Syria is set to reconnect to the Swift international payment system within weeks, marking a pivotal step in reintegration into the global economy after enduring 14 years of conflict and international isolation. This return to Swift is not just a technical overhaul; it signals a radical shift in Syria’s economic landscape under the new administration which is actively seeking to attract international trade and foreign investment.
The new central bank governor, Abdulkader Husrieh, has outlined an ambitious plan to restructure Syria’s financial systems and reform its monetary policies, hoping to revitalize the economy that has been ravaged by war and stringent sanctions. With the recent lifting of sanctions by the United States, the government is moving quickly to liberalize the economy, a strategic approach to draw in much-needed foreign investment.
The Road to Economic Resurgence
Abdulkader Husrieh expressed optimism about transforming Syria into a financial hub, emphasizing the necessity of creating an environment conducive to foreign direct investment. “We aim to enhance the brand of the country as a financial hub, given the expected foreign direct investment in rebuilding and infrastructure—this is crucial,” he shared in an interview with the Financial Times. While acknowledging that progress has been made, he also noted that the journey ahead remains fraught with challenges.
Since the outbreak of civil war in 2011, Syria has been cut off from global markets. The Assad regime’s response to a popular uprising led to an economic freefall that left the state’s treasury nearly depleted. The emergence of a new government under interim president Ahmed al-Sharaa has prompted discussions about free-market reforms designed to create an atmosphere of inclusion and transparency, appealing to wary investors.
Shifting Economic Policies
Despite skepticism regarding the new government’s capability to stabilize the country, steps toward reform are gaining momentum. Sharaa’s administration has made strides in attracting international support, essential for stabilizing the nation, even amidst ongoing violence. The recent lifting of certain U.S. sanctions has provided a much-needed boost.
However, Husrieh cautioned that while this move is welcome, comprehensive policy changes are imperative. “So far, we’ve only seen license issuance and selective sanctions removal. Implementation must be comprehensive, not ad hoc,” he noted. His approach involves crafting a stabilization plan that spans six to twelve months, focusing on banking reforms, social security updates, and efforts to encourage investment from the Syrian diaspora.
Revamping the Banking Sector
Central to Syria’s economic revival is a reformed banking sector which has suffered due to years of war and mismanagement. Husrieh’s vision includes dismantling the legacy of Assad’s regime, which was characterized by strict regulations and financial overreach. The goal is to enhance transparency and trust within the financial system, enabling banks to reclaim their roles as intermediaries between households and businesses.
The reinstatement of Swift is expected to simplify foreign trade, lower import costs, and bolster export capabilities. By routing international trade through formal banking channels, Syria aims to reduce reliance on informal networks that have previously dominated cross-border transactions.
“Swift’s return will help encourage foreign trade, cut import costs and facilitate exports,” Husrieh stated, underscoring the importance of this system in aiding Syria’s economic revival.
Currency Challenges and Inflation Control
The Syrian pound, which has suffered significant depreciation—losing approximately 90% of its value against the dollar before the current government came to power—remains volatile. Husrieh is working on unifying exchange rates and transitioning the currency toward a managed float, a critical step toward economic stabilization.
With reconstruction costs totaling in the hundreds of billions of dollars, Sharaa’s government faces its most daunting challenge yet—reviving a broken economy. Talks with the International Monetary Fund (IMF) and the World Bank have begun in earnest, and cooperation with regional powers is increasingly vital.
Regional Support and Financial Strategies
Support from neighboring countries has been instrumental in Syria’s attempts to stabilize its economy. Recently, Saudi Arabia and Qatar have taken significant steps, including clearing outstanding debts to the World Bank and committing to covering public sector salaries. These measures are crucial as they provide immediate relief to the beleaguered Syrian government.
Initial agreements with companies from the UAE, Saudi Arabia, and Qatar have been inked to spearhead major infrastructure and energy projects, essential for rebuilding the nation.
Interestingly, Husrieh mentioned that Syria is contemplating issuing Sukuk—an Islamic financial instrument compliant with Sharia law—as a potential means of raising funds without incurring debt, a unique approach given the current economic climate.
Additionally, Syria has accepted grants aimed at revitalizing essential sectors, including a grant from the World Bank for the power sector and funds from Sweden for educational and healthcare improvements.
Conclusion
While Syria’s reentry into the global economic arena comes with its share of challenges, the determination shown by the new government under interim president Ahmed al-Sharaa offers a glimmer of hope for revitalizing a country deeply scarred by conflict. The integration into the Swift payment system is just the beginning; profound and lasting reforms in economic policies, banking practices, and international partnerships will dictate Syria’s ability to rise from the ashes of its tumultuous past. A successful transition would not only benefit Syria but also contribute to regional stability, fostering a revitalized economy that can thrive on the principles of transparency and inclusivity.
