The Strategist

Five-year war destroyed the Syrian economy

11/16/2016 - 13:08

More than five years of war have killed about 250 000 people in Syria. 5 million men became refugees, and other 7 million have been ousted from their homes. More than half of the country is controlled by armed groups, including the "Islamic State", and territories controlled by President Bashar Assad are experiencing severe shortage of electricity. Roads in the country are dangerous, and truck drivers are forced to bribe rebels and government forces when crossing borders. The economy has lost its bearings - oil exports - after ISIL captured east of the country in 2014. In addition, business conditions are the country are affected by international sanctions imposed because of the West's displeasure with brutal actions of Assad’s regime against the civilian population.

Elizabeth Arrott
Elizabeth Arrott
In the course of military operations, President Bashar al-Assad has lost control over nearly half of the country, which is currently dominated by a variety of groups, including the ISIL.

FT says that government-controlled areas managed to keep most of factories alive, yet they are suffering from daily power outages and insecurity on the roads.

Oil exports, one of the main sectors of the Syrian economy, has been lost after ISIL troops entered the eastern province in 2014. International sanctions have also had their influence, and the Syrian pound has fallen to a mark of 500 pounds per dollar, plunging vast number of people in poverty.

"There are huge problems everywhere: in preparation of fuel and raw materials, transportation, and inflation. People cut consumption down since their purchasing power has decreased. We are not able export our products partly due to the sanctions ", - said Iyad Betinjaneh, a businessman from Damascus, who heads a family-run conglomerate on import and export of foodstuffs.

Head of the Chamber of Industry in Damascus Samer al-Debs said that production volume in some sectors has been reduced by 50-60%. Many US and European sanctions have raised cost of imports as most banks are refusing to cooperate with Syria, he said.

Analysts of International Monetary Fund said that Syria would need $ 200 billion to rebuild the country's infrastructure after five years of war.

According to experts, to restore the destroyed infrastructure of the Syrian military conflict need of $ 100-200 billion. Over time, this number will only increase.

Gross Domestic Product of Syria in 2010 was $ 104 billion. During five years of war, the figure decreased by 57% to $ 63.7 billion, the IMF experts told. Financial experts drew attention to decrease in other important indicators. Thus, number of people living below the poverty line has increased to 83% from 12.5%. During the war, the country's inflation rate increased by 300%, volume of imports fell by 40%, international reserves decreased by 80%.

Business in Syria is experiencing pressure from all sides, says Abu Abdullah, a Damascus wholesale food dealer. Local business community is being pressed by "the authorities, armed groups, criminals and ISIL. Previously, delivery of goods from Eastern Deir ez-Zor took six hours. Now, it takes two weeks. Transport costs are two hundred times bigger now, not even counting all fees to be paid to armed men".