Attachments
Despite a significant decline in military operations, since 2020, Syria has witnessed a sharp economic deterioration, a rise in unemployment rates, a decline in the levels of public services, a rise in the cost of living and prices, and a worsening of the levels of poverty, deprivation, and food insecurity. This deterioration and its repercussions took root as the controlling powers continued to consolidate the components of conflict economies and divert material and human resources to the benefit of the conflict elite through monopoly, appropriation, corruption, smuggling, drug trade, looting, unjust exploitation of natural resources, and others. This is being done in light of the political and economic fragmentation of the country between four areas of influence of local military and political forces with direct support from external forces. The role of the military and security forces prevails in the existing regimes, the spread of tyranny, the failure to achieve the basic functions of public institutions, including security, protection, and the provision of public services, and the spread of looting and waste in the absence of accountability.
Economically, Syria's GDP deteriorated significantly during 2023, reaching 527 SYP billion (at constant 2000 prices), equivalent to only 38 per cent of the 2010 GDP. The value of the total cumulative losses amounted to USD 864 billion, of which USD 724 billion were losses. In the GDP and USD 72 billion in losses in the capital stock,1 the February 2023 earthquake added total losses worth USD 5.85 billion, mostly distributed in the governorates of Idleb and Aleppo. The economic losses of the earthquake are equivalent to about 33 per cent of the GDP for the year 2023.
The economic deterioration was reflected in the continued high unemployment rates, which reached 52 per cent in 2023, hindered the participation of half of the individuals capable of working in economic activity, with the absence of decent work conditions in light of the scarcity of opportunities and the urgent need for work. Child labour has spread in an unstable and unsafe environment.
The trade deficit reached about 70 per cent of GDP in 2023, in light of continued reliance on imports, which amounted to more than 6 times exports. The state's general budget deficit exceeded 50 per cent of GDP. This deficit has accumulated the economy's dependence on external forces so that the debt exceeds 250 per cent of the gross domestic product in 2023.
The accumulated and continuing state budget deficits, which are covered by internal loans from the Central Bank of Syria, accelerated the deterioration of the value of the local currency, thus, the average exchange rate of the Syrian pound declined against the US dollar to record SYP 1935 per USD in 2020, and SYP 3393 per USD in 2021, SYP 4392 per USD in 2022, and SYP 10565 per USD in 2023.
The economy has become largely dependent on foreign aid. Official aid provided to Syria within the framework of the United Nations Response Plan alone amounted to approximately USD 21.6 billion during the period (2012-2023), that is, an average of USD 1.8 billion per year.
Structural imbalances during the conflict contributed to the surge of price inflation, which reflects the depth of the economic deterioration, so the annual inflation rate reached 110 per cent in 2021, 85 per cent in 2022, and 116 per cent in 2023.5 Note that the annual inflation rate in the Arab countries reached 3.1 per cent, 5.1 per cent, and 12.5 per cent during the years 2021, 2022, and 2023, and the global inflation rate reached 3.5 per cent, 8.5 per cent, and 6.8 per cent during the same period.
The continued rise in prices at these unprecedented levels was accompanied by a deterioration in GDP, aggregate demand, and employment, and contributed to undermining the state of economic and human development. According to the Socio- economic assessment survey conducted by SCPR, the Human Development Index declined again in 2023, as the ability of families to spend on income deteriorated. Health, education, food, and meeting their essential needs.
The conflict has led to the systematic destruction of the social determinants of public health and the fragmentation of the health system. Individuals face many obstacles to obtaining health services due to the lack of specialized services, the shortage of medicines, and the destruction of infrastructure and equipment.8 The educational system was also fragmented, with a significant shortage of qualified teachers, and a declining quality of education. The dropout rate from basic education reached 33 per cent in 2023 across Syria, exceeding 43 per cent in the SIG and SSG areas and 49 per cent in the AA areas.