Syria's War Economy
Publisher: Jihad Yazigi
Date: 2014
Topics: Extractive Resources, Governance, Land
Countries: Syrian Arab Republic
Three years into a conflict that is estimated to have killed at least 140,000 people from both sides, much of the Syrian economy lies in ruins. The regime of President Bashar al-Assad has succeeded in resisting full collapse in areas it controls – in part because of economic support from its external backers Iran and Russia. But above all in rebel-held areas, a war economy is emerging that is creating significant new economic networks and business activities that feed off the violence, chaos, and lawlessness gripping the country. This war economy – to which Western sanctions have inadvertently contributed – is creating incentives for some Syrians to prolong the conflict and making it harder to end it.
At the same time, the Syrian economy is fragmenting as the areas controlled by the regime and the opposition become increasingly disconnected from each other. The relative autonomy gained by local stakeholders is creating new interests and power centres that are likely to clash with any future central government should it want to reassert the level of control exerted by Damascus prior to the war. But the fragmentation of the economy could also be part of a solution to the crisis: a decentralised political system could be a way of appeasing the fears of all sides of the conflict and of guaranteeing them a say in their future.