Dr Ziad Ayoub Arbache

PhD. Applied Economics

(Polytechnic Institute of Grenoble, France), Associate Professor, Damascus University & Advisor 

Syria

Syria’s Economic Question: One Year On, What’s Next? (Résumé)

Executive Summary

Integrating innovation and technology into the digitization of economic activities, prioritizing jobs and employment, halting resource waste and developmental bleeding by reversing harmful trends, transforming every extracted barrel of oil or ton of phosphates into a technological asset, and designing governance institutions rather than allowing institutional erosion and drift—these are the pillars of an economic recovery plan. This plan must be formulated and implemented with robust monitoring and correction tools to avert a catastrophic scenario and the disintegration of economic linkages, particularly before the demographic dividend is exhausted by the middle of the next decade.

Report Topics

This report synthesizes three working papers deliberated in Damascus over the past two weeks. Two meetings were held with the support of German and Spanish organizations, while the third emerged from a Damascus-based and diaspora intellectual collective. Participants spanned academics, business leaders from industry and agriculture, civil society representatives, development agencies, and media experts. This included specialists in engineering, energy, the environment, economics, management, social sciences, law, transitional justice, and gender studies.

These sessions fostered a “common language” by bridging geographical and intellectual divides. Free expression, rigorous debate of opposing views (the entire group was present during the last session), and sustained engagement enabled consensus on Syria’s economic pathways one year after the regime’s fall on December 8, 2024.

The dialogues highlight Syria’s four critical gaps: pre-war imbalances and reform neglect; war-induced devastation and brain drain; reconstruction lags amid global advances; and the 2030–2035 technological acceleration outpacing recovery. The discussions identified a developmental vision: re-engineering systems through participatory, gradual, and spatially integrated bottom-up approaches to move from rent-seeking behaviors to production, while addressing the cumulative effects of sanctions, spatial economics, local development, and energy policy.

Context, Importance, and Imperatives

Syria’s rentier economy—reliant on oil rents, state patronage, and elite capture—has drained development potential, exacerbated by authoritarian failures, elite flight, and war. While digitalization elevates agile nations, it traps rentier states in cycles of dependency. One year post-regime, Syria faces acute imperatives: rebuilding trust via credible policies in public and monetary sectors; combating poverty, unemployment, and illiteracy; harnessing the demographic dividend to 2035 with managed migration; prioritizing digital-job education; and ensuring climate equity per Paris Agreement commitments.

An intelligentsia-led think tank must integrate infrastructures as growth engines within a national vision—economic, social, and environmental; geographic, sectoral, and temporal—ranging from immediate recovery to long-term sustainability. Planning prior to rubble clearance remains essential, rejecting empty rhetoric in favor of risk-aware execution.

Re-engineering Systems: Innovative, Trans-Disciplinary Approaches

• Bottom-up and demand-driven: Tailor interventions to local needs to ensure stability.

• Participatory and state-citizen focused: Mobilize communities and stakeholders.

• Incremental and flexible: Link macro-micro levels holistically, reinforcing citizenship.

• Spatial planning (Law 107/2011): Rehabilitate infrastructure with local input, balancing urban-rural demographics, economics, scales, timelines, and sectors.

Economic Gaps: Transitioning from Rentierism to Production

Syria requires a comprehensive vision and roadmap emphasizing trust-building across policies, public/monetary sectors, and civil society. Key challenges include financing, technology access, property rights, governance, pricing, resource allocation, and equitable utilities—prioritizing inclusion over profit.

Priorities Amid Constraints

1. Local, self-driven responses: Shift from relief to sustainability, customized by region.

2. Supply and quality enhancement: Meet rising demand from returnees and economic takeoff.

3. Future-oriented infrastructure: Ensure efficiency, justice, and sustainability.

4. Institutional reforms: Optimize resources (e.g., energy) for universal access.

5. Social capital restoration: Forge partnerships between local administration and the private sector with transparent financing, capacity-building, accountability, and anti-monopoly tracking.

