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Will sanctions relief unlock Syria’s potential, spur economic recovery?

Analysis Will sanctions relief unlock Syria’s potential, spur economic recovery?
Experts argue the interim government and international partners can still take steps to foster investment and recovery. (AFP)(AFP)
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Updated 25 May 2025

Will sanctions relief unlock Syria’s potential, spur economic recovery?

Will sanctions relief unlock Syria’s potential, spur economic recovery?
  • With US and EU restrictions easing and the diaspora mobilizing, Syria’s entrepreneurs are cautiously eyeing a path to renewal
  • The future may depend less on oil, and more on whether people believe it is safe to come home — and stay, analysts say

LONDON: In a major shift in US foreign policy, President Donald Trump recently pledged to lift sanctions on Syria — a move that has sparked cautious optimism among Syrian entrepreneurs eyeing a long-awaited path to economic recovery after years of war and isolation.

The announcement was quickly followed by a widely publicized meeting in Riyadh on May 14 between Trump and Syria’s interim president, Ahmad Al-Sharaa, ahead of a broader summit of Gulf leaders during Trump’s regional tour, signaling a renewed emphasis on diplomatic engagement with Damascus.

Hosted by Saudi Crown Prince Mohammed bin Salman, the meeting marked the most significant international overture to Syria since the fall of Bashar Assad’s regime in December.

It also marked the first meeting between a sitting US president and a Syrian head of state in more than 20 years.




Sanctions imposed on the Assad regime and inherited by Al-Sharaa’s government targeted key sectors such as banking, transport and energy. (AFP)

As a follow-up to Trump’sannouncement,the US governmenton Saturday issued a six-month waiver of key Caesar Act sanctions, authorizing transactions with Syria’s interim government, central bank, and state firms. The move also clears the way for investment in energy, water, and infrastructure to support humanitarian aid and reconstruction.

Significantly, the EU announced on May 20 that it would follow the US lead and lift its own remaining sanctions on Syria. “We want to help the Syrian people rebuild a new, inclusive and peaceful Syria,” EU foreign policychief Kaja Kallas postedon X.

Analysts believe that these developments indicatea thaw in relations, opening the door to future cooperation, particularly in rebuilding Syria’s war-ravaged economy.

“Lifting sanctions is a necessary and critical measure,” Syrian economic adviser Humam Aljazaeri told Arab News, highlighting that a key sector poised to benefit is energy, particularly electricity generation.

Syria’s energy infrastructure has been decimated by more than a decade of civil war and sanctions.

Before the conflict erupted in 2011, Syria produced about 400,000 barrels of oil a day, nearly half of which was exported, according to the Alma Research and Education Center.




Saudi Crown Prince Mohammed bin Salman, center, hosted a meeting between Syria’s interim president, Ahmed Al-Sharaa, right, and US President Donald Trump in Riyadh. (SPA)

Since then, oil and gas output has plunged by more than 80 percent, as fields, refineries and pipelines were destroyed or seized by warring factions, according to World Bank data.

Power generation dropped 56 percent between 2011 and 2015, the local newspaper Al-Watan reported at the time. Today, daily blackouts — sometimes lasting 20 hours — are a grim feature of life across Syria.

Beyond energy, Aljazaeri highlighted the humanitarian sector as another area in urgent need of relief. If sanctions are lifted, Syria “would enjoy a frictionless flow of programs through various UN and other international agencies,” he said.

That relief cannot come soon enough. The UN estimates that 16.7 million Syrians — roughly three-quarters of the population — will require humanitarian aid in 2025. Syria is now the world’s fourth most food-insecure country, with 14.5 million people in need of nutritional support.

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Despite the scale of need, international funding remains woefully short. As of late February, only 10 percent of the $1.2 billion required for early 2025 humanitarian operations had been secured, according to the UN Office for the Coordination of Humanitarian Affairs.

Even when funds are available, getting aid to those in need is an ongoing logistical challenge. Continued conflict, insecurity and decimated infrastructure — especially in the hard-hit northern and northeastern regions — make delivery slow and difficult.

