Shafaq News

After years of tight economic restrictions, the repeal of the US Caesar Act has opened a new window for the Syrian economy to regain stability and enter a broader phase of economic transformation.

As Syrians anticipate the impact of the decision on daily life, attention is turning to whether the new government can seize the opportunity through substantial reforms and a reorganization of regional and international economic ties.

Investment Channels Reopen

Osama Al-Qadi, a senior adviser at the Syrian Ministry of Economy and Industry, told Shafaq News that lifting the Caesar Act marks an important step toward restoring economic growth, particularly because the law had severely restricted financial transfers. Its removal, he said, “offers confidence and reassurance for Arab and foreign companies to invest in the country.”

According to Al-Qadi, American, British, and Arab companies have already begun entering the Syrian market. With the repeal of the act, banking transactions have become more accessible, although he noted that the full impact on investment and economic recovery may take from six months to two years.

He emphasized that the newly elected Syrian parliament must revise several outdated regulations dating back to 1947, “which hinder reconstruction and urban planning in any governorate,” and stressed the importance of strengthening the banking infrastructure and expanding electronic payment systems to support business activity.

Conditional Sanctions Relief

The Caesar Act—passed by the US Congress on December 11, 2019—aimed to “punish the pillars of the Assad regime for war crimes committed against civilians in Syria,” imposing broad sanctions on individuals, companies, and institutions linked to Damascus. However, many experts argue that the restrictions harmed Syrian society and its economy more than the ruling elite.

Its name relates to a Syrian military photographer who smuggled out thousands of images documenting torture and war crimes committed by the Syrian government.

Earlier this week, the US Congress approved by a majority the final version of the amendment repealing the act. According to the draft document, “lifting sanctions remains subject to certain conditions, including that US President Donald Trump submit an initial report to congressional committees within 90 days, and subsequent reports every 180 days for four years.”

The document states that Syria must demonstrate concrete steps to combat terrorist organizations, respect minority rights, refrain from unilateral military action against neighboring states, counter money laundering and terrorism financing, prosecute crimes against humanity committed under the former regime, and curb drug production. If these conditions are not met in two consecutive reports, sanctions could be reimposed.

Gradual Economic Effects

Ibrahim Nafi’ Qushji, a lecturer at the Private National University, told Shafaq News that scrapping the Caesar Act is pivotal for restoring confidence in the Syrian economy. He said the move will allow the banking system to reconnect with global markets, recover financial transfer capabilities, and attract investment.

He also noted that this reopening “will gradually reflect on the value of the Syrian pound as capital flows increase and inflationary pressures ease, provided it is accompanied by balanced monetary policies and serious banking reforms.”

According to Qushji, agriculture is the sector most likely to benefit, as it remains a cornerstone of Syria’s economy. He also expects a revival in light industries—such as textiles and food production—thanks to easier access to raw materials and reopened export markets.

“Construction and real estate are set to expand due to reconstruction needs, along with logistics and trade services, as import and export routes return to normal.”

Qushji noted that Syria has the human and geographic capacity to launch a large-scale reconstruction effort, but it requires significant external financing and legal reforms to strengthen investor confidence and ensure a safe business environment. “The government’s ability to modernize infrastructure and adopt transparent policies will be decisive.”

He added that lifting sanctions will help reopen ports and border crossings for normal trade, reduce import costs, diversify goods, and allow Syrian products to reach regional and international markets. “This openness could restore Syria’s traditional role as a commercial corridor linking the Gulf, Turkiye, and Europe.

Despite the positive outlook, Qushji noticed that “weak infrastructure, high levels of corruption, and bureaucracy may slow the pace of recovery.” Partial European and American restrictions may also limit full integration with global markets and maintain some legal risks for investors.

Stressing that “the Syrian financial system needs comprehensive modernization,” he added, “rebuilding trust with global banks will require time, effort, strict compliance with international standards, and stronger anti–money laundering regulations.”

Qushji expects the Syrian economy could gradually shift from crisis-driven operations to a production-based model if structural reforms succeed, with agriculture and light industry serving as primary engines of growth.

He also noted the need for “clear government plans for restructuring and attracting investment through updated laws, incentives, and guarantees,” emphasizing that the private sector will be the main driver of the post-sanctions era by investing in agriculture, industry, services, and job creation.

Reform Needed for Daily Life Improvements

On daily living conditions, Qushji explained that improvements will not be immediate, but “will become noticeable within two years” through increased employment, rising purchasing power, gradual price declines, and strengthened public services supported by external financing.

Read more: Beyond Sanctions: New chapter for Syria, new opportunities for Iraq

“Lifting sanctions strengthens Syria’s return to its Arab environment and prepares the ground for joint projects in energy, transport, and trade, in addition to increased Gulf corporate interest in the Syrian market—provided a safe legal environment exists,” he concluded.

Economic analyst Firas al-Hayyali told Shafaq News that “lifting the Caesar Act does not necessarily mean an immediate economic takeoff,” but it opens a transitional period that could reshape the Syrian economy over the next three years.

He said Syria is currently operating at roughly 40% of its pre-2011 productive capacity. Re-activating even half of the idle capacity could raise GDP by 8–12% within five years, provided a stable investment climate is established.

Written and edited by Shafaq News staff.