Alwaght- A majority of the Turkish politicians and media outlets believe that Ankara which has been leading a project to topple the Syrian government is the biggest winner of the current Syrian developments.
But many of the observers believe that complications of the Syrian scene given the exceptional geopolitical position of the country in the regional and international competitions raise many doubts about possibility of realization of the Turkish project in Syria and perhaps its challenges and threats outweigh its opportunities for Turkish President Recep Tayyip Erdogan’s lofty ambitions.
Certainly, one of the most important areas of this duality of opportunity and challenge is the Syrian economy.
Turkish media are talking about the economic opportunities of the Syrian market opening up further to Turkish goods, especially since the new officials in Damascus are said to be allowing transactions in Turkish currency, which is important for maintaining the value of the Turkish lira, which has been declining in recent years. Daily Sabah newspaper recently reported that shares of Turkish companies in the construction, steel and cement sectors have seen a significant increase immediately after the fall of the al-Assad government.
In 2023, Turkey’s exports to Syria, mainly to the opposition-run province of Idlib, amounted to $2 billion, including construction materials, energy and food, while imports from Syria amounted to $363.5 million.
In the meantime, in addition to Ankara’s expectation of increasing its share of the Syrian market, Turkish companies hope to play a pivotal role in the reconstruction of Syria’s infrastructure.
Due to more than a decade of civil war, Syria needs to rebuild a large part of its economic infrastructure, including roads, power plants, and communication networks, and in the absence of the necessary capital within the country, it needs extensive foreign investment.
According to World Bank estimates, Syria’s economy shrunk by 85 percent during nearly 14 years of civil war, with GDP falling from $67.5 billion in 2011 to just $8.98 billion in 2023.
According to Fitch Solutions, the country’s reconstruction cost is estimated at around $300 billion, requiring international and regional support.
Another economic opportunity for Turkey in Syria is facilitation of Turkish access to Arab markets in the Persian Gulf, Africa, and the Eastern Mediterranean. Syria constitutes Turkey’s most important trade corridor, connecting it by land to the Arab world, its east and west, as well as Southeast Asia and Africa, especially after Turkey was excluded from the India-Middle East Corridor (IMEC) project, which was proposed last year by the US in opposition to China's Road and Belt Initiative (RBI).
Turkey also believes that the fall of the al-Assad government is an important incentive for Syrian refugees in its territory to return to their country. It is said that about 3 million Syrian refugees are hosted by Turkey, and the Erdogan government has attributed part of the inflation in food and housing sectors and the increase in unemployment rates to the presence of these refugees. In this regard, Ahmet Öksüz, president of the Istanbul Textile and Raw Materials Exporters Association, stated that the return of Syrian refugees to their country may cause a change in the business and labor dynamics between the two countries.
Daily Sabah pointed out in a report the high potential of Syria's agricultural sector, most of which is concentrated in the fertile areas around the Euphrates River.
According to the report, these areas can help boost food security and create vast job opportunities, which will increase Syria's ability to achieve self-sufficiency and export.
Energy relations have been another potential that Turkish officials and media have been interested in taking advantage of in Syria.
In this regard, Turkish Energy and Natural Resources Minister Alparsalan Bayraktar announced in a press statement his country's plans to supply electricity to Syria as soon as possible and stressed that Turkey will help improve power generation capabilities in the neighboring country. Turkey will take charge of supplying power to areas suffering from severe outages and will focus on increasing local power generation in the near future, according to the Turkish minister.
Bayraktar could not hide his country's interest in Syrian oil and gas resources, announcing the possibility of constructing new pipelines to deliver Syrian oil and gas to Turkey, which he said would help link the energy markets of the two countries in addition to strengthening economic ties. He also announced Turkey's plans for long-term cooperation in energy sector, including connecting the Syrian pipeline with the Iraq-Turkey pipelines.
Despite this planning and the optimism of Turkish officials and media, experts estimate Syria's economic outlook to be more challenging than Ankara expects.
Although Syria is resource-rich, including in oil and gas reserves, the war has led to a significant decline in production.
According to data from the Energy Statistics Bulletin published by BP, oil production has fallen from about 385,000 barrels in 2010 to 40,000 barrels per day, making the road to economic recovery bumpier than in Libya.
A report by the Chatham House think tank says the challenges facing Syria are greater than those faced by Libya in 2011. Libyan leader Muammar Gaddafi was overthrown after less than a year of conflict, leaving much of the country's infrastructure intact. Libyan rebels had begun exporting oil even before the government fell. But Syria's oil infrastructure, in addition to severely declining production, is concentrated in Kurdish-majority areas and controlled by US-backed militias that are off the control of the central government. This means that Syria does not have a national energy sector in which all parties have a common economic interest.
It is also unrealistic to be optimistic about large-scale foreign investment in Syria, which Turkish companies could take a large share of and thereby stir economic boom in Turkey.
Sanctions remain the most important economic challenge in Syria. Experts believe that lifting sanctions is important to attract foreign capital and finance reconstruction operations. But the measures of the ruling Hayat Tahrir Al-Sham (HTS) government, which has a history of ties to Al-Qaeda, have not yet won the trust of the international community, and the prospects for quick sanctions relief are unclear. Even if sanctions are lifted, Western countries will have other priorities for investment due to the backbreaking costs of the war in Ukraine over the past three years and, possibly, the heavy factor of Ukraine’s need for post-war reconstruction. Trump, as a businessman, may also make the lifting of sanctions conditional on maintaining control over Syrian oil and a large share of the country’s market.
Meanwhile, the Arabs, especially those of the Persian Gulf Cooperation Council, have shown no zeal to invest in post-Assad Syria. Apart from Qatar, which has welcomed the developments in Syria, other important Persian Gulf monarchies such as the UAE and Saudi Arabia do not consider the increase of influence of Turkey and the Muslim Brotherhood in the Arab world to be to their advantage, and the remarks of the advisor to the president of the UAE bear the best witness to this. In addition, Saudi Arabia and the Emirates have been busy attracting foreign investment in recent years due to the decline in oil revenues during the coronavirus outbreak and the adoption of their own development policies. Therefore, currently, Turkey and Qatar are the only hopes of the new rulers of Damascus to settle economic problems, which means that the costs of Syria reconstruction are now on Ankara as the key actor behind the toppling al-Assad rule.
Meanwhile, the Syrian currency lira continues to fluctuate wildly, reflecting the major economic challenges the country is grappling with. The Syrian currency rose in value slightly from 15,000 to 13,100 lira for a US dollar on the black market after the fall of al-Assad, but the deteriorating security conditions in recent days have put the brakes on the short-lived gains of the Syrian currency against the dollar, and the new government’s central bank has officially set the official lira rate to the dollar at 15,000.
The figures show that the gap between the official and black markets remains wide, with a clear price difference between them that blocks citizens' prediction of the future of financial stability in the country.
The World Gold Council report also stated that Syria’s gold reserves amounted to 25.8 tons in June 2011, with an estimated current value of around $2.23 billion, but the report stresses that its use is uncertain in light of political changes.
Also economic strains and gloomy economic conditions the Syrians are suffering from can flare up with hasty economic decisions of the new officials like un-subsidization of bread and fuel.
Therefore, it is too early to confirm the optimism of Turkish officials and media about economic opportunities opening up to Turkey in post-Assad Syria, and perhaps Erdogan government will face a predicament as economic problems of new Syrian government can spoil over to Turkey.
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