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
  • Contractor wins $197m Doha infrastructure works

    6 November 2026

     

    Register for MEED’s 14-day trial access 

    Qatar’s Public Works Authority (Ashghal) has awarded an estimated QR722m ($197m) contract to develop roads and infrastructure north of Al-Rifaa Street in Doha.

    The contract was awarded to local firm Tadmur Contracting Company.

    Six other contractors submitted bids: 

    • Qatar Trading & Contracting Group ($244m)
    • Iris Construction Tourism Industry & Trade ($259m)
    • Lotus Trading & Contracting ($260m)
    • Generic Engineering Technologies & Contracting ($261m)
    • Alghanim International / National Industrial Contracting ($268m)
    • Hamad Bin Khalid Contracting Company ($281m)

    The scope of work covers the construction of more than 34 kilometres of roads, dedicated plot developments, site clearance, backfill and earthworks.

    The package also requires the installation of surface and groundwater drainage systems, a foul-water drainage network and treated sewage effluent lines.

    In addition, the contractor will deliver a dedicated pumping station, an emergency flood area pond, 3,735 car parking spaces, road cross-sectional elements and verge parking bays.

    Secondary infrastructure works include electrical distribution, water mains, utility lines, manholes, gully pots and house connections, along with kerbing, road pavement works, landscaping, street lighting, road markings and directional signage.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/21204827/main.jpg
    Yasir Iqbal
  • Stakeholders aim to sign Iraq pipeline deal by year end

    6 November 2026

     

    Stakeholders expect a key contract to be signed before the end of the year for the development of a major oil export pipeline network in Iraq, according to industry sources.

    Iraq and Syria’s governments, state-owned oil companies and a consortium led by Qatar’s UCC are currently discussing the terms.

    If all parties agree to the proposed deal, the UCC-led coalition will become the selected developer responsible for tendering engineering, procurement and construction (EPC) contracts for the project.

    The consortium includes US-based Chevron, the investment company TI Capital and France’s TotalEnergies.

    The proposed plan will use a fast-track framework to bring the pipelines online as quickly as possible.

    One source said: “The plan that is being discussed is highly unusual, because it is such a large-scale pipeline project and it would be brought online in a relatively short timeframe.”

    A team from UCC is currently in Iraq for meetings with government officials to discuss the project, one source said.

    The project will be focused on four pipeline packages:

    • Basra to Najaf
    • Najaf to Haditha
    • Haditha to Fish Khapour
    • Haditha to Banias Port in Syria

    In July, Iraq’s cabinet approved state-owned Basra Oil Company signing a ​heads of agreement and a non-disclosure agreement with the UCC-led consortium to explore possible future oil pipeline projects.

    Under the terms of the agreement, the consortium is preparing technical and financial feasibility studies for strategic export pipeline projects.

    Also in July, US-based KBR was awarded a consultancy contract for the section of pipeline due to extend from Basra to Haditha.

    In April, Iraq announced the allocation of $1.5bn for the Basra-Haditha route, while the larger scheme is estimated at around $5bn.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/21181262/main.jpg
    Wil Crisp
  • Taqa shortlists 17 contractors for Mirfa-Liwa scheme

    6 November 2026

     

    Up to 17 contractors have been invited to submit bids for a major water transmission and distribution scheme serving Mirfa, Madinat Zayed and Liwa in Abu Dhabi, a source close to the project has confirmed to MEED.

    The project, originally estimated to cost $775m, comprises a water transmission system from Mirfa, alongside distribution networks serving farms and settlements in Abu Dhabi’s western region.

    In October, MEED exclusively reported that a request for proposals had been issued, with bids due on 5 January 2027, following an extension from the initial deadline of 11 November 2026.

    The Mirfa-Liwa scheme has been in procurement for several years and was previously tendered in December 2024 as an engineering, procurement and construction scheme, divided between transmission and distribution works.

    As MEED understands, it was recently re-tendered under a design, build and operate model, extending the contractor’s responsibilities to operating the infrastructure after construction.

    According to sources, the full list of contractors invited to bid for the tender includes:

    • Afcons Infrastructure (India)
    • Alkhorayef Water & Power Technologies (Saudi Arabia)
    • China Machinery Engineering Corporation (China)
    • China National Chemical Engineering (China)
    • China Tiesiju Civil Engineering Group (China)
    • Danway Electrical & Mechanical Engineering (UAE)
    • Emarat Aloula Contracting (UAE)
    • FCC Aqualia (Spain)
    • Gulf Contractors Company (UAE)
    • Hydropower Energy & General Construction (UAE)
    • Jereh Oil & Gas Engineering Corporation (China)
    • Mapa (Turkiye)
    • Nesma & Partners Contracting Company (Saudi Arabia)
    • Orascom Construction (Egypt)
    • Power Construction Corporation of China (China)
    • Tecton Engineering & Construction (UAE)
    • Tristar Engineering & Construction (UAE)

    According to details seen by MEED, the scope includes a pumping station at Mirfa with a capacity of 128 million imperial gallons a day, approximately 125 kilometres of transmission pipelines to Muzairah, with branches to Madinat Zayed and Liwa Summit, and storage tanks at the three locations.

    The distribution network is divided into four geographic clusters covering Liwa East, Liwa West, Madinat Zayed and Seih Al-Kheir. The works include associated pipelines, pumping stations and storage facilities.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/21181223/main.jpg
    Mark Dowdall
  • Gulf conflict cuts Emirates Group profit by 66%

    6 November 2026

    Register for MEED’s 14-day trial access 

    Dubai’s Emirates Group made a profit before tax of AED4.1bn ($1.1bn) in the first half of its 2026-27 financial year, 66% less than the AED12.2bn it made in the same period last year.

