meed-logo

line1 line2 line3
SIGN IN / REGISTER

Regional diplomacy fails Syrian economy

6 June 2024

 

Syria’s dire economic position continues to worsen. In a report issued in May, the World Bank predicted the economy will shrink by 1.5% this year, following a 1.2% decline in 2023.

The economy had already contracted by 54% between 2010-21, according to the Washington-based body. Its international trade has also entered freefall, with the value of exports falling from $8.8bn in 2010 to just $0.7bn in 2023, while imports dropped from $17.5bn to $3.2bn over the same period. Syria was once an oil exporter with a large agriculture sector, but it has become reliant on fuel and food imports.

What makes matters worse is that the cost of importing goods is now far higher than it once was, thanks to the collapse in the value of the Syrian pound. In 2011, you needed £Syr47 to buy one US dollar; by 2023, the cost had risen to more than £Syr12,500 for every greenback. Last year alone, the Syrian pound declined by 141% against the dollar, while inflation was running at 93%.

Agriculture fared slightly better in 2023 due to improved weather conditions compared to 2022, but the north of the country suffered a devastating earthquake in February 2023, which killed several thousand people and destroyed thousands of homes.

The authorities have few spare resources to devote to rebuilding areas devastated by natural disasters or the civil war. 

The government has lost control over oil revenues to the Autonomous Administration of North and East Syria (AANES), which holds the oil-rich parts of the country. The security challenges of the past 13 years have also led to a downturn in most other parts of the economy and enfeebled the government’s ability to collect taxes.

The World Bank estimates that, after adjusting for inflation, government revenues are now 85% lower than before the war.

The poor living conditions prompted a fresh wave of protests in Daraa and Al-Sweida in August 2023, which then spread to other government and rebel-controlled areas of the country. Locals have much to complain about.

The International Rescue Committee reckons that nearly three-quarters of Syria’s population, or more than 16.5 million people, require some sort of humanitarian assistance and upwards of 90% of Syrians now live in poverty.

Smuggling economy

One area of activity that has prospered has been the production and export of Captagon. This illegal amphetamine-like drug is smuggled in huge quantities into the Gulf, where it finds a ready market despite concerted efforts by the authorities there to clamp down on it.

The World Bank has estimated Syria’s Captagon trade was worth between $1.9bn and $5.6bn a year from 2020-23; that higher figure is not far below the country’s GDP of $6.2bn in 2023.

Those linked to the Syrian trade are thought to earn between $600m and $1.9bn in revenue a year. To put that in context, the revenue generated from all legal exports from Syria last year was $960m.

The Captagon trade might be enriching some figures close to the regime of President Bashar Al Assad, but it is also undermining the country’s wider economic prospects.

One potential avenue for rebuilding the shattered economy is to attract inward investment and the rich Gulf countries are an obvious potential source for that.

However, despite the diplomatic normalisation with Gulf governments over the past few years, the hoped-for investment flows have not materialised, with unhappiness over the Captagon trade a key factor – even if there have been some signs of a reduction over the past year or two.

Caroline Rose, who runs the Washington-based New Lines Institute’s research project on the Captagon trade, said: “We keep tabs of recorded Captagon seizures … and noted a slight dip in Captagon seizures region-wide between 2022 and 2023, so the reduction in seizures could be related to a stabilisation in the supply and production of Captagon.” However, she added that Syria continued to export the drug “at industrial levels”.

Investment brakes

The drug trade is not the only barrier to attracting foreign capital, though. Inward investment has also been hampered by US sanctions set out under the Caesar Syria Civilian Protection Act of 2019, generally known as the Caesar Act, and the myriad problems within the domestic economy are also a major hurdle for any would-be investor.

“When it comes to business and investment, Syria does not really provide any good environment for that. You have high costs, high risks, absence of rule of law, low purchasing power,” said Haid Haid, a consulting fellow at UK thinktank Chatham House, in April. “Businesses in general will not be tempted to go and open businesses there because the gains are low.”

Some regional aid has been flowing in, though. Arab countries raised their contributions from 2% of the total aid in 2022 to 15% in 2023, with the UAE, Kuwait and Saudi Arabia being the largest donors.

Others have been focusing their efforts on the plight of the millions of Syrian refugees displaced inside the country and beyond its borders in Turkey, Jordan, Iraq and Lebanon. Since the war started, around half of Syria’s 23 million-strong population has been displaced, with more than 5 million fleeing abroad.

