Most notably smuggled funds… 5 major economic files on the table of the new administration in Syria economy

After more than a decade of devastating conflict and the fall of Bashar al-Assad, Syria faces great challenges regarding its infrastructure, which was destroyed by the war, as it suffers from deterioration in its main sectors such as agriculture, industry, education, health, and energy, and its rebuilding is expected to take more than 10 years. According to experts.

In this report, we highlight five major economic issues facing the new regime in Syria, most notably the looted funds and those that Assad took with him, the fate of the local currency, the country’s accumulated debts, the cost of reconstruction, and the impact of the sanctions left by the ousted regime on the Syrians.

• Smuggled money

Numbers are conflicting regarding the size of the wealth that Assad took with him before his escape to Russia, between hundreds of millions and billions of dollars. According to a report by the British newspaper “Financial Times”, the Syrian Central Bank during the reign of Bashar transferred about 250 million dollars in cash to Moscow during two years when he was then indebted to the Kremlin in exchange for… Military support and his relatives were secretly buying assets in Russia.

The newspaper revealed records showing that the Assad regime airlifted banknotes weighing nearly two tons in denominations of 100 dollars and 500 euros to Vnukovo Airport in Moscow to deposit them in Russian banks subject to sanctions between 2018 and 2019.

The newspaper also reported that the Assad family owns at least 18 luxury apartments in Moscow, and indicated that members of the extended family were buying a lot of assets in Russia between 2018 and 2019.

According to estimates by the International Monetary Fund and the US Federal Reserve, Syria’s dollar reserves in 2010 before the outbreak of the revolution amounted to about 18.5 billion dollars. The World Gold Council also stated that Syria possessed about 25 tons of the precious metal in June 2011.

Syrian journalist and analyst Adnan Abdel Razzaq says that Al-Assad transferred – in the last ten days before his escape – huge amounts of gold and dollars, and he adds to Al-Jazeera Net that the Al-Assad family possesses great wealth, whether in Swiss banks or around the world, and now it has begun to reveal the size of the real estate and the volume of the looted money.

• Currency value

Regarding the status of the Syrian currency and its future prospects, Abdel Razzaq says that it is linked to economic, psychological and political factors, most notably reassurance about political stability, noting that the Syrian pound improved directly on the night of Assad’s fall.

He added that the stability of the exchange rate depends on many factors, the most important of which is the volume of exports, and therefore production, which brings the country back in hard currency, and means the balance of supply between local labor and foreign currencies.

The Minister of Economy in the caretaker government, Basil Abdel Hanan, had spoken to Al Jazeera Net – earlier – about the plan to save the lira from collapse, and said that the main goal is first to stabilize the exchange rate in order to stabilize the markets and move the wheel of trade exchange.

He added that in the future, as the wheel of production moves and exports begin, there will be steps that raise the value of the lira, but the current reality requires great efforts in addition to the concerted efforts of all.

He explained that the most important factor for strengthening the lira is production and export to introduce hard currency and increase the cash reserve, thus increasing the strength of the currency, in addition to achieving stability in the exchange rate to stabilize the movement of commercial and monetary circulation.

As for the professor of financial management at the Turkish University of Basaksehir, Firas Shaabo, he expects that the lira’s recovery file will take some time. He said in statements to Al Jazeera Net that “the currency is a mirror of the economy,” and the value of the lira is deteriorating significantly and may be exposed to decline in the future.

However, Shaabo is optimistic about the rise of the Syrian currency and links it to the ability to revitalize the economy, restore confidence in state institutions, and boost the gross domestic product, which amounted to 61.3 billion dollars in 2010 and declined to 7.4 billion in 2023.

He told Al Jazeera Net, “The caretaker government in Syria must restore confidence in the economy by achieving monetary and political stability, giving freedom to the private sector, and creating laws that guarantee its rights.”

In turn, economic researcher at the Abaad Center for Studies, Khaled Al-Tarkawi, expects that there will be no major adjustments to the price of the lira, unless there are major changes in political and security issues.

Al-Tarkawi believes that Syria is entering a stage of stability, and therefore the lira will follow this stability, stressing that strength lies in stability and not the rise or fall of the currency.

• Debts

Researcher Fayez Abu Eid says that the ousted president left Syria torn apart, burdened with debt and in a state of complete economic collapse. According to the annual report issued by the World Bank Group in 2022, the volume of external debt incurred by Syria amounted to 5 billion dollars at the end of 2021, up from 4.8 billion in 2020. .

As for Shaabo, he points out that Syria’s debts also include billions of dollars owed to Russia and Iran, for which the numbers conflicted, to the point of 100 billion dollars. He pointed in this regard to “bad debts,” which is an economic term used when the state takes loans and uses them to kill its people and in other practices. Illegitimate.

• Reconstruction

Syria needs a lot after the devastation it has been exposed to in the past decades. According to the Central Bank, the economy has shrunk by 85% since the beginning of the war in 2011.

According to Minister Abdel Hanan, many local and international organizations sent their delegates to Syria to develop plans and assess needs and priorities for reconstruction, and that there is communication with the relevant international authorities in order to speed up this matter and organize it properly, stressing It is not possible to expect a specific time for reconstruction before assessing the needs.

Regarding the cost of reconstruction, estimates ranged between 200 and 400 billion dollars, and economic researcher Turkawi says that it requires determining the basic goal, whether it is arranging the infrastructure or rebuilding completely destroyed cities, as this may take about 10 years.

He added to Al Jazeera Net that the goal includes rebuilding cities that were completely destroyed, such as the old city of Homs, which was damaged by 70% between 2011 and 2014, and the matter applies to other areas such as eastern Aleppo, the Damascus countryside, and Daraa.

As for the journalist, Abdul Razzaq, he stresses the necessity of determining the extent of the destruction first, and then researching the costs of reconstruction, noting that international estimates speak of 400 billion dollars.

• Penalties

With the outbreak of the revolution in 2011 and the escalation of the confrontation between the protesters and the Assad regime and the use of repression, the United States and European and Arab bodies began issuing sanctions against the regime.

The sanctions expanded and their forms and scope of work varied over the years, the most prominent of which were the “Caesar Act,” which was enacted by the United States and entered into force in 2020, and the “Anti-Captagon Law” 1 and 2.

The aim of the various Western sanctions against the Baath regime was to stop the regime’s violence in the country and shift to the reform process, especially in light of the civil war, violence against civilians, human rights violations, war crimes, and support for terrorist organizations.

But these sanctions – which sought to weaken and punish the Assad family regime – also left a great burden on the Syrian people, so it is expected that their lifting after the fall of the regime will accelerate the economic recovery process and help its development.

The new Syrian administration is keen to persuade the world to lift the imposed sanctions, to enable parties wishing to invest in the country, which needs huge sums of money to rebuild it and provide many needs that the population lacks.

The caretaker Minister of Economy says that the impact of the sanctions imposed on his country is significant, especially on reconstruction because they require investments in infrastructure in the electricity and water generation sector and advanced industries, adding that these sectors need the entry of strong companies, while the sanctions hinder the entry of these companies in order to Reconstruction.

The Syrian Network for Human Rights had called on the United States and the European Union to lift economic sanctions after the overthrow of the Assad regime, to enable Syrians to advance their country, while maintaining individual sanctions targeting individuals linked to human rights violations.