    The six months to 30 September were the group’s first full half-year since military activity disrupted commercial air traffic across the Gulf on 28 February. Group revenue fell 12% to AED66.2bn ($18bn), from AED75.4bn a year earlier. Profit after tax fell 66% to AED3.6bn ($1bn).

    Earnings before interest, tax, depreciation and amortisation (Ebitda) fell 41% to AED12.5bn ($3.4bn).

    The results follow a record 2025-26 financial year. The group made a profit before tax of AED24.4bn in that year, on revenue of AED150.5bn.

    “It has been a demanding six months, and once again our business model and our people stood up to the test,” said Sheikh Ahmed Bin Saeed Al-Maktoum, chairman and chief executive of Emirates Airline and Group. “Customer demand held firm and our cargo operations made a strong contribution, keeping revenue and cash levels healthy even as global jet fuel prices doubled against the same period last year.”

    Airline performance

    Emirates airline’s profit before tax fell 68% to AED3.7bn ($1bn), compared with AED11.4bn a year earlier. Its revenue fell 13% to AED56.9bn ($15.5bn). The airline carried 21.8 million passengers, 22% fewer than a year earlier. Capacity measured in available seat kilometres fell 17%, and the passenger seat factor dropped to 72% from 79.5%.

    Cargo partly offset the drop in passenger numbers. Emirates SkyCargo carried 1.2 million tonnes, 1% less than a year earlier, but its revenue rose 52%. The conflict reduced the airfreight capacity available on the market, and disruption to shipping pushed shippers towards air transport.

    Before hedging gains, fuel costs rose 60%, even though the airline uplifted 12% less fuel. Gains of AED7.1bn ($1.9bn) from fuel hedging cut the net increase in fuel costs to 13%. Fuel accounted for 34% of operating costs.

    On 30 September, Emirates was operating 91% of its pre-disruption network, serving 150 airports in 78 countries and territories. On 31 March, it had been flying 58% of its passenger capacity to 122 destinations in 65 countries.

    Fleet investment

    The airline received nine Airbus A350s and five Boeing 777 freighters during the period. Its fleet grew to 289 aircraft, from 277 on 31 March. Emirates is continuing its cabin retrofit programme, a planned investment of more than $7bn. It refurbished 12 aircraft in the first half. In May, it broke ground on a $5.1bn engineering and maintenance, repair and overhaul (MRO) facility at Al-Maktoum International airport, which is expected to be completed in the mid-2030s.

    The group’s cash position was AED54.1bn ($14.7bn) on 30 September, down from a record AED59.6bn on 31 March. The group said it had used its reserves to make pre-delivery payments for aircraft and to service existing debt. It also paid the remaining AED2bn of the AED3.5bn dividend declared for 2025-26 to its owner, the Investment Corporation of Dubai.

    Ground services and travel company dnata made a profit before tax of AED410m ($112m), down 51%. Its revenue fell 7% to AED11bn ($3bn), and the group said dnata’s international businesses helped offset weaker traffic in the UAE.

    The group’s workforce fell 2% to 128,237 people.

    “We enter the second half of our 2026-27 financial year with measured optimism,” said Sheikh Ahmed.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/21198114/main.jpg
    Colin Foreman
  • King Salman airport tenders roads and utilities package

    6 November 2026

     

    Register for MEED’s 14-day trial access 

    Saudi Arabia’s King Salman International Airport Development Company (KSIADC) has tendered the Zone C1+C2 roads, bridges and utility networks package for King Salman International airport (KSIA) in Riyadh.

    The tender was issued on 26 October, and bids are due by 6 December.

    The request for proposals covers the procurement, construction, testing and commissioning of civil infrastructure supporting Terminal 6, alongside the existing Terminals 1-5.

    The scope includes upgrades to Airport Road 539, which runs west of Terminals 1-5, and to part of Mohamed Bin Faraj Road 5333, west of Junction 6.

    It also includes new roads, ramps, service roads, and signalised at-grade junctions. An additional access road will connect the Terminal 6 site offices to Road 5333.

    Structures will include the Junction 6 and Terminal 6 bridges, retaining walls and reinforced-soil structures.

    The contractor will also construct the central ground services equipment (GSE) bridge. Before construction begins, the contractor must validate the design, complete any outstanding elements – including mechanically stabilised earth walls, approach slabs, drainage and lighting – and secure the required authority approvals.

    Dry utilities will comprise high- and extra-high-voltage containment, a 13.8kV medium-voltage network with package substations, low-voltage distribution and street lighting, and security-surveillance systems.

    Wet utilities will include potable water, fire water, irrigation water, treated sewage effluent, district cooling and wastewater networks. Wastewater pipes will range from 200mm u-PVC gravity lines to 1,700mm glass-reinforced plastic mains.

    The stormwater network will include channels, culverts, ponds and pipes ranging from 400mm to 1,400mm in diameter. Crossings will be constructed using open-cut excavation, horizontal directional drilling or microtunneling.

    Utilities serving the operational terminals will be diverted on a design-and-build basis. Enabling works will include earthworks and the relocation of the security fence and trees. The contractor will also demolish a temporary car park, existing bridges and a sewage pumping station.

    Optional works comprise two design-and-build elements that will proceed only at the client’s instruction.

    The first is the south GSE bridge. The second is an approximately 1,400-metre, multi-lane access road to the Terminal 6 Transportation Hub, including bridges, underpasses, ramps and tunnels, as well as provisions for future Wadi Loop utilities and structures.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/21176175/main.png
    Yasir Iqbal