Executive Summary
Following 2011, Syria spent over a decade being torn apart. Torn apart physically and torn apart figuratively. The economic devastation wrought by the civil war was itself preceded by decades of a corrosive political economy that saw the institutions as well as the soft and physical infrastructure required for a sustainable nation state to never be consolidated or even built in the first place. The product of this is a Syria that, economically, is on its knees.
A civil war like Syria’s rips a country apart in far more ways than just devastated buildings and crippled industries. But rebuilding, or building, legitimate institutions of governance and order, soft and hard infrastructure, and systems that enable individuals to advance their livelihoods required for an economic reconstruction rebuilds far more than an economy. A successful, sustainable and comprehensive economic reconstruction addresses, whether directly or through second- or third-order effects, many of the social cleavages caused by an era of conflict like that Syria suffered. The operative word there is comprehensive. Reconstructions that benefit a minority while others are left in the cold are not rebuilding anything except a path back into conflict.
Building a roadmap for such a comprehensive reconstruction is the objective of this essay series. The roadmap will unfold over three parts, each presenting the key bottlenecks that are preventing Syria from achieving such a reconstruction and proposing how to overcome these bottlenecks. The entire series is deliberately geared to be of real utility to wide range of stakeholders engaged in/with Syria aside from the government alone. Foreign envoys and embassies designing their engagement strategies, INGOs and development agencies devising their programmatic strategies, public and private investors and financiers looking to ascertain the risks surrounding their prospective projects and thus what best practices they should demand as terms of their engagement – all of these stakeholders and more will be able to lean on this series as they chart their path ahead in Syria.
Part 1 (“Pillar I: Institutional Foundations of the State”) is the most important pillar of the roadmap, as its bottlenecks must be addressed first to enable addressing those of Pillars II and III. Pillar I laid out the platform of governance – spanning normative and procedural imperatives – yet to be established in Syria that is the essential substrate for any reconstruction to emerge from and sustain. Six bottlenecks and their solutions were examined:
1) A published national vision
2) A bureaucracy designed to serve the public
3) Verifiable transparency
4) Separation of powers, in transition and after
5) Technical roles and technical people
6) Clear government communication and information environment
This part, Part 2 (“Pillar II: Economic Enablers – Regulation, Market Structure, and Infrastructure”), lays out the key systems that must be built off the foundation of Pillar I to enable the resources required for the reconstruction to flow and be protected. If Pillar I is the central nervous system and immune system of the reconstruction, Pillar II is the circulatory system – the arteries and veins. Five bottlenecks, and how to overcome them, constitute the analysis of this pillar:
7) A functional banking system
8) Electricity capacity
9) Property rights and contract enforcement
10) Physical and soft trade and customs infrastructure
11) An empowered Syrian private sector
Part 3 (“Pillar III: Growth That Reaches – Human Capital, Jobs, and Local Government”) concerns how to empower Syrians with agency, and thus to be the agents the reconstruction needs – not only in terms of individual skills and value creation opportunities, but also having the authority for the crucial local-level problem solving required. If Pillar I is the central nervous system and immune system, and Pillar II is the circulatory system, Pillar III is the reproductive system – the ability of the organism to sustain life. Three bottlenecks, and the paths to overcoming them, will be examined here:
12) Rebuilt education system and skilled workforce
13) Job creation
14) Calibrated responsibilities between municipalities, governorates, and the central state
Part 3 will end with a proposal for the creation of a small body, a “Delivery Unit”, to coordinate and guide the reconstruction’s administration on a macro level and conduct the iterative problem-solving and reflective accountability mechanisms ongoing to ensure its path remains correct.
If there is a unifying perspective throughout the series, it is urgency. The government has made real gains, particularly in the relationship building required for the partnerships that will be crucial to Syria’s reconstruction. But the challenge is now the domestic front and the far harder but far more critical work of compromise, sharing, and systems building – work that often doesn’t provide instant payoffs like a headline-grabbing sanctions removal announcement, but work that provides the foundation for a Syria that moves away from conflict, not towards it. Without being alarmist, time is not on Syria’s side – the foundations for addressing the root causes of the highly visible fractures in the country, building the trust between communities and between people and government required to prevent those fractures deepening into true cleavages, are yet to be laid. The 24-month timeframe of the programme – unlocking certain bottlenecks and establishing significant tangible momentum across the others – is thus by no means arbitrary, but essential. Yet the wager underlying this series is a positive one. Once these bottlenecks are addressed, Syria is positioned to reclaim its role as the political, economic, and financial centre of the Levant, and to convert a decade of destruction into a generation of construction. This is one of the largest reconstruction and investment opportunities of this generation, and we are bullish on what comes next.