We must blend relief with strategic axes to balance supply and demand, ignite takeoff, and achieve a holistic ascent. It is crucial to avoid the pitfalls of prior plans, which ignored execution risks such as corruption and elite capture.

Sanctions and Recovery: Ending Randomness in Treatment

Sanctions debates pit liberal views (weaken aggressors to end war) against realist ones (deter aggression). Syria’s economy suffered pre-war and wartime looting, with over $147 billion in oil extraction from 1982–2011 fueling imbalances. Relief aid risks waste without a restructuring model incorporating digital integration and cohesion. Illogical anomalies persist: three parallel “central banks” (Central Bank of Syria, SDF entities, Sham Cash) trap liquidity, marginalizing formal banks amid remittance dominance. Labor unions remain unreformed and unelected.

Accusations linking bankers and businessmen to the old regime enable extortion and asset seizures, eroding trust. Relief fails if U.S. firms seize assets (leading to a scenario where, instead of society’s forces returning to production, the nation becomes dependent on aid), currency “de-zeroing” inflates prices, locals are excluded, or aid bypasses productive sectors like agriculture for corrupt channels. The UN’s “Day After” planning (initiated in 2013) lacks tracking, raising the question: “Growth for whom?”

Lessons urge seizing post-conflict windows proactively:

• Train youth in AI/design over oil dependency.

• Grid-in/Grid-out: Develop grid apps for IT students allowing them to sell solar surplus during the day and rebuy at night (net metering).

• Deploy small-scale wastewater units (e.g., for leather dyeing) for reuse, avoiding aquifer depletion.

• Example: Digitally integrate insurance and interior ministries for retiree records, eliminating redundant bureaucratic demands.

• Tech tools like MIS/GIS are vital for housing/zoning, countering passivity amid urban chaos and decay.

Spatial Economics and Local Development

Time constraints preclude experimental economics or liberalization that worsens marginalization. Spatial economics empowers local administration for community uplift, prevents fragmented projects, and counters service decline amid price hikes and the new lira. Regional planning (via growth poles, zones, and tech cities) enables efficient local funding over mega-projects, fostering interlinked growth.

Core 3D Framework (Density, Distance, and Division): Density amplifies urban economies and scale effects; distance facilitates trade; divisions impede transport. Local development redistributes burdens to ensure cohesion.

Strategic Shifts

1. Regional Positioning: Leverage Syria’s trade/energy hub potential via axes (energy, transport, trade, tourism), pipelines, and ports as oil transit points; negotiate effectively with neighbors.

2. From Growth to Development: Transition from polarized centers to integrated axes and radial expansion through:

   • Demographic management (displacement, training, poverty alleviation).

   • Sectoral/regional integration.

   • Resource-based settlements, rural infrastructure, and industrial cities.

   • Halting capital hemorrhage and illicit trade.

3. “Raise Your Hand” Mapping: Identify constraints (protected sites, zones) to curb random settlements that drain capital.

4. New Infrastructure:

   • Roads as axes: North-south (Turkey-Jordan) and east-west (Iraq-Lebanon) for hubs/deltas.

   • Peripheral-central cities to relieve congestion and house displaced populations.

   • Industrial zones linked to roads/residential areas for SMEs and crafts.

Energy Sector: Phased Policies for Restart

Align supply and demand through phased actions:

1. Cut losses: Implement waste reduction, rationalization, laws, and efficiency measures.

2. Flatten demand curve: Use smart pricing/technology to foster job creation.

3. Assess and repair damage: Conduct comprehensive audits.

4. Renewables priority: Target ≥1,500 MW wind/solar for independence and jobs.

5. System re-engineering: Reform tariffs, support local firms, and implement vulnerability mitigation.

6. Update investment map: Address financing and institutions.

7. Revise electricity law: Enable private entry and progressive pricing.

8. Assess demand shifts: Minimize losses.

9. GIS/MIS monitoring: Ensure real-time oversight.

10. Diaspora leverage: Integrate external expertise.