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
  • AtkinsRealis confirms Sphere Abu Dhabi role

    4 August 2026

    AtkinsRealis has confirmed it has been appointed lead design and supervision consultant on the $1.7bn Sphere Abu Dhabi project on Yas Island.

    The Canadian engineering and project management firm said it will partner with local firm Alec Engineering & Contracting on the venue, which is scheduled to open in 2029.

    AtkinsRealis will be responsible for overall design coordination across architecture, structural engineering and specialist immersive technologies. Alec – appointed by Abu Dhabi’s Department of Culture & Tourism (DCT Abu Dhabi) – will oversee procurement, construction delivery and project completion.

    The project is being delivered under a design-and-build framework.

    Alec Holdings confirmed in May that its subsidiary, Alec Engineering & Contracting, had received a letter of award for the construction contract. MEED previously reported that Alec was the selected contractor and had been working on the project during the pre-construction phase.

    Sphere Abu Dhabi will be built on Yas Island on a plot between Yas Mall and SeaWorld Abu Dhabi. It will be the first Sphere venue outside the US and is expected to echo the scale of Sphere Las Vegas, with a capacity of up to 20,000, depending on configuration.

    The venue will feature a fully programmable LED exosphere and a wraparound interior display capable of delivering 16K-resolution visuals, alongside beamforming audio technology that can direct sound to individual seats.

    DCT Abu Dhabi is developing Sphere Abu Dhabi with US-based Sphere Entertainment.

    READ THE AUGUST 2026 MEED BUSINESS REVIEW – click here to view PDF

    Saudi Arabia builds for the global stage; Rising uncertainty creates fresh set of challenges in the Maghreb; Gulf banks remain robust in the face of geopolitical tensions.

    Distributed to senior decision-makers in the region and around the world, the August 2026 edition of MEED Business Review includes:

    > MARKET FOCUS: Maghreb fortunes diverge
    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/18079715/main.jpg
    Colin Foreman
  • Opec+ agrees sixth straight month of oil output hikes

    3 August 2026

    Opec+ has approved an oil production quota increase of around 188,000 barrels a day (b/d) from September, completing the unwinding of a layer of voluntary output cuts by its main member countries.

    Due to export disruptions from the Gulf, Russia and Kazakhstan caused by the Iran and Ukraine wars, successive monthly Opec+ output hikes over most of this year have remained largely on paper, with little impact on the market.

    The September increase agreed by core Opec+ members – Saudi Arabia, Russia, Iraq, Kuwait, Algeria, Kazakhstan and Oman – at a meeting on 2 August completes the phased rollback of a 1.65 million b/d supply cut originally agreed in 2023, when the group still included the UAE, which left Opec in May.

    A separate Opec+ meeting of a panel called the Joint Ministerial Monitoring Committee also met on 2 August and reiterated concern about attacks on energy assets during the US-Israeli war on Iran, saying they are expensive and time-consuming to repair and therefore can affect supply.

    With September’s output hike now agreed, Opec+ still has one more layer of output cuts in place that applies to most of the group’s members. These roughly 2 million b/d of cuts date back to 2022 and are due to remain in place until the end of this year.

    Opec+ is carrying out a review of its members’ oil production capacity that will be used to set the 2027 output baselines from which quotas are calculated.

    It faces potentially difficult talks over new production quotas, with some members, including Iraq, pushing for higher individual quotas to reflect their higher capacity.

    Opec+ is an alliance of 21 countries, comprising members of Opec along with a group of 10 non-Opec states led by Russia.

    In recent years, only the seven core countries – and the UAE until its departure – have been involved in monthly production management.

    The seven members will hold their next meeting on 6 September.

    READ THE AUGUST 2026 MEED BUSINESS REVIEW – click here to view PDF

    Saudi Arabia builds for the global stage; Rising uncertainty creates fresh set of challenges in the Maghreb; Gulf banks remain robust in the face of geopolitical tensions.

    Distributed to senior decision-makers in the region and around the world, the August 2026 edition of MEED Business Review includes:

    > MARKET FOCUS: Maghreb fortunes diverge
    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/18043979/main4234.jpg
    Indrajit Sen
  • Dewa opens bids for MBR Solar Park phase seven

    3 August 2026

     

    Dubai Electricity & Water Authority (Dewa) has opened bids for the seventh phase of the Mohammed Bin Rashid Al-Maktoum Solar Park.

    According to a source, technical and financial offers were opened last month. The utility received bids on 1 July. 

    Phase seven will add 2,000MW from photovoltaic solar panels and include a 1,400MW battery energy storage system (bess) with a six-hour capacity, providing a total storage capacity of 8,400 megawatt-hours. 

    It is understood that Saudi Arabia’s Acwa, the UAE’s Etihad Water & Electricity and Abu Dhabi Future Energy Company (Masdar) are among the companies that submitted bids for the project.

    The winning bidder “is likely” to come from one of those three, a source told MEED.

    As MEED understands, the previously prequalified Electricite de France did not submit a bid for the project.

    Dewa completed the prequalification process for the latest phase of the world’s largest single-site solar park in 2025. 