Conditions are worsening. Severe drought this year threatens to wipe out up to 75 percent of Syria’s wheat crop, according to the UN Food and Agriculture Organization, placing millions at even greater risk of hunger.




Syria is now the world’s fourth most food-insecure country, with 14.5 million people in need of nutritional support. (AFP)

The crisis is further compounded by the return of about 1.2 million displaced Syrians between December and early 2025. Many have returned to towns and villages in ruins, overwhelming humanitarian services.

While sectors such as transport and trade could see quick wins if sanctions are eased, Aljazaeri cautioned that a full recovery would require time and clearer international policy direction.

“Sectors like infrastructure, health, education and general business are not expected to move quickly in the interim period,” he said. “These areas need a clearer international policy on sanctions and a more stable investment climate.”

Lifting sanctions is a necessary and critical measure

Humam Aljazaeri, Syrian economic adviser

For now, Aljazaeri said, the US is expected to offer only limited relief — temporary exemptions and executive licenses for 180 days — before reassessing its stance, potentially through a broader congressional review.

“This piecemeal approach won’t provide enough assurance for serious investors,” he said. “Against this backdrop, it is important to see how the government will act in the coming weeks and months to justify further international integration and a more sustainable lifting of sanctions.”

Rebuilding Syria could cost between $400 billion and $600 billion, according to Lebanese economist Nasser Saidi.




Syria’s energy infrastructure has been decimated by more than a decade of civil war and sanctions. (AFP)

Syria’s natural resources and its regional pipeline network could attract investors, he wrote in an essay for Arabian Gulf Business Insight magazine.

However, he emphasized that tapping this potential would require dismantling the country’s “corrupt, politically controlled, state-owned enterprises and government-related entities,” and reviving a vibrant private sector.

Some positive steps, however small, are already underway. The Karam Shaar Advisory, a New Zealand-based consulting firm, noted that 97 new limited liability companies were registered in Syria between Assad’s fall in December and March 26.

While the firm called it “a modest rise in formal company formation,” it said that economic stagnation persists.

Meanwhile, efforts to rebuild shattered infrastructure are gaining traction, particularly with the Syrian diaspora poised to play a role.

INNUMBERS

• 84% Syria’s GDP contraction between 2010 and 2023.

• $400–$600bn Syria’s projected reconstruction and redevelopment needs.

(Sources: World Bank & Nasser Saidi & Associates)

“Conversations are underway about involving all stakeholders to create enabling frameworks,” Mohamed Ghazal, managing director of Startup Syria, a community-led initiative supporting Syrian entrepreneurs, told Arab News.

Government buy-in will be essential. “Think tanks and task forces are working on this, but strong cooperation from the Syrian government is crucial — and there are promising signs in this direction,” Ghazal said.

He highlighted the diaspora’s potential to drive investment, skills transfer and community development. “There is a growing recognition that the Syrian diaspora can significantly contribute to ecosystem-building,” he said.

Still, many in the diaspora remain cautious. Ghazal said that the tipping point for engagement included sustainable peace, rule of law, property rights, improved governance, reduced corruption, investment incentives, infrastructure reconstruction and a coordinated international approach.

Aljazaeri echoed those concerns, noting that lifting sanctions alone would not stabilize Syria or improve living conditions. “Issues related to law and order, reconciliation and good policies are detrimental,” he said.

“In our view, it is not inflation, corruption, or cronyism that would pose a challenge at this stage, rather ‘right economics’ or the lack of it. The Syrian administration needs to demonstrate competency in running the economy and applying the necessary reforms.

“It has the power, maybe also the will, but must have the capabilities to do the right thing,” he said, stressing that “to do that, it needs to engage more and widen the pool of dialogue and trust.”




Despite the optimism, the path ahead remains fraught with dangers. (AFP)

However, the path ahead remains fraught with dangers. Geir Pedersen, the UN special envoy for Syria, warned on Wednesday of “the real dangers of renewed conflict and deeper fragmentation” in the war-torn country.

