War has left Syria ‘on brink of economic collapse’

Groups such as Isis have established their own administrative structures

George Devereau
Monday 22 June 2015 23:26
Comments
A new report says that the Syrian economy has retracted by over 50 per cent in real terms, as outward migration and an estimated 250,000 deaths have caused Syria’s population to fall by more than 15 per cent
A new report says that the Syrian economy has retracted by over 50 per cent in real terms, as outward migration and an estimated 250,000 deaths have caused Syria’s population to fall by more than 15 per cent

Syria is heading towards economic collapse after four years of war, a report by a leading British think-tank says.

In a report published today, Chatham House says that the Syrian economy has retracted by over 50 per cent in real terms, the Syrian pound has lost 80 per cent of its value and inflation has averaged 51 per cent.

Outward migration and an estimated 250,000 deaths have caused Syria’s population to fall by more than 15 per cent, from 21 million to 17.5 million.

With a sharp drop in output in the energy and manufacturing sectors, agriculture now accounts for a greater percentage of the nation’s overall output, Chatham House said. But overall food production has fallen sharply due to the conflict. David Butter, the author of Picking up the Pieces, said the economic failure could lead to military collapse within the Syrian army.

“During the first half of 2015 the regime has shown increasing signs of strain on both the military and the economic fronts,” he said. “This gives rise to the question as to whether a dramatic worsening in the economic situation may be the catalyst for the regime’s military collapse or for an externally imposed political settlement against Assad’s wishes, or whether further military setbacks might be the catalyst for the regime’s economic collapse.”

The Syrian regime has suffered several setbacks in recent months, including the loss of the city of Idlib to an alliance led by the al-Qaeda-linked Jabhat al-Nusra. A recent recruitment drive failed to raise enough new men for the army, and the government is relying on foreign fighters to fill its ranks.

The Chatham House report said that while Syria continues, in some capacity, to operate under central government in Damascus, its economic reach has diminished severely.

Groups such as Isis have established their own administrative structures, resulting in a ‘war economy’ in which the government’s control has weakened. This has led to an increased reliance on foreign aid, particularly from Iran, whose credit and oil supplies enable imports of commodities and equipment into Syria, but which come with political and economic conditions.

Register for free to continue reading

Registration is a free and easy way to support our truly independent journalism

By registering, you will also enjoy limited access to Premium articles, exclusive newsletters, commenting, and virtual events with our leading journalists

Please enter a valid email
Please enter a valid email
Must be at least 6 characters, include an upper and lower case character and a number
Must be at least 6 characters, include an upper and lower case character and a number
Must be at least 6 characters, include an upper and lower case character and a number
Please enter your first name
Special characters aren’t allowed
Please enter a name between 1 and 40 characters
Please enter your last name
Special characters aren’t allowed
Please enter a name between 1 and 40 characters
You must be over 18 years old to register
You must be over 18 years old to register
Opt-out-policy
You can opt-out at any time by signing in to your account to manage your preferences. Each email has a link to unsubscribe.

Already have an account? sign in

By clicking ‘Register’ you confirm that your data has been entered correctly and you have read and agree to our Terms of use, Cookie policy and Privacy notice.

This site is protected by reCAPTCHA and the Google Privacy policy and Terms of service apply.

Join our new commenting forum

Join thought-provoking conversations, follow other Independent readers and see their replies

Comments

Thank you for registering

Please refresh the page or navigate to another page on the site to be automatically logged in