Damascus, April 23 (SANA) After one year in power, Syria’s government is focusing on reintegrating the country into the global political and economic system, seeking to end decades of sanctions and isolation. While officials say the most difficult phase has passed, the country still faces deep structural challenges after a 14-year war that devastated infrastructure, housing, industry, agriculture and key institutions.
Government strategy and international positioning
President Ahmad al-Sharaa has committed to restoring Syria’s position internationally while rebuilding the economy through domestic resources and partnerships with regional and global actors.
Speaking at the Antalya Diplomacy Forum on April 17, President al-Sharaa outlined a foreign policy based on balance and neutrality, saying Syria aims to act as a bridge between major powers rather than align with any bloc. He pointed to strengthened relations with the United States, Russia, China and European countries, emphasizing a shift from conflict toward investment and economic cooperation.
Scale and cost of reconstruction
The scale of reconstruction remains a major challenge. According to the World Bank, rebuilding Syria will cost about $216 billion, nearly ten times its projected GDP. Infrastructure accounts for around $82 billion of that total, residential housing $75 billion, and non-residential buildings $59 billion.
The destruction of roughly one-third of the country’s productive assets underscores the magnitude of the recovery effort, making Syria’s reconstruction one of the largest globally and requiring sustained international financing.
Sanctions relief and diplomatic re-engagement
Recent sanctions relief has improved the outlook. Since 2025, the United States has eased restrictions following diplomatic engagement, including a White House meeting between President al-Sharaa and Donald Trump in November 2025. The repeal of the Caesar Act removed key barriers to foreign investment, improving the legal and financial environment for reconstruction.
The European Union has also moved toward normalizing relations. EU foreign policy chief Kaja Kallas said this week that the European Commission had proposed resuming the EU-Syria partnership agreement dating back to 1978, signaling a broader trend toward gradual reintegration into the global economy.
Financial reforms and international support
Economic reforms are underway to rebuild financial institutions and restore stability. The government is working with the World Bank and the International Monetary Fund to modernize the financial system.
In this context, the World Bank has allocated a $200 million grant for railway infrastructure projects and an additional $20 million to strengthen public financial governance. The World Bank has also allocated an additional $146 million grant for electricity and economic recovery.
Fiscal policy and budget outlook
Finance Minister Mohamed Yisr Barnieh said at a Middle East Institute dialogue session in Washington this week that the government inherited weak institutions, limited administrative capacity and a largely non-functioning financial system marked by corruption and low transparency. He said authorities are prioritizing infrastructure rebuilding, restoring services and avoiding monetary financing to maintain macroeconomic stability.
Despite these challenges, Syria recorded a budget surplus in 2025, the minister said, signaling fiscal discipline. For 2026, the government projects a deficit of $1.8–2 billion, with increased spending on social sectors such as education, healthcare and welfare. Social spending now accounts for about 40% of the budget, exceeding defense expenditure according to the minister. Wage reforms have also been introduced, raising the minimum wage from $17 to $110.
Institutional trust and governance reforms
Rebuilding trust between the state and the private sector is another priority. Barnieh said years of authoritarian rule weakened this relationship, and the government is now promoting inclusive policymaking by engaging businesses, academia, civil society and media to improve transparency and accountability.
Central bank strategy and monetary stabilization
The Central Bank of Syria is central to restoring economic stability. Governor Abdulkader Husrieh said at the dialogue session that the country inherited a fragmented monetary system with severe liquidity shortages and no effective policy framework.
Reforms include rebuilding monetary tools, modernizing payment systems and restoring financial connectivity, including rejoining SWIFT. The central bank’s 2026–2030 strategy focuses on institutional rebuilding and alignment with international standards. Inflation has dropped from 117% to around 15%, though external shocks may renew price pressures. Authorities are prioritizing price stability while managing risks of stagflation.
Regional risks and external pressures
Regional tensions involving the United States, Israel and Iran conflict have had limited direct impact on Syria but pose indirect risks through energy markets and regional economies. The country has faced reduced tourism, flight suspensions and rising energy costs.
Authorities have sought to absorb these shocks without increasing the burden on citizens, maintaining stable fuel prices despite fiscal pressures.
Economic potential and investment outlook
Syria is entering a critical phase of recovery, with early gains in sanctions relief, institutional reform and macroeconomic stabilization beginning to reshape its trajectory. With a population of about 24 million, potentially rising to 30 million with refugee returns, the country offers a relatively educated workforce and access to expatriate capital.
Opportunities span sectors including energy transit, reconstruction, agriculture and natural resources. Regional initiatives, such as Iraqi oil transit to Mediterranean ports, highlight Syria’s potential strategic role.
While significant challenges remain, Syria is increasingly seen as a high-potential frontier market. With sustained reform efforts, international support and improved governance, it has the potential to transition into a key regional economic hub.
ABD
