Rebuilding through reform: Syria’s post-sanctions economic crossroads

In a landmark announcement from Riyadh, U.S. President Donald Trump declared a full lifting of American sanctions on Syria—marking the first major international move following the fall of the previous regime and the formation of a transitional government. While the decision drew significant political attention, its economic implications are equally critical and warrant a closer look at the context, drivers, opportunities, and potential risks.

Since 2011, U.S. and European sanctions have served as the main tools for isolating Syria economically. These measures targeted financial transactions, froze assets, restricted trade, and directly impacted strategic sectors including energy, the central bank, and state-linked companies. Over time, they helped drive a deep economic collapse: the country’s GDP shrank by more than 60 per cent, the Syrian pound lost most of its value, poverty rates rose above 85 percent, and over 12 million Syrians came to rely on humanitarian aid.

Lifting these sanctions represents more than a legal shift—it signals the gradual reintegration of Syria into the global financial system. One immediate area of impact is the financial sector. For years, Syria’s isolation from international banking networks hindered its ability to conduct trade or receive remittances. With the lifting of sanctions, Syrian banks—especially new ones operating under the transitional government—could reconnect to global systems like SWIFT, helping to restore cross-border transactions, encourage trade, and revive the inflow of remittances from Syrians abroad, a crucial source of hard currency.

Another significant area of change is the energy and investment landscape. Sanctions had crippled Syria’s oil and gas sector, reducing production and exports. Now, the removal of restrictions could attract international interest—possibly from U.S. or Gulf-based companies—in rebuilding energy infrastructure. Investment in this area could serve as a key driver of economic recovery, restoring part of the state’s revenue base and creating employment.

Trade and supply chains are also expected to see renewed activity. Under sanctions, Syria’s access to essential goods and industrial inputs was severely limited, often relying on high-cost smuggling or indirect import routes. With reentry into global supply networks, sectors such as agriculture and manufacturing could gain traction. Access to medical equipment, industrial machinery, and digital technologies will also be essential for the reconstruction process.

Despite these opportunities, challenges remain. The lifting of sanctions alone will not bring immediate investment. Investors will be watching for signs of political and regulatory stability, reforms in the banking sector, and basic security guarantees. Additionally, Syria’s economy remains fragmented and lacks a unified policy framework, which could complicate the path forward.

The regional dimension of the announcement also matters. Saudi Arabia’s role in hosting the declaration signals a broader interest in shaping Syria’s reconstruction. Investment agreements signed alongside the announcement, particularly in energy and technology, suggest a coordinated effort to reintroduce Syria into a regional economic order aligned with new geopolitical priorities.

For Jordan, the move presents a strategic economic opportunity. As a key transit hub between the Gulf and Europe, Jordan could benefit from the reopening of the Jaber–Nassib border crossing, revitalizing its logistics and transport sectors. Jordanian exports—especially agricultural and light industrial goods—could find a nearby market as Syria reopens. The construction sector in Jordan may also see new prospects in contributing to Syria’s rebuilding. However, these opportunities depend on improvements in Syria’s internal conditions and clear bilateral investment regulations.

The success of this economic opening depends on the Syrian government’s ability to demonstrate genuine reform, institutional stability, and a clear economic vision. The lifting of sanctions offers a historic chance—but it is also a test of whether Syria can move from collapse to recovery through partnerships, production, and sustainable development rather than dependency on aid.

Raad Mahmoud Al-Tal is head of the Economics Department – University of Jordan – r.tal@ju.edu.jo