    As previously reported, 47 firms submitted their responses to Dewa’s expression of interest request for the contract in March 2025. The main tender was issued last November.

    The following companies were among those prequalified to submit main contract bids on the project:

    • Acwa (Saudi Arabia) 
    • Abu Dhabi Future Energy Company (Masdar)
    • Electricite de France (EDF)
    • Etihad Water & Electricity (EtihadWE)
    • China Machinery Engineering Corporation
    • China Construction Eighth Engineering Division
    • Power China
    • Larsen & Toubro (India)
    • Shanghai Electric Group

    The transaction advisory team for the project comprises UK-headquartered Deloitte and US-based CMS and Sargent & Lundy as financial, legal and technical advisers, with Deloitte acting as lead adviser. 

    Meanwhile, construction on the 1,800MW sixth phase of the MBR Solar Park is nearing completion, with commissioning expected by the end of the third quarter.

    Dewa and Masdar reached financial close for the $1.5bn project in 2024. Once completed, the sixth phase will increase the solar park’s total production capacity to 4,660MW.

    Dewa increased its flagship solar project’s 2030 installed capacity target by 45% in 2025, from 5,000MW to 7,260MW. This comprises a total investment of AED50bn ($13.6bn).

    READ THE AUGUST 2026 MEED BUSINESS REVIEW – click here to view PDF

    Saudi Arabia builds for the global stage; Rising uncertainty creates fresh set of challenges in the Maghreb; Gulf banks remain robust in the face of geopolitical tensions.

    Distributed to senior decision-makers in the region and around the world, the August 2026 edition of MEED Business Review includes:

    > MARKET FOCUS: Maghreb fortunes diverge
    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/18031819/main0723.jpg
    Mark Dowdall
  • Three groups bid for $5bn Asir-Jizan highway

    3 August 2026

     

    Three groups have submitted bids for an estimated SR20bn ($5bn) contract to develop and operate the Asir-Jizan highway project on a public-private partnership (PPP) basis.

    According to sources close to the project, the consortiums that bid are:

    • Lamar Holding (local) / Shaanxi Construction Engineering (China) / Safari (local)
    • Vision Invest (local) / China Harbour Engineering Company (China)
    • Plenary (Australia) / Alayuni (local) / Limak Holding (Turkey) / Nesma & Partners (local)

    Saudi Arabia’s Roads General Authority, the National Centre for Privatisation & PPP and the Aseer Development Authority (Asda) are the government agencies managing the tender and project.

    The 136-kilometre Asir-Jizan highway will have three lanes in each direction and include six intersections, 57 bridges totalling 18km and 11 tunnels totalling 9km.

    The project is one of four planned highway schemes in the kingdom’s privatisation and public-private partnership pipeline.

    The route begins in Al-Farah in Asir and extends to the Red Sea through Jizan.

    The 30-year contract will follow a design, build, finance, operate and maintain model.

    READ THE AUGUST 2026 MEED BUSINESS REVIEW – click here to view PDF

    Saudi Arabia builds for the global stage; Rising uncertainty creates fresh set of challenges in the Maghreb; Gulf banks remain robust in the face of geopolitical tensions.

    Distributed to senior decision-makers in the region and around the world, the August 2026 edition of MEED Business Review includes:

    > MARKET FOCUS: Maghreb fortunes diverge
    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/18031383/main1110.jpg
    Colin Foreman
  • Adnoc Onshore extends bid deadline for field facilities project

    3 August 2026

     

    Abu Dhabi National Oil Company’s onshore business (Adnoc Onshore) has given contractors extra time to prepare bids for a project to build on-plot and off-plot facilities at the Rumaitha and Shanayel fields, part of the Northeast Bab cluster of oil fields in Abu Dhabi.

    The project aims to enhance and sustain oil production at the Rumaitha and Shanayel fields at a rate of 45,000 barrels a day (b/d). It forms part of Adnoc Onshore’s contribution to parent company Adnoc Group’s broader objective of increasing oil production capacity to 5 million b/d by 2027 through its Accelerated Integrated Programme 5 (AiP5). Adnoc Group currently has a production capacity of 4.85 million b/d.

    Adnoc Onshore issued the main tender for the engineering, procurement and construction (EPC) works package for the Rumaitha and Shanayel on-plot and off-plot facilities project on 19 June, MEED previously reported.

    The project operator has now extended the deadline for contractors to submit technical bids to 5 August, from 2 August previously, according to sources. The prior deadline had been 30 July.

    Adnoc Onshore issued the expression of interest for the Rumaitha and Shanayel on-plot and off-plot facilities project in early December, with contractors submitting their responses later that month, MEED previously reported.

    The prequalification and ongoing tendering process is understood to result from Adnoc Onshore revising its strategy for executing EPC works on an earlier, larger project covering the Northeast Bab cluster, which comprises the Al-Nouf, Rumaitha and Shanayel fields.

    MEED reported in December that Adnoc Onshore had cancelled the engineering, procurement and construction management (EPCm) phase it launched in 2024 for the Northeast Bab on-plot and off-plot facilities project in favour of executing the scheme under a conventional EPC model.

