Sophie Fullerton is a political scientist and human rights researcher based in New York who has written for The Washington Post, the Index on Censorship and other outlets.
Rena Netjes is a Dutch journalist and researcher who has reported extensively from Syria throughout its war. She was previously the Cairo correspondent for Parool newspaper and BNR radio in the Netherlands.
On May 13, U.S. President Donald Trump suddenly announced a "cessation" of sanctions during a major speech in Riyadh. The Syrian diaspora in the United States, Saudi Arabia, Qatar and Turkey has tirelessly advocated for sanctions relief for months after the shock collapse of the former Assad regime in December 2024. The decision possibly marks the start of a long-awaited reprieve from the widespread economic collapse plaguing Syria today. Thus, immediately after the announcement, Syrians across the country took to the streets to celebrate.
"It is truly a historic decision. It was a dream for Syrians—a dream far out of reach when the previous regime was still there. It was the dream of all Syrians that Syria would become productive and take its place in the international community. It is truly a historic moment, and I describe it as a just and humanitarian decision. The Syrians have suffered a lot for more than 60 years, and thanks to Saudi Arabia, Qatar and Turkey, we have managed to achieve this," Syrian Economy Minister Mohamed Nadaal Al-Shaar said in a TV interview on Syria TV in response to the decision.
Lifting sanctions would significantly boost foreign trade. In January 2025, the U.S. Treasury Department issued General License 24, a six-month sanctions waiver designed to ease restrictions on humanitarian aid and essential services. But future U.S. investments hinge on whether the new Syrian Transitional Government aligns with Western values and demands—including its stance on Israel's occupation of Syrian territory and its approach to the country's ethnic minorities.
While the West has been slow to act, experts and activists agree that lifting sanctions is essential. In February 2025, EU nations suspended—but did not lift—certain sanctions on energy, transport and reconstruction. While EU officials are discussing further sanctions easing after confirming a desire to lift sanctions fully, uncertainty remains over whether exports to the EU will resume quickly. Meanwhile, Israel lobbied the United States to maintain sanctions and continue its support for the Syrian Democratic Forces (SDF), likely to advance ethnic divisions in the country given its fear of a stable, unified Syria. From Israel's perspective, this outcome could challenge its illegal occupation of the Golan Heights.
It is truly a historic decision. It was a dream for Syrians—a dream far out of reach when the previous regime was still there. It was the dream of all Syrians that Syria would become productive and take its place in the international community.
- Syrian Economy Minister Mohamed Nadaal Al-Shaar
The Trump administration will announce a 180-day Caesar Act sanctions waiver—a sweeping law the U.S. Congress passed in 2020. "If we make enough progress, we'd like to see the law repealed, but we're not there yet. That's premature," U.S. Secretary of State Marco Rubio said about progress on the list of conditions the State Department gave Syrian Foreign Minister Asaad al-Shaibani in Brussels earlier this year. Trump reiterated some of those conditions when he met Syrian Interim President Ahmad al-Shara'a in Saudi Arabia, according to the White House.
These conditions include ensuring the protection of minority groups, fighting remnants of the Islamic State, and removing all foreign fighters. However, some of these individuals have been integrated into high-ranking military roles. This group includes radicals potentially implicated in the massacre of hundreds of Alawites following attacks by Assad loyalists on Shara'a's forces in March.
These major diplomatic currents occur in the shadow of Syria's widespread economic malaise During a visit to Syria in April 2025, we met engineer Fadi al-Azar, a Catholic Christian from Izra, Daraa. He now lives with his family in Bab Touma, a Christian neighborhood in Damascus. In explaining the sanctions situation, he said "I am a partner in a construction company. Now, it is at a standstill. Hopefully, we can start again soon. The sons of this land do not have enough freedom to send money to Syria or to take money out of Syria."
Syria is excluded from the Society for Worldwide Interbank Financial Telecommunications (SWIFT) system, as the organization implements sanctions imposed by the EU and Belgian authorities, severing it from the global banking system. "If someone wants to deposit $2 billion, no one carries that in cash. You need a functioning banking system for transactions," according to economic researcher Osama al-Qadi in media interviews.
This situation hampers payment, import and loan capabilities. Huseyin Eissa, director of the Chamber of Industry and Commerce in Syria's al-Ra'y, shared this sentiment in two interviews with these authors. "We need foreign currency," he said. "We need to expand. We are excluded from the SWIFT system, and this is a disaster."
Now, after the sanctions announcement, the governor of the Central Bank in Damascus announced on May 15 that work has started to rejoin the SWIFT international payment system, enabling bank transfers important for investors and ordinary Syrians.
"The impact was already felt yesterday in the streets and in the squares. Today, Syrians expect us to start a new economic journey, and this affects the psychology of the citizen, and of the trader and of the investor, who hesitated to come to Syria. Today, the decision has been made—the doors are open," Syrian Finance Minister Mohamed Yaser Burnieh said in an interview to Syria TV on May 14. "We were the country with the most severe sanctions. Optimism is very important."
Western sanctions remain the primary obstacle to this recovery and transition. The Caesar Sanctions—once supported by anti-Assad Syrians—have morphed into a particularly significant barrier.
- Rena Netjes and Sophie Fullerton
Immediately after the fall of former President Bashar al-Assad on Dec. 8, Syria's new caretaker government announced plans to transition from a state-controlled economy to a liberal model based on free-market competition. This resonated with Syrians long ravaged by the Assad regime's corruption—a major contributor to the nation's deep poverty. The term "socialism" holds a toxic reputation in Syria after decades under the so-called Arab Socialist Ba'ath Party.
