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
  • Seven opens entertainment complex in Abha

    7 August 2026

    Saudi Entertainment Ventures (Seven) has opened its integrated recreational complex in Abha, the first of 14 entertainment destinations the company plans to develop across the kingdom.

    Local contractor Modern Building Leaders (MBL) built the complex under an estimated SR950m ($253m) contract awarded in December 2022. The scheme has a built-up area of more than 70,000 square metres and features go-karting, edutainment, bowling and indoor golf facilities.

    Seven is a wholly owned subsidiary of Qiddiya Investment Company. The Abha complex is the first Seven project to be completed, and supports the Public Investment Fund’s strategy to develop the entertainment and sports sector in line with Saudi Vision 2030.

    The destination is located within the Abha International airport cluster and connects the airport with the region’s cultural, tourism and entertainment sites. Entertainment experiences at the complex include Formula E Karting alongside Seven-developed concepts such as Kawaken, GolFi, Cyber Bowling and Scene Cinema.

    Consultants on the project include Dar Engineering and Lebanon’s Khatib & Alami, with the UK’s Mace International as project management consultant, according to regional projects tracker MEED Projects.

    Seven plans to invest SR50bn ($13.3bn) in developing 21 integrated entertainment destinations across 14 cities in the kingdom as Riyadh pursues its strategy to diversify away from hydrocarbons, create jobs and improve quality of life.

    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/18196472/main.jpg
    Colin Foreman
  • Nine contractors submit bids for Oman flood protection dam

    7 August 2026

     

    Oman’s Ministry of Agricultural, Fisheries Wealth & Water Resources has received bids from nine contractors for the construction of the Wadi Rijma flood protection dam in Liwa, North Batinah Governorate.

    The Wadi Rijma dam project is one of four flood protection dams being planned in the sultanate to intercept floodwaters flowing from the northern Omani mountain range into the coastal plain.

    The bids include seven local contractors, one from Turkiye and one from China. The lowest offer of $50.6m was made by Strabag Oman.

    The full list of bidders includes: 

    • Strabag Oman ($50.6m)
    • Detonator Engineering ($53.0m)
    • AZ Engineers & Partners ($54.3m)
    • Eksen Project Construction Tourism & Trade (Turkiye, $58.4m)
    • Galfar Engineering & Contracting ($58.7m)
    • The Arab Contractors Oman ($59.3m)
    • Premier International Projects ($59.4m)
    • China International Water & Electric Corporation (China, $60.0m)
    • Khimji Ramdas Construction ($62.4m)

    MEED reported in March that the ministry had issued the tender for the project, which aims to protect flood-prone areas, reduce risks to life and property, and support groundwater recharge where possible.

    The proposed Wadi Rijma dam (R2A) is located between the mountain range to the south and west and the Gulf of Oman to the north and east. The area is characterised by wadis that cut deep valleys before spreading into multiple channels across alluvial fans.

    In June 2025, MEED reported that the Islamic Development Bank (ISDB) had extended a $632m loan to the ministry to fund the construction of four major flood protection dams in the sultanate.

    The four projects are:

    • Wadi Al-Khoud Flood Protection Dam (AK01) in Seeb
    • Wadi Rijma Flood Protection Dam (R2A) in Liwa
    • Wadi Majlas Flood Protection Dam in Qurayat
    • Wadi Ahin Flood Protection Dam in Saham North

    In June, the ministry invited contractors to bid for the construction of the Wadi Al-Khoudh flood protection dam in Wilayat Al-Seeb, Muscat Governorate.

    The contract is being tendered under ISDB’s Climate-Resilient Flood Protection Dams Project.

    The tender marks the revival of a project that has been on hold since 2019. The project was originally planned by the former Ministry of Regional Municipalities & Water Resources and was previously estimated to be worth about $159m.

    The bid submission deadline is 9 August.

    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/18193497/main.jpg
    Mark Dowdall
  • Syria signs 760MW solar power purchase agreements

    7 August 2026

    The Syrian Electricity Company (Sec) has signed power purchase agreements (PPAs) with Saudi Arabia’s Mohammed Ahmed Al-Harfi Company for three solar power projects with a combined generation capacity of 760MW.

    The projects will be supported by battery energy storage systems (bess) with a total storage capacity of 1,077MWh and will be located in the Widyan Al-Rabie area of Rif Dimashq.

    The PPAs were signed in Damascus on 5 August under the supervision of Saudi Arabia’s Ministry of Energy. According to the ministry, the agreements range from 20 to 25 years and cover the provision of electricity at tariffs starting from $0.03/kWh.

    Alongside the PPAs, Al-Harfi signed two technical cooperation agreements. 

    Saudi Electricity Project Development Company (PDC) will provide engineering and advisory services to support the management and implementation of the solar projects. Germany’s Siemens Energy will provide technical cooperation and expertise covering substations, power generation and bess.

