Following the fall of Bashar al-Assad’s regime in 2024, Syria has undergone rapid economic liberalization, exposing longstanding manufacturers to intense foreign competition and forcing some to cease operations. The new leadership under Ahmed al-Sharaa swiftly dismantled Assad-era import restrictions, opening the Syrian market to unfettered trade after years of protectionism.
One high-profile example is National Textile Group’s acrylic yarn factory outside Damascus, which closed less than a year after market liberalization. The factory’s owner, Mohammad Aita, cited an influx of cheaper Egyptian yarn that undercut his ability to compete, leading to sustained financial losses and the layoff of 110 workers. “There is not one item on the cost sheet that is not cheaper in Egypt,” Aita said, underscoring challenges facing domestic producers adjusted to Assad’s tightly controlled economy.
Syria’s previous economic framework combined elements of crony capitalism and state control, featuring strict limits on imports, currency exchange, and pervasive government management of key industries. Years of civil conflict and international sanctions deeply eroded the economy, with GDP falling by more than half from 2011 to 2022 and poverty levels reaching 90 percent of the population.
Under Sharaa’s leadership, trade liberalization has been accompanied by efforts to reforge diplomatic and economic ties. Restrictions easing international transactions have seen Visa and Mastercard authorize card payments in Syria. Gulf states have also pledged substantial investments in infrastructure and real estate, although the execution of these projects remains uncertain.
Economic indicators suggest tentative growth. The World Bank projects GDP expansion between 2 and 4 percent for 2025, while an International Monetary Fund team predicted double-digit growth in 2024 with sustained momentum into 2027. However, experts like Syrian political economist Karam Shaar warn that this growth is largely driven by external aid rather than robust internal recovery.
The government’s removal of subsidies on energy and bread has triggered widespread protests amid a rising cost of living, particularly after fuel price hikes last month. Critics argue that rapid deregulation has disproportionately affected vulnerable populations, leaving many Syrians struggling to meet basic needs.
Domestic manufacturers face multiple hurdles beyond foreign competition. High energy costs, inflated by subsidy cuts, and rising labor expenses have increased operational burdens. Prolonged conflict and sanctions have hindered technological upgrades, reducing quality and efficiency, while financing opportunities remain limited due to frozen banking reforms.
Late last year, authorities introduced unified customs duties across the divided country, which initially imposed steep tariffs on raw materials but lower ones on finished goods, a policy that many producers said worsened their competitive position. Responding to industrial grievances, the economy ministry has since modified tariffs in a more protective direction and tightened import quality standards, allowing some factories to resume partial production.
“We support opening the market, but quality control is essential,” said Hussam Abdeen, who runs a chemical manufacturing plant in Adra Industrial City. “Industry cannot develop without improvements in banking and infrastructure.”
Deputy Minister of Economy Mohammad Hourieh acknowledged persistent structural challenges such as electricity costs and credit shortages, noting these systemic issues will require years to resolve as Syria transitions from a war-torn, command-driven economy toward a more open market system.