As of 2015, the Syrian economy is reliant on fundamentally unstable revenue streams such as decreasing customs and income taxes, which are supported in part by Iranian lines of credit. During the Syrian Civil War, Iran is thought to invest between $6 billion and $20 billion dollars each year on Syria. The Syrian economy has shrunk by 60%, and the Syrian pound has lost 80% of its value, as the country’s economy has shifted from state-owned to war-driven. Syria was categorized as a “lower middle income nation” by the World Bank at the start of the current Syrian Civil War. Syria’s economy remained reliant on oil and agriculture in 2010. About 40% of export profits came from the oil industry. Large amounts of oil are believed to exist on the Mediterranean Sea bottom between Syria and Cyprus, according to proven offshore missions. Agriculture accounts for about 20% of GDP and 20% of employment in the United States. In the next years, oil reserves are projected to decline, and Syria has already become a net oil importer. The Syrian economy has shrunk by 35% since the civil war started, and the Syrian pound has plummeted to one-sixth of its prewar value. Iran, Russia, and China are progressively providing loans to the government.
The government regulates the economy heavily, increasing subsidies and tightening trade restrictions to appease protestors and preserve foreign currency reserves. Foreign trade restrictions, decreasing oil output, high unemployment, growing budget deficits, and increasing pressure on water resources due to heavy usage in agriculture, fast population growth, industrial development, and water pollution are all long-term economic limitations. According to the UNDP, 30% of the Syrian population lives in poverty, with 11.4 percent living below the poverty line.
Since 2001, Syria’s proportion in world exports has steadily decreased. During the years 2000–2008, real per capita GDP growth was just 2.5 percent per year. Unemployment is at a peak of more than 10%. The poverty rate has risen from 11% in 2004 to 12.3 percent in 2007. Crude oil, processed goods, raw cotton, textiles, fruits, and cereals were among Syria’s major exports in 2007. Raw materials for industry, cars, agricultural equipment, and heavy machinery account for the majority of Syrian imports. The government’s main sources of foreign currency are earnings from oil exports and remittances from Syrian employees.
Political instability is a major risk to future economic growth. Violence, government limitations, economic sanctions, and international isolation all limit foreign investment. Syria’s economy is additionally hampered by the government’s bureaucracy, declining oil output, increasing budget deficits, and inflation.
Prior to the civil conflict in 2011, the government intended to diversify its economy and decrease its reliance on oil and agriculture by attracting new investment in tourism, natural gas, and service industries. The administration started to implement economic changes aiming at liberalizing most markets, but they were sluggish and haphazard, and they have been entirely overturned since the war began in 2011.
The value of Syria’s total exports has been reduced by two-thirds since 2010, from US$12 billion in 2010 to just US$4 billion in 2012. This is due to the continuing Syrian civil conflict. Syria’s GDP dropped by more than 3% in 2011 and is projected to drop by another 20% in 2012.
Syria’s oil and tourist sectors, in particular, have been decimated since 2012, with the continuing civil war costing the country $5 billion. The continuing civil conflict will need reconstruction costs of up to $10 billion. The government’s finances have been drained by sanctions. Oil import restrictions imposed by the United States and the European Union in 2012 are expected to cost Syria $400 million per month.
Tourism revenues have plummeted, with hotel occupancy rates plummeting from 90 percent before the conflict to less than 15 percent in May 2012. Since the commencement of the conflict, about 40% of all tourist workers have lost their employment.
ISIS took control of Syria’s phosphate mines in May 2015, cutting off one of the Assad regime’s last major sources of revenue. ISIS blew up a gas pipeline to Damascus that was used to produce heating and power in Damascus and Homs the next month; “the name of its game for now is denial of critical resources to the government,” according to one expert. In addition, ISIS is closing in on the Shaer gas field and three other nearby facilities—Hayan, Jihar, and Ebla—with the loss of these western gas resources potentially causing Iran to support the Assad government even more.
Syria’s petroleum sector has been on the decline for a long time. In September 2014, ISIS was producing more oil than the regime, at 80,000 barrels per day (13,000 m3/d) compared to the regime’s 17,000 barrels per day (2,700 m3/d), with the Syrian Oil Ministry reporting that by the end of 2014, oil production had plummeted to 9,329 barrels per day (1,483.2 m3/d); ISIS has since captured another oil field, resulting in a projected oil production of 6,829 barrels per day (1, Syria’s two major oil refineries were working at less than 10% capacity in the third year of the Syrian Civil War, according to deputy economics minister Salman Hayan.
Since the late 1960s, the nation has been producing heavy-grade oil from sources in the northeast. Light-grade, low-sulphur oil was found in Deir ez-Zor in eastern Syria in the early 1980s. Syria’s oil output has plummeted from a high of over 600,000 barrels per day (95,000 m3/d) in 1995 to less than 182,500 barrels per day (29,020 m3/d) in 2012. Since 2012, output has dropped even more, reaching 32,000 barrels per day (5,100 m3/d) in 2014. (bpd). Official statistics put production at 27,000 barrels per day (4,300 m3/d) in 2015, but such data should be interpreted with care since it’s impossible to determine how much oil is being produced in rebel-controlled regions.
Prior to the revolt, over 90% of Syria’s oil exports went to EU nations, with the rest going to Turkey. In 2012, oil and gas income accounted for about 20% of overall GDP and 25% of total government revenue.