Introdução

After more than 13 years of war, the humanitarian and socioeconomic situation in Syria is catastrophic at every level. More than half the Syrian population is displaced inside or outside the country; there are around 6 million Syrian refugees in the world, mostly displaced to neighbouring countries, with only a small minority having returned to Syria. The living conditions of the majority of Syrian refugees in neighbouring countries are marked by poverty and exploitation, often through discriminatory policies. At the beginning of 2024, the United Nations estimated that around 16.7 million people remaining in Syria were in need of humanitarian aid (out of a total population of 23 million), while over 90% of the country’s population lived below the poverty line. At the same time, the volume of humanitarian assistance has begun to diminish over the past few years and remains predominantly focused on emergency relief, rather than questions of development. 

However, this dramatic situation has  not halted economic dynamics favouring private capital accumulation and reducing the social responsibilities of the state – quite the opposite. The so-called ‘war economy’ model has been portrayed by various analysts as a new paradigm, supposedly representing a rupture with and departure from the economic dynamics that existed in Syria before 2011. In reality, the conflict has exacerbated already established dynamics, intensifying the Syrian government’s pre-war neoliberal policies and orientation, alongside deepening austerity measures, while reinforcing the authoritarian and patrimonial aspects of the regime. These policies have contributed to an expansion of various forms of corruption in the country. This essay will analyse Syria’s political-economic evolution after the 2011 war and the ways in which the Syrian regime is fostering the roots of the initial social crisis through its austerity measures while further entrenching neoliberalism.

Privatisation and PPP, as the main axis of ‘reconstruction’

The extensive destruction and damage across the country has had a profound negative impact on the Syrian economy. Gross domestic product declined from $60.2 billion USD in 2010 to approximately $20.6 billion in 2020, while estimates of total accumulated economic losses during the conflict, including the destruction of large sectors of the productive economy, damage to physical capital, and estimated losses to GDP, are estimated at several hundred billion US dollars. The war and the destruction it left behind has only exacerbated pre-2011 dynamics, as the Syrian government accelerated its neoliberal policies in the wake of the 2011 uprising, and as the conflict became increasingly militarised after 2012.

In February 2016, the Syrian government announced ‘the National Partnership’, its new economic strategy replacing the previous ‘social market economy’ strategy established in 2005. A central aspect of the new strategy has been the Public Private Partnerships (PPPs) law, introduced in January 2016, six years after its initial drafting, which authorises the private sector to manage and develop state assets in all sectors of the economy as a majority shareholder/owner, with the sole exception of the oil-extraction sector. Former Economy and Foreign Trade Minister Humam al-Jaza’eri declared that the law created a ‘legal framework for regulating relations between the public and private sectors and meets the growing economic and social needs in Syria, particularly in the field of reconstruction’, while also providing the private sector with the opportunity to ‘contribute to economic development as a main and active partner, and to also help develop the public sector via the time-limited contractual relations with the private sector’. 

A recent example of such privatisation in action was the contract allowing a private company to manage Syrian Airlines, announced in July 2024. The company was not named, but is likely Eluma, owned by businessmen linked to the presidential palace. The director of Syrian Airlines stated that the contract with the private company would be for 20 years, and that the government would receive 25% of annual revenues in the first ten years, rising to 37.5% in the second ten years of the contract. Another example, in October 2024, was an agreement to privatise the production of vehicle license plates, announced just prior to the beginning of a campaign compelling vehicle owners to update their cars with newly designed plates. Other public-private partnership projects have been undertaken in everything from cement to tractors to battery manufacturing. This privatisation process consolidates the influence of regime-affiliated businessmen, and their control over public goods, at the expense of state and public interests, thereby renewing and consolidating the regime’s authoritarianism and patrimonialism. 

Thus, these economic policies renew the dominant strategies for private capital accumulation that date back to before 2011, while at the same time renewing and consolidating the regime’s authoritarianism and patrimonialism.