"The situation in former regime areas is disastrous," says Eissa. "You can recognize who has lived in the liberated areas for years by the clothes—by the shape of the body." In parallel, rebel-held areas achieved fragile economic stability in part by adopting the Turkish lira and attaining freedom from Assad's corrupt oversight. Many Syrians now hope these zones' successes will spread nationwide, but concerns linger over entrenched patronage networks and the massive challenge of liberalization.
Western sanctions remain the primary obstacle to this recovery and transition. The Caesar Sanctions—once supported by anti-Assad Syrians—have morphed into a particularly significant barrier. Named after a defector who smuggled thousands of photos documenting torture and murder in Assad's prisons, the sanctions aimed to isolate the old regime. "The original Caesar Act was enacted to punish a dictator—a criminal who violated the rights of his people. Now, those circumstances have changed," argues al-Qadi.
Syrians in the country widely echoed this sentiment to one of these authors during her recent travels throughout Syria in December 2024 and April and May 2025. "We were in a rotten situation. It wasn't normal at all. Sanctions need to be removed," stated a Christian restaurant and hotel owner from Bab Touma, Damascus, in December.
To be sure, sanctions are not the only cause of economic collapse. Years of bombardment, corruption and warlordism dissuaded investment. But sanctions compounded this hardship by intentionally blocking trade and restricting financial transactions. As such, local businesses struggle to import materials and process payments. Medium-sized businesses, the backbone of the economy, face difficulties securing loans and conducting cross-border transactions. In Damascus, hotel owner Emad, who reopened after Assad's fall, said, "We were in a terrible situation—completely abnormal. The most important thing is lifting the sanctions."
It is in this context that the new government inherits a country in ruins. The United Nations reports that upwards of 200,000 refugees returned by mid-January 2025—encountering a shattered economy with little opportunity. Some 400,000 Syrians have returned from neighboring countries since Assad's fall, according to U.N. Refugee Agency estimates. In parallel, more than one million internally displaced people (IDPs) within Syria have returned, bringing the total number of Syrians who have gone home to over 1.4 million. In former regime areas, electricity is often available just two or three hours a day.
In May, the situation in Damascus improved somewhat, depending on the region. A young Kurdish-Arab woman told the author that they now had eleven hours of electricity in Dumar, an area outside the city center. "Damascus is still semi-habitable. The electricity and heating are such a mess," one Syrian noted in February.
In December 2024, the World Food Program reported that over 90 percent of Syrians lived below the poverty line—less than $2.15 a day. Many Syrians survive on one meal a day. When one author arrived in downtown Damascus shortly after Assad's fall, unwashed children and adults in tattered clothes swarmed her, begging for money. She witnessed similar scenes in Homs.
To advance economic liberalization efforts in this difficult context, the government is appealing to expatriate Syrian businessmen. However, its grip on key sectors like oil and telecommunications has deterred free-market advocates. Monopolies like Watad Oil and SyriaPhone—controlled by figures close to the new leadership—spark fears of Assad-era patronage persisting.
Infrastructure challenges further complicate economic recovery. Infrastructure untouched by bombs remains dilapidated, lacking serious maintenance or updates since the 1950s. "Put yourself in the position of a businessman," al-Qadi says. "If you want to invest billions in production, you need electricity, water, communications and a functioning banking system. None of this is easy in cash-driven Syria."
Yet, despite ongoing hardship, northern Syria shows glimmers of revival. Before Assad's fall, areas like northern Aleppo and Idlib—outside regime control since 2012 and cleared of the Islamic State by 2017—became safe havens for six million Syrians, including four million IDPs. Entrepreneurs rebuilt towns like Azaz, al-Bab, al-Ra'y and Idlib.
Their rejection of the Syrian pound in favor of the Turkish lira proved critical, as it fared better, even when facing devaluation. Syrian National Army (SNA) areas, constituting the old opposition and its militia factions, reportedly enjoy lower prices and more dynamic markets than Hay'at Tahrir al-Sham's (HTS) Idlib, where monopolies continue to inflate costs. "Opposition brigades compete with each other, which is why prices in SNA areas are lower than in Idlib, where a single group controls the market," an activist in Afrin told us.
Products from SNA areas now reach Iraq, Libya and Morocco—even going as far as Germany and the United States. Al-Ra'y's stable infrastructure attracts Syrian and Turkish investors. "There is an economic opening to Syria," said Eissa. "New investors are arriving." The industrial zone includes cement, textiles and agriculture—creating badly needed jobs. In November 2024, factories hired Syrians fleeing Lebanon due to Israeli bombardment. In other words, Turkey helped them get exemptions from sanctions.
Since 2021, the Turkish-backed Syrian Interim Government (SIG)—dissolved following Damascus's liberation—established seven industrial zones in northern Aleppo. "The positive aspect is that we have skilled workers. The downside is that unemployment remains above 30 percent. Even those who work earn very low wages," said former SIG Economy Minister Abdel Hakim al-Masry.
During visits to al-Ra'y's industrial city in June and November 2024, returning investors from Turkey expressed optimism. "While…Aleppo and Damascus lack infrastructure, here in the north…we have all the necessary infrastructure in place." Eissa said. Lower customs duties, Turkish facilitation and rising demand have bolstered business.
Thus, Syria's transition to a liberal economy presents opportunities and challenges amid much-needed sanctions relief. Still, the impact of reforms will depend on the speed of sanctions relief—a process that will admittedly take time after the U.S. announcement. Now, the new government must foster private sector growth. The contrast between opposition and regime-held areas underscores the need for competition and reduced state interference. The success of regions like al-Ra'y shows how an open economic climate can unlock opportunity.
