Editor’s note: This commentary was originally commissioned and published by Levant24 on June 30, 2026. It is republished here with permission and full credit to Levant24. The text reflects Levant24’s copy-editing and editorial style guide, so some wording, spellings, and stylistic choices may differ from those usually used on The Syria Dispatch. We invite you to read the original version here.

Syria is once again trying to turn geography into strategy.

Yet before becoming a full-fledged transit hub, the strongest case for Syria’s transit ambitions rests on redundancy. In a region where maritime chokepoints, war risk, insurance costs, and political disruption have made alternative routes more valuable, and given its position, Syria does not need to prove that it can become the region’s next great hub overnight. First, it needs to show that selected routes through its territory can work.

That makes recovery the starting point. Rebuilding ports, roads, border crossings, electricity links, pipelines, and telecommunications networks is not separate from Syria’s transit ambition. It is the condition for it. If these systems become safer, cheaper, and more predictable, Syria could gradually position itself as a supplementary corridor for trade, energy, logistics, and data. Hub status, if it comes, would not emerge from geography alone.

Syria cannot replace the Suez Canal, the Strait of Hormuz, or Bab al-Mandab. Nor can it assume that it will simply displace Israel-linked routes in Western and Gulf connectivity planning. Its value lies elsewhere: offering additional options in a region where redundancy has become strategically important. The more Syria rebuilds the infrastructure it needs for its own recovery, the more it may organically become useful to others.

Leave a comment

An Old Idea, New Conditions

Such a vision is not new. In the late 2000s, deposed dictator Bashar al-Assad promoted a “Four Seas” vision that sought to turn Syria into a regional intersection for investment, transport, and energy linking the Mediterranean, the Gulf, the Caspian, and the Black Sea. At the time, the concept was tied to Syria’s rapprochement with Turkey and its attempt to escape isolation through infrastructure and regional connectivity. War, sanctions, institutional collapse, and political isolation threw that idea into the abyss.

Today, Damascus is trying to revive this idea under new political conditions: Syria as an economic transit hub. President Ahmad al-Sharaa has already made that pitch abroad. At the Antalya Diplomacy Forum in April, and later at an informal summit with European leaders in Cyprus, he presented the “Four Seas” and “Nine Corridors” initiative, a vision for linking the Gulf, the Mediterranean, the Caspian, and the Black Sea through Syrian territory.

Syrian diplomats in Washington are also carrying the message. Muhammad Qanatari, chargé d’affaires in Washington, recently said Syria was entering a new phase of positive relations with Iraq, focused on bilateral cooperation and regional economic connectivity. He framed Syria’s geography as a permanent strategic asset, placing the country at the intersection of the Caspian Sea, the Mediterranean, the Persian Gulf, and the Black Sea. Crucially, he also described the initiative not as a replacement for existing trade routes, but as an alternative framework to strengthen connectivity through energy networks, electricity grids, railways, and communications links.

This should be the core of Syria’s strategy: prove that specific corridors can work before claiming hub status. That is already beginning to happen through reconstruction itself.

In transport, Syria, Jordan, and Turkey have moved to strengthen north-south connectivity toward the Gulf. In logistics, CMA CGM’s Latakia port agreement and dry port plans for Adra and Aleppo, alongside DP World’s Tartous project, point toward better links between seaports and inland markets. Iraq is also testing Syria’s redundancy potential through the reopened Rabia-Yarubiyah crossing, fuel oil trucking, and discussions over the Kirkuk-Baniyas pipeline. In telecommunications, SilkLink could position Syria as a future digital corridor.

None of this makes Syria a hub yet. But it shows how rebuilding the systems Syria needs for itself could gradually make the country useful to others.

Through recovery rather than grand design, Syria is already moving toward a transit role. Gas, ports, dry ports, oil trucking, and telecom investment all respond first to Syria’s own reconstruction needs. If those systems become reliable, regional actors will have more reason to use them too. That is why the path to hub status starts at home. Syria’s long-term role cannot depend only on crisis conditions or disrupted maritime routes. It has to become commercially useful in normal times, not merely strategically useful when other corridors are under pressure.

Share

The Reliability Test

Still, while the direction of travel is encouraging, the path is fraught with challenges, with the main constraint being reliability at all levels. Physical reliability remains weak: much of the transport network still needs repair, from railways and roads to border facilities and port connections. Legal and operational reliability is also incomplete: customs rules, transit fees, dispute settlement, banking channels, insurance, and security guarantees also remain unclear or incomplete. For traders, logistics firms, and energy companies, a route is only useful if it is predictable.

Politics will be just as important as infrastructure. Turkey may benefit from faster access to Jordan and the Gulf. Iraq may want another route to the Mediterranean. Gulf states may want alternatives to vulnerable maritime chokepoints. Europe may value more resilient trade, energy, and data routes. But shared interests do not automatically create shared guarantees, and spoilers could easily interfere.