The government’s willingness to privatise the economy has reached even further, to include key social sectors such as the health and education systems. In mid-March 2024, a conference was organised at the University of Damascus under the title of ‘Investing in Health – Potential and Goals’, gathering the Minister of Health, Dr. Hassan Ghobash, government officials, representatives of the pharmaceutical and insurance sectors, and members of the doctors’ union and pharmacists’ union. The Minister of Health and his assistant stated that the Ministry had started the process of converting all public hospitals into entities with administrative and financial independence, and was considering a public-private partnership model for the management of medical facilities. Two weeks after the conference mentioned above, the education sector was targeted: The University of Damascus held another conference, this one entitled ‘Investment in Education’, with the presence of officials from the Ministry of Education, the president of the National Union of Syrian Students, and other representatives of the sector. 

Comparable steps have already been taken to further privatise the energy sector. The Law No. 41 of 2022, which amended Electricity Law No. 32 of 2010 by modifying three articles in the original law, articles 9, 14, and 30, A 2022 law granted more contracting authority to provincial electricity-management bodies and eased the conditions for selling privately produced electricity to consumers. Through this legislation, the government awarded the management of the Deir Ali Power Plant to a Syrian company – though without disclosing the company’s name or other contract details. The plant, located near Damascus, is one of the newest and largest in the country, producing 930 MW of the country’s reported total output of 2,000 MW. Plans to do the same with other facilities have been announced already, including at the Tishreen and Aleppo power plants, according to Omar Breijawi, general manager of the Public Establishment for Electricity Generation. 

This said, today, it is the use of the system of ‘amperes’ that has expanded throughout the country, exceeding the city of Aleppo where it initially appeared, as a result of the extensive destruction of infrastructure and the government inability to secure electricity. It is through this framework and the consolidation of such dynamics, that the government has also deepened austerity measures and cutting of subsidy policies.

Policy of subsidies, or continuous austerity measures

At the end of June 2024, the Syrian government announced its new plan to restructure the subsidies system, by shifting from subsidising items through a ‘smart card’ system, which was established by the Ministry of Petroleum in 2014 to regulate the consumption of certain commodities, to directly transferring cash subsidies to citizens. The government instructed Syrians with smart cards but without bank accounts to open an account within three months in order to receive cash transfers. It was estimated that the various banking institutions would need to open about 2.5 million new accounts over the following 3 months.

This decision was part of a generalised effort to reduce subsidies, particularly on key commodities such as oil derivatives and bread, which had been underway for several years. On February 1^st, 2022, Damascus took another important step, announcing the exclusion of approximately 600,000 families from its subsidy programme. Many of these families were forced to further reduce, or even cease altogether their consumption of essential goods and commodities, due to the substantial gap between subsidised and unsubsidised prices.

In the same month, the Ministry of Internal Trade and Consumer Protection increased, once again, the retail price of a loaf of subsidised bread by up to 100%, and the price of diesel for ovens by more than 165%. After these new increases, the price of a 1,000-gram loaf of bread reached SYP 400, while the price of a litre of subsidised diesel for ovens jumped from SYP 700 to 2,000. Meanwhile, the Ministry of Electricity announced a dramatic new increase, of between 300% and 585%, in the cost of electricity for domestic, commercial, industrial and agricultural uses. In March 2024, the newspaper Qassioun estimated that each household needed at least SYP 3 million annually (equivalent to $238 USD at the official exchange rate), to cover its electricity needs, including through the ampere system. 

At the end of March 2024, in a meeting with economists affiliated with the Baath party, Bashar al-Assad argued that, in principle, subsidies should remain in place, but that their form should change in order to be useful and support the people in need. He added that the current form of support was not realising its objectives, and that, moreover, it had fostered corruption. Declaring that fighting corruption was now a key issue for the improvement of citizens’ livelihoods and distribution of support, Al-Assad  explained that support should be provided directly to individuals in cash, instead of via subsidisation of goods such as bread. An economist present during this discussion explained that the system of receiving cash support via electronic card would help dismantle part of the corruption that existed in the subsidising of goods. 

A few months later, in September 2024, the government announced yet another rise in the price of a litre of subsidised diesel for ovens, from SYP 2,000 to SYP 5,000. The main government objectives for these cuts to subsidies, particularly on oil derivatives, were fiscal and monetary: to stabilise the SYP; increase state revenues; diminish state expenditure (on the subsidies); and accumulate foreign currency. This has been reflected in a continuous diminution of the share of spending on public subsidies and other such support programmes. In the 2024 budget the share of spending on public subsidies and other such support programmes was 18%, down from almost 30% in 2023. These subsidies accounted for just 5.6% of the 2024 budget, down from 15.5% in 2010. In the 2025 budget this trend continued, with the share of spending on public subsidies and other such support programmes representing now 15.8%. 

