Economic Update – Analysis
Syria is currently experiencing significant economic decline, coupled with escalating security risks, with calls for the United States to consider temporarily lifting sanctions to prevent further destabilization, as the country is nearing a state of failure.
Three months post-regime change, Syria remains in a critical situation. A protracted civil war lasting 14 years has decimated the nation’s economy, leaving 90% of the population living below the poverty line, while approximately 16.5 million individuals rely on humanitarian aid to fulfill their basic needs.
The newly established Syrian administration is grappling with formidable challenges, particularly in reforming an economically chaotic environment, and seeks assistance from various sources. The Biden Administration has the opportunity to alleviate some restrictions that are currently hindering recovery efforts in Syria.
Impact of US Sanctions
The sanctions imposed on Syria, supported by certain Western allies, rank among the strictest globally, effectively crippling economic activity within the nation. However, the ruling regime under Assad has been minimally affected due to support from Russia and other sources.
Indeed, certain countries have begun to relax specific sanctions to facilitate recovery efforts by the new leadership. For instance, the European Union has lifted restrictions on the energy, banking, and transportation sectors, while the UK has removed sanctions on 24 Syrian entities and unblocked assets of the Syrian Bank. Canada has also allowed funds to reach Syrian banks.
Despite these measures, significant financial aid and foreign investment have not yet materialized, largely because stringent US sanctions remain in place. Additionally, Gulf states remain cautious in providing assistance, wary of potential violations of US laws.
Syrian and international relief organizations, alongside human rights advocates, as well as members of the Jewish community with historical ties to Syria advocating for the restoration of ancient temples, have urged the Biden Administration to ease sanctions.
In conclusion, while the United States has outlined its rationale for maintaining these restrictions, it holds the power to stave off Syria’s descent into a failed state by temporarily lifting sanctions without incurring additional financial costs.
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