Israel is the clearest complication. A Syrian route can be drawn on a map as an alternative or supplement to other east-west connectivity projects, including the India-Middle East-Europe Economic Corridor. The original IMEC logic relied heavily on a route through the Gulf, Jordan, Israel, and Europe. Still, recent analysis has already raised the need for alternative or wartime redesigns of the corridor. But that does not mean it would be politically accepted. Israel would likely view any project that strengthens the Syrian state, deepens Syria’s ties with Turkey and the Gulf, and turns Syrian territory into strategic infrastructure through a security lens.

Other spoilers could come from Syria’s own partners. Gulf engagement is positive, but it is not automatically stabilizing. Saudi Arabia, the United Arab Emirates, and Qatar are all expanding their portfolios in Syria, with their approaches well-defined and sometimes conflicting, particularly regarding reconstruction, governance, and regional alignment. Competition between Gulf capitals could bring money and political attention, but it could also reproduce rival networks of influence inside Syria if investments become tied to competing interests.

The U.S. track is more encouraging, but it also raises a durability question. Under President Donald Trump, the direction of travel is clearly positive, with Washington doing all it can to support the Syrian transition. But long-term infrastructure investors will still ask whether this policy survives the next U.S. political cycle. A corridor that depends on U.S. political cover cannot be built only on today’s White House position.

At the end of the day, Syria’s transit ambitions should be measured by reliability above anything else. The Four Seas framework can help attract investment and situate Syria’s recovery within a broader regional logic, but only if it is tied to implementation, which is still lacking today. Let us first make Syria usable: open borders, predictable customs, functioning ports and dry ports, clearer investment rules, workable banking channels, and security arrangements that lower risk before declaring it a hub.

If Syria gets this right, its role as a corridor can emerge from reconstruction itself. Ports rebuilt for Syrian trade can serve neighboring markets; energy links restored for Syrian households can connect to wider networks; digital infrastructure upgraded for Syria’s economy can eventually carry regional data. Geography gives Syria an opening, but it does not move goods, finance projects, or keep routes open. Redundancy only matters if the backup route works. For Syria, the path to becoming a transit hub begins with focusing on itself.

On May 29, 2026, I presented at the European University Institute workshop “Designing Sovereignty in Post-Assad Syria”, organized by Raffaella A. Del Sarto, Théo Blanc, and Olivier Roy.

The workshop examined a central question facing Syria today: how does a post-Assad state rebuild sovereignty after almost 15 years of war, institutional fragmentation, territorial division, foreign intervention, displacement, and economic collapse?

My presentation focused on one part of that question: the different ways in which Gulf and European actors are engaging Syria after the fall of the Assad regime.

The core argument was simple: Gulf and European engagement should not be read as two versions of the same “international re-engagement.” They operate according to different political and economic logics.

The Gulf is competitive because Saudi Arabia, Qatar, and the UAE have overlapping ambitions and similar instruments. All three can offer capital, political access, infrastructure deals, energy support, logistics, real estate, and high-level state-to-state engagement. They are not only helping Syria stabilize. They are also competing to shape what stabilization means: who gets access to Damascus, which sectors become strategic, which networks matter, and which external patron becomes most useful to the new Syrian authorities.

Europe is different. It is fragmented, but not politically competitive in the same way. EU member states may compete commercially, but they do not necessarily pursue the same opportunities. Politically, they remain broadly aligned around a shared set of principles: Syrian unity, stabilization, minority protection, inclusive governance, refugee return conditions, accountability, and the avoidance of renewed war.

Below is a structured summary of the key arguments I presented.

1. Gulf and European Engagement Follow Different Logics

I began by arguing that the return of external actors to Syria is not a single process.

Syria is not simply being “re-engaged” by the international community. Different actors are entering the post-Assad landscape with different priorities, different tools, and different expectations.

For Gulf actors, Syria is a strategic arena. Stabilization matters, but so does influence. Saudi Arabia, Qatar, and the UAE all want to avoid state collapse, Iranian re-entrenchment, uncontrolled external dominance, renewed jihadist mobilization, and unmanaged refugee or security spillovers. But they also want access, leverage, and visibility.

For Europe, the logic is more institutional and procedural. The EU wants a stable Syria, but also one that meets minimum political, legal, and governance expectations. Its engagement is therefore slower, more conditional, and more tied to questions of sanctions relief, assistance programming, accountability, minority protection, refugee return conditions, and institutional reform.

This difference matters because Damascus does not experience these actors in the same way.

The Gulf can offer political recognition, money, energy, infrastructure projects, high-level visits, and visible announcements. Europe can offer sanctions relief, aid, technical assistance, trade frameworks, institutional support, and eventual financial normalization, but usually through slower channels and with more conditions attached.

