers have ended up working as agricultural labourers to makes ends meet. In Sweida, the governor had to rally local traders to provide food baskets to soldiers deployed without supplies to quell protests in February 2022. In comparison, militias backed by Iran and Russia offer much higher salaries and benefits. Lack of state resources already makes it difficult for the Syrian regime to demobilize militias and this will continue to be a challenge post-conflict.
Low soldier salaries also make it difficult to impose discipline on behaviour. The Syrian government has implemented measures to divert revenue to the Syrian army. One such measure is a directive in 2020 requiring many importers to resell 5 percent of their imports at cost to the Social Military Establishment. The Syria Report explains that not only do these measures help the Syrian government get around sanctions, they also allow the Social Military Establishment to sell goods at low prices to soldiers at a time when inflation in Syria has become severe. But such measures have not stopped military actors and their affiliates from engaging in unethical and illicit activities.
The Syrian army has been documented to engage in looting on a wide scale in areas that the army took back from rebel groups. Sometimes looting was conducted in collaboration with profiteers linked with the Syrian regime. For example, in 2016 soldiers from the Fourth Armoured Division of the Syrian army (controlled by Maher al-Assad) were instructed to loot steel from destroyed houses in Daraya to be used as raw material in a factory belonging to regime profiteer Mohammad Hamsho. On this occasion, Fourth Division soldiers were used as free labour. On other occasions, soldiers would be allowed to loot at will. The Syrian authorities turned a blind eye and sometimes encouraged such looting as an informal supplement to the army’s low salaries.
Engagement in the drug trade, especially Captagon, is another source of funding for Syrian army officers. The Center for Operational Analysis and Research estimated the market value of Captagon exports from Syria to have reached almost 3.5 billion dollars in 2020. The Syrian army’s engagement in this trade has taken different forms. The army has provided protection for smugglers operating between Jordan and Syria. The Fourth Division itself has also set up drug factories and runs smuggling operations between Lebanon, Syria, Jordan and Iraq in collaboration with non-Syrian actors like Hezbollah and the Popular Mobilization Units. Although the revenue from the drug trade is high, it is not being directed to fund Syrian state institutions but rather is being pocketed by war profiteers including high-level Fourth Division officers who use some of this revenue to pay rents to their loyalists.
The Fourth Division’s involvement in the war economy goes beyond drugs, extending to the smuggling of foodstuffs, weapons, and fuel and to imposing Fourth Division escort on the transport of goods through Syria for a fee. Other smaller armed groups like the Republican Guard and the Third Armoured Division operate in a similar way in Syria, with each group being officially affiliated with the army but generating revenue through its own illicit activities that usually take place within a geographical area dominated by the armed group.
Syria’s bleak security sector governance prospects
The political economy of Syria’s security sector governance in Syria shows that reforms are extremely challenging. The Syrian military has de facto fragmented into almost private smaller entities no longer reliant on Ministry of Defence funding and which have heavily invested in the war economy. Their operations are often locally bound and driven by profit. For example, the Fourth Division is deeply present in Syria’s western border regions because lucrative smuggling operations take place here. The Syrian state has suffered severe financial losses while revenue from illicit activities is being diverted away from state institutions. For example, the Third Armoured Division imposes taxes on the trade of goods in Qalamoun near Damascus but these taxes are not funnelled into any state budget.
Such dynamics make these groups less amenable to agreeing to report to a centralized military command. They also make it difficult for state institutions to present them an economic alternative that is more attractive than the prevailing illicit economy. Adding to these challenges, leaders of these almost private armed groups have channelled their financial gains into political gains, as in the case of the leader of the 25th Division Suheil al-Hassan who between 2018 and 2020 enjoyed a privileged relationship with his Division patron in Russia. Therefore, there is a significant gap between the majority of the Syrian army’s battalions harbouring most of its low-ranking soldiers, who are dependent on meagre state salaries, and these smaller but elite forces. All this underlines that SSR cannot be meaningfully overseen by the Assad regime, which has enabled entrenched problems and resulting grievances. It also highlights the importance of taking the political economy into consideration in any SSR policy, including the need to reign in illicit profiteering.
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