International Monetary Fund (IMF) experts’ visit to Syria in mid-July 2026 and its subsequent report published a few weeks later in August has been celebrated by various Syrian authorities and officials for strengthening “confidence in reforms guiding Syria’s economic recovery path”. Syrian Finance Minister Mohamed Yisr Barnieh for instance welcomed the IMF’s assessment of improved growth and fiscal performance, stressing that the evaluation represents an important message that reinforces confidence in the reforms the government is implementing to restore macroeconomic stability and support recovery.
IMF’s visiting team report announced that growth in 2026 “is expected to reach 10%”, because “agriculture is recovering strongly with improved rainfall, hydro-carbon production and electricity provision are expanding, and trade and services continue to grow”. The report adds that “growth is projected to remain strong in 2027”. The Finance Minister announced a growth of 11.3% for 2026 and 9.7% for 2027. However, the international financial institution (IFI) does acknowledge that this growth is “uneven across regions” and “poverty, while somewhat reduced, remains widespread”. Moreover, it points out that inflation has increased in 2026 because of “the impact of higher import prices, notably for fuel and food, as a result of the regional conflict”, “strong domestic demand, including from public sector wage increases”, and “higher utility prices”.
The IMF however praised the Syrian government’s fiscal performance for the 2025 budget small surplus, and for restraining “the spending to the limited resources available and with spending focused on meeting essential needs”. In addition, it also positively assessed the potential increase in revenues in 2026, based on “tax and customs revenues already realized in the first half of the year and owing also to rising hydro-carbon revenues, as well as some one-off revenues, including from telecom license and fuel transit fees”. The IMF report concluded by stating that “further improvement in revenue mobilization and spending prioritization is critical to create the fiscal space needed to create room for development spending and to enhance the social safety net to protect the most vulnerable segments of the population”.
The report mentions the need as well for continued “international financial support” and “to accelerate efforts to rehabilitate the banking system, enabling it to fulfill its essential role in financial intermediation and facilitating payments, both domestically and internationally, as well as to provide the central bank with an effective mechanism for the transmission of monetary policy”.
Alongside latest IMF team report, the World Bank extended its fifth grant in August to Syria since the fall of the Assad’s regime, a $100 million grant from the International Development Association (IDA) to support Syria in building the foundations of a modern, secure, and digitally-enabled financial sector, following support for electricity, health, water, and public financial management. The latest grant by the financial institution brought the total amount to $491 million. The World Bank states on its website that “Since early 2025, Syria has advanced a broad reform agenda aimed at modernizing institutions and supporting economic stabilization and reconstruction”.
Both the World Bank and IMF re-established their relations with Syria following the fall of Assad's regime in December 2024 and the country’s progressive reintegration in the regional and international political scene, accompanied by a progressive removal of international sanctions. In mid-April 2025, Syria’s former central bank governor and finance minister attended the International Monetary Fund and World Bank Spring Meetings for the first time in more than two decades. A few weeks later, Saudi Arabia and Qatar announced they would settle Syria’s arrears to the World Bank, totaling roughly $15 million. Clearing these arrears allowed Syria to resume access to the bank’s financial support and technical assistance. In early June 2025, an IMF delegation visited Syria for the first time since 2009, meeting with officials from both the public and private sectors, including the finance minister and former central bank governor.
While this rapid rapprochement with these key International financial institutions (IFI) is connected to Syrian ruling authorities’ foreign policy strategy to root the country in a US led alliance with its regional allies, the close collaboration with these institutions have of course impacts on the country’s economy.
This raises questions as both institutions had advised and made recommendations to Syria in the 2000s. Indeed, unlike his father, Bashar al-Assad had allowed the World Bank and the IMF to intervene in the process of economic liberalization through advisory and analytical services.
