DAMASCUS, Feb. 13 (Xinhua) -- Stepping up economic support for war-torn Syria will be a key focus at an international conference on Thursday in Paris, which gathers foreign ministers from the Middle East and other countries.
Over two months have passed since the downfall of Bashar al-Assad's government, yet Syria continues to face a prolonged economic crisis marked by persistent poverty.
Though some international sanctions have been eased, the country is still grappling with deep structural economic problems affecting businesses and ordinary citizens.
WHAT'S HOLDING SYRIA BACK?
During almost 14 years of conflict, Syria's economy shrank by 84 percent, pushing nearly 90 percent of Syrians below the poverty line, according to UN estimates.
The country witnessed a significant devaluation in its currency. According to a World Bank report, the official exchange rate of the Syrian pound fell 270-fold against the U.S. dollar between 2011 and 2023, from 47 Syrian pounds per dollar to 12,562.
The report added that currency depreciation has fueled hyperinflation, noting that in 2023, Syria's consumer price inflation surged by 115 percent.
However, prices have fallen dramatically in Syria since the al-Assad government's collapse last December. According to a recent report from the Middle East Eye, many food items in Syria are now priced at half their levels compared with the prices before the government change, with potatoes dropping from 9,000 Syrian pounds (0.69 U.S. dollars) per kilogram to 4,000 Syrian pounds per kilogram.
Meanwhile, despite the price drop, consumer purchasing power remains low, as many Syrians still struggle with delayed salary payments and depleting savings.
In addition, the conflict has wreaked havoc on the country's infrastructure, particularly the electricity system. Syria now generates just 1,500 megawatts of electricity, far below the 7,000 megawatts needed to meet basic demand.
Oil shortages exacerbate the problem, as the bulk of the country's electricity comes from thermal power plants fueled by oil and natural gas. Once a pillar of the Syrian economy, oil production accounted for about a quarter of government revenue in 2010. However, it has now dwindled to just 5 percent of the nation's needs, mainly due to the loss of control over key oil fields.
WHAT ABOUT SANCTIONS?
In addition to the devastation caused by the conflict, Western sanctions have plagued the Syrian economy.
Among the Western sanctions, the Caesar Syria Civilian Protection Act, passed by the U.S. Congress in 2019, effectively barred almost all foreign businesses from engaging with Syria, obstructing the flow of key goods like wheat into the country.
Such sanctions have also severely hampered Syria's ability to export oil. With output falling to under 9,000 barrels per day in government-controlled areas last year, Syria has become increasingly dependent on imports from Iran.
In a recent interview with media, Syrian Minister of Internal Trade and Consumer Protection Maher Khalil al-Hasan warned that Syria would face a "catastrophe" if sanctions are not lifted soon.
A recent Brookings report noted that, following the fall of the al-Assad government, discussions on Syria's economic recovery have centered on sanctions relief.
Selectively lifting sanctions on key sectors such as energy, banking and transportation are already happening, as well as efforts to restore commercial airline services and reintegrate Syria into the global financial system.
However, Damascus-based economist Hayam Ali said the impact on the ground remains limited, warning such changes alone will not be enough to revive the economy.
"Lifting sanctions is just one step. Syria needs major policy reforms, foreign investment and political stability to rebuild its economy," Ali said.
Despite ongoing hardships, experts are cautiously optimistic that economic conditions could improve if the government successfully implements market reforms, secures investment and maintains stability.
"Syria is at a crossroads," Ali said. "The challenges are immense, but with the right policies and international support, the country can gradually move toward economic recovery." ■
