After the Assad regime fell in December 2024, Syria’s swift return to the regional and international fold kindled hopes of a rapid economic recovery following 14 years of war and upheaval. Sanctions were eased, investments were pledged, and new business-friendly laws were promised, all seeming to bear that optimism out.
This hope, however, is fading. Polling across Syria has shown mounting dissatisfaction with socioeconomic conditions since early 2026, despite a pickup in economic growth. By April, sentiment toward the ruling authorities had soured, above all over the economy: just 13 percent of respondents felt the government was doing enough to curb soaring energy and food prices, against 66 percent who found its efforts insufficient. The discontent has played out on the ground, with growing labor strikes and protests over deteriorating living conditions.
Syria’s needs are indeed critical: the World Bank expects the cost of reconstruction to reach $215.6 billion, nearly 10 times the size of the Syrian economy in 2024. The country is also facing structural economic challenges, including the instability of the Syrian pound, an impaired and weakened financial system, weak purchasing power, and a lack of skilled workers, among others.
No lasting political stability can be achieved without a genuine economic recovery that is rooted in the interests of the vast majority of the population rather than a narrow elite
Confronting such challenges as it took power, Syria’s transitional government has increasingly embraced a political-economic model that favors big capital and breeds new forms of cronyism, while pushing for an austerity agenda that weighs on the population and the economy’s productive sectors.
In this context, the stability and legitimacy that Syrian and international actors are trying to build may prove out of reach. No lasting political stability can be achieved without a genuine economic recovery that is rooted in the interests of the vast majority of the population rather than a narrow elite.
Favoring big capital
Authorities in Damascus are doubling down on an economic orientation that was already at play under Assad’s rule. Instead of focusing on productive, labor intensive sectors that contribute to exports and sustainable growth, they are prioritizing commercial and other relatively low productivity activities with short-term returns. The majority of the investment opportunities that Syria has offered foreign investors since December 2024 were in tourism, real estate, and financial services. Promises were also made in essential infrastructure, but these were relatively few.
Meanwhile, no protection has been provided to local production—particularly manufacturing and agriculture—against foreign competition. Quite the opposite: The government pursued trade liberalization policies that are threatening their very existence, while widening the trade deficit with countries like Turkey. Authorities have also advanced legislation that prioritizes investment from large foreign companies and high-net-worth individuals, while promoting consumption, rather than strengthening the country’s productive capacities.
No protection has been provided to local production—particularly manufacturing and agriculture—against foreign competition. Quite the opposite
The new tax system, set to come into force in 2027, introduces a top corporate tax rate of 15 percent across all entities, regardless of size. While simpler tax regimes generally improve collection and compliance, the new system will likely weaken the state’s ability to expand its revenue base, not to mention that it is fundamentally unequal. Similarly, the new investment law enacted last year provides large concessions to investors, such as permanent exemption from income taxes for agricultural and educational projects, reductions of up to 80 percent of income taxes in export-oriented and priority industrial sectors, and wide customs exemptions.
Alongside these measures, several prominent Assad-era businessmen, including Muhammad Hamsho, Wassim Qattan, Samer Foz, and Salim Daaboul, negotiated reconciliation deals with the ruling authorities. These opaque agreements undermine transitional justice, especially in the absence of mechanisms to prosecute economic crimes or recover assets. Other business affiliates of the Assad regime, such as Rami Makhlouf—Bashar al-Assad’s cousin— and the Katerji family, have had their assets absorbed by networks loyal to the new leadership.
Consolidating economic power
Authorities paired this liberalizing agenda with measures that consolidate their power over the Syrian economy.
They restructured the country’s chambers of commerce and industry and appointed members who are close to Hay’at Tahrir al-Sham (HTS)—the group that President Sharaa led before Assad’s fall. One example is Alaa Al-Ali, the new president of the Federation of Syrian Chambers of Commerce who headed the HTS-affiliated Idlib Chamber of Commerce and Industry. The authorities have also appointed the leaders of trade unions and professional associations, with no elections held for these posts.
New economic institutions were also established, and they report to the presidency or are headed by the President himself, including the Supreme Council for Economic Development, the Syrian Sovereign Fund, and the Syrian Development Fund. The decrees establishing these institutions have minimal mechanisms for oversight or accountability. The General Authority for Supply and Procurement, for instance, was established in March 2026 under the Secretary General of the Presidency, a position that was held by the President’s other brother, Maher al-Shareh until May 2026. It now oversees all internal and external procurement for state institutions.
At the same time, the selection criteria for the companies or states that have signed investment memoranda of understanding with the government have not been disclosed. In some cases, contracts were awarded to companies that lack the capacity or experience to implement projects.
Similarly, companies affiliated with HTS figures have won a disproportionate portion of government contracts. A telling case is that of former HTS commander Muhammad Omar Qadid, who now heads the Central Organization for Financial Control. Several of his companies hold state contracts, including Taiba Petroleum, which operates numerous state-owned fuel stations with no public tenders or public contracts from the Ministry of Energy. Qadid also owns Sham Cash, the digital payment platform that disburses public sector salaries and pensions.