Some €7.5bn ($8.1bn) of grants and loans were pledged by international donors to help Syrian refugees at the Brussels VIII Conference on Supporting the Future of Syria and the Region on 27 May.

But until a political resolution to the civil war can be found, Syria’s enormous economic and humanitarian crises are unlikely to be solved. Speaking at the Brussels conference, the European Union’s foreign policy chief Josep Borrell said a “Syrian-owned political solution … is the only credible path for all Syrians to live in peace and stability, and for refugees to return home.”

Gaza conflict renews violence in Syria

https://image.digitalinsightresearch.in/uploads/NewsArticle/11854850/main.gif
Dominic Dudley

Register for MEED's guest program now to access this article.

Click here to register
Exclusive from Meed
Related Articles
  • Dubai plans EPC tender for Warsan sewage treatment plant

    25 February 2026

     

    Register for MEED’s 14-day trial access 

    Dubai Municipality is preparing to tender the main construction package for the Warsan sewage treatment plant (STP) by the end of the year, according to sources close to the project.

    The scheme is linked to the deep sewerage tunnels infrastructure programme being implemented by the municipality’s sewerage and recycled water projects department.

    As MEED understands, the Warsan STP had previously been expected to be procured as a public-private partnership (PPP) scheme.

    However, sources confirmed that the main construction package will now be procured as an engineering, procurement and construction (EPC) contract.

    The project involves the construction of a sewage treatment plant with a capacity of about 175,000 cubic metres a day (cm/d), including treatment units, sludge handling systems and associated infrastructure.

    The plant, estimated to cost about $326m, will be developed at the existing Warsan complex, where the municipality is also progressing separate expansion and rehabilitation packages.

    These include Warsan STP Phase 1 (DS-355/1), which involves sewerage and stormwater network upgrades, and Stage 2 of the Al-Warsan sewage treatment plant (DS-203/2), comprising new treatment units

    Kuwait-headquartered Mohammed Abdulmohsin Al-Kharafi & Sons is the main EPC contractor for both projects.

    Separately, the municipality is also progressing the expansion and upgrade of the first and second phases of the Jebel Ali STP.

    The upgraded facility will be capable of treating an additional sewage flow of 100,000 cm/d.

    Earlier this month, contractors were invited to prequalify for the contract.

    The bid submission deadline is 2 April.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/15765751/main.jpg
    Mark Dowdall
  • Aramco firm and Arcapita sign logistics facility deal

    25 February 2026

    Asmo, the logistics joint venture of Saudi Aramco and DHL Supply Chain, has signed an agreement with Bahrain‑headquartered Arcapita Group Holdings to deliver a 1.4-million-square-metre (sq m) built-to-suit logistics complex at King Salman Energy Park (Spark).

    The project will feature a 43,000 sq m temperature-controlled, Grade A warehouse, more than 3,000 sq m of office and staff amenities, 5,300 sq m dedicated to chemical storage, and an open yard spanning about 1.2 million sq m.

    Planned for large-scale industrial use, the site is expected to incorporate advanced warehouse and building management systems, end-to-end digital connectivity, automation and robotics.

    It will also be developed in line with internationally recognised sustainability standards, featuring solar (photovoltaic) readiness, EV charging infrastructure and a target of LEED Gold certification.

    The development is aimed at supporting the next stage of Saudi Arabia’s logistics and supply chain expansion.

    Under the deal structure, Arcapita will provide funding and retain ownership of the asset, while Asmo will develop the facility and then lease and operate it under a 22-year occupational lease.

    According to a statement, “the scheme will be executed via a forward-funding model, underscoring a long-term commitment to national infrastructure”.

    Asmo added that this will be its first purpose-built logistics centre and one of four strategic locations planned to anchor its nationwide logistics network, aligned with the National Transport and Logistics Strategy (NTLS) under Saudi Vision 2030.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/15765085/main.gif
    Yasir Iqbal
  • Algeria gives bidders more time for 1.2GW plant

    25 February 2026

    Algeria’s state-owned electricity and gas utility Sonelgaz has extended the bid submission deadline for a contract to build a 1,200MW combined-cycle gas-fired power plant in Adrar.

    The project is being procured through Sonelgaz’s power generation subsidiary, Societe Algerienne de l’Electricite et du Gaz – Production de l’Electricite (SPE).

    The new bid submission deadline is 29 April. The main contract was first tendered in April last year, and the deadline has been extended several times since.

    The latest deadline was 26 February.

    The tender is open to local and international companies with experience in delivering large-scale power generation projects and with sufficient technical and financial capacity.

