HTS must reject Assad-era neoliberalism

The fall of Assad in December 2024 raised hopes for a brighter future in Syria. But as the country looks to rebuild its economy, enormous challenges remain. 

More than half of Syrians remain displaced, either internally or abroad. 90% of Syrians are living below the poverty line, and 16.7 million people—three in four—required humanitarian aid in 2024, according to the UN. 

Improving socio-economic conditions is crucial to Syria's future and the broader participation of the Syrian people in the current political transition. Recovery and reconstruction will need forms of international financial assistance, including foreign investments. 

However, in its efforts to improve its geopolitical standing and encourage foreign investment, the interim government led by Hay’at Tahrir al-Sham (HTS) is largely continuing, or even extending, the previous regime's neoliberal policies, deepening inequalities and exacerbating key economic challenges. 

Syria needs investment to fund reconstruction

The cost of reconstruction in Syria is estimated at between $250 billion and $400 billion. Syria needs foreign investment, which should, with the assistance of the state, be used for the reconstruction of housing for its displaced population and for productive sectors of the economy, rather than to boost commercial and speculative dynamics.  

Investment is, however, still being impeded by the sanctions placed on both Syria and HTS. In late February 2025, the EU suspended sanctions in some sectors. The UK also lifted sanctions on 24 Syrian entities, including its central bank, last week.  

Broad U.S. sanctions remain the greatest obstacle. In January, the Biden administration eased sanctions on the energy sector and personal remittances. The new Trump administration has yet to articulate a clear Syria policy or a stance on sanctions.  

Structural weaknesses—unstable currency, damaged infrastructure and shortages

Even without sanctions, Syria faces deep economic challenges that could hinder recovery. 

The instability of the Syrian pound (SYP) is a significant issue. In the aftermath of Assad's fall, its value on the black market surged due to an influx of foreign currencies, the expectation of support from the international community, monetary policies aimed at diminishing the supply of SYP in the market, and informal dollarisation. There is still a long way to go before the SYP stabilises, deterring investors seeking rapid and medium-term returns. 

Some regions in the northwest have been using the Turkish lira for several years to stabilise markets damaged by severe SYP depreciation. U.S. dollars are also circulating across the country. Reintroducing SYP as the primary currency could prove problematic if stability is not achieved. 

Syrian infrastructure and transport networks remain severely damaged. Production costs remain high and there are severe shortages of key commodities and energy resources. Syria also suffers from a shortage of qualified labour, and it is not yet clear if or when skilled workers will return.  

The private sector, mostly composed of small and medium-scale enterprises with limited capacities, still requires significant modernisation and rebuilding after more than 13 years of war. State resources are also severely restricted, further limiting investment in the economy. 

Syria's main oil resources are in the northeast, currently controlled by the Kurdish-led Autonomous Administration of North and East Syria (AANES). As a result, Syria's oil and natural gas production have continued to decline drastically. Oil production has fallen from 400,000 barrels a day in 2010 to around 91,000 barrels in 2023—vastly insufficient for local needs. Before the fall of Assad, Iran supplied much of Syria's oil, but that support has since dried up. 

As the cost of living continues to rise and the SYP depreciates, Syrians have become increasingly dependent on remittances—generally monetary transfers from relatives abroad. The volume of remittances is higher than both Foreign Direct Investment (FDI) in Syria—which has been minimal since 2011—and humanitarian aid, which has averaged over $2 billion per year in recent years.

Neoliberalism under Assad and HTS

Since coming to power, HTS's economic policies have broadly followed the neoliberal economic framework established by the former regime. 

Bashar al-Assad accelerated neoliberal reforms when he came to power in 2000. In 2005, his Baath Party adopted the social market economy as its strategy, positioning the private sector as a leader in the process of economic development and employment. The state withdrew from key areas of social welfare provision, worsening pre-existing socio-economic problems. Privatisation, liberalisation and subsidy reductions were key features of the policy.  

