After decades of authoritarian rule and a 13-year civil war that left the country in ruins, Syria stands at a pivotal juncture in its history. The fall of the Assad regime in December 2024 has created an unprecedented opening to reshape the nation’s future. Syria’s new government has surprisingly signaled its intent to transition from a corruption-ridden, state-controlled economy to a dynamic free-market system, a shift that has sparked optimism among citizens and business leaders alike.
This transformative moment brings both promise and peril. On the one hand, the commitment to market liberalization and integration into the global economy presents a unique opportunity to rebuild Syria’s shattered economic and political foundations. On the other hand, the road ahead is fraught with formidable challenges, including the need to restore political institutions, reconstruct infrastructure, lift crippling international sanctions, and address the widespread poverty affecting millions.
While the path forward is uncertain, Syria’s steps in the coming years will determine whether it can achieve sustainable growth and prosperity for its people or fall back into cycles of instability and hardship.
Can Syria Overcome its Past and Secure a Prosperous Future?
Syria’s economy has suffered from decades of state mismanagement and war. Under the Al-Assad family, the country functioned as a Soviet-style planned economy, with state monopolies, limited trade, and suppressed innovation. GDP stagnated, industries failed to modernize, and foreign currencies were banned. High tariffs stifled trade, and imported goods were secretly sold from behind counters, available only to those who knew how to ask, with fear of security raids and extortion looming. Syrians even used coded terms like “mint” or “parsley” for “dollar” to avoid arrests.
The Syrian civil war has plunged the economy into further decline, with GDP contracting by 54% between 2010 and 2021. The Syrian pound has lost 99% of its value, trading at 13,000 pounds to the dollar, making even basic market purchases a struggle requiring bags of banknotes. The human cost is equally harrowing. The UN reports that 90% of the population lives below the poverty line. Food insecurity affects 13.1 million Syrians, and 16.7 million require urgent humanitarian assistance.
Yet, in the shadow of Assad’s fall and Hayat Tahrir al-Sham’s (HTS) controversial rise to power, an unexpected glimpse of hope has emerged. Despite its contentious past, the new leadership has pledged to transition toward a free-market economy. This shift, if sustained, could mark the beginning of Syria’s economic resurrection.
Bassel Hamwi, the president of the Damascus Chambers of Commerce, indicated that the new vision will focus on competition and openness. Within days of the regime fall, prices for essential goods fell by as much as 60% after removing dollar restrictions and high tariffs, which led to increasing imports. Damascus shops are now stocked with foreign goods, ending reliance on smuggling and oppressive trade policies.
So far, the HTS-led government has outlined several promising market-friendly economic reforms. These include liberalizing currency trading, privatizing state-owned enterprises through transparent and competitive bidding processes, dismantling cronyism, emphasizing property rights, simplifying the tax regime, reforming customs procedures to facilitate international trade, and overhauling the complex import permission system.
However, significant challenges remain. Syria’s new leaders must first rebuild the country’s political and economic institutions. The HTS-led government is still viewed with skepticism by many in the international community due to its historical links to extremist groups. To gain support, it must demonstrate a commitment to minority rights, non-sectarian governance, and avoiding authoritarianism. Political instability and doubts about the regime’s intentions risk delaying economic recovery.
Sanctions present another significant challenge. Syria is the third most heavily sanctioned nation globally after Russia and Iran. Initially imposed during Assad’s regime, these sanctions persist, undermining reconstruction efforts. Two weeks after Bachar Assad fled, U.S. President Joe Biden still extended the Caesar Act until 2029 through a military spending bill, targeting Syria’s energy and construction sectors and restricting trade and access to essential goods.
Removing sanctions is far more complicated than imposing them, even after regime change. Without easing these restrictions, foreign investors and aid agencies will remain hesitant, delaying Syria’s recovery efforts.
From Soviet-Style Regimes to Liberal Democracies: Lessons for Syria from Eastern Europe
As Syria grapples with the aftermath of civil war and economic collapse, the road to recovery may seem insurmountable. Yet, history offers a glimmer of hope. The experiences of Eastern European and Baltic nations, which successfully transitioned from Soviet-style regimes to liberal democracies, underscore a powerful lesson: meaningful reforms rooted in economic freedom, transparency, and political accountability can unlock long-term prosperity.
For Syria, the priority must be establishing inclusive institutions that protect property rights, uphold the rule of law, and foster political pluralism and economic competition. Economic liberalization must serve as the cornerstone of Syria’s recovery strategy. Reducing the government’s economic dominance and encouraging private sector growth are essential. Opening markets to domestic and international competition, simplifying business processes, and incentivizing entrepreneurship—especially for youth—can drive innovation and job creation.
Economic freedom is vital for societal well-being, reducing poverty, entrepreneurship, and economic growth. Nations with free markets and open trade see lower poverty levels, higher innovation, better education, personal success, and human development. It also bolsters political freedom and democratic governance.
The new Syrian government has pledged to guide the country toward a brighter future, prioritizing economic development and prosperity and leaving behind Syria’s sectarian and conflict-ridden past. Plans include initiating a democratic process, holding national unity talks, drafting a new constitution, disarming armed groups, and safeguarding minority and women’s rights. In a notable step toward inclusivity, a woman outside the ranks of HTS has been appointed as Syria’s Central Bank governor.
After 14 years of war and decades of authoritarian rule, both HTS and the Syrian people are weary of conflict and yearn for peace and stability. With a focus on economic growth and cooperation with regional and Western countries, optimism is growing that Syria can overcome its challenges and build a stable, prosperous future.
The path to recovery is long, but adopting a free-market vision—alongside institutional reforms—could transform the country into a model of economic success in the Middle East. With abundant natural resources, a strategic Mediterranean location, and a highly educated population, Syria has the foundational assets to fuel economic growth—if managed effectively and strategically.
Photo by Aladdin Hammami