IMF and World Bank, and Syria’s economic liberalisation
Both actors were rather positive in their assessment of Syrian liberalisation economic reforms in the 2000s, including establishment of private banks and development of a private financial system, trade liberalization, reduction of corporate taxes, and processes to encourage flexibility of the labor market and privatization of state-owned enterprises (notably through PPPs), etc… The IMF encouraged in its report in 2008 the continuous “efforts to transition toward a market-based economy” in “enhancing the business environment by modernizing and streamlining the regulatory framework, and further liberalizing trade”. The World Bank praised the observer status in WTO obtained by the Syrian authorities in May 2010 and the conclusion of various free trade agreements (Greater Arab Free Trade Area Agreement, GAFTA, and with Turkey) and Association Agreement (AA) with the European Union as a “good indication of Syria’s intention of integrating into the global economy to take advantage of growing international trade”. This regardless of the negative impacts of this trade liberalization on Syrians SMEs in the manufacturing industry unable to compete, many of them had to close their enterprises.
Similarly, both IFI made repeated calls for “fiscal consolidation” throughout the 2000s, in other words austerity policies including promoting processes to end subsidies, and downsize the role of the state in the economy, including through a hiring freeze in the public sector and a reduction of the state’s role in domestic investment. The IMF argued to further reduce “petroleum subsidies” in order to ultimately put an end to them, launching a VAT, continuing “to restrain public expenditure” and encouraging public-private partnership agreements. The World Bank on its side saw negatively the lack of flexibility of labor markets in Syria by stating that “On the Doing Business 2005 “difficulty of firing” index, Syria ranks behind the MENA average. This may limit the ability of firms to adjust their labor force and skill mix in response to market conditions, and to motivate workers to perform well”. The former Syrian government regime took into consideration these comments in Labour Law No. 17, promulgated in 2010, which regulates the relations between workers and employers in the private, public-private, and cooperative sectors. This law clearly favoured employers at the expense of workers, as Article 64 thereof notably granted employers the right to dismiss their workers without any justification and with very limited compensation. In addition, while the right to collective bargaining is officially recognised in Labour Law No. 17, the Ministry of Social Affairs and Labour (MoSAL) retained wide prerogatives and powers to deny and contest the registration of finalised collective agreements. Furthermore, while strikes are not officially prohibited in the private sector, the right to strike is commonly undermined by the prospects of punitive measures and fines.
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Both IFI also celebrated the expansion of the Syrian GDP from $28.8 billion in 2005 to $60 billion in 2010, and the country’s yearly average growth reaching 4.3%. But the questions to ask of who benefitted from this growth was never asked. Far from appealing to working-class Syrians battered by inflation and rising living costs, these developments catered to elite Syrian circles and foreign investors, particularly from the Gulf and Turkey. In 2007, the percentage of Syrians living below the poverty line was 33%, representing approximately seven million people, while 30% of Syrians were only just above this level. This represented a large shift from the late 1990s, when only 14.3% were recorded as living below the poverty line. Poverty was concentrated particularly in rural areas, with 62% of Syria’s impoverished living in rural areas compared to 38% in urban areas as of 2004. Concurrently, rural areas accounted for just over half of Syria's total unemployment.
At the same time, while the World Bank argued to advocate for a robust investment climate, because «the economic literature makes clear that economic growth, led by the private sector, is the primary vehicle by which employment and income expands», this was not reflected throughout the 2000s in Syria. The labor force participation rate for people aged 15 years and above actually declined from 52.3% in 2001 to around 42.7 and 43.5% in 2010. This was a direct result of the failure of the neoliberal policies of the Assad’s regime, unable to absorb potential entrants to the labor market, especially young graduates. The Syrian economy created only 400,000 net jobs between 2001 and 2010, at an annual growth rate of 0.9% , which resulted in a decline of the employment rate from 47% in 2001 to 39% in 2010. Labor force participation fell across both rural and urban sectors, with rural areas experiencing the sharpest decline.
