Syria Business Overview

Business and Economic Overview

The Syrian economy has suffered greatly since 2011; GDP has been estimated by the World Bank to have contracted by 63% between 2011 and 2016, plummeting to just $15 billion.

Meanwhile, last year the Consumer Price Index inflation was measured at 58%, although areas with greater conflict experienced much higher inflation and the cumulative CPI increase between 2011 and 2016 stands at over 350%.

Furthermore, the Syrian Pound is now worth less than a tenth of its 2011 value against the US dollar whilst imports and exports have decreased annually by 25% and 45% respectively, since 2010.5

Conflict, rampant corruption, legal inconsistency and inadequate banking systems all provide considerable obstacles to doing business in Syria. Indeed, Syria ranks at 133 of 190 in the World Bank’s Starting a Business Index and 174 of 190 in their Ease of Doing Business rankings.6

There are seven procedures to starting a business within Syria all of which take time and require payments, although the time and cost involved is lower than the average across the Middle East and North Africa.

The Syrian Government is also subject to numerous sanctions, embargoes and restrictions, particularly concerning military or dual-use items and Syria’s oil and gas industries, which makes participation in Syria’s economy extremely difficult by Western firms, although there are exemptions for UN supplies and non-lethal equipment for humanitarian use. Extensive information on the restrictions can be found on respective government websites, such as that of the UK Government or the US Treasury.7

At least 255 persons and 67 entities are also subject to EU sanctions. Syria will need significant post-conflict investment and reconstruction, particularly in its energy sector which has been severely disrupted since 2011. Syria’s geostrategic location and potential as an energy transit country, in the long term, may provide significant opportunities.

Nevertheless, this heavily depends on the length of the conflict and the continuing geopolitical environment. Currently, owing to Western sanctions and domestic Syrian obstacles, doing business in Syria is extremely challenging.  

Security Situation

The situation in Syria remains dangerous and unpredictable. The civil war continues to rage between pro-Regime forces, including Hezbollah and foreign Shi’a militias, and opposition forces, which range from pluralists such as the Free Syrian Army to nationalist Islamists such as Ahrar al-Sham and the al-Qaeda linked Hayat Tahrir al-Sham.

Daesh continues to operate within Syria, although is now largely confined to the Deiz az-Zor Governorate along the Syria- Iraq border, facing the predominantly Kurdish Syrian Democratic Forces to the north and pro- government forces to the south and west. There is also significant intervention by third parties.

Russia continues to provide military support for Assad through primarily air and missile strikes, targeting both Islamic State and opposition groups they deem terrorists.

Iranian Revolutionary Guard forces are also active, as are Western military advisors and air forces whilst the Turkish military have a presence in northern Aleppo Governorate and Idlib. Israeli Defence Forces have also operated within and over Syria striking both regime and Hezbollah targets. As such, no part of Syria is safe from conflict; attacks, including those of a chemical nature, may transpire with little or no warning.

The risk of terrorism remains extremely high owing to the presence of Daesh and other Islamist designated terrorist groups such as Tahrir al-Sham.

The use of suicide bombers and improvised explosive devices have been widespread and targeted government buildings, shopping areas and road checkpoints in major urban centres. The risk of kidnapping, for financial, political or ideological motivations, is also high with Westerners viewed as high value targets.

As such, for these reasons all travel to Syria is advised against.8  

References

1 http://www.voltairenet.org/article173033.html

2 http://www.syrianef.org/assets/estimate_position/english/Corruption-in-Syria.pdf

3 D. Stigall, ‘The Civil Codes of Libya and Syria: Hybridity, Durability, and Post-Revolution Viability in the Aftermath of the Arab Spring’, US Department of Justice; https://works.bepress.com/dan_e_stigall/6/

4 http://www.syrianlawjournal.com/index.php/main-legislation/commercial-law/#l4-1

5 Toll of War, World Bank Group; ‘Syria’s Conflict Economy’, IMF Working Paper; https://atlas.media.mit.edu/en/profile/country/syr/.

6 http://www.doingbusiness.org/Rankings.

7 https://www.gov.uk/guidance/sanctions-on-syria#extent-of-restrictive-measures-imposed-on-syria; https://www.treasury.gov/resource-center/sanctions/Programs/pages/syria.aspx

8 https://www.gov.uk/foreign-travel-advice/syria; https://travel.state.gov/content/passports/en/alertswarnings/syria-travel- warning.html