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
  • Gulf LNG sector enters a new prolific phase

    24 October 2025

     

    Liquefied natural gas (LNG) has been produced in the GCC since the 1970s. However, it is only since the start of this decade that regional producers have begun committing tens of billions of dollars to significantly ramp up output, driven by soaring global demand for the super-chilled fuel.

    The GCC is projected to add at least 80 million tonnes a year (t/y) of LNG capacity by 2030, placing it firmly among the world’s top three producing regions. 

    Qatar leads the Gulf’s push for LNG dominance as the region’s largest – and one of its earliest – LNG producers.

    State enterprise QatarEnergy has been producing LNG from the giant North Field offshore gas reserve in the Gulf waters, which it shares with Iran, since the 1980s. QatarEnergy currently produces 77.5 million t/y of LNG from 15 processing trains, all located in a sprawling complex in Ras Laffan Industrial City.

    Top spot

    QatarEnergy is on course to nearly double its LNG production to 142 million t/y by the end of the decade through its $40bn North Field LNG expansion programme.

    The energy giant is understood to have spent nearly $30bn on the first two phases of its North Field expansion – North Field East and North Field South – which will raise LNG production capacity from 77.5 million t/y to 126 million t/y by 2028. Engineering, procurement and construction (EPC) works on both projects are progressing.

    QatarEnergy awarded the main EPC contracts for the North Field East project in 2021. The project aims to boost LNG output to 110 million t/y by 2025. The $13bn EPC package – covering the engineering, procurement, construction and installation of four LNG trains, each with a capacity of 8 million t/y – was awarded in February 2021 to a consortium of Japan’s Chiyoda Corporation and France’s Technip Energies.

    In May 2023, QatarEnergy awarded the $10bn main EPC contract for the North Field South project to a consortium of Technip Energies and Lebanon-based Consolidated Contractors Company. 

    The contract includes two large LNG trains, each with a capacity of 7.8 million t/y.

    Once fully operational, the first two phases of the North Field expansion will add 48 million t/y of supply to the global LNG market.

    In February 2024, QatarEnergy announced the third phase of its North Field expansion – North Field West. The project will add 16 million t/y of LNG capacity through two processing trains of 8 million t/y each, following the model of earlier phases. It will source feedstock from the western zone of the offshore North Field reserve.

    Progress on the North Field West project has, however, been slow, and it has remained in the pre-front-end engineering and design (pre-feed) phase since its announcement.

    QatarEnergy is reportedly exploring options to fast-track it to the EPC stage.

    The first two phases of the North Field expansion will add 48 million t/y to the global LNG market

    Oman progress

    Oman has recently made significant progress in the global race to expand LNG production and exports. The Omani government made headlines in July last year, when it announced that majority state-owned Oman LNG would build a fourth train at its Qalhat LNG production complex in Sur.

    The new LNG train will have an output capacity of 3.8 million t/y, increasing Oman LNG’s total production capacity to 15.2 million t/y when it is commissioned in 2029.

    Oman LNG recently made key progress on its project to add a fourth processing train at the Sur LNG complex. The majority state-owned company has shortlisted a consortium of Chiyoda and South Korea’s Samsung C&T, Japanese contractor JGC Corporation and another consortium of Italian contractor Saipem and South Korea-based Daewoo Engineering & Construction to participate in the main tender for EPC works.

    Technical and commercial bids are due in February and March 2026, respectively.

    The EPC tender process began less than a year after Oman LNG awarded the feed contract to US-based consultancy KBR.

    Separately, France’s TotalEnergies is studying a potential expansion of its Marsa LNG bunkering and export terminal in Oman. The move is significant considering that the first phase of the project is currently under construction in the sultanate’s northern industrial city of Sohar, and will have an output capacity of 1 million t/y.

    TotalEnergies purportedly began an initial study on a potential second phase of the Marsa LNG facility earlier this year. The French energy major may consider doubling the output capacity of the LNG complex, although the plan is yet to be confirmed, according to sources.