    The latest agreements build on a memorandum of understanding signed in February between Syria’s former General Establishment for Electricity Transmission and Distribution and Al-Harfi to develop a 210MW solar project supported by an 827MWh bess.

    The projects are among the first major investments signed by Sec since it was established in April following a restructuring of Syria’s electricity sector. The new state-owned utility replaced the former Public Establishment for Generation and the Public Establishment for Transmission and Distribution of Electricity and assumed their assets, contracts and obligations.

    Separately, in a LinkedIn post published on 6 August, Acwa vice-chairman and managing director Raad Al-Saady said he had accompanied the Saudi Ministry of Energy on a visit to Damascus to sign agreements and discuss existing and potential energy projects in Syria.

    He said he represented Acwa and the infrastructure committee of the Saudi Syrian Business Council during the visit.

    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/18192007/main1207.jpg
    Mark Dowdall
  • Lowest bidder emerges for Dewa Solar Park phase seven

    7 August 2026

     

    Abu Dhabi Future Energy Company (Masdar) is likely to be awarded the contract to develop the seventh phase of the Mohammed Bin Rashid Al-Maktoum Solar Park after submitting the lowest bid for the project, sources have told MEED.

    Dubai Electricity & Water Authority (Dewa) received bids on 1 July, as previously reported by MEED.

    According to a source, China’s BYD will act as battery energy storage system (bess) supplier for the project, while another Chinese firm, Gotion, is also understood to be in the running to supply battery storage technology.

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

    Technical and financial offers were opened last month after developers including Saudi Arabia’s Acwa, the UAE’s Etihad Water & Electricity and Masdar submitted bids 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 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. 

    Dewa phase six

    Masdar is also expected to commission the 1,800MW sixth phase of the MBR Solar Park in the third quarter of this year.

    The $1.5bn facility is being implemented by Shuaa Energy 4, a special purpose vehicle jointly owned by Masdar (40%) and Dewa (60%). It is understood that the winning bidder for Dewa 7 will enter into a similar partnership.

    The companies reached financial close on the sixth phase in 2024.

    India’s Larsen & Toubro (L&T) has been working as the main engineering, procurement and construction (EPC) contractor. The firm is also working with Masdar on Abu Dhabi’s round-the-clock 5.2GW solar PV plus bess project that reached financial close last month. 

    Also in July, a Masdar-led consortium emerged as the frontrunner for a contract to develop Kuwait’s first utility-scale solar PV plant.

    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 last year by 45%, 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/18189204/main5104.jpg
    Mark Dowdall
  • US Army awards Kuwait air defence work

    7 August 2026

    The US Army Corps of Engineers (USACE) Middle East District has awarded an architect-engineer design task order to a joint venture of US companies Aecom and Black & Veatch for the design of Kuwait’s air defence infrastructure.

    The contract covers the design of multiple National Advanced Surface-to-Air Missile System (Nasams) tactical sites and communication tower infrastructure for the Kuwait Ministry of Defence.

    The award represents a bilateral initiative aimed at strengthening Kuwait’s sovereign air defence capabilities. It was issued under an indefinite delivery/indefinite quantity (IDIQ) contract.

    The task order is the latest in a series of US-backed defence awards in Kuwait this year. In May, the Middle East District awarded a $9.1m firm fixed price contract to local firm Combined Group Contracting Company to build an engine shop and an airframes shop, along with pavement works. The scope includes an option to construct a squadron operational facility.

    In February, the district awarded a $31.4m firm fixed price contract to Kuwait’s Al-Ghanim Combined Group to construct a quick reaction area and combat aircraft loading area. The scope covers four parking shelters, five aircraft sunshades and airfield pavement, together housing 13 aircraft separated by reinforced barricades.

    Air defence focus

    Air defences across the GCC have been in the spotlight this year following a series of attacks originating from Iran. Kuwait has felt a significant impact, with strikes reported on its international airport, oil and gas infrastructure, and US military installations hosted in the country. The disruption has sharpened regional demand for advanced surface-to-air systems and driven renewed investment in protective infrastructure.

    Regional awards

    The USACE’s Middle East District has remained active across the wider region in 2026. In March, it said it had awarded a $48m IDIQ contract to Al-Rawabet Commercial Services Contracting Company for operations and maintenance support at the Falcon 5/F-15QA facilities at Al-Udeid Air Base in Qatar. USACE turned over the $500m facilities associated with that programme in spring 2025.

    The same month, the district awarded a $14.6m firm fixed price contract, with a further $5m in options, to the US’ Pearlson Shiplift Corporation for the refurbishment of the ship lift system at King Abdulaziz Naval Base in Jubail, Saudi Arabia. The work will upgrade vessel-handling infrastructure used by the Royal Saudi Naval Forces.

    In Egypt, the district has awarded a contract to build a maintenance hangar for four CH-47F aircraft, with an apron extension providing five parking spots, an aircraft wash rack and a new access road.

    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/18189787/main.gif
    Colin Foreman