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
  • Adnoc Onshore selects contractors for well tie-ins project

    27 October 2026

     

    Abu Dhabi National Oil Company’s onshore operating arm (Adnoc Onshore) has selected contractors for a major project to tie in wells across the Bab and North East Bab oil field developments in Abu Dhabi.

    Located 84 kilometres southwest of Abu Dhabi city, the Bab field has been in production since 1960 and is the emirate’s first oil-producing asset. The North East Bab cluster comprises the Al-Nouf, Rumaitha and Shanayel fields. 

    The Bab and North East Bab One Tie-In project is central to Adnoc Onshore’s contribution to Adnoc Group’s target of expanding crude oil production capacity to 5 million barrels a day (b/d) by 2027, an initiative known as the Accelerated Integrated Programme 5. The state energy company’s total production capacity currently stands at approximately 4.85 million b/d.

    According to industry sources, Adnoc Onshore has selected local contractor Robt Stone Middle East and China’s Jereh Group to carry out engineering, procurement and construction (EPC) works on the project. While both firms have been notified of their selection, a formal project kick-off meeting has yet to take place.

    Adnoc Onshore is understood to have started the tendering process for the Bab and North East Bab One Tie-In project last year, with contractors submitting technical and commercial bids earlier this year.

    Following the evaluation of bids, Adnoc Onshore sought best commercial offers from the bidders, which contractors submitted in May, MEED previously reported.

    The project budget is estimated at $1.2bn.

    Bidders for the contract are understood to have included:

    • Galfar Emirates (UAE branch of Oman’s Galfar Engineering & Construction)
    • Jereh (China)
    • Kalpataru Projects International (India)
    • Matrix Construction (UAE)
    • Robt Stone Middle East (UAE)
    • Target Engineering Construction Company (UAE)

    The project scope covers residual engineering, procurement of materials not supplied as free-issue items, site surveys, construction, installation, inspection, testing, and pre-commissioning and commissioning support. The works will deliver new wellsite facilities, including a new mini-pad, well bays and clusters across the Bab and North East Bab developments.

    Adnoc Onshore is Adnoc Group’s largest production subsidiary, accounting for roughly 2 million b/d of crude and about 7 billion cubic feet a day of associated gas from four primary onshore asset clusters: Bab, Bu Hasa, North East Bab and South East.

    ALSO READ:

    https://image.digitalinsightresearch.in/uploads/NewsArticle/20951928/main.jpg
    Indrajit Sen
  • Ashghal tenders Al-Udeid air base access road works

    27 October 2026

     

    Qatar’s Public Works Authority (Ashghal) has invited contractors to bid on a contract to build roads and related infrastructure around Al-Udeid Air Base.

    The project is located in Zone 95 of Al-Wakra Municipality, adjacent to Al-Majd Road. 

    The tender was issued on 22 October, with a submission deadline of 22 November.

    The scope includes the construction of a dual-lane carriageway to improve access to the air base, together with three roundabouts. The alignment will connect to Al-Majd Road to the east and tie into Street 203 in Zone 95 to the west. The contractor will also resurface and maintain connections to the existing road network.

    Associated works include street lighting, intelligent transport systems, directional signage and a surface-water drainage collection system.

    The contractor will provide crossing ducts, protect and relocate conflicting existing utilities, and complete detailed utility designs as required by relevant stakeholders through the Qatar Design Review System.

    The project also includes the design and construction of two electrical substations. The contractor must secure the necessary stakeholder and authority approvals before starting these works.

    The scheme will be delivered on a remeasurable, build-only basis using designs approved by others. It will also include designated contractor-designed elements and design-and-build packages for the substations.

    Bidders must submit two commercial pricing options: a base offer subject to material price-fluctuation provisions, and an alternative authority option without such provisions.

    The contract has a 550-day completion period from the commencement date, including mobilisation, followed by a 400-day maintenance period after the completion certificate is issued.

    Participation is restricted to local and international contractors registered under the Ministry of Finance classification system in Grade A or Grade B for road specialisation.

    Unclassified foreign firms may submit equivalent certified documentation from their country of origin, attested by Qatari diplomatic missions. They must obtain Ministry of Finance registration before contract award.

    For joint-venture bids, the lead partner must hold the required classification grade.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/20950810/main.jpg
    Yasir Iqbal
  • Saudi Arabia gauges interest for Al-Ula wastewater expansion

    27 October 2026

     

    Saudi Arabia’s Royal Commission for Al-Ula (RCU) is conducting market sounding for the first phase of the Mughayra wastewater treatment plant (WWTP) expansion before formally starting its tendering process, according to industry sources.

    The project is valued at SR400m ($107m) and is intended to increase the Mughayra plant’s wastewater treatment capacity to 62,000 cubic metres a day.

    RCU is gauging interest from potential contractors and has not yet issued a prequalification questionnaire, a source said.

    The scheme forms part of Saudi Arabia’s broader investment drive to develop its cultural and tourism offering across Al-Ula.

    The commission launched its Journey Through Time Masterplan in April 2021, with implementation scheduled in three phases through 2035. The masterplan covers infrastructure development, water management and irrigation, alongside the regeneration of a 9-kilometre cultural oasis.

    French engineering firm Artelia previously noted in its 2025 annual corporate report that it is involved in the design phase of the Mughayra WWTP.

    RCU is also developing strategic potable-water storage infrastructure in Al-Ula, including a design-and-build project covering a 50,000-cubic-metre reservoir at Hub 06 and a 15,000-cubic-metre reservoir at Hub 08.

