Syria's fragile future - can its economy rise from the chaos?

After 13 years of relentless civil war in Syria, Bashar al-Assad's government has been toppled. In its place is a fragile transitional coalition of Islamist rebels, former opposition leaders, technocrats, and international mediators, tasked with rebuilding a nation ravaged by conflict.

But what remains of Syria? The economy that the coalition inherits is a shadow of what it was in 2011, when the first large-scale protests broke out against Assad's rule. 

Syria is now the poorest nation in the Middle East, with an estimated GDP of around $9 billion - comparable to the economies of Chad and Togo. 

In absolute terms, its GDP has shrunk by 86 percent, while its share of the global economy has fallen by 90 percent, according to the World Bank.

Before the civil war, Syria's economy was worth $68 billion, ranking 68th globally. It was a middle-income economy, on par with Paraguay and Slovenia, and boasted a diverse economic structure with low inflation. 

Agriculture, industry, retail, and tourism were pillars of its stability. In 2009, agriculture contributed 22 percent to the economy, industry and excavation 25 percent, retail 23 percent and tourism 12 percent.

War's ruinous toll

The civil war obliterated this diversity. Agricultural output has plummeted by at least 50 percent, according to the World Food Program. Infrastructure vital to the industrial sector, once concentrated in Aleppo and Homs, has been reduced to rubble. 

Oil production, a crucial export for Syria, has collapsed from 380,000 barrels per day in 2010 to 40,000 barrels per day today - a drop of nearly 90  percent. 

Tourism, once a burgeoning sector drawing millions of visitors annually to historic sites like Palmyra, has all but disappeared.

Meanwhile, poverty is endemic. The UN estimates that over 90 percent of Syrians live below the poverty line, with more than half facing food insecurity. Inflation is rampant, and the Syrian pound, battered by years of war, has lost over 99 percent of its value since 2011.

A war economy

What remains is a war economy sustained by informal markets, foreign aid, and illicit activities. Chief among these is the Captagon trade, a lucrative drug-smuggling network that has thrived in the chaos of war. 

In 2021, German news outlet Der Spiegel estimated the narcotics trade's value at $5.7 billion. More recent analysis suggests it could now exceed $30 billion annually, making it Syria's largest export. 

Western governments, including the UK and U.S., claim the Captagon trade is roughly three times larger than the combined revenues of Mexican cartels.

Foreign aid, meanwhile, props up what little remains of Syria's formal economy. The World Food Program reports that over 12 million Syrians rely on humanitarian assistance for survival. Reconstruction, an endeavor estimated by the UN to cost at least $250 billion, remains a distant hope, hampered by ongoing instability and a lack of international consensus on Syria's future.

End of an era

For all the faults his opponents accuse him of, Assad's tenure was once synonymous with order. The streets of Damascus bustled with traders, tourists marveled at Palmyra, and industries churned out goods for export. That Syria is no more. His departure, though celebrated by many, leaves behind a vacuum fraught with uncertainty.

The coalition now faces a monumental challenge. Restoring the economy to its pre-war levels - let alone achieving prosperity - will require years of investment, political stability, and international cooperation. 

Yet with Islamist factions dominating parts of the government, concerns abound about whether the country can attract the necessary foreign investment.

Sanctions, too, loom large. Western powers remain skeptical of the new government, wary of lifting the punitive measures that have choked Syria's economy for over a decade. Without their removal, the path to recovery will be even steeper.