Commitment to austerity
A third feature of Syria’s emerging political economy is the authorities’ commitment to austerity, which has a significant impact on the population’s purchasing power and living conditions.
Since December 2024, the government has raised the price of subsidized bread and reduced its size, suspended fuel and oil derivatives subsidies, and sharply raised electricity tariffs. Fuel prices are now denominated in US dollars, exposing consumers to exchange rate risk should the Syrian pound depreciate, as it has been the case following the US and Israel war on Iran.
Soaring costs could force many small farmers to abandon their land and seek city jobs, deepening Syria’s dependency on imports and raising the price of essential goods
The increase in energy prices has sharply impacted key economic sectors, particularly manufacturing industry and agriculture. Over 95 percent of Syria’s private sector is made up of micro, small, and medium-sized enterprises needing modernization and access to finance, if not assistance. Soaring costs could force many small farmers to abandon their land and seek city jobs, deepening Syria’s dependency on imports and raising the price of essential goods.
All of this has pushed the cost of living higher still. Authorities raised public-sector salaries and pensions by 200 percent in July 2025, and by a further 50 percent in March 2026, bringing the minimum monthly wage to 1.26 million Syrian pounds (about $93). But the Syrian Center for Policy Research put the abject poverty line, as measured by the inability to purchase food and essential goods, for a household at 3.34 million pounds (about $250) in April 2026. Many Syrians rely on remittances from relatives abroad, estimated at $4 billion annually, to make ends meet.
Authorities have also signaled plans to cut up to a third of the state workforce but no legal criteria or procedures for this process have been announced, raising concerns about arbitrary dismissals. Nonetheless, multiple ministries witnessed dismissals in 2026. Salaries, meanwhile, rose for senior or “prestigious” positions in the public sector, entrenching the pay gap between employees doing similar work in the same institution.
Alongside the cuts, officials have spoken about plans to privatize state-owned enterprises and assets, including essential services such as education and health, which will most likely result in raising costs and limiting access; further entrenching the state’s withdrawal from its social responsibilities.
Rising socioeconomic struggles
In this context, protests and strikes have increased, particularly since the beginning of the year, reflecting growing frustration with the government’s economic policies.
Notably, protests erupted in mid-May—first in Raqqa, Deir Ez-Zor, and Daraa, before spreading nationwide—after the government set the price at which it will buy wheat from farmers in 2026 at around $333, below the production cost that ranges between $340 to $530. In response, President Sharaa issued a decree raising the effective price to nearly $400, still below what the protesting farmers demanded.
Meanwhile, protests have also targeted real estate projects that threaten to displace residents or undermine their property rights. In Homs, residents of the Qarabis neighborhood successfully pressured the Kuwait-based al-Omran Real Estate Development Company to cancel the element of its “Boulevard of Victory” plan affecting their homes.
In Damascus, residents from the Mezzeh, Kfar Souseh, and Basateen al-Razi neighborhoods protested the Assad-era urban Decree 66 underpinning real estate projects that have forcibly displaced people from their areas. Two of the protest organizers were arrested days later.
Available alternatives
Any post-Assad government would have inherited a challenging set of political, social and economic problems. However, on the socioeconomic front, the ruling authorities’ policies have in many ways exacerbated these challenges rather than addressed them. Their economic orientation has done little to improve living conditions for the majority of Syrians, and has compounded the obstacles to the recovery of the economy’s productive sectors. The growing discontent reflects this dynamic.
Any successful economic recovery and reconstruction must rest first on an inclusive, democratic political transition that lets diverse segments of society take part in decision-making, including on the economy. From political parties and trade unions, to feminist groups and farmers associations, a broad-based inclusive system would help align policy with public interest, which would provide the political stability needed to sustain it. Accordingly, holding free and transparent elections across trade unions, professional associations, and chambers of commerce and industry must be prioritized.
On the socioeconomic front, the ruling authorities’ policies have in many ways exacerbated these challenges rather than addressed them
Similarly, supporting and protecting micro, small and medium-sized enterprises, particularly in manufacturing and agriculture, should be a priority. Alongside a strategic plan to promote these sectors, a series of targeted measures could be considered to provide funding and technical assistance.
The new fiscal system should be reformed through progressive taxation, strengthening tax compliance and broadening the tax base. A temporary additional levy on large companies and wealthy individuals could be imposed in the context of the reconstruction. This would enable the state to undertake reforms that reduce inequality, such as universal health coverage and targeted investment in productive sectors.
A comprehensive transitional justice mechanism and accountability process should include a social and economic dimension by integrating efforts to recover state assets and hold accountable those responsible for serious economic and financial crimes.
Syria’s development strategy should be built around the idea of shared public resources. At its core, this means that communities themselves decide which resources to manage together and set the rules for how they are produced, maintained, and used. Put simply, decisions about how wealth is created and distributed, and about economic policy more broadly, should be debated by society as a whole, not left to a small minority in power.
Joseph Daher is a Swiss-Syrian academic and expert on the political economy of the Middle East.