At a souvenir shop in a central Damascus market, socks bearing
caricatures ridiculing ousted Syrian leader Bashar al-Assad and his
once-feared family are selling like hot cakes
When Hayat Tahrir al-Sham, led by Ahmed al-Sharaa and backed by
Türkiye, mounted a lightning attack against al-Assad’s battered military
at the end of 2024, they were initially met with skepticism by the
American government given their terrorist designation.
However, al-Sharaa has since started to gain international
recognition and support, including trips to Saudi Arabia and France. The
European Union and the United Kingdom took
steps to ease sanctions on Syria. Alongside advocacy efforts by Saudi
Arabia and Türkiye, a proposal for a Trump Tower in Damascus may have
also wooed the American president.
But the complex web of American sanctions continued to cut off Syrian
banks and government institutions from the U.S. dominated financial
system. This also included secondary sanctions, so any foreign financial
institution risked being sanctioned itself, discouraging investment and
aid. And while there were in theory humanitarian exemptions to allow
for life-saving support, in practice, the nature of the sanctions led to
overcompliance and delays.
For example, in early 2025, Qatar planned
to fund public sector salary increases to more than a million employees
in Syria, but balked because of uncertainty over whether such
transactions would breach U.S. sanctions, particularly those related to
Syria's central bank. Only after Trump’s May announcement was the
initiative finally allowed to go through.
Two days after, the World Bank said
that Saudi Arabia and Qatar paid off the $15.5 million in debt that
Syria had in debt, which will now allow Damascus to take out new loans
toward its reconstruction needs.
A week later, on May 20th, European Union foreign ministers met
in Brussels where they too decided to lift the remaining sanctions.
While there continues to be concern toward the new Syrian authorities,
including a series of sectarian clashes, this will certainly provide a
further boost to the Syrian economy. Kaja Kallas, the European Union’s
top diplomat, said,
“I think we do not have a choice. We actually either give them the
possibility to stabilise the country, or we do not do that.”
Speaking to the Senate Foreign Relations Committee in Washington DC, US Secretary of State Marco Rubio expressed
his assessment that Syria could be weeks away from "potential collapse
and a full-scale civil war of epic proportions." This reflects the
concern of international and regional leaders alike that an unstable
Syria could once again have regional spillover effects. Still he
contradicted Trump’s initial announcement, stating that sanctions relief
would be “incremental.”
While the Syrian economy got a major boost following Trump's pledge
in Riyadh, its people are certainly not out of the woods yet. Part of
the US sanctions, including those imposed under the Caesar Act,
cannot be lifted by Trump and require Congressional approval—something
that requires consensus in American politics. Other sanctions such as
the country’s designation as a state sponsor of terror will similarly be cumbersome to remove.
Moreover, long-term stability and investment in Syria will requires
massive domestic changes as well. The country’s pre-war economy was
marked by corruption and cronyism. Such internal policy changes will be
necessary to attract the remaining Syrians to return to stimulate
business activity beyond Turkish and Saudi construction companies. And
accountability and rule of law will also be needed for the Syrian
population to sustain confidence in their new leader.
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