Pillar II: Economic Enablers – Regulation, Market Structure, and Infrastructure
The five constraints in this pillar require capital and infrastructure as much as decisions. They are sequenced behind the institutional foundations of Pillar I because capital cannot deploy at scale until those foundations are in place. Banking is the exception: the work of restoring correspondent relationships can, and should, proceed in parallel.
Bottleneck 7: A functional banking system
No Syrian bank yet maintains a working relationship with major international commercial banks. The U.S. Office of Foreign Assets Control lifted comprehensive sanctions on 1 July 2025 and removed the Commercial Bank of Syria from the Specially Designated Nationals and Blocked Persons list, but correspondent banking relationships take time to rebuild. The consequence is that no business can wire funds in or out through a bank, and no importer can open a letter of credit. Syrians abroad are left to move money through informal channels that cost between five and fifteen percent once fees and the foreign exchange spread (the gap between the rate the broker demands and the official rate) are accounted for.
This constraint conditions seven of the others, and the dependencies are specific. Until money can move through a bank with functioning correspondent access, electricity tariffs cannot settle in hard currency (Bottleneck 8); the investment flows that an independent commercial judiciary is meant to protect cannot clear (Bottleneck 4); property cannot be financed against collateral (Bottleneck 9); trade letters of credit cannot issue (Bottleneck 10); the SME wholesale credit facility cannot disburse (Bottleneck 11); the job-creation lending that depends on that facility cannot reach firms (Bottleneck 13); and diaspora remittances cannot route through formal channels that would turn them into investment rather than consumption. This is why banking is sequenced ahead of the rest.
The objective is concrete: the Central Bank Governor, working alongside the bank’s international advisory partner (Oliver Wyman, engaged in early 2026 to lead the reform review), should secure the first correspondent relationship within ninety days from now and the first letter of credit within one hundred and twenty. Trade finance is the first casualty of lost correspondent lines, so the interim solution has to come from an institution with its own network. The International Islamic Trade Finance Corporation (ITFC) has one. Sized against ITFC’s typical country framework envelopes, the ITFC should be able to carry $200 to $500 million in bridge trade finance through its own network while direct correspondent relationships are rebuilt. A correspondent-banking readiness dashboard maintained at the Central Bank (recording which international banks have opened lines, which remain in due diligence, and which have declined to open correspondent lines) would tell the international financial community more than any government statement could.
Responsible bodies: the Central Bank of Syria, the Commercial Bank of Syria, and the Ministry of Finance. Status quo: zero active correspondent relationships with major international banks; SWIFT reconnection in progress through 2025; new Syrian pound currency rollout launched 1 January 2026; Oliver Wyman reform review underway.
Bottleneck 8: Electricity capacity
Much of Syria currently receives between eight and twelve hours of electricity each day. National electricity generation now runs at roughly 1,600 to 2,200 MW compared to pre-war installed capacity of some 8,500 MW. In anticipation of pre-war consumption patterns being restored, Syria needs at least another 5,000 MW of generation capacity. Turkey and Qatar announced emergency Karpowership supply of roughly 800 MW in January 2025. More than a year on, none of it has been deployed.
The structural difficulty is that the electricity constraint is bound to the banking one. Production costs approximately $0.14 per kilowatt-hour, while consumers pay ~$0.05–$0.16 depending on consumption tier and user category, a figure that not only portends minimal to no profits for the power sales, but indeed exceeds what the average Syrian salary can bear, thus throwing into question the rate’s sustainability. Concession agreements such as the UCC Holding-led consortium confer the right to build and operate generation. But achieving more long-term power purchase agreements (the contract fixing the price, buyer, term, and payment mechanism) will be significantly expedited by drastically improving the gap of the cost vs sale price ratio, yet doing so without using government subsidies that the state can ill afford. And even were an acceptable tariff agreed, settlement would still require a functioning hard-currency payment mechanism, which the absence of correspondent banks precludes.