In practical terms, the Gulf is more immediately attractive to the Syrian government. Europe may be more important for long-term normalization, but it is less able to provide quick wins.

2. The Gulf: Collective Stabilization Language, Competitive Practice

Immediately after Assad’s fall, Gulf states broadly agreed on the need to prevent Syria from becoming another unmanaged regional vacuum.

At the collective level, Gulf and Arab messaging emphasized Syria’s unity, sovereignty, territorial integrity, stability, sanctions relief, and the preservation of state institutions. But beneath this shared language, different national strategies quickly emerged.

Saudi Arabia positioned itself as the central diplomatic broker. Riyadh sought to place itself at the heart of Syria’s regional reintegration, linking political legitimacy, Arab coordination, sanctions relief, and future reconstruction.

Qatar moved from a position of pre-existing political legitimacy. Unlike Abu Dhabi, Doha was less deterred by the Islamist origins of the new rulers, had long-standing links with Syrian opposition networks, and could engage quickly through political, humanitarian, and operational channels.

The UAE moved more cautiously at first. Its skepticism toward Islamist movements shaped its initial hesitation. But over time, Abu Dhabi began to engage more pragmatically, especially through business channels, infrastructure, ports, logistics, real estate, and state-linked investment opportunities.

The result is what I described as competitive stabilization.

This competition is especially visible because Saudi Arabia, Qatar, and the UAE are not occupying clearly separated niches. They repeatedly appear in the same strategic sectors: energy, transport, airports, logistics, ports, real estate, tourism, finance, industrial zones, and investment platforms. If each Gulf actor were operating in a different sector, we might simply describe their engagement as complementary. But when they compete over similar sectors and similar forms of access, stabilization itself becomes a field of influence.

Leave a comment

3. Europe: Not Commercially Competitive and Politically United

The EU, the Commission, the European External Action Service, member states, development agencies, humanitarian actors, banks, and private firms do not all move at the same speed or with the same priorities. Economically, countries such as France, Germany, Italy, Greece, Cyprus, and others may see different opportunities in energy, ports, trade, finance, development, or reconstruction.

But politically, Europe is less competitive than the Gulf.

European states are broadly aligned around the same principles: Syrian unity, stabilization, minority protection, inclusive governance, safe and voluntary refugee returns, accountability, and the avoidance of renewed war.

There are differences, of course. Some European actors may prioritize engagement more than others. Some may focus more on the Kurds, decentralization, minority protection, Israel, Türkiye, Russia, migration, counterterrorism, or commercial opportunities. But these are differences of emphasis and risk tolerance, not fundamentally competing visions for Syria’s political alignment.

Europe’s challenge is therefore different. It is not primarily a problem of internal geopolitical competition, but a problem of translation: how to convert broad political principles, sanctions relief, aid pledges, and institutional frameworks into visible, practical support for Syria’s recovery.

That is much harder than making a statement or hosting a dialogue.

4. Why the Gulf Moves Faster Than Europe

Beyond political will, the difference between Gulf and European engagement also lies in their institutional capacity and decision-making style.

Gulf states can move quickly because they often operate through centralized decision-making, state-linked companies, sovereign funds, high-level political channels, and direct relationships with the Syrian presidency and key ministries. When a Gulf actor wants to explore a port, airport, power plant, real estate project, or logistics corridor, it can often do so quickly and visibly.

Europe, by contrast, is structurally slower. European engagement has to navigate EU institutions, member-state coordination, legal constraints, procurement procedures, sanctions compliance, risk assessments, partner selection, monitoring frameworks, and political conditionality. European banks and firms are also cautious, even after sanctions relief, due to concerns about compliance, reputational risk, payment channels, dispute resolution, property rights, and political uncertainty.

Gulf actors are also constrained by some of these limitations. Gulf MoUs, for instance, have not always materialized quickly, partly due to operational constraints within Syria. But their ability to mobilize capital and provide support is much less constrained by bureaucratic hurdles. Qatar and Saudi Arabia, for example, cleared Syria’s World Bank arrears and provided support for public-sector salaries, while the EU is still struggling to spend its 2025 financial envelope for Syria’s socio-economic development.

All of this makes Europe less attractive to Damascus in the short term, especially because the new government is under pressure to show results quickly.

That does not mean Europe is irrelevant. On the contrary, Europe remains essential for long-term recovery. It can support institutional reform, trade normalization, humanitarian and development assistance, financial reintegration, technical assistance, and, eventually, private-sector confidence.

But these forms of support are slower and less visible than a Gulf-backed energy deal, an airport concession, a port announcement, or an investment forum.

