Ekonomisk riskbedömning
Syrian Arab Republic

Syrian Arab Republic

Population 16.9 million
GDP -
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Country risk assessment
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Synthesis

STRENGTHS

  • Strategic geographical location
  • Energy transit country
  • Oil potential

WEAKNESSES

  • Civil war since 2011: hundreds of thousands of deaths, millions of internally and externally displaced people, and much of the country’s infrastructure destroyed
  • Divided territory, under the sway of different groups
  • Official oil production has been sharply reduced

RISK ASSESSMENT

The regime strengthens, but influence of foreign powers remains

After nine years of civil war, the Syrian conflict has entered a new phase. Since the fall of Aleppo in 2016, the balance of power has reversed. Bashar al-Assad’s regime, which a portion of the Syrian population rebelled against in 2011, has retaken much of the country. Other participants have joined the confrontation between the regime and the Free Syrian army. On one side, Russia, Iran and Hezbollah are providing military and logistical support to keep the Damascus regime in place, while on the other, an international coalition of Western and Arab countries has formed to curb the expansion of radical Islamist groups (al-Nusra and Daesh) in Syria and Iraq. Although these jihadist groups have been defeated, coalition forces remain present in the Kurdish-held areas east of the Euphrates, and some Islamist militias continue to be active in the desert areas of southern Syria. Finally, Turkey, which shares a land border with Syria, has intervened several times in the conflict to protect its borders and interests in the region. While supporting the rebellion against the Syrian regime, Turkey is trying to limit the influx of Syrian refugees into its territory and to make sure that the end of the war does not lead to the creation of a Kurdish state.

 

The regime’s recapture of the Idlib region could be the last act of the war in Syria. This north-western region, torn between jihadist groups and opposition rebels, was partly recaptured by the regime between April and August 2019. At the same time, the gradual withdrawal of American troops from Syria has weakened the control of the predominantly Kurdish Syrian Democratic Forces (SDF) over the north-east of the country. America’s presence, notably in the Manbij region, had contained the ambitions of Turkey. In October 2019, following the announcement of the almost total withdrawal of US troops and despite international protests, Turkish forces invaded Syria from the northeast to create a 30-kilometre deep security zone, or “buffer zone”. To counter the Turkish attack, the SDF authorized the deployment of the Syrian army on their territory. However, following the Sochi agreement between Presidents Erdogan and Putin, the Kurds still had to withdraw from the security zone. In addition, the agreement establishes Russian-Turkish patrols along the Turkish-Syrian border. The Kurds are therefore even more trapped between Turkish forces and those of Bashar al-Assad, who still wants to recapture this lost territory. Accordingly, violence and instability should continue.

 

In September 2019, the United Nations announced the creation of a constitutional committee to initiate a political transition. It is composed of 150 members, equally divided between the government, the opposition (the semi-autonomous Kurdish administration is not represented) and civil society. They have to draft a new constitution and pave the way for free elections. However, the potential progress that this committee may achieve is uncertain at this time. A new offensive on Idlib would raise big questions about its legitimacy, while Bashar al-Assad appears increasingly in a position of strength after his recent recaptures and the weakening of the Kurds.

 

A difficult and controversial reconstruction process

The return of several provinces to the Bashar al-Assad regime is expected to trigger a gradual recovery for the Syrian economy, which remains badly weakened by nine years of conflict. Syrian GDP shrank by more than 60% during the 2010/2016 period, according to World Bank estimates. Much of the country’s infrastructure was destroyed during the fights. Syrian industry has shrivelled up, while economic sanctions make it difficult to access financing. Bashar al-Assad's regime has been under US and European sanctions since 2011, but it can count on China's support in addition to that of its main allies. Despite the backing of Russia and Iran, the country still has considerable needs. The Economic and Social Commission for Western Asia (ESCWA) has estimated the total cost of Syrian reconstruction at USD 388 billion. While some Western countries would be willing to participate in the financing, they are making their assistance conditional on the establishment of an inclusive political process.
Another factor limiting the reconstruction process is the lack of human resources. Nine years of war have taken a severe human toll. The number of deaths related to the conflict is estimated at 570,000 (Syrian Observatory for Human Rights, March 2019). In addition, 6.2 million people, including 2.5 million children, have been displaced, and 5.6 million are officially registered as refugees (UNHCR, September 2019), mostly in Turkey, Lebanon and Jordan. The issue of refugee return remains central to the success of the peace process. While countries hosting large numbers of Syrians would be in favour of facilitating their return, the regime continues to send conflicting signals. Announcements made by the government are intended to be reassuring and support a return of displaced persons. However, starting back in 2012, the government has used a property law to seize the assets of displaced persons. Furthermore, many refugees fear conscription or arbitrary arrest, not to mention the threat of insecurity that persists in many Syrian regions.

 

 

Last update: February 2020

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