The response must run on two tracks at once. Fast track: emergency mobile generation totaling 500 MW within six months, directed first to industrial zones with confirmed offtake: Sheikh Najjar in Aleppo, Adra in the Damascus countryside, and Hassia in Homs. These three zones are selected, firstly, due to investor interest being heaviest there, and secondly for the concentrated nature of the physical damage they suffered, meaning focused reconstruction can restore whole industrial clusters at once. Mobile generation unit coverage would then expand to the remaining industrial cities and zones over twenty-four months. Medium track: the World Bank Syria Electricity Emergency Project (SEEP), rehabilitating transmission lines and transformer substations; the Jandar plant rehabilitation; the SOCAR gas supply agreements; and the UCC Holding-led consortium’s $7 billion suite, which would deliver 5,000 MW across four combined-cycle gas plants and four solar installations. Each requires a specific obstacle removed: land access rights restored for the SEEP transmission corridors (including physical land access restoration, like de-mining), environmental permissions conducted in parallel for all projects rather than one after the other, fuel-supply terms pre-negotiated for the SOCAR project, bankability terms (like force majeure clauses) drafted for consortium investors to enable financial closing on deals, and a tariff structure explicit enough to let the operator recover costs without imposing a politically untenable price shock on consumers.
Achieving a cost-viable tariff will depend on the combined-cycle plants generating power cheaply enough to support a tariff acceptable to both operator and buyer (the latter bounded by what Syrian consumers can actually pay). And to achieve this, the long-term SOCAR supply terms, still unfinalized, must come in low. Gas price, however, is only half the equation: the consortium’s $7 billion outlay must also be recovered, and that figure too will be built into the tariff to be negotiated. Unless the offtake buyer, most likely the Syrian Electricity Company, can raise its purchasing power (whether through stronger consumer incomes or through subsidies the state cannot presently afford), the power production-power sale price ratio will not add up.
The government’s principal move came in late October 2025, replacing a flat rate of 10 Syrian pounds per kilowatt-hour with a tiered structure. Households now pay 600 pounds for each of the first 300 kilowatt-hours they consume in a two-month billing cycle, and 1,400 for every kilowatt-hour above that. Government institutions and factories on 24-hour supply pay 1,700, and heavy industry 1,800. Even the lowest tier remains roughly 60 percent below the cost of production. Factory closures and protests have already followed the increase. Syrian households were financially submerged before the revision, and the new level will not be livable.
One answer lies in an escrow account positioned between the plant operators and consumers. Government revenue (drawn, for instance, from the recovering oil and gas exports) and donor money (Gulf assistance would be a highly strategic move here). Syrian consumers’ power bills would also be paid into this account, but the tariffs charged to these consumers would be a feasible amount and would only be raised incrementally over time as Syrian economic recovery, and thus household income, improves.
Responsible bodies: the Ministry of Energy, formed in March 2025 by merging the former ministries of Electricity, Water Resources, and Oil and Mineral Resources; and the Syrian Electricity Company, established by decree in April 2026 to replace the Public Establishment for Electricity Generation and the Public Establishment for Transmission and Distribution of Electricity, taking over their assets, contracts and obligations as a wholly state-owned holding company reporting to the Minister of Energy. Status quo: operational generation 1,600 to 2,200 MW against pre-war 8,500 MW; tariff structure not yet at cost-recovery / not yet bankable for independent operators’; $7 billion consortium agreements signed but not yet under construction (concession agreements and PPAs signed November 2025; foundation stones laid at Deir Ezzor and Mhardeh in December 2025; turbine manufacturing slots reserved April 2026; the largest plant, North Aleppo, still pre-construction with a 2028 target); Karpowership arrangements announced January 2025 not deployed.
Bottleneck 9: Property rights and contract enforcement
Land registries were partially destroyed during the conflict. Investors therefore cannot establish clean title to industrial sites, and banks cannot lend confidently against property as collateral. Many displaced families hold no documentation for property they once owned.
The advice sometimes offered to investors, “build now, and settle the title later,” is advice they do not follow, because the cost of being ordered to vacate a factory later almost always exceeds the near-term return.
A workable design to mitigate this situation is a temporary ownership certificate that permits economic activity without prejudging contested claims. Two precedents inform the process. Rwanda’s Gacaca land verification paired community testimony with documentary evidence to confirm occupancy where records were incomplete. And Kosovo’s Housing and Property Directorate drew on satellite imagery and reconstructed registers to fix structure boundaries at given points in time. Combined, an integrated model along these lines can map what stood where through satellite imagery and confirm who lived there, and when, through community verification.