In other words, the liberalization of economic policies led to unprecedented impoverishment with wealth inequalities continuing to increase, while processes of privatisation created new monopolies in the hands of relatives and associates of Bashar al-Assad and the regime.
Moreover, these neoliberal policies actually led to a new phase of “upgraded authoritarianism” and did not at all lead to a process of enhancing an “independent middle class or capitalists” who were supposed to challenge dictatorships and lead to democracy, a discourse promoted by academic literature throughout the 90s and onwards, by international financial institutions and some Western states, especially US governments that combined the expansion of neoliberal policies with the so-called “democracy” promotion agenda in the Global South.
Under these conditions, those marginalized by economic liberalization, particularly the working and lower-income classes in provincial towns and agrarian communities, formed the vanguard of the uprising. A toxic mix of political repression, deepening poverty, rampant corruption, and severe social inequality prepared the ground for the popular insurrection that was waiting for a spark.
However, just as elsewhere in the MENA region, both the World Bank and IMF, were incapable of understanding the roots of the revolt in Syria. The IMF published a report in 2016 describing Syria’s economy prior 2011 as stable with robust growth. Although the report noted the sharp rise in poverty, unemployment, and regional inequality, it drew no connection to the damaging effects of economic liberalization. Rather, it pivoted toward factors it had previously overlooked before 2011, such as the lack of political reform and legal accountability. This rhetoric served primarily to insulate the institutions' free-market orthodoxy rather than offer a genuine critique of their pre-war economic strategy.
Reflecting this pattern of elimination neoliberal economic policies as one of the main source of the regional uprisings in 2011, a statement of the World Bank in October 2015 declared:
“Judging by economic data alone, the revolutions of the 2011 Arab Spring should have never happened. The numbers from the decades before had told a glowing story: the region had been making steady progress toward eliminating extreme poverty, boosting shared prosperity, increasing school enrollment, and reducing hunger, child and maternal mortality. Reforms were underway and economic growth was moderate. And then, in late 2010 and early 2011, millions of people poured onto the streets of major cities in the Middle East and North Africa (MENA), calling for change, and the Arab street began to tell a story that standard quantitative indicators had not foreseen”.
Moreover, another report of the World Bank in 2016 analysing the eruption of the Arab uprisings states “the study rules out high and rising inequality as a reason for the Arab Spring uprisings. Economic indicators tracking income growth, poverty rates, and expenditure or income inequality also presented a favorable picture and suggested that the autocratic Arab regimes had delivered on economic, human development, and shared prosperity goal. One could have concluded that the benefits of economic growth were broadly shared in the Arab world”. The report argues instead that it was rather the middle classes’ discontent at not getting what they considered to be their fair share of the abundance.
The WB and IMF were actually very far from the reality in ignoring rising poverty, social inequalities and concentration of wealth in a small elite making the MENA region the most unequal one in the world. These IFI failed to see that the profound causes of the long-term economic blockade affecting Syrian and regional societies and the subsequent uprisings were rooted in the specific modalities of the dominant capitalist mode of production in the Arab region dominated by short term profit in nonproductive sectors of the economy and the neoliberal inheritage of these past decades. Behind the appearances and decent macroeconomic performance, all countries in the MENA region suffer from similar symptoms. These economies are characterized by a polarization in limited sectors, very low employment rates associated with extremely high rates of skilled migration, rentier-based management of resources (including non-natural resources), and corruption organized by a clannish oligarchy.
Expect different results with similar strategies
Karl Marx wrote “all great world-historic facts and personages appear, so to speak, twice… the first time as tragedy, the second time as farce”.
It is unfortunately not a farce: the WB and IMF maintain similar political economic orientation, including in compelling regional countries to apply the same policies that were at the root causes for the uprisings and even deepening them. They indeed still argue that large sectors of the economy are in need of privatization, in favour of trade liberalization and more favourable regulations to attract foreign investment, austerity measures, including halting subsidies.