Since Assad’s fall, Syria has seen new waves of violence, particularly along the coast, where his Alawite sect is concentrated. Hayat Tahrir Al-Sham, the Islamist group that led the offensive that toppled Assad, now controls much of the area, which has been wracked by sectarian violence.

Reports of mass executions, looting and arson have heightened fears of renewed sectarian conflict. Al-Sharaa’s government is reportedly struggling to assert control, facing clashes with Druze in the south and standoffs with Kurds in the northeast.

“The Al-Sharaa government has two options in Syria; bring the minorities into government in a meaningful way so they feel invested in the future of the country and believe that they can protect themselves from within the state, or to suppress the minorities and force their compliance,” Joshua Landis, director of the Center for Middle East Studies at the University of Oklahoma, told Arab News.

FASTFACTS

• By 2023, the Syrian pound had collapsed 300-fold from SYP47 per dollar in 2011 to over SYP14,000.

• Hack for Syria, a hybrid event held Feb. 22–28, drew 5,500 participants from Syria and abroad.

“So far, Al-Sharaa has been using both methods. With the Alawites, he has favored the second method — force. With the Druze and Kurds, he has offered deals.”

Despite the instability, experts argue the interim government and international partners can still take steps to foster investment and recovery.

“Temporarily unlocking frozen financial assets could provide a lifeline,” Aljazaeri said. “How those resources are used will define the government’s direction.”

Ghazal said that capital is urgently needed to fuel entrepreneurship. “Transparent financial channels, encouragement of diaspora investment and attraction of impact investors could bring necessary seed and growth capital,” he said.

He noted Syria’s growing startup scene, with more than 200 active ventures. Events such as the “Hack for Syria” hackathon, held from Feb. 22–28, showcased the country’s talent and drive to solve local problems.

“However, these entrepreneurs need support to scale and access global opportunities,” he said.

Sanctions imposed on the Assad regime and inherited by Al-Sharaa’s government targeted key sectors such as banking, transport and energy.

Syria’s gross domestic product plunged from $67.5 billion in 2011 to about $21 billion in 2024, according to the World Bank.




The diaspora has a potential to drive investment, skills transfer and community development. (AFP)

The sanctions cut Syria off from the global financial system, froze government assets and strangled trade — especially in oil — crippling state revenues and economic activity.

This contributed to widespread poverty, with more than 90 percent of Syrians forced below the poverty line.

As Syria emerges from more than a decade of turmoil, the lifting of US and EU sanctions offers a rare economic lifeline — and the possibility of a new chapter in its complex relationship with the West.


UN aid chief says Israel’s blocking of food to Gaza is a ‘war crime’

UN aid chief says Israel’s blocking of food to Gaza is a ‘war crime’
Updated 30 May 2025

UN aid chief says Israel’s blocking of food to Gaza is a ‘war crime’

UN aid chief says Israel’s blocking of food to Gaza is a ‘war crime’
  • Tom Fletcher says Israel is attempting to forcibly displace the Palestinian population by withholding aid
  • ‘History will be tough in the way it judges us’ over failing to prevent genocide, he tells BBC

LONDON: Israel’s blocking of food aid to starving Palestinians in Gaza in an attempt to forcibly remove the population amounts to a war crime, the UN’s humanitarian chief said in an interview broadcast on Friday.

Israel allowed a trickle of supplies into Gaza last week after a complete blockade for nearly three months. But there have been chaotic and deadly scenes amid a new distribution system that sidelined the UN.

“We’re seeing food sat on the borders and not being allowed in when there is a population on the other side of the border that is starving, and we’re hearing Israeli ministers say that is to put pressure on the population of Gaza,” Tom Fletcher .

Using food as a weapon “is classified as a war crime,” he said, adding that would be for the courts and history to judge.

He also warned Israel against the forced displacement of Palestinians from Gaza to another country, a policy that Israeli Prime Minister Benjamin Netanyahu and members of his hard-line cabinet have advocated.