    Earlier in the year, TotalEnergies appointed Technip Energies – already the main EPC contractor on the under- construction Marsa LNG terminal – as a consultant to perform concept and feasibility studies on the proposed second expansion phase.

    With Oman LNG advancing its fourth train and TotalEnergies mulling a potential doubling of LNG production in Oman, the sultanate is positioning itself as a key global LNG player by 2030.

    UAE plans

    Abu Dhabi National Oil Company (Adnoc) has historically been one of the GCC’s smaller LNG producers. Its subsidiary, Adnoc Gas, operates three large gas processing trains on Das Island. 

    The Das Island terminal has a liquefaction and export capacity of about 6 million t/y. The first two trains, commissioned in the 1970s, provide a combined 2.9 million t/y, while the third, added in the mid-1990s, contributes 3.2 million t/y.

    Adnoc Gas will significantly expand its LNG capacity with a new greenfield terminal in Ruwais, set to come online in 2028.  The terminal will add 9.6 million t/y of LNG capacity via two 4.8 million t/y trains.

    Adnoc awarded the $5.5bn EPC contract in June 2024 to a consortium of Technip Energies, JGC Corporation, and NMDC Energy, coinciding with its final investment decision.

    Along with the main processing trains, the Ruwais LNG complex will also feature process units, storage tanks and an export jetty for loading cargoes and LNG bunkering, as well as utilities, flare handling systems and associated buildings. The facility will ship LNG mainly to key Asian markets, such as Pakistan, India, China, South Korea and Japan. 

    https://image.digitalinsightresearch.in/uploads/NewsArticle/14933998/main.gif
    Indrajit Sen
  • NHC signs Al-Fursan project deal with South Korean firm

    24 October 2025

    Register for MEED’s 14-day trial access 

    Saudi Arabia’s National Housing Company (NHC) has signed a memorandum of understanding (MoU) with South Korea’s GS Engineering & Construction to build a residential project in NHC’s Al‑Fursan suburb of Riyadh.

    The MoU was signed in Seoul earlier this week by Saudi Arabia’s Minister of Municipal and Rural Affairs and Housing, Majed Al‑Hogail, and NHC’s CEO, Mohammed Al‑Buty.

    In an official statement published by the Saudi Press Agency, NHC said: “The MoU extends the growing Saudi-Korean partnerships, strengthened by the signing of another MoU in November 2024 to develop the Balady Platform and implement digital twins and smart city applications, contributing to urban planning development and improved quality of life.”

    This is the second major project agreement NHC has signed for residential development within the Al‑Fursan district.

    In March last year, NHC and Egyptian real estate developer Talaat Moustafa Group signed an agreement to develop more than 27,000 residential units at NHC’s Banan City project in the Al‑Fursan suburb.

    The project will cover an area of 10 million square metres and include hospitals, schools, retail, sports facilities and other public amenities.

    In 2023, NHC and Saudi Arabia’s Housing Ministry signed investment agreements totalling more than SR24bn ($6.4bn) to launch the Al-Fursan residential project.

    Al‑Fursan is described as the largest scheme in terms of area and number of housing units that NHC is implementing in partnership with other real estate developers. 

    For the district’s first phase, 18 real estate development agreements were signed with companies including Retal Urban Development Company and Sumou Real Estate Company.

    NHC also signed four consultancy contracts to manage projects and supervise implementation of phase one and the deployment of comprehensive infrastructure works.

    Other deals involved the development of facilities, including commercial and recreational areas, hospitals, health and sports centres, mosques and schools.

    MEED reported in 2020 that Riyadh planned to oversee the development of more than 1 million homes by 2025 to meet growing demand in the kingdom.

