On May 13, U.S. President Donald Trump announced that he would lift all U.S. sanctions on Syria. The announcement, made during his historic visit to Saudi Arabia, was a miraculous reprieve for the people of Syria, who had been struggling to rebuild their country after a devastating 14-year civil war. On May 20, European Union countries followed suit, lifting remaining sanctions after having already done so in February on select sectors like energy and transportation.
Trump’s decision came after months of diligent diplomatic preparations by Saudi Arabia, Qatar, Türkiye and the fledgling Syrian transitional government. U.S. administration officials are now working to translate Trump’s promise into policy. This will initially be done by issuing waivers; however, these must be renewed every 180 days. The resulting uncertainty over the long-term economic situation can create a “chilling effect” that induces firms or states to withhold investment or over-comply in order to avoid violating sanctions by accident. Only by fully removing all international sanctions can Syria truly make progress on its path to economic recovery.
The High Cost of Conflict
It is difficult to fathom the level of destruction and misery brought about by Syrian’s civil war. In 2011, on the eve of conflict, Syria was a lower-middle income country of 23 million people. Its income per capita was close to $3,000. In 2009, the poverty rate was 16.4 percent and the extreme poverty rate was only 2.8 percent. This reflected the regime-controlled, quasi-socialist nature of the economy, which kept people vulnerable but not destitute.
The cost of conflict was devastating. The Syrian Observatory for Human Rights has verified the deaths of over 650,000 people since the conflict began in March 2011. These include close to 200,000 civilians, among them over 26,000 children. The World Bank estimates that income per capita had fallen to around $1,000 by 2022. Poverty rates soared to nearly 70 percent, with extreme poverty affecting more than one in four people. Average government salaries reached around $25 a month, or less than $1 per day—barely enough to put bread on the table. The dramatic fall in incomes was exacerbated by high inflation rates, housing and commodity shortages, cuts in energy and food subsidies, and declines in the provision of public services.
Still, with 1.3 million government workers, the wage bill came close to $400 million a year. To cover the costs, and expand the influence of Assad-family cronies, the state resorted to cannibalizing the private sector through excessive taxes and fees. The private sector was further impacted by the financial crisis in neighboring Lebanon, which had served as a financial lifeline for many Syrian firms. This pushed many companies to shut down, driving up unemployment. These dynamics created a vicious circle, with the state and its cronies targeting smaller and smaller segments of the business sector and entering into illicit activities to cover revenue shortfalls, including the production and export of narcotics.
The damage to physical infrastructure was also great. By 2018, roughly one million housing units were damaged or destroyed in the fighting. By 2020, the cost of infrastructure destruction was estimated at $118 billion. Roughly half of Syria’s education and healthcare facilities became dysfunctional, and over half the country’s population had either migrated or been internally displaced. Returning home to rebuild their lives would require improving the security situation, rebuilding infrastructure, providing basic services including water and electricity, and supporting the resumption of economic activity—most urgently, by helping farmers restart the agricultural cycle.
The Long Path to Economic Recovery
Syria’s transitional government has a long road ahead. It inherited a broken state—barely able to function, let alone rebuild the country. Since coming to power, it has taken several steps to resuscitate the moribund Syrian economy: managing government expenses, raising revenues, reducing constraints on the private sector, and fighting corruption and illicit activities. However, Syria needs help, both in terms of financial support and removing the shackles of sanctions.
In February 2025, the caretaker government, that was formed after the fall of the regime, announced its intention to increase government wages by 400 percent. This would bring average monthly salaries to around $100—less than half what they were before the conflict, but above the poverty line. This would provide public sector workers with needed income, which would in turn circulate throughout the economy as it was spent. The increase was also necessary to limit corruption; how can a parent earning less than $1 a day be blamed for taking a bribe to put food on the table for their children?
The government tried to manage spending by reducing the public sector workforce by around 400,000 people. It removed “ghost workers” who received salaries, but otherwise did not work. It also took steps to privatize state-owned enterprises, most of which were incurring losses and had bloated payrolls. However, it also laid off “temporary” workers who did not have permanent contracts but were often doing important work. Some of these actions drew criticism, but the numbers had to add up. The state’s coffers were empty. In the end, it would be difficult to increase wages without cutting expenses elsewhere.
In terms of economic recovery, the transitional government that was appointed in March 2025 has been prioritizing reestablishing security and electricity provision. It is also providing space for the private sector and civil society to engage. This is important, as the government cannot hope to create all the jobs needed and provide vital services on its own. Rebuilding the economy requires a national effort, with all sectors playing a role. Yet even though Syrians are eager to rebuild their lives and reestablish their livelihoods with their own hands, they need help and relief.
Full Sanctions Relief Is Imperative
The most important priority is the removal of the remaining international sanctions. It is simply not reasonable to expect a country that has emerged from a devastating civil war to rebuild while encumbered by sanctions that prevent its people from doing so or its friends from helping. It is not fair to hold the Syrian people responsible for the sins of the brutal, authoritarian Assad regime, nor to punish the transitional government today for what it might or might not do in the future.
One of the most insidious aspects of sanctions is its deterrent effect, which discourages countries and firms from engaging or causes them to over-comply to avoid uncertainty regarding red lines or the temporary nature of waivers. Following Trump’s announcement, U.S. Secretary of State Marco Rubio noted: “If we make enough progress, we’d like to see the law repealed, because you’re going to struggle to find people to invest in a country when … in six months, sanctions could come back.”
Sanctions removal also allows friendly nations to assist. Indeed, in close tandem with Trump’s announcement of sanctions removal, Saudi Arabia and Qatar helped to clear Syria’s arrears of approximately $15.5 million owed to the World Bank. Both countries have offered to provide additional financial support for government operations and reconstruction—but again, only after receiving a green light from the U.S. While U.S. approval was expected and welcome, the underlying sanctions remain. Removing them completely is the only way to give the people of Syria the freedom they need to rebuild their lives.