Earlier this month, Israel’s extremist Finance Minister Bezalel Smotrich said Gaza would be “totally destroyed” within six months and Palestinians there would be so despairing that they would be “looking for relocation to begin a new life in other places.”

Fletcher called on Netanyahu to ensure that “this language, and ultimately, this policy ... of forced displacement, isn’t enacted.”

Since Israel broke a two-month ceasefire in March it has ramped up its operations in Gaza, killing thousands more Palestinian civilians in an attempt to take full military control of the territory.

The increased violence has led European countries to shift their stance and threaten sanctions against Israel if it does not stop the slaughter and allow the full flow of aid.

On May 14, Fletcher told the UN Security Council that it must act to prevent genocide in Gaza. He said the comments were in response to what his colleagues on the ground were telling him.

“What they’re reporting is forced displacement. They’re reporting starvation, they’re reporting torture, and they’re reporting deaths on a massive scale,” he said.

“In previous cases, Rwanda, Srebrenica and Sri Lanka, the world had told us afterwards that we didn’t act in time, that we didn’t sound the warning and ask that the world respond to prevent genocide.

“And that’s my call to the Security Council and the world right now, ‘will you act to prevent genocide?’”

He added: “History will be tough in the way it judges us. And it must be.”

The conflict has killed almost 54,000 Palestinians since it started in October 2023 when a Hamas-led assault killed 1,200 Israelis and seized dozens of hostages.


Israel’s Gaza war producing ‘staggering’ carbon footprint

Israel’s Gaza war producing ‘staggering’ carbon footprint
Updated 30 May 2025

Israel’s Gaza war producing ‘staggering’ carbon footprint

Israel’s Gaza war producing ‘staggering’ carbon footprint
  • Emissions from military activity, reconstruction more than annual footprint of 100 countries: Study
  • Analyst: ‘Sobering reminder of the ecological and environmental cost of Israel’s genocidal campaign’

LONDON: The emissions caused by Israel’s war on Gaza as well as estimated reconstruction costs are greater than the annual footprint of 100 individual countries, new research has found.

The war caused more carbon emissions than the annual combined total of Costa Rica and Estonia in its first 15 months.

The research, published by the Social Science Research Network, was shared exclusively with The Guardian.

Destroying, clearing and rebuilding the Gaza Strip could produce 31 million tonnes of carbon dioxide equivalent (tCO2e), researchers from the UK and US found.

There is no obligation for states to record military emissions to the UN’s climate body, with researchers warning that the lack of accountability could lead to an underreporting of the global carbon footprint.

The study’s data, which also includes estimates of emissions relating to Hamas and Hezbollah activity, highlights the asymmetry between each side.

Hamas’s use of bunker fuel and rockets accounted for about 3,000 tCO2e, just 0.2 percent of the conflict’s total carbon footprint.

Israel’s use of weapons, equipment, tanks and ordnance produced 50 percent of emissions, the study found.

Researchers also included estimated emissions from Yemen’s Houthi militia, which has traded strikes with Israel over the course of the war. Iran and Israel’s tit-for-tat attacks, and the war in southern Lebanon, were also recorded.

All military activity arising from the Gaza war produced the equivalent, in emissions, of charging 2.6 billion smartphones or running 84 gas power plants for a year.

The figure includes the tC02e estimate — 557,359 — of the pre-war construction of Hamas’s tunnel network and Israel’s “iron wall” barrier surrounding Gaza. The findings could eventually help calculate claims for reparations, The Guardian reported.

More than 99 percent of the tCO2e generated between Oct. 7, 2023, and the temporary ceasefire in January this year was attributed to Israeli bombardment and the invasion of Gaza.

US involvement in the emissions was also highlighted by researchers. They found that almost 30 percent of greenhouse gases generated in the same period came from regular resupply flights carrying military equipment to Israel from American stockpiles in Europe.

Israel’s destruction of Gaza has produced an estimated 60 million tonnes of toxic rubble that requires clearing, producing what researchers warned would be the biggest emissions toll of the conflict.