5. Damascus Is More Interested in the Gulf But Cannot Choose Only One Patron

A central part of my argument was that the Syrian government is not a passive recipient of external engagement. Quite the contrary. President Ahmad al-Sharaa’s pragmatism has long been noted, and the new authorities are actively managing, sequencing, and balancing between different partners.

Damascus needs Gulf support because it needs quick wins. It needs electricity, fuel, political recognition, investment announcements, infrastructure projects, and visible signs that the country is no longer isolated. Gulf engagement helps the government project an image of sovereignty and recovery.

But Damascus cannot fully align with any one Gulf actor without risking the frustration of others.

If it leans too strongly toward Saudi Arabia, Qatar, and the UAE may feel sidelined.
If it privileges Qatar too openly, Saudi Arabia and the UAE may worry about Doha’s influence and Türkiye’s proximity.
If it gives too much space to the UAE, Qatar, and others, they may see their earlier political investment diluted.

This gives Damascus room to maneuver, but it also creates risks.

The Syrian government’s strategy appears to be one of maximizing optionality. It wants to keep all major Gulf actors engaged, extract support from each, and avoid becoming dependent on any single patron. This is understandable. But it can also cause frustration if Gulf actors feel their support is not translating into privileged access, thereby creating potential risks.

The first is duplication. If multiple actors compete over similar sectors without coordination, Syria may end up with overlapping announcements, fragmented planning, and projects that are not integrated into a coherent national recovery strategy.

The second is opacity. Large infrastructure, energy, port, airport, and real estate deals can create long-term fiscal and regulatory consequences. If their terms are not public, it becomes difficult to assess pricing, guarantees, revenue-sharing, procurement standards, or contingent liabilities. I warned against this in my piece on Qatar-backed UCC Holding’s electricity projects.

The Syria Dispatch

Syria Needs More Electricity. Does It Matter Who Builds It?

Executive Summary…

Read more

2 months ago · 2 likes · Benjamin Fève

The third is political capture. Competitive stabilization can strengthen networks that control access to the state rather than institutions that transparently regulate investment. This matters especially in a context where Syria is rebuilding state capacity from a very low base.

The fourth is uneven recovery. Gulf-backed projects may concentrate in sectors and locations that generate returns, visibility, or strategic leverage: ports, airports, energy, logistics, tourism, real estate, and high-value urban development. These sectors matter, but they do not automatically improve living conditions for most Syrians.

6. Europe’s Risk Is Becoming Too Slow to Matter

With Europe, the risks are different.

If European support remains too slow, too fragmented, or too difficult to absorb, it may lose relevance in the eyes of Damascus. The Syrian government may continue to engage Europe diplomatically while looking elsewhere for the resources it actually needs.

This would be a mistake for both sides.

For Europe, Syria is not only a humanitarian issue. It is connected to regional stability, migration, energy, trade, counterterrorism, refugee returns, and the future of the Eastern Mediterranean. If Europe wants influence, it needs to move beyond statements and conditionality alone.

For Syria, Europe offers something the Gulf cannot easily provide: long-term institutional support, regulatory credibility, technical expertise, development funding, trade normalization, and eventual financial reintegration. These may be less visible than Gulf-backed projects, but they are essential if Syria wants a recovery process that is more than a series of deals.

The challenge is to make European engagement more operational without abandoning political principles.

That means clearer priorities, faster project preparation, better coordination with Syrian ministries, stronger banking channels, and more realistic sequencing between humanitarian aid, early recovery, development support, and private-sector engagement.

Subscribe now

8. Two Questions/Comments from the Discussion

During the Q&A, two questions helped clarify the broader stakes of the argument.

The first (not really a question but rather a comment) concerned whether Syria marks the end of the European Union’s ambition to support democratic nation-state building in its neighborhood.

While I did not have time to write a proper, fully-fledged reflection at the time, I would argue today that in the Syrian case, I would tend to agree and say that I do not really see the EU approaching engagement through the language of democratic state-building anymore—at least not in the way it might have claimed to do in earlier moments of Euro-Mediterranean policy.

This does not mean that European officials no longer care about governance, minority protection, accountability, inclusion, or the rule of law (and, broadly speaking, ‘democracy’). These issues remain present in European rhetoric and programming. But the hierarchy of priorities appears different.

In Syria today, the EU is primarily interested in helping produce a state that is more stable, safer, more functional, and less likely to generate insecurity for Europe. That may be understandable, albeit somewhat cynical. A major part of the European interest in Syria’s recovery is linked to migration, refugee returns, border security, counterterrorism, and the desire to prevent Syria from remaining a permanent source of instability. In that sense, Syria fits into a broader European pattern of externalizing security and migration management to its southern and eastern neighborhood.

This is interesting because Syria is not Egypt, Libya, Tunisia, or Lebanon. The EU is not engaging an existing authoritarian state, a collapsed transition, or a fragmented political order with inherited institutions. It is engaging a post-regime context in which the state itself is being reassembled (maybe something for academics to look into!).