    Algeria’s wider power sector has experienced periods of limited contract activity in recent years. Between 2018 and 2022, virtually no new solar or wind farm contracts were awarded, according to available data from the regional projects tracker MEED Projects.

    In 2023, Sonelgaz Energie Renouvelables, a subsidiary of Algeria’s state-owned utility, awarded 14 of the 15 solar photovoltaic (PV) packages it tendered that year.

    At the time, MEED reported that the 15 packages had a total combined capacity of 2,000MW, requiring at least AD172bn ($1.2bn) of investment.

    However, publicly available data suggests that progress has been slow with several schemes yet to reach full construction or commercial stages.

    Gas-fired combined-cycle plants continue to account for the majority of Algeria’s electricity generation capacity. Data from MEED Projects indicates that more than 5,000MW of oil- and gas-fired power capacity is currently under construction.

    Despite this, new contract awards in 2025 came from three solar schemes.

    This included the construction of a 154MW solar PV plant in Bechar, for which China Power was appointed main contractor in August.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/15765079/main.jpg
    Mark Dowdall
  • Riyadh tenders Line 7 metro project management deal

    25 February 2026

     

    Register for MEED’s 14-day trial access 

    The Royal Commission for Riyadh City (RCRC) has issued a tender inviting firms to bid for a contract for project management consultancy services for the construction of Riyadh Metro Line 7.

    MEED understands that RCRC has allowed firms until March to submit their proposals.

    The latest development follows contractors submitting bids on 31 January for a contract to design and build the project.

    The project involves constructing a metro line linking the Qiddiya entertainment city development, King Abdullah International Gardens, King Salman Park, Misk City and Diriyah Gate. The total length of the line will be about 65 kilometres (km), of which 47km will be underground and 19km will be elevated.

    The line will have 19 stations, 14 of which will be built underground and five above ground.

    Riyadh Metro’s first phase features six lines with 84 stations. The RCRC completed the phased roll-out of the Riyadh Metro network when it started operating the Orange Line in January this year.

    Construction has also begun on the next phase of Riyadh Metro, the extension of Line 2.

    In July last year, MEED exclusively reported that RCRC had awarded an estimated $800m-$900m contract for the project.

    The contract was awarded to the Arriyadh New Mobility Consortium, led by Italy’s Webuild. 

    The group also includes India’s Larsen & Toubro, Saudi Arabia’s Nesma & Partners and France’s Alstom.

    Line 3, also known as the Orange Line, stretches from east to west, from Jeddah Road to the Second Eastern Ring Road, covering a total distance of 41km. 

    The line spans 8.4km, of which 1.3km is elevated and 7.1km is underground. It includes five stations – two elevated and three underground.

    It will run from the current terminus of Line 2 at King Saud University (KSU) and continue to new stations at KSU Medical City, KSU West, Diriyah East and Diriyah Central – where it will interchange with the planned Line 7 – before terminating at Diriyah South.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/15764750/main.png
    Yasir Iqbal
  • Six companies prequalify for Algeria gas contract

    25 February 2026

    Register for MEED’s 14-day trial access 

    Six companies have prequalified for a contract that is part of a project to connect the liquefied natural gas (LNG) storage and loading lines of the gas complexes known as GL1Z and GL2Z, according to a statement issued by Algeria’s state-owned oil and gas company Sonatrach.

    The two complexes are part of Sonatrach’s Arzew LNG hub.

    The scope of work for the contract is focused on the execution of the basic engineering study for the project.

    The six companies that have prequalified for the project are:

    • JGC (Japan)
    • McDermott (US)
    • Synergy Engineering (Indonesia)
    • ExidaSP (UAE)
    • EPPM (Tunisia)
    • Enreco (Italy)

    In its statement, Sonatrach said: “Following the review of applications, the companies … have been prequalified and will be invited to participate and submit bids in the selective consultation.”

    The Arzew LNG hub is Algeria’s main LNG export centre, located near the port town of Arzew, about 40 kilometres east of Oran on the Mediterranean coast.

    Sonatrach is currently implementing several projects to upgrade facilities within the hub.

    In October last year, MEED revealed that the gas train known as T-300 had been brought back online at the site.

    The train was brought back online after a new main cryogenic heat exchanger (MCHE) was commissioned.

    The upgrade was part of a broader contract with US-based Honeywell to replace four MCHEs at GL1Z.

    The contract was originally signed with Air Products, and Honeywell acquired the contract when it bought Air Products’ LNG process technology and equipment business in September 2024.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/15762638/main.png
    Wil Crisp