Neoliberal policies and austerity measures benefitted the upper class and foreign investors at the expense of most of Syria's population, who were hit hard by inflation and the rising cost of living.  Assad's wartime economic policies exacerbated pre-2011 economic dynamics, favouring private capital accumulation, reducing the social responsibilities of the state, and leading to the expansion of corruption and illicit economic practices.  

The approach taken by the new ruling group, Hay’at Tahrir Sham (HTS), does not represent a rupture with the former regime's neoliberal economic policies but quite the opposite.  

HTS leader Ahmad al-Sharaa and his ministers have held numerous meetings with representatives of Syria's chambers of commerce and industry, as well as prominent business leaders inside and outside the country, to present their economic visions and hear concerns. 

There are already concrete signs that HTS are accelerating privatisation and implementing austerity. Before his visit to the World Economic Forum in Davos—a conference that is symbolic of western neoliberalism—Foreign Minister Asaad al-Shaibani told the Financial Times that HTS plans to prioritise "public-private partnerships", including the privatisation of state-owned ports and factories to invite foreign investment and boost international trade. 

Austerity and mass layoffs amid a cost-of-living crisis

Several key austerity measures have already been implemented by HTS. The price of subsidised bread was raised from 400 SYP (weight 1100 grams) to 4000 SYP (initially 1500 grams, later reduced to 1200 grams). Bread subsidies are set to end within months, in line with the liberalisation of the market. In January, the Minister of Electricity Omar Shaqrouq told Syria Report that HTS will reduce or even remove electricity subsidies. 

Also in January, the Ministry of Economy and Foreign Trade announced that one quarter to one third of the state workforce would be laid off, targeting employees who, according to the new authorities, were receiving a salary but not working.  Dismissed and suspended workers led protests throughout the country in response. 

HTS has pledged to raise wages by 400%, making the minimum salary 1,123,560 Syrian pounds (approximately $86)—a step in the right direction. However, implementation is still pending, and the increase is still insufficient in light of the continuing cost of living crisis. Kassioun newspaper estimates that a five-member household in Damascus needs at least 9 million Syrian pounds ($692) per month to meet basic needs.

HTS is using economic policy to gain international legitimacy

HTS's neoliberal economic policies are part of a wider plan to consolidate its power and carry out a controlled transition. The group is attempting to allay foreign fears, establish contacts with regional powers, and be recognised as a legitimate force with which it is possible to negotiate. Despite its status as a terrorist organisation, a change of behaviour from regional capitals is already visible. 

Ankara is, for now, the main political, economic and military influence on the new Syria, and is consolidating its position by providing support for HTS. Turkey's main objective, other than carrying out forced returns of refugees and benefiting from future economic opportunities, is to deny Kurdish aspirations for autonomy in Syria.

Qatar will most probably also play a major role as an economic pillar. Both Qatar and Turkey are already providing various forms of assistance to the new government in Damascus. Turkish business delegations have visited Syria's chambers of commerce and industrial groups to explore potential investment opportunities.  

In late January, Damascus reduced customs duties on over 260 Turkish products. Turkish exports to Syria have surged by 35.5% year-on-year, reaching $219 million as of 25 January. 

Syrian and Turkish officials have also agreed to reopen negotiations on the 2005 Turkey-Syria Free Trade Agreement, suspended since 2011, with plans for a broader economic partnership. However, this could have negative consequences for Syrian national production, particularly in manufacturing and agriculture, which may struggle to compete with Turkish imports. The original 2005 FTA had a detrimental impact on local industries, leading to the closure of many manufacturing plants, especially in the suburbs of major cities.

Can HTS learn from Assad's failures?

Syria faces pressing socio-economic challenges against the backdrop of fast-moving geopolitical dynamics. In this context, social and economic issues must be tackled rapidly to improve living conditions and the ability of the population to engage in political life during the country's transition. 

While HTS have had some success in provoking a change of outlook from regional capitals, the political-economic orientation of the new government does not offer any alternative to the neoliberal approach of the former regime. HTS are accelerating these trends through liberalisation, privatisations, austerity and subsidy cuts. 

This economic orientation will only lead to more social inequality, impoverishment, the concentration of wealth in the hands of a minority and the absence of productive development—all elements at the root of the popular uprising in 2011.