If democracy is no longer the organizing objective, then the question becomes: what kind of state is Europe actually helping to build?

My reading is that the answer is a functional, unified, internationally legible Syrian state, and preferably inclusive and not overtly repressive, but above all stable enough to manage borders, refugees, security risks, aid flows, and economic recovery.

The second question/comment concerned the impact of the current regional war environment on Gulf investment in Syria.

Here, my answer was more cautious. Since it is still difficult to assess the impact, as many Gulf-related MoUs, investment announcements, and framework agreements signed before the latest escalation have not yet fully materialized, and implementation was already slow, we need to be careful before attributing forthcoming delays solely to the war.

The better indicators to watch are not only headline announcements, but the pace of official visits, business delegations, technical follow-up meetings, due diligence missions, financing structures, and so on. If these slow down significantly, then we can begin to speak of a more direct effect.

The war will almost certainly constrain political bandwidth. Gulf governments, investors, and state-linked companies have limited attention, and Syria is not their only priority (especially compared to their own countries). Regional escalation raises risk perceptions, complicates planning, and may delay decision-making.

But at the financial level, the picture is more nuanced.

The amounts discussed in Syria, even when they reach hundreds of millions or several billion dollars, remain relatively small compared to the financial capacity of Gulf states and their sovereign investment ecosystems. For Saudi Arabia, Qatar, and the UAE, Syria is not financially impossible, even if they now have to allocate even greater amounts to their own reconstruction.

In short, my answer was that the war may slow Gulf engagement, particularly in terms of attention, logistics, and investor confidence. But I would not assume that it fundamentally changes Gulf capacity to invest in Syria.

I would like to thank Raffaella A. Del Sarto, Théo Blanc, Olivier Roy, and the European University Institute for the invitation, as well as the other participants, for such a rich discussion on Syria’s post-Assad transition.

On May 22, 2026, I joined Umutcan Yüksel on the first episode of PRISM Insights: The Future of Syria: Economic Recovery and EU–Syria Relations for a wide-ranging discussion on Syria’s economic recovery, reconstruction prospects, energy politics, refugee returns, and evolving relations with the European Union.

The conversation took place roughly 15 months after the collapse of the Assad regime, at a moment when Syria was no longer in outright economic freefall, but still far from genuine recovery. Inflation has eased, investor and consumer sentiment have improved, electricity provision has expanded in parts of the country, and regional engagement has accelerated. Yet the daily economic reality for most Syrians remains extremely difficult.

Below is a structured readout of the key arguments I made during the discussion.

1. From Collapse to Partial Stabilization

I began by arguing that Syria’s economy is best understood as being in a phase of fragile stabilization, not reconstruction.

Over the past months, Syria has seen some improvements in macroeconomic indicators. Inflation has come down from extreme levels (but is picking up again), regional economic ties are reopening (but promises fail to materialize), refugees and IDPs are returning (to sometimes poor living conditions), and electricity provision has improved in parts of the country (unequally, and with prices increasing significantly). But these improvements start from an exceptionally low base.

The structural picture remains extremely fragile. GDP is still only a fraction of its pre-war level. Public institutions are overstretched. The banking system remains weak and disconnected, both from Syrians inside the country and from the international financial system. Purchasing power remains low, and investment announcements are still running ahead of actual implementation.

For that reason, I described Syria as moving:

This distinction matters because, while stabilization can mean that the worst forms of collapse have slowed, it does not necessarily mean that households are better off, that businesses can operate normally, or that people feel a material improvement in their daily lives.

During my most recent trip to Syria in early May, what struck me most was the scale of frustration with the economic situation, including in Damascus. This is important because if people are struggling in Damascus, the situation is likely even more difficult in Aleppo, Idlib, the northeast, the coast, and other areas further away from the political and administrative center. This was confirmed to me by contacts on the ground and reporters who have made the trip to Northern Syria.

I also emphasized that it would be unfair to blame all of this on the current authorities. Syria is emerging from near-total economic collapse, institutional fragmentation, sanctions, destruction, and massive capital flight. Recovery was always going to be slow.

Still, several policy choices have increased pressure on vulnerable households. The gradual lifting of subsidies on bread, fuel, and electricity has weighed heavily on Syrians who were already economically insecure. Discussions around greater privatization in sectors such as healthcare have also generated anxiety.

One central challenge today, therefore, is the tension between macroeconomic stabilization and social protection.

Subscribe now

2. Energy as the First Condition of Recovery

A major part of the discussion focused on energy. My main argument was rather straightforward: electricity is a condition for almost every form of recovery, not just one sector among others.

Electricity affects factory production, irrigation, cold storage, hospitals, schools, water pumping, telecoms, household welfare, and the ability of local markets to function. Where the lights are on, people are more likely to return, businesses are more likely to restart, and local economies are more likely to recover.