    The operator awarded a contract to state-owned China Petroleum Engineering & Construction Corporation (CPECC) to carry out EPCm services for the Northeast Bab off-plot facilities package in October 2024. However, the contract was subsequently cancelled last year.

    Separately, Adnoc Onshore received bids during the second quarter of 2025 for the EPCm tender covering the Northeast Bab on-plot facilities package, but that procurement process was also later cancelled.

    Project scope of work

    The detailed scope of work on the Rumaitha and Shanayel on-plot and off-plot facilities project is as follows:

    On-plot facilities:

    • Oil train: One new oil train with slug catcher, two-stage separation, desalting, exchangers for crude heating and stabilisation, and all associated interconnections, utilities and civil/structural works, etc.
    • Produced water treatment (PWT): New produced water treatment package to enable 100% produced water reinjection (PWRI), including chemical dosing, tanks, pumps, all associated controls and blending with aquifer water, etc.
    • Water injection system: New water injection system, including surface water injection pumps, necessary connections and controls from produced water systems, headers, chemical dosing, power and controls, etc.
    • Gas handling and export:
      • Low-pressure gas compression system
      • Medium-pressure gas compression system
      • Gas dehydration and regeneration system
      • Export gas compression system
    • Utilities and offsites: Plant air and instrument air systems, nitrogen generation system, potable water system, vapour recovery system (liquid ejector package), fuel gas import and distribution, closed and open drain systems, hot oil heater, snuffing nitrogen package, enclosed ground flare systems (high-pressure and tank flares), etc.
    • Modifications in existing systems, including, but not limited to, installation of a slug catcher at phase-I, connectivity of gas systems, water systems, existing high-pressure compressors modifications, etc
    • Electrical, instrumentation and control, and safety: Electrical systems, instrumentation and control system (ICSS, F&G system, field instrumentation, HIPPS, etc.), substation and ITR room building, fire water system, etc.
    • Overhead line (220 kV): Installation and extension of overhead lines and 220 KV GIS compound or equivalent power distribution solutions to the central processing plant and other designated areas, as necessary.

    Off-plot facilities:

    • New gas-lifted oil producers and water injectors installation with necessary piping, controls, etc. and their connections to the new or existing clusters and pipeline networks
    • New clusters with facilities such as control panels, ITR, production and test manifolds, headers, chemical injection skids, multiphase flow meters, closed drain systems, HIPPS valves, WHCPs, pig traps, ICSS/telecom extensions, etc.
    • Modifications in existing clusters, including the addition or extension of manifolds, headers, additional pipelines with pig traps, ICSS/telecom extensions, chemical injection kids, etc.
    • Gathering and injection networks: Construction of new and modified oil gathering and water injection trunklines/laterals, pigging facilities (launchers/receivers), valve stations, block valves, corrosion protection and monitoring, and all associated equipment, etc.
    • Export gas pipelines and Adnoc Gas interface: Provision for export gas pipeline and facilities from Rumaitha central processing plant to new manifold station and from NMS to Adnoc Gas, including isolation/blowdown, etc.
    • Overhead line: Installation and extension of 33kV overhead lines to clusters, etc., as required.

    The tendering exercise for the Rumaitha and Shanayel on-plot and off-plot facilities project is taking place as Adnoc Onshore continues to make progress with EPC works on another, similar project to build off-plot facilities at the Southeast cluster of oil fields in Abu Dhabi, which is also integral to Adnoc Group’s AiP5 campaign.

    The Southeast cluster comprises the Asab, Mender, Qusahwira, Sahil and Shah fields and accounts for approximately a third of Adnoc Onshore’s oil production capacity.

    MEED previously reported that Adnoc Onshore had awarded EPC works on the Southeast off-plot facilities project to state-owned China Petroleum Engineering & Construction Corporation (CPECC), with the value of the contract estimated to be around $1.2bn.

    The overall scope of work on the Southeast off-plot facilities project includes tying in more than 150 wells across the area’s fields, upgrading remote and central degassing stations, laying more than 270 kilometres of flowlines, digitising wells for remote monitoring, and implementing artificial intelligence-driven telemetry technologies.

    MEED also recently reported that CPECC awarded subcontracts on the Southeast off-plot facilities project, in its capacity as the main EPC contractor.

    The off-plot facilities project is a component of the overall $2bn-$3bn South East AIP5 development, with the on-plot facilities project forming the other part of the programme.

    CPECC is also performing EPC works on the Southeast on-plot facilities project in a consortium with Greece-headquartered Archirodon. Adnoc Onshore awarded an estimated $1.5bn contract for that project to the consortium in December 2024, with EPC works scheduled for completion in 2027.

    READ THE AUGUST 2026 MEED BUSINESS REVIEW – click here to view PDF

    Saudi Arabia builds for the global stage; Rising uncertainty creates fresh set of challenges in the Maghreb; Gulf banks remain robust in the face of geopolitical tensions.

    Distributed to senior decision-makers in the region and around the world, the August 2026 edition of MEED Business Review includes:

    > MARKET FOCUS: Maghreb fortunes diverge
    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/18022436/main2622.jpg
    Indrajit Sen