Syria’s War Economy

In a policy brief for the European Council on Foreign Relations, Jihad Yazigi, the editor-in-chief of The Syria Report, argues that against the backdrop of armed conflict Syria is seeing the spread of a war economy, which both feeds directly off the violence and incentivises continued fighting. He also says:

– The Syrian economy has witnessed four stages of decline provoked by the outbreak of the conflict, the imposition of sanctions, the expansion of fighting into the country’s economic powerhouses and the opposition seizure of the resource-rich northeast. Nonetheless, regime-controlled areas remain resilient particularly because of the critical support provided by domestic and international allies.

– The expansion of the war economy in opposition-controlled areas has been fuelled by the intra-rebel fight for lucrative resources such as oil fields and grain stores, but the rise of state militias and the impact of sanctions have also created powerful new networks on the regime side. A growing number of groups on both sides of the divide now reap significant material benefit from the conflict, which gives them a powerful incentive to prolong the fight.

– The relative autonomy gained by local stakeholders is creating new power centres that are likely to clash with any future central government. The entrenched fragmentation of the economy means that areas controlled by the regime and the opposition have become increasingly disconnected.

– However, the fragmentation of the economy could also be part of a solution to the crisis: Europeans and other international actors should consider an approach built around a decentralised political system as a way of appeasing the fears of all sides and providing a means of working towards a new national consensus from the bottom up. 

Read the full report on ECFR’s website (pdf)