Removing debris, rebuilding 436,000 destroyed apartments, roads, 700 schools, mosques and administrative sites will produce an estimated 29.4 million tCO2e.

Zena Agha, analyst for Palestinian policy network Al-Shabaka, said: “This report is a staggering and sobering reminder of the ecological and environmental cost of Israel’s genocidal campaign … But this is also the US, UK and EU’s war, all of which have provided seemingly limitless military resources to enable Israel to devastate the most densely populated place on the planet.

“This brings home the destabilizing (regional) impact of the Israeli settler state and its inseparability from the western military-industrial complex.”

In producing the report, researchers used open-source information, media articles and data from independent groups, including UN agencies.

Hadeel Ikhmais, head of the climate change office at the Palestinian Environmental Quality Authority, said: “Wars not only kill people but also release toxic chemicals, destroy infrastructure, pollute soil, air and water resources and accelerate climate and environmental disasters.

“War also destroys climate adaptation and hinders environmental management. Not counting carbon emissions is a black hole in accountability that allows governments to get away from their environmental crimes.”


Three suspects detained for storming Libya’s state oil firm, attorney general says

Three suspects detained for storming Libya’s state oil firm, attorney general says
Updated 30 May 2025

Three suspects detained for storming Libya’s state oil firm, attorney general says

Three suspects detained for storming Libya’s state oil firm, attorney general says
  • “The public prosecution reviewed the evidence of the storming of the Corporation’s headquarters,” the attorney general said
  • The three suspects were handed over by the defense ministry

TRIPOLI: Three suspects have been detained for allegedly storming the Libyan state oil firm’s headquarters in Tripoli, the country’s attorney general said on Friday, a day after its rival government in the east threatened to declare force majeure on oil fields and ports citing assaults on the firm.

The National Oil Corporation is based in Tripoli under the control of the internationally-recognized Government of National Unity. The parallel government in Benghazi in the east is not internationally recognized, but most oilfields in the major oil producing country are under the control of eastern Libyan military leader Khalifa Haftar.

The NOC has previously denied its corporation’s headquarters were stormed, calling it “completely false” and quoted its acting chief as calling it “nothing more than a limited personal dispute that occurred in the reception area.”

But the eastern-based government has threatened to also temporarily relocate the NOC’s headquarters to “safe cities” such as Ras Lanuf and Brega, both of which it controls.

“The public prosecution reviewed the evidence of the storming of the Corporation’s headquarters, inspected the scene, reviewed the video footage recorded at the time of the incident and heard the testimonies of those present,” the attorney general said in a statement.

The three suspects were handed over by the defense ministry, which was asked “to arrest the remaining contributors to the incident,” the attorney general said.

The national output of crude oil in the past 24 hours reached 1,389,055 barrels per day, the NOC said on Wednesday, reflecting normal levels.

Libya’s oil output has been disrupted repeatedly in the chaotic decade since 2014 when the country divided between two rival authorities in the east and west following the NATO-backed uprising that toppled Muammar Qaddafi in 2011.


RSF drone strike kills six in Sudan hospital: army source

RSF drone strike kills six in Sudan hospital: army source
Updated 30 May 2025

RSF drone strike kills six in Sudan hospital: army source

RSF drone strike kills six in Sudan hospital: army source
  • “The militia launched a drone strike on the Social Insurance Hospital, killing six and wounding 12,” an army source said
  • A medical source at El-Obeid Hospital, the city’s main facility, confirmed the toll

KHARTOUM: Sudan’s paramilitary Rapid Support Forces bombarded El-Obeid on Friday, killing six people in a hospital in the key southern city, medical and army sources said.

“The militia launched a drone strike on the Social Insurance Hospital, killing six and wounding 12, simultaneously attacking residential areas of the city with heavy artillery,” an army source told AFP, adding that the bombardment had also hit a second hospital in the city center.

A medical source at El-Obeid Hospital, the city’s main facility, confirmed the toll, adding that the Social Insurance Hospital had been forced shut “due to damage” sustained in the drone strike.