This is no different in Syria today. Indeed, how to interpret “there is a need for continued sound fiscal and monetary policies”, other than pursuing austerity measures, such as cutting subsidies. The improvement of “Fiscal performance”, as described by the IMF, which was achieved mostly in large parts through subsidy cuts, reductions in public spending and investment, favors such a fiscal and economic orientation, regardless of the impacts on the population and rising cost of living. The rise in prices of key commodities and services has also contributed to increasing inflation, pushing the cost of living higher still for Syrians. Whilst the authorities raised public-sector salaries and pensions by 200% in July 2025, and by a further 50% in March 2026 – bringing the minimum wage to SYP 1,256,000 per month (approximately USD 114) at this period – this remains far from enough to guarantee dignified living conditions. According to the Syrian Center for Policy Research “The poverty line for a household reached SYP 3.11 million per month in February 2026, while the lower poverty line stood at SYP 4.89 million, and the upper poverty line at SYP 6.76 million”. Large segments of society rely on remittances from relatives abroad amounting to around $4 billion annually, according to estimates from earlier this year.
Alongside these dynamics, the IMF expects inflation “to slow in 2027, provided import price pressures ease and sound fiscal and monetary policies are pursued”. The current monetary management by the Central Bank to stabilize the dollar exchange rate, and therefore connected to its inflation dynamics, has been to lock up liquidity with dire impacts on the national economy, which among its many negative impacts weakens the ability to promote a policy of provisions of loans to SMEs and therefore create a major obstacle to national economic recovery.
Meanwhile, the IMF states that “the authorities are rightly focusing on further improving revenue mobilization, through tax reform and strengthening tax and customs administration”. Nonetheless, the mobilisation of revenues has mostly concentrated on indirect taxation and customs duties connected to consumption and trade. Tax revenue compared with gross domestic product remains very low compared with other countries, amounting to no more than 3.5% of GDP, according to a statement of the Syrian Finance Minister in May 2026. In the first 6 months of 2026, customs duties represented the largest source of state revenues at USD 1.079 billion, or around 40% of total revenues, while taxes and non-customs fees generated only USD 252 million, only 9% of total revenues.
The draft of the new tax system established by the Syrian Ministry of Finance and coming into force at the beginning of 2027, will probably diminish even further state’s financial capacities and revenues. Indeed, the new tax system with its unified and non-categorical tax structure, weakens the ability to expand the revenue base and is fundamentally unequal. Taxpayers have been categorized according to the nature of their activity, and a maximum tax rate of 15% has been set for the business sector. Yet, this rate does not apply uniformly to everyone. Certain sectors benefit from discounts and exemptions, which can reduce the tax rate to zero in some cases. Industrialists, for example, can benefit from discounts that lower the rate to around 9%, depending on their location and number of employees. This sectoral differentiation aims to reduce the burden on certain categories of capital rather than increase it, aligning with the system's overall objective of stimulating investment. Agriculture, bank deposit returns, and stock trading are exempt from taxation, while a 2% rate is applied to supplies and services provided by non-residents. Individual income tax will only be applied for annual income over 64 million Syrian pounds (equivalent to around USD 4,830 for 13,250 SYP for one USD in mid August 2026), with very low rates imposed on higher income brackets, ranging from only 2.5% to 5%.
Similarly, the new Investment Law No.114 enacted by presidential decree in June 2026 provides large concessions to investors, such as permanent exemption from income taxes for agricultural and educational projects, reductions of up to 80% of income taxes in export-oriented and priority industrial sectors, and wide customs exemptions. In addition, full ownership rights are allowed for foreign investors, as well as renewable residence permits, and unrestricted profit repatriation.