This is why recent energy arrangements are so important. Qatar has provided gas through Jordan. Azerbaijan has provided gas through Turkey to Aleppo. MOUs have been signed for new power plants. The government has also sought to regain control over oil and gas resources in the northeast.

Yet energy recovery also involves a difficult balancing act. Emergency gas and fuel support can improve electricity supply quickly, but new power plants, offshore exploration, oil and gas development, and grid rehabilitation are much longer-term projects.

The government, therefore, needs to ensure that short- and medium-term support from countries such as Qatar, Turkey, Azerbaijan, Saudi Arabia, Jordan, and Egypt remains durable enough to allow time for deeper rehabilitation.

I also warned that energy recovery can create an uneven geography of reconstruction. Areas connected to gas supply, generation, or transmission improvements will recover faster. Areas outside those networks may lag, even if they are politically important or resource-rich.

3. EU–Syria Normalization: Politically Significant, Economically Slow

We then turned to EU–Syria relations. I argued that the improvement in relations between the European Union and Syria is politically significant, but its immediate economic impact should not be overstated.

The EU lifted most economic sanctions in 2025 and moved to restore the full application of the 1978 EU–Syria Cooperation Agreement. This marks a major political normalization after years of rupture. But it does not mean that European companies or banks will quickly return to Syria.

Sanctions relief changes the legal environment, but it does not automatically solve Syria’s operational constraints. Banks remain cautious. Companies still face uncertainty. Payment channels are weak. The investment climate remains difficult.

The same applies to European aid and socio-economic support. The EU has pledged substantial funding since Assad’s fall, but implementation remains slow. It is difficult to find reliable partners on the ground, difficult to move money into Syria, and difficult to align European and Syrian priorities around reconstruction and recovery.

Moving from an emergency humanitarian framework toward development assistance and socio-economic recovery takes time. For that reason, I argued that EU–Syria normalization is very important politically, but will require time before it becomes economically meaningful.

This is not only true for Europe. Gulf countries, Turkey, and other partners have also promised significant support and investment. But in many cases, announcements have moved faster than implementation.

4. Aid, Investment, and the Limits of the “We Want Investment, Not Aid” Narrative

Another central tension in Syria’s recovery is the government’s insistence that it wants investment, not aid.

Politically, this makes sense. No postwar government wants its legitimacy to rest solely on humanitarian dependency. The new Syrian authorities want to project sovereignty, normality, and economic revival. They want power plants, industrial projects, tourism, ports, logistics, and private investment, not only aid convoys and emergency relief.

But economically, aid and investment solve different problems.

Private investment will not replace humanitarian support in areas where people are poor, services are weak, and markets are not functioning. With millions of Syrians still requiring assistance and the humanitarian response facing major funding gaps, Syria cannot simply substitute aid with investment.

At the same time, I understand why the government wants to move beyond the emergency framework. If people only continue to see humanitarian trucks and aid deliveries, while officials announce large investments abroad, frustration will grow. Syrians need to see recovery materialize in visible and practical ways: better electricity, functioning services, jobs, and local economic activity.

The challenge is therefore not to choose between aid and investment, but rather to manage both.

The government should give international organizations and NGOs enough room to operate, while also pursuing investment in sectors that can restart economic life. Excessive centralization of aid and recovery processes risks slowing delivery and alienating donors.

As I put it in the discussion, the government cannot simply refuse aid. It still needs billions of dollars per year in external support. The more constructive approach would be to frame aid, development support, and investment as complementary parts of the same recovery process.

Subscribe now

5. Syria, Lebanon, Turkey, and the Political Economy of Refugee Returns

We also discussed Syria’s economic relationship with neighboring countries, especially Lebanon and Turkey.

On Lebanon, I argued that Syria and Lebanon are deeply economically interdependent. Their relationship has long involved labor, trade, informal finance, smuggling networks, refugee flows, and transport corridors. If Syria stabilizes, Lebanon could benefit through voluntary returns, renewed trade, transport activity, tourism, and cross-border commerce.

But Lebanon’s own collapse limits its ability to play the role it once did. Lebanese banks are damaged, the state is weak, and border infrastructure remains vulnerable.

I made the point (maybe somewhat bluntly and controversially) that:

This is because Syria is Lebanon’s only viable land gateway to the Arab hinterland. Beirut needs Damascus for overland trade, transit routes, potential electricity interconnection, and possibly future energy flows.

At the same time, refugee returns should not be celebrated too quickly. Large-scale returns could reduce pressure on Lebanese housing and services, but they could also reduce humanitarian funding flows into Lebanon and shrink parts of the low-wage labor force.