    Local contractor Bin Omairah previously confirmed that it is serving as the engineering, procurement and construction contractor for the storage facilities.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/20950333/main.jpg
    Mark Dowdall
  • Qatari firm wins $147m Syria road deal

    27 October 2026

    Qatari contractor Al-Mohannadi for Roads, Trading & Contracting has signed a $147m contract with Syria’s General Directorate of Roads to rehabilitate and expand a 215-kilometre (km) highway corridor connecting to the Iraqi border.

    The project covers the rehabilitation and dualisation of a 170km section linking the Al-Busairi junction to the Al-Tanf border crossing, alongside the construction of a 45km link between the Al-Sabaa Biyar junction and Al-Busairi. Work is scheduled for completion within 900 days.

    The agreement was signed in Damascus by Moaz Najjar, director-general of the General Directorate of Roads, and Abdullah Adnan Al-Zattam, chief executive of Al-Mohannadi, in the presence of Syrian Transport Minister Yarob Badr and Finance Minister Mohammad Yusr Barnieh.

    The upgrade is intended to restore and expand one of Syria’s primary overland arteries to Iraq, which has suffered significant deterioration and capacity bottlenecks following years of conflict. The Al-Tanf corridor represents the most direct overland link between Damascus, central Syrian industrial centres and Baghdad.

    The project is designed to accommodate heavier commercial freight vehicles and reduce transit times between the two countries.

    The investment also forms part of broader efforts to re-establish Syria’s role as a regional transit corridor connecting Mediterranean ports with landlocked trade routes into Iraq and the wider region.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/20950332/main.gif
    Yasir Iqbal
  • Adnoc showcases $16.3bn local manufacturing potential

    27 October 2026

    Abu Dhabi National Oil Company (Adnoc Group) has identified more than AED60bn ($16.3bn) in local manufacturing opportunities through 2030.

    The Abu Dhabi energy company also announced changes to its procurement, supplier registration and In-Country Value (ICV) localisation frameworks.

    The measures were announced at the second Make it with Adnoc Forum, held in Abu Dhabi on October 25. They are intended to give manufacturers, suppliers and investors greater visibility of future demand and a faster, clearer route to compete for Adnoc contracts, the company said.

    The more than 200 manufacturing opportunities cover products required for Adnoc’s projects and operations, including:

    • Rotating equipment and power
    • Electrical, control and automation systems
    • Drilling and completion equipment
    • Chemicals and catalysts
    • Piping, fabrication and heavy equipment
    • Spare parts and advanced manufacturing

    Many of the identified products are currently imported, Adnoc said. “Manufacturing them in the UAE shortens lead times, reduces exposure to global supply disruptions and strengthens the resilience of Adnoc’s operations,” it said in its statement.

    Adnoc, the UAE Ministry of Industry & Advanced Technology and the Abu Dhabi Investment Office (Adio) will work together to connect manufacturers with these opportunities. The collaboration will combine visibility of Adnoc’s demand, access to the national industrial database and financing through the National Industrial Resilience Fund, the company said.

    Adnoc also signed two memorandums of understanding on the sidelines of the forum with Adio and Kezad Group.

    ICV scheme expansion

    Adnoc announced the expansion of its Local+ programme, part of its ICV framework, to more than 100 UAE manufacturers, compared with 70 at its launch in May. The programme gives UAE-made products priority in Adnoc projects by requiring engineering, procurement and construction (EPC) contractors bidding for new tenders to source relevant products from manufacturers approved under the programme.

    Separately, Adnoc announced a redesign of its supplier registration and prequalification process. The company is targeting a reduction of up to 80% in the time required for suppliers to complete the process and become eligible to compete for Adnoc opportunities.

    The new model halves the number of required documents and removes prequalification requirements for 60% of service categories.

    A single window brings together registration, qualification and compliance, with requirements tailored to the nature of the work and its level of risk. Artificial intelligence will support document verification and the reuse of existing data, reducing repetitive submissions and administrative processing.

    ALSO READ:
    Adnoc steps up crude oil capacity expansion
    Adnoc funnels billions into boosting gas processing

    “Adnoc’s enhanced ICV model will more closely connect procurement decisions with commercial value and suppliers’ contribution to the UAE economy. Under the new model, commercial and ICV offers will be integrated into a single evaluation model,” the company said.

    “The previous bid-matching approach will be retired, encouraging suppliers to submit their most competitive commercial and ICV offers from the outset. Requirements will be proportionate to contract size and scope.

    “The model also enhances the administration of ICV-related retention payments. Where retention applies, automated calculation and release processes through the Adnoc Supplier Hub will improve transparency, reduce manual follow-up and support suppliers’ cash flow as obligations are met.”

    Alongside the ICV and registration enhancements, Adnoc outlined a new commercial approach built around four strategic shifts: agile, competitive, strategic and forward-looking.

    “The approach will advance simpler procurement and faster decision-making, contracting models aligned with project and market dynamics, targeted commercial negotiations and earlier visibility of Adnoc’s future demand.”

    Since its launch in 2018, Adnoc’s ICV programme has directed more than AED307bn ($83.6bn) into the UAE economy, the company said. By the end of 2025, it had also supported the localisation of more than 130 products, the development of 95 UAE factories, and employment opportunities for more than 27,500 Emiratis at participating private sector companies.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/20948385/main5518.jpg
    Indrajit Sen