Syria's new tax system and investment law reflect the ruling authorities' prioritization of investment from large foreign companies and high-net-worth individuals, as well as promoting dynamic consumption, rather than strengthening the country's productive capacities. This dynamic is also reflected in the reliance on foreign capital and assistance, as well as local businessmen, to promote Syrian reconstruction and economic recovery through foreign donations or donation campaigns, such as the Syrian Development Fund and other initiatives for specific regions and cities. Accompanying these policies favoring economic liberalization and interests of big capital, the ruling authorities have promulgated a series of decisions and measures boosting dynamics of concentration of power in the Syrian economy.
The promotion of “Syria’s re-integration into the international financial system and facilitating much-needed investment and financial flows" is also seen as an important step forward for the country’s economic recovery. Syria has recently adopted a new legal and regulatory framework for electronic payments and money transfers, representing a new step in the authorities’ efforts to expand electronic payment options and reduce reliance on cash. While it could facilitate the transfer of remittances from abroad through electronic channels and potentially reduce their costs, these measures for the development of electronic/digital payments are faced with many challenges and limitations connected to the infrastructures required to support such expansion. In addition, several structural challenges exist such as the low proportion of Syrians with bank accounts and limitations of the national financial and banking system. This does not challenge the structural problems of the Syrian economy, including lack of development of productive economic sectors and low purchasing power. For instance, the rollout of Visa and Mastercard payments was hailed as a milestone in Syria’s global financial reintegration, but its reach is fundamentally exclusionary. In reality, it benefits only a narrow elite with the wealth and access required to obtain and use such cards.
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In a parallel development, the steady easing of sanctions and Syria's reintegration into the global banking system pave the way for international credit, unlocking loans from private investors and global institutions alike. The more recent example is the loan of a $7 billion led by US bank JPMorgan Chase, with the participation of major Gulf financial institutions, including Qatar National Bank (QNB) and Abu Dhabi Commercial Bank to the Qatari Power International Holding – owned by the influential Khayyat family who are very close to the new ruling authorities and whose influence is continuously growing in Syria, both economically and politically, – to build several energy and transport infrastructure projects in Syria. While reconstruction of essential infrastructures is absolutely needed, there are several issues to be raised regarding this loan. First, it consolidates the privatization of essential energy assets and services in the hands of private actors, allied to the new current ruling authorities, without any transparent process. Secondly, it could result in further increase in electricity prices to cover the costs. In addition, a large part of the loan will most probably be spent outside the country to purchase equipment and different types of supplies from foreign companies, while within Syria the rest of the funds will be disbursed on local labor and contractors, and construction materials such as cement and steel. In other words, the $7 billion loan will not be invested completely in Syria.
Building on these shortcomings, IMF and Syrian Finance Ministers announcements of a growth exceeding 10% should raise questions. First on the methodological issue to reach such a number. While refugee returns and a resurgence in trade certainly contributed to this uptick, a substantial share of the growth stems from territorial recapture, specifically the Syrian government expanding its footprint back into the northeast between 2025 and 2026. This means that their economic activity was not previously included in the GDP and has now been added to the current figure, as the mention of the “increase in hydrocarbon production” points to. This does not therefore represent genuine "growth” in economic terms, it is merely a statistical expansion with the inclusion of the reintegrated areas.
Then the question would be: who benefits from this economic growth? Again, only a small minority of the elite, mostly connected to the new ruling authorities, and certainly not the vast majority of the Syrian population living under the poverty line and suffering from low wages and salaries, rising electricity prices, and cuts on key essential subsidized goods such as oil derivatives and bread.
Another question to raise is how this growth was created and how sustainable it is. The IMF and Syrian Minister of Finance pointed to recovering agricultural production, but as explained by both actors is connected to good rainfall and not to any structural changes and ameliorations in agricultural production. The sector is on the opposite facing structural challenges connected to higher cost of production, especially linked to rising prices in oil derivatives, fertilisers and electricity because of cuts in subsidies and government support, accumulation of debts, climate change, etc. pushing many farmers and peasants to sell and leave their lands.
