Bavarian companies on Gut Job: Opportunities in Syrian reconstruction!

Bavarian companies on Gut Job: Opportunities in Syrian reconstruction!

After almost 13 years of civil war, the Syrian economy has been severely weakened and much of the population lives in poverty. In this uncertain environment, rebuilding infrastructure is seen as one of the most urgent tasks for a future government after the fall of the Assad regime. German and Bavarian companies could play an important role in the reconstruction, as before the conflict there were close trade relations between Germany and Syria, especially in the oil sector.

Oil remains Syria's most important commodity, although current prescriptions are lower than in neighboring Saudi Arabia and Iraq. Before the civil war, Germany was the largest buyer of Syrian crude oil. Unfortunately, these trade relationships have almost completely collapsed due to sanctions and the dramatic decline of the oil industry. Many oil facilities were either completely destroyed during the war or only operated in emergency mode. This has brought Syria's oil production to a standstill from 368,000 barrels per day in 2010 to just 25,000 barrels in 2019.

Economic prospects

As a result of the ongoing crisis, Syria's exports fell by an alarming 92% between 2011 and 2015. In 2023, Bavarian exports to Syria only amounted to seven million euros, while imports were even less than 700,000 euros. These exports consisted mainly of agricultural products such as pistachios, which were delivered from Syria to Bavaria. Bavarian companies could also supply vehicles, machines and systems, which could be important for the Syrian economy in the future.

Another weak link in Syria's infrastructure is the power grid. It only partially functions and there is a lack of power plants and electricity distribution networks. Experts see opportunities here for German and Bavarian companies in the field of energy technology. Siemens was one of the most important suppliers of energy technology in Syria until 2011; However, plans for further expansion were not realized due to sanctions.

Geopolitical challenges

Syria's economic recovery not only faces enormous financial challenges - estimates suggest that between $250 and $1 trillion will be needed for reconstruction - but is also complicated by geopolitical tensions and differing interests of international actors. Law No. 10 of 2018 allows for expropriations during reconstruction and has been used by the Syrian government to ignore many UN requests for humanitarian assistance.

The humanitarian situation in Syria is catastrophic. The UN describes the situation of millions of Syrians as increasingly critical; around 90 percent of the population lives below the poverty line. The official unemployment rate was also 43.5% in 2019 and the Syrian currency has lost sharply in value. Syria also has one of the highest refugee populations in the world, with approximately 3.6 million refugees living in Turkey.

Although the situation in Syria is difficult to improve without a return to stable conditions and lasting peace, a number of experts see potential for reconstruction and economic renewal, particularly through German investments in the energy and infrastructure sectors.

However, Syria's future remains uncertain, particularly as long as the Assad regime and its supporters remain in control and the international community, including the EU and US, continue to impose sanctions that impact both humanitarian aid and the country's reconstruction.

For more information on the economic prospects in Syria, visit BR.de or SWP Berlin.