The same applies, in different ways, to Turkey. Syrians in Turkey are relatively well integrated compared to Syrians in Lebanon, Jordan, Egypt, or Iraq. They are active in the Turkish economy, including in sectors that depend on low-wage labor. A large-scale return of Syrians would therefore have economic consequences for Turkey as well.

More broadly, I argued that European and regional expectations around returns remain too simplistic. Many assumed that once Assad fell, Syrians would return quickly. But return is not just a question of permission or safety.

That means housing, electricity, schools, water, healthcare, documentation, security, and livelihoods. Without these, return risks becoming a transfer of vulnerability: Syrians who were vulnerable in Turkey, Lebanon, Jordan, Iraq, Egypt, or Europe may simply become vulnerable inside Syria.

Some Syrians will return. Many already have. But others will not, especially those with citizenship, residency, jobs, family ties, and social networks in host countries. European and regional policymakers need to accept that some Syrians will stay abroad, and that this is not necessarily a bad thing.

6. What Gives Me Hope and What Worries Me

The final question was more personal: what gives me hope, and what worries me?

What gives me hope is the ability of Syrians to rebuild economic and social life from almost nothing.

In Syria, this is visible everywhere: small businesses reopening after years of destruction, families returning despite uncertainty, traders reconnecting supply chains, young people launching projects, and communities trying to restore some form of normality after more than a decade of war and displacement.

There is also an international and regional opening today that did not exist before. Syria is no longer isolated diplomatically or economically. Regional actors, international organizations, investors, the IMF, and the World Bank are all engaging in ways that would have been unimaginable only a few years ago.

But what worries me is the possibility that reconstruction becomes too narrow politically and economically.

There is a risk that recovery becomes too centralized, too opaque, and too focused on large headline investments. Syria could end up with announcements, luxury projects, diplomatic meetings, and reconstruction contracts — but without meaningful improvements in the daily lives of most Syrians.

I also worry about expectations. Many Syrians expected the fall of the Assad regime to quickly translate into better living conditions, more dignity, and greater economic opportunity. But recovery after this level of destruction will be long, uneven, and painful. If the gap between expectations and lived reality becomes too wide, frustration could grow quickly.

At the end of the day, Syria does not just need capital or reconstruction contracts.

It needs trust, functioning institutions, credible rules, social protection, and a recovery process that people can actually feel in their daily lives.

We are not there yet. But with enough support, engagement, pressure, and institutional learning, Syria can still move from partial stabilization toward a recovery that is not only visible in macroeconomic indicators but felt by ordinary Syrians.

I would like to thank Umutcan Yüksel and PRISM Insights for the invitation and for launching the podcast series with such a substantive discussion.

You can listen to the full episode here:
👉 https://www.prismonitor.eu/insights/the-future-of-syria-economic-recovery-and-eu-syria-relations

The episode runs for 42 minutes and covers Syria’s economic recovery, energy constraints, EU–Syria relations, aid and investment, refugee returns, regional interdependence, and the challenge of turning political normalization into material recovery.

Read the report from my previous podcast appearance, “Centralization First: Syria’s Emerging Political Economy,” based on my discussion with Colin Powers and Richard Solomon on Sultat al Mal, where we explored reconstruction, Gulf capital, sovereign debt, and the risks of managed access.

Nearly three months later, many of the structural questions we discussed remain highly relevant: the centralization of authority under the new institutional setup, the rise of sovereign and development funds, the growing reliance on PPPs, evolving state–capital relations, Gulf capital’s expanding role, and the unresolved questions surrounding sovereign debt and financial reform.

The conversation took place at an early but decisive moment in Syria’s post-Assad transition—when institutions were still being consolidated, major MOUs were being signed, and the contours of the new political economy were beginning to take shape. Below is a structured readout of the key arguments I made during the discussion.

1. Centralization and the “Project State” Model

In the first part of the program, I argued that the new institutional setup signals a clear hierarchy of priorities: centralization first, investment facilitation second, and accountability third—for now. The Constitutional Declaration concentrates authority in the presidency, while newly created or revamped bodies, including the Supreme Council for Economic Development, the Syrian Investment Authority, and the Syrian Sovereign and Development Funds, largely report upward rather than outward.

I characterized the emerging model as a “project state”, where reconstruction is fast-tracked through sovereign/development vehicles and public-private partnerships, with the presidency acting as the central hub. At the same time, a technocratic layer built atop a factional inheritance, with governing instincts shaped by Idlib’s wartime political economy: tight control, selective inclusion, and speed. This can produce early wins (e.g., ports and energy MOUs) but risks institutionalizing opacity.

A year after the collapse of the Assad regime, I emphasized that this remains an early post-regime phase. The Constitutional Declaration was drafted quickly to balance domestic and international audiences during a period when the new authorities were still consolidating power. The rules of the game are not yet fully set a d that Parliament’s ability to legislate and exercise oversight will be a key test of whether meaningful checks on executive and economic power emerge.