Meanwhile, the “expansion of hydrocarbon production” is not the result of a major increase in real production as mentioned earlier, and does not constitute a productive growth leading to the creation of jobs on a significant scale. Both the IMF’s report and Syrian finance Minister also explained that the growth was particularly concentrated in the services and trade sectors.
Though important to diversify the country’s sources of revenues, there are shortcomings in promoting a model of economic development based primarily on commercial and renting dynamics, accumulating capital by merely owning and controlling scarce assets, or seeking to attract FDI at all costs, and diverting capital from productive investment. In addition, such policies increase the country’s dependence on foreign actors and dynamics, rather than promoting an economy rooted in its own national productive capacities.
These patterns of growth resemble the 2000s, based on rent-based dynamics, dependent on oil-export revenue, capital inflows, including FDI in trade, services and finance, and remittances. The Syrian economy was increasingly rent based, the share of productive sectors diminished from 48.1% of the GDP in 1992 to 40.6% in 2010, while the share of wages from the national income was less than 33% in 2008-2009, compared to nearly 40.5% in 2004, meaning that profits and rents commanded more than 67% of the GDP. Today, wages represent around 10% of national income and profits and rents the rest.
Economic policies of the Syrian ruling authorities hailed as positive by the IMF and WB have actually worsened the conditions to re-develop productive sectors, both agriculture and manufacturing industry, following the suppression of subsidies on key commodities, rising electricity prices, and trade liberalization leading to a surge in competition of foreign products in the national market. These dynamics are certainly not a strong basis to foster a successful economic recovery and reconstruction process.
It is therefore not a surprise that both the IMF and WB completely ignore the rising discontent of the population when it comes to socio-economic issues since the beginning of the year as reflected with rising labour strikes and protests denouncing worsening working and living conditions. This is without mentioning the lack of reforms to democratize the political system and make it more inclusive and transparent. Similarly no words on the lack of transparency regarding economic deals and allocation of contracts, which have benefitted local and foreign actors allied with the current ruling authorities.
Polling in different areas of Syria has actually been showing growing dissatisfaction regarding socio-economic issues. According to the website Syria in Transition, “Yet by April the mood had changed (towards the ruling authorities). The most serious deterioration was in attitudes toward the economy and the state’s capacity to manage it. Only 13% of respondents now believed the government was doing enough to tackle soaring energy and food prices, while 66% said its efforts were insufficient”.
The Syrian Initiative for Fundamental Rights (SIFR), which is an independent Syrian coalition monitoring the alignment of laws and public policy with international human-rights standards, have also rightly expressed in the end of April 2026 “concern regarding the nature and substance of this engagement, particularly in light of statements and reports by international financial institutions that present current economic performance and policies as indicators of recovery and stability”. The SIFR also adds that the economic approach of the IMF “cannot be understood in isolation from past experiences” and pointing out that prior 2011, “similar policies — including non-gradual trade liberalization, reductions in subsidies on essential goods without effective social protection mechanisms, and the expansion of the private sector’s role within an environment dominated by networks closely linked to those in power — received international support, despite being associated with an authoritarian context and rising social inequality”. The coalition ends its statement by stating that “Approaches that achieve superficial stability in financial indicators while deepening poverty, weakening production, and concentrating wealth and power do not constitute recovery. Instead, they pave the way for renewed grievances and instability. If international financial institutions are genuinely committed to supporting peace and development, they must move beyond narrow economic indicators and adopt a political economy as a framework for analysis and evaluation - one that takes into account the distribution of power and resources, the social and environmental impacts of reforms, and identifies who bears their costs and who benefits».
Alongside legitimizing and boosting the regional authoritarian ruling political system, the neoliberal dogma promoted by the IMF and World Bank needs to be challenged because we know their results and impacts on the economy and populations in Syria and elsewhere. This is a recipe for a renewed catastrophe. We can ignore this, otherwise as this famous quote (misattributed to Einstein) says this is insane. “The definition of insanity is doing the same thing over and over again and expecting different results”.