The legitimate concern is fraudulent claims or administrative abuse, but there are safeguards to minimise this: a 90-day public objection window on each certificate; registration in an online national gazette; legal standing for any claimant to contest, including from overseas; and a presumption in favour of documented pre-2011 occupancy when competing documented claims exist (this is due to prevalence of situations like owners having been coerced into selling their property during the war). For potential investors, the certificate converts open-ended tenure risk into a bounded process: a fixed 90-day objection window, public registration, then a defined judicial route for residual claims. Investors can price a defined process like this, while they cannot price indefinite uncertainty, as is the case currently. A residual claims indemnity fund, seeded by the state with international donor co-financing, would compensate successful late claimants in cash where the property has already been developed, preserving their right to a remedy without unwinding the investor’s project. The certificate thus enables activity without extinguishing prospects for contesting claims. Final title would be determined through specialized property chambers modelled on Colombia’s Restitution of Lands Unit and Kosovo’s Housing and Property Claims Commission, with dedicated judicial capacity funded as a separate request to international partners with an interest in investment.
Responsible bodies: the Ministry of Local Administration and Environment, the Real Estate Registry Directorate, the Ministry of Justice. Status quo: land registries partially destroyed; estimated millions of titles unverified; no temporary certificate framework yet established.
Bottleneck 10: Physical and soft trade and customs infrastructure
Syria’s geography constitutes a comparative advantage no other eastern Mediterranean state can match: land borders with Turkey, Iraq, Jordan, Lebanon, and Israel; two functioning Mediterranean ports; and a natural transit role linking the Gulf, the Levant, and Europe. Almost all of that transit value is not being captured. Latakia and Tartous handle a fraction of their pre-war volumes; customs procedures at every land border remain slow, paper-based, and discretionary; trade documentation is undigitized, which constrains the pace at which volumes can grow; and rules-of-origin certification is underdeveloped for the agricultural and industrial goods that are the traditional engines of Syria’s economy, eroding the preferences Syrian goods are entitled to under the Greater Arab Free Trade Area and thus also eroding the returns they might otherwise yield.
The textile sector that Aleppo’s industrialists are rebuilding cannot establish itself in Gulf and European markets if a container requires weeks to clear customs. The light manufacturing now returning to the industrial zones depends on inputs that arrive predictably and outputs that depart on the same terms.
A four-part programme would unlock this trade potential.
1) First, treat the gateway investments as the recovery’s critical path. The two signed port concessions, CMA CGM at Latakia and DP World at Tartous, represent the largest committed private capital in Syria’s trade infrastructure, and the Latakia programme reaches well inland: dry ports at Nassib and Aleppo, a Latakia–Damascus rail memorandum, and air freight at Damascus International. What these programmes need from the state is execution enablement: land access resolved, customs frameworks agreed before civil works, and a single empowered counterpart on the state side. The November 2025 unification of ports and customs into the Ports and Customs Authority, under Director-General Qutaibah Badawi, has made that structurally possible: one institution now holds the mandate for port operations, customs clearance, and the sequencing between them, which is the coordination the concessionaires need to execute against. Two principles should govern that execution. Firstly, speed as signal: these are the demonstration projects the next potential major inflows of capital is watching. And secondly, openness as durability: a gateway serving every Syrian trader on equal terms, with all projects competitively tendered, builds a network defended by thousands of businesses, and that, not exclusivity, is what makes a thirty-year commitment safe for the investor and valuable for the country alike.
2) Second, establish customs digitization: a single electronic customs declaration system across all border points, integrated with the ASYCUDA (UNCTAD Automated System for Customs Data) framework that Jordan and Lebanon already operate, and Iraq is rolling out currently, with a published target of seventy-two-hour clearance.
3) Third, trade-corridor agreements building on the April 2026 Türkiye-Syria-Jordan transport and transit MoU: a Syria-Türkiye facilitation agreement covering mutual recognition of standards and accelerated clearance at Bab al-Hawa and Bab al-Salam; a comprehensive Syria-Jordan agreement on customs harmonization, mutual recognition of standards, and transit fees and clearance times for the Nasib crossing (also including Gulf transit freight); and activation of the Syria-Iraq energy pipeline.
4) Fourth, rules-of-origin and export certification through a Syrian Export Promotion Authority empowered to issue certificates of origin recognized by the Gulf and the EU, with agricultural and textile categories given priority for their immediate recovery potential.
