## Rebuilding Through Control: The Assad Regime’s Economic Strategy
Over the past decade, the Assad government has systematically dismantled Syria’s pre-war economy, deliberately fostering widespread corruption and creating dependence on patronage networks. Initial efforts to attract foreign investment were consistently thwarted by bureaucratic obstacles and the inherent risks associated with operating in a conflict zone. However, beginning approximately six months ago, a new, carefully calibrated approach has emerged, one characterized by a willingness to engage with a diverse range of actors – including China, Russia, and elements within the Gulf states – while maintaining a firm grip on key sectors like oil, gas, and strategic infrastructure. This strategy isn’t solely about reconstruction; it’s about reconfiguring Syria’s economy to serve as a strategic asset, a lever for exerting influence across the region. A key component is the legalization of “Islamic Neoliberalism,” a term coined by academics observing the regime’s prioritization of private sector development coupled with elements of Sharia law guiding economic activity.
“The Assad regime’s economic approach is fundamentally about maintaining power,” states Dr. Fatima Al-Zahawi, a specialist in Middle Eastern economic development at the Georgetown Institute for Security Studies. “They recognize that traditional aid and international reconstruction efforts are contingent on political reform, something they are demonstrably unwilling to provide. Therefore, they’ve proactively sought to build alternative economic relationships.”
## Stakeholders and Shifting Alignments
Several key stakeholders are involved in this evolving economic landscape. Russia, through its military presence and investment in reconstruction projects, remains a crucial partner, ensuring continued access to Syrian oil and gas reserves. China is rapidly becoming a dominant investor, primarily in infrastructure projects – ports, roads, and telecommunications – leveraging Belt and Road Initiative funding. Simultaneously, the UAE and Saudi Arabia, albeit with carefully managed channels, are injecting capital into the Syrian economy, primarily through real estate development and private sector investment, largely driven by the desire to secure a return on investments and counter Iranian influence. Iran continues to provide significant financial support, maintaining its influence over the country’s banking system and strategic industries.
Recent data reveals a significant uptick in Syrian exports, particularly of wheat and phosphates, ostensibly driven by increased agricultural production. However, investigations by PeaceRep and affiliated research groups suggest these exports are frequently routed through opaque channels, ostensibly to evade sanctions, and that much of the revenue is re-directed back to the regime. “We’re seeing a deliberate blurring of lines between legitimate trade and illicit financing,” confirms Javier Daher, lead researcher at PeaceRep’s Syria Economic Transition project. “The Assad regime is leveraging the complexity of the sanctions regime to its advantage.”
## The Data Speaks
According to the UN’s Office for the Coordination of Humanitarian Affairs (OCHA), the economic situation in Syria remains dire. Approximately 80% of the population lives below the poverty line, and unemployment rates are staggering. However, parallel to this widespread poverty, there’s evidence of growing economic inequality, with a small number of individuals – primarily those connected to the regime – accumulating considerable wealth. Furthermore, there’s a marked shift in the structure of the Syrian economy. The pre-war dominance of large-scale industrial enterprises has been replaced by a proliferation of small, often informal, businesses, largely driven by necessity rather than strategic planning.
## The Future: A Shifting Regional Order?
Looking ahead, the next six months are likely to see continued consolidation of the Assad regime’s economic control, with China and Russia solidifying their positions as key economic partners. A major factor will be the outcome of upcoming elections in Lebanon, as Syrian support for Hezbollah, a strong influence in the country, could shift the regional balance. Over the next five to ten years, Syria’s economy is projected to remain fragile, heavily reliant on external financing and susceptible to geopolitical shocks. The emergence of a truly diversified economy, capable of generating sustainable growth, appears unlikely under the current political circumstances.
The long-term impact of this economic gambit will be profoundly consequential. It’s creating a new regional order, one where economic leverage is inextricably linked to political influence. The Assad regime, by effectively exploiting the vulnerabilities of the global economic system, has demonstrably strengthened its position, potentially delaying any prospect of democratic reform and perpetuating a state of instability throughout the Levant.
The challenge moving forward is to understand and address the root causes of Syria’s economic woes, while simultaneously mitigating the risks posed by the regime’s strategic maneuvering. A genuine conversation about the future of Syria—one that acknowledges the systemic failures that led to this crisis and that prioritizes the needs of the Syrian people—is urgently required. The question isn’t simply about rebuilding Syria’s economy; it’s about shaping the future of a nation and, ultimately, the trajectory of the region.