These austerity measures have proved largely ineffective in stabilising the Syrian economy. At the same time, shortages of subsidised products, particularly oil derivatives, have pushed individuals and economic actors to buy on the ‘free market’, or ‘black market’. However, quantities remain restricted in these alternate marketplaces. The government has gradually lifted subsidies, substantially increasing prices for both oil derivatives and bread, while the quantities allocated to families is constantly diminishing.  

Socioeconomic consequences and corruption

These cuts in subsidies are negatively impacting the Syrian families on a day-to-day basis, but also the economy as a whole. The rise in prices of oil derivatives, for example, undermines agriculture and manufacturing projects by increasing production costs, leading  to some farmers and manufacturers ceasing their activities. 

To compensate for the rise of subsidised prices over the past few years, the government granted bonuses to state employees, soldiers, and pensioners, as well as some salary increases. These measures have not alleviated the population’s continuous suffering or reduced the cost of living. Most state employees are unable to cover a majority of their monthly needs with their salaries. The current salary scale for civil servants, between SYP 280,890 and SYP 336,348 (equivalent to $22.20 and $26.60 USD), is significantly less than required to sustain a family, which reached SYP 2,696,877 for a family of five in February 2024, as measured by the Minimum Expenditure Basket (MEB). (This cost had doubled since 2023 and quadrupled since 2022.) The major pressure on the cost of living in January and February was caused by the reduction of subsidies on fuel and bread.  By September 2024, the Kassioun newspaper estimated the average cost of living for a Damascene family of five at SYP 13.6 million, and the minimum cost at SYP 8.5 million.

The dire economic situation has led most civil servants, soldiers, and other state employees to seek additional jobs, with some tempted into illegal economic activities at every level of government and the public sector.

In this context, remittances have become indispensable to the livelihoods and survival of large and growing segments of the population. The government has not only failed to provide job opportunities that allow these Syrians to live in dignity and cover their daily needs, but its policies have actively worsened the population’s living conditions. At the same time, corruption has been expanding significantly since 2011, exacerbated by the policies of the Syrian regime, including the unrestricted powers granted to specific bodies, the continuing economic decline, and the low salaries of civil servants. 

Conclusão

Such so-called ‘reforms’ as the replacement of subsidies with cash transfers, and ending price controls, have been promoted by international monetary institutions including the World Bank and the International Monetary Fund for decades. According to the official narrative, these actions reduce the distortions created by subsidies, including waste and smuggling to other countries, while giving more agency to households regarding their individual spending priorities. In reality, reforms of this kind have almost always led to increased suffering for the popular classes, in Syria and in many countries where they have been implemented. 

These arguments, which frame the replacement of the subsidy system with cash transfers in terms of granting individuals the freedom to consume in the way they see fit, have been propounded recently not only by global insitutions but by ministers and other officials of the Syrian regime. Their logic is based on the assumed primacy of homo economicus, where freedom of choice is understood as the ability to consume according to individual preferences. A system of cash distribution therefore reframes individuals in need or in crisis as consumers with the assumed means to purchase the goods and services that they want most. This system therefore helps to promote ‘pro-market dynamics’ and a specific economic vision supporting market development and poverty reduction.

In this context, the progressive lifting of subsidies, ending of price controls, and the shift towards a cash transfer program, are not only about state fiscal savings, improving the so-called ‘efficiency’ of government-assistance policy, or providing more ‘freedom’ to citizens, especially as no social and economic compensation takes into consideration the structural consequences for the economy and society. Measures symbolically increasing salaries or granting bonuses on specific occasions do not compensate for rising living costs or the loss of purchasing power.

Syrian official discourses and policies should not be considered as solely ‘technocratic’, but rather as indicators of a reorientation of the economy that aims to consolidate the regime’s power and various patronage networks, all while allowing new forms of capital accumulation and pursuing new austerity measures leading to the withdrawal of the state’s social responsibilities. Decisions and initiatives taken by the government in these past few years have not tried to achieve any ‘social justice’ or improve conditions for the vast majority of Syrians. Instead, they have pushed those citizens further into the abyss.