El-Obeid, a strategic city 400 kilometers (250 miles) southwest of Khartoum which is the capital of North Kordofan state, was besieged by the RSF for nearly two years before the regular army broke the siege in February.

It was one of a series of counteroffensives that also saw the army recapture Khartoum, but El-Obeid has continued to come under RSF bombardment.

The city is a key staging post on the army’s supply route to the west, where the besieged city of El-Fasher is the only state capital in the vast Darfur region still under its control.

The RSF and the army have clashed repeatedly along the road between El-Obeid and El-Fasher in recent weeks.

On Thursday, the paramilitaries said they retaken the town of Al-Khoei, around 100 kilometers (60 miles) west of El-Obeid, after the army recaptured it earlier this month.

The war between army chief Abdel Fattah Al-Burhan and his former deputy, RSF commander Mohamed Hamdan Dagalo, has killed tens of thousands of people and uprooted 13 million since it erupted in April 2023.

The United Nation says the conflict has created the world’s biggest hunger and displacement crises.

It has also effectively split Sudan in two, with the army holding the center, east and north, while the paramilitaries and their allies control nearly all of Darfur and parts of the south.

Since losing Khartoum in March, the RSF has adopted a two-prong strategy: long-range drone strikes on army-held cities accompanied by a counteroffensive in the south.

On Thursday, the paramilitaries also announced they had recaptured Dibeibat, in South Kordofan state some 100 kilometers (60 miles) south of El-Obeid, another town that the army had retaken earlier this month.

Swathes of South Kordofan are controlled by a rebel group allied with the RSF, Abdelaziz Al-Hilu’s faction of the Sudan People’s Liberation Movement-North.


Israel minister says ‘we will build Jewish Israeli state’ in West Bank

Israel minister says ‘we will build Jewish Israeli state’ in West Bank
Updated 30 May 2025

Israel minister says ‘we will build Jewish Israeli state’ in West Bank

Israel minister says ‘we will build Jewish Israeli state’ in West Bank
  • “This is a decisive response to the terrorist organizations that are trying to harm and weaken our hold on this land,” Katz said
  • Katz was speaking during a visit to the Sa-Nur settlement outpost in the northern West Bank

JERUSALEM: Defense Minister Israel Katz vowed on Friday to build a “Jewish Israeli state” in the occupied West Bank, a day after the government announced the creation of 22 new settlements in the Palestinian territory.

Israeli settlements in the West Bank, seen as a major obstacle to lasting peace, are regularly condemned by the United Nations as illegal under international law, and Thursday’s announcement drew sharp foreign criticism.

“This is a decisive response to the terrorist organizations that are trying to harm and weaken our hold on this land — and it is also a clear message to (French President Emmanuel) Macron and his associates: they will recognize a Palestinian state on paper — but we will build the Jewish Israeli state here on the ground,” Katz was quoted as saying Friday in a statement from his office.

“The paper will be thrown into the trash bin of history, and the State of Israel will flourish and prosper.”

Katz was speaking during a visit to the Sa-Nur settlement outpost in the northern West Bank.

Sa-Nur was evacuated in 2005 as part of Israel’s disengagement from Gaza, promoted by then prime minister Ariel Sharon.

Israel has occupied the West Bank since 1967.

During a visit to Singapore on Friday, French President Macron asserted that recognition of a Palestinian state, with some conditions, was “not only a moral duty, but a political necessity.”

An international conference meant to resurrect the idea of a two-state solution to the Israeli-Palestinian conflict is set to take place in June at the UN headquarters in New York.

A diplomat in Paris close to preparations for the conference said it should pave the way for more countries to recognize a Palestinian state.

Macron said in April that France could recognize a Palestinian state in June.

Following Israel’s announcement of the new settlements on Thursday, Britain called the move a “deliberate obstacle” to Palestinian statehood, while UN chief Antonio Guterres’s spokesman said it pushed efforts toward a two-state solution “in the wrong direction.”