    By 2030, the Saudi capital aims to more than double its population, from 7-8 million to 15-20 million, and become one of the 10 wealthiest cities in the world.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/14934006/main.jpg
    Yasir Iqbal
  • October 2025: Data drives regional projects

    24 October 2025

    Click here to download the PDF

    Includes: Commodity tracker | Construction risk | Brent Spot Price | Construction output

    MEED’s November 2025 report on the UAE includes:

    > COMMENT: Investment shapes UAE growth story
    > GOVERNMENT: Public spending ties the UAE closer together
    > ECONOMY: UAE growth expansion beats expectations
    > BANKING: Stability is the watchword for UAE lenders
    > OIL & GAS: Adnoc strives to build long-term upstream potential
    > PETROCHEMICALS: Taziz fulfils Abu Dhabi’s chemical ambitions at pace
    > POWER: UAE power sector hits record $8.9bn in contracts
    > WATER: Tunnel projects set pace for UAE water sector
    > CONSTRUCTION: UAE construction faces delivery pressures
    > TRANSPORT: $70bn infrastructure schemes underpin UAE economic expansion

    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/14933968/main.gif
    MEED Editorial
  • Oman tenders industrial city infrastructure contracts

    24 October 2025

     

    Oman’s Public Establishment for Industrial Estates (Madayn) has issued two tenders for infrastructure development works at Al‑Suwaiq Industrial City in Al‑Batinah North Governorate and Madha Industrial City in Musandam Governorate.

    Madayn issued a tender on 21 October inviting companies to bid for a contract to develop the first phase of the infrastructure and utilities network at Al‑Suwaiq Industrial City.

    The scope covers construction of a building, greenhouses, roads, water network, electricity and sewage networks, and other associated facilities.

    The bid submission deadline is 30 November.

    The tender for construction of infrastructure works at Madha Industrial City was also issued on 21 October, with a submission deadline of 30 November. 

    In December 2023, Madayn inaugurated two projects at Al-Mazunah Free Zone valued at RO9.5m ($25m), including a facility building project and phase one package two and phases two and three at Al-Mazunah Free Zone.

    Madayn, OQ Refineries & Petrochemical Industries and the Industrial Innovation Academy signed an agreement in June 2022 to set up Ladayn Polymer Park in Sohar.

    At that time, Madayn also signed seven land‑usufruct agreements with an extendable duration of 33 years at reduced prices with the investors.

    According to a report from UK-based data analytics provider GlobalData, the output of the Omani construction industry is expected to register annual growth of 4.2% from 2025 to 2027, supported by investments in economic zones, renewable energy, manufacturing and tourism projects under Vision 2040.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/14933905/main.jpg
    Yasir Iqbal
  • Petrofac submits lowest bid of $1.48bn for Kuwait oil project

    24 October 2025

    Register for MEED’s 14-day trial access 

    UK‑based Petrofac has submitted the lowest bid for a contract to install Water Injection Plant 4 (WIP‑4) in south Kuwait.

    Petrofac submitted a bid of KD453,736,367 ($1.48bn), which is 7% lower than the KD488,378,247 ($1.59bn) submitted by India’s Larsen & Toubro, the only other company to bid for the project.

    The project’s bid deadline was postponed at least 14 times before prices were ultimately submitted.

    The main contract tender was originally issued by Kuwait Oil Company (KOC) on 11 August 2024, with a bid submission deadline of 10 November 2024.

    The project includes:

    • Construction of a water injection plant called WIP-4
    • Installation of safety and security systems
    • Laying of pipelines
    • Installation of oil gathering systems
    • Installation of the new well pads
    • Construction of associated facilities

    When it was first tendered in August last year, nine companies were qualified to bid. They were:

    • Samsung Engineering & Construction (South Korea)
    • Sinopec Luoyand Engineering Company (China)
    • Hyundai Engineering & Construction Company (South Korea)
    • Sinopec Engineering Incorporation (China)
    • Larsen & Toubro (India)
    • Petrofac International (UK)
    • Saipem (Italy)
    • Daewoo Engineering & Construction (South Korea)
    • Tecnicas Reunidas (Spain)

    Kuwait is currently trying to boost project activity in its upstream sector.

    The country’s national oil company, Kuwait Petroleum Corporation (KPC), is aiming to increase oil production capacity to 4 million barrels a day by 2035.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/14933876/main.jpg
    Wil Crisp