2. State–Capital Relations: Managed Access, Not Open Competition

There are obviously clear continuities between Idlib and Damascus in the structure of state–capital relations, as I described the current pattern as:

• Centralized bargaining rather than rules-based policymaking, with deals routed through committees and funds with limited public disclosure.

• “Managed access” rather than “free access”, where businesspeople operate through proximity and sponsorship networks.

“We have first centralized bargaining rather than rules-based policymaking.”

In my view, this is unsurprising for several reasons: (1) many formerly wealthy elites were tied to Assad and are now sidelined or cautious; (2) authorities must move quickly, and personal networks accelerate decisions; (3) investors close to the current leadership are more willing to move in Syria’s high-risk environment; (4) there is a strong supply-and-demand dynamic, with many investors eager to enter; thereby, limiting their leverage to impose conditions.

As a result, early beneficiaries are likely to be firms positioned to win concessions and PPPs, along with intermediaries who possess security-bureaucratic access. Broader households, given that roughly 90% of the population lives under the poverty line, will only benefit if deals translate into tangible improvements in electricity, water, jobs, and price stability.

Obviously, there is a risk for these patterns to become entrenched. However, two potential counterweights should be considered:

• Donors and international partners, if they coordinate around transparency, procurement standards, and audit safeguards;

• Parliament, if it gains the capacity to legislate and oversee executive economic decisions meaningfully.

3. Gulf Capital: Necessary but Risky

In my opinion, Syria’s outreach to the Gulf reflects limited alternatives. Yet, the state is effectively swapping long-term revenue streams for short-term capital expenditure, fuel, and legitimacy. While Gulf engagement may be one of the only viable sources of large-scale financing, it risks rent leakage, weak domestic value capture, and longer-term fiscal vulnerabilities, especially if PPP structures generate implicit or contingent liabilities.

Parliamentary oversight will be key.

Still, details surrounding various deals, including the UCC Holding BOO electricity deal, for which I mentioned that key contractual terms (pricing, indexation, guarantees) have not been made public, making firm conclusions impossible.

4. Banking Sector Constraints

Then, I discussed plans to expand Syria’s banking sector, possibly by doubling the number of banks, as per a previous statement from the Central Bank Governor. I argued that the most realistic path would involve foreign banks (particularly Gulf institutions) opening affiliates or recapitalizing existing Syrian banks.

However, I see several major bottlenecks:

• Lack of correspondent banking relationships;

• Persistent compliance caution despite sanctions easing;

• Snapback risks;

• AML/CFT vulnerabilities and heavy cash usage;

• Weak capitalization and non-performing loan exposure in domestic banks.

Indeed, only a small share of liquidity is in the formal banking system, and meaningful normalization will take time.

5. Debt to Iran, the EU, and Future Borrowing

On the topic of debt, I expressed some skepticism vis-a-vis the various figures put forward. Syrian authorities have cited approximately $30 billion owed to Iran and Russia, while leaked Iranian documents have suggested up to $50 billion owed to Tehran alone. This is because much of this debt was opaque and did not follow proper parliamentary procedures.

As a result, the most likely path is selective contestation, particularly framing Iranian claims as “odious” or non-enforceable. In fact, I highly doubt that Syria will repay substantial portions of that debt.

I also highlighted Syria’s outstanding obligations to the European Union (approximately €640–700 million), suggesting that restructuring or forgiveness is more plausible than repayment.

Regarding new borrowing, although Syria is now eligible for World Bank operations after Gulf states cleared arrears, officials have publicly signaled reluctance to borrow externally. However, I am still quite skeptical about a strategy relying primarily on donations and PPP-style investment, noting that “free money” is rarely free and often carries political or economic strings.

I would like to sincerely thank Colin Powers for the invitation and for hosting such a thoughtful and substantive discussion on Sultat al Mal – The Power of Money. It was a real pleasure to exchange views with both Colin and Richard Solomon at such an important moment in Syria’s transition.

If you would like to listen to the full episode (Episode 9: Ahmed al-Sharaa’s Syria – A Political Economy, Part 1), you can find it here:
👉 https://podcast.ausha.co/sultat-al-mal-the-power-of-money/9-ahmed-al-sharaa-s-syria-a-political-economy-part-1

The episode runs for 55 minutes and covers institutional restructuring, state–capital relations, Gulf financing, sovereign debt, and the outlook for Syria’s financial sector in greater depth.

And of course, I would also encourage you to listen to Part 2 of the conversation (Episode 10 – Ahmed al-Sharaa’s Syria: A Political Economy, Part 2): https://podcast.ausha.co/sultat-al-mal-the-power-of-money/10-ahmed-al-sharaa-s-syria-a-political-economy-part-2