The fiscal logic is worth stating plainly. Customs accounted for 39 percent of 2025 revenue, so a reform that doubled customs throughput within twenty-four months would be one of the quickest routes to a sharp increase in revenue generation available to the government over the same period.
Responsible bodies: the Ministry of Transport, the Customs & Ports Authority and the Ministry of Finance (customs and trade revenue), the Ministry of Economy and Industry (trade policy), and the Ministry of Foreign Affairs (bilateral trade agreements). Status quo: Latakia and Tartous operating well below pre-war volumes; customs paper-based; no integrated electronic declaration system; bilateral trade facilitation agreements with neighbors largely lapsed, highly nascent and incomplete, or never modernized.
Bottleneck 11: An empowered Syrian private sector
The pillars above each bear on the private sector, yet two constraints rest squarely upon it. The first is the task of dismantling the cronyist political economy of the Assad period, under which the largest private firms operated as extensions of regime patronage rather than as independent commercial actors. The second is the integration of the domestic private sector that survived the war (the SMEs, the family firms, the agribusiness operators, the contractors) into a reconstruction whose planning has thus far tilted toward Gulf capital and diaspora investors.
On the first: the Makhloufs, the Hamshos, and a smaller circle of well-connected families captured the most lucrative sectors of the Bashar al-Assad economy, leaving independent business to the margins. The institutions that allow SMEs to form and compete (independent business associations, antitrust enforcement, transparent procurement, equal access to credit) were left deliberately underdeveloped, since a regime sustained by patronage had no reason to build them. A meaningful share of those networks remains active within the country, competing for the very openings new entrants require.
The risk sits closer to the centre of the new transitional framework than is comfortable. The 2025 Investment Law 114, on which several of the reforms above rely, concentrates two of the most valuable levers in the economy under the presidency: the allocation of state-owned land, through the Supreme Council for Economic Development, and the granting of investment licenses, through a strengthened Syrian Investment Authority. A framework that grants generous, and in places open-ended, concessions while retaining executive control over who receives them can reproduce the patronage economy under new management as readily as it can replace it. The competition policy, the independent associations, and the domestic-content rules proposed below are, in part, the safeguards against that outcome. Without them, Investment Law 114 risks becoming the instrument of the very capture this bottleneck is meant to prevent.
In terms of the second constraint: the businesses that endured the war understand the country in ways diaspora returnees and Gulf financiers cannot readily replicate, drawing on working supplier networks, governorate-level knowledge, relationships of trust that survived the conflict, and a workforce already on the payroll. Most reconstruction discussions to date have not seated domestic SMEs at the table, and the risk is a reconstruction designed for foreign capital and elite returnees that sidelines the operators already on the ground and already employing the bulk of the workforce.
A single integrated programme, comprising five components, addresses both constraints:
1) A published competition policy that identifies patronage practices and prohibits them, with enforcement vested in an independent Syrian Competition Authority, the structural counterpart to the transparency reforms set out in Bottleneck 3.
2) Independent business associations established sector by sector, under elected rather than appointed leadership, and empowered to participate in the regulatory and procurement decisions that affect them.
3) Domestic-content requirements within major reconstruction contracts, accompanied by mandatory SME participation thresholds in the PPP frameworks under Decree 114/2025, on the model of the EU’s small-business participation rule in public procurement.
4) A $500 million SME wholesale credit facility, co-financed by the IFC, EBRD, and the Islamic Development Bank and channeled through Syrian banks once correspondent relationships are restored, with an explicit allocation to firms that operated continuously through the war.
5) A supplier-development programme linking returning Gulf and diaspora capital to domestic operators capable of supplying goods, services, or components, modelled on the supplier-linkage programmes the IFC has supported in Turkey, Egypt, and Morocco.
The case for prioritizing this constraint is, equally, a case about employment. Large reconstruction projects employ hundreds, occasionally thousands. The number of such projects will not reach high enough to approach the two to three million formal jobs Syria must create over five years. That volume will come instead from the growth of the private sector, including the SMEs that already operate but lack the institutional environment they need to scale.
Responsible bodies: the Ministry of Economy and Industry (private-sector development policy and competition framework), the Syrian Investment Authority (PPP frameworks and supplier integration), the Central Bank of Syria (SME credit facility), and the Ministry of Justice (antitrust enforcement). Status quo: no published competition policy; no independent Competition Authority; no domestic-content requirements in PPP contracts; no integrated supplier-development programme; SME credit channels disrupted by sanctions-era banking dislocation, currently being rebuilt.