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THERE AREGDPEUEUYour browser does not support the element. few tougher jobs in Syria. On December 30th the country’s interim government named Maysaa Sabrine to head the central bank. A former deputy governor of the bank and the first woman ever appointed to the job, her nomination sent two reassuring messages: that Syria’s new rulers recognise the need for technocrats, even those who were part of Bashar al-Assad’s regime; and they will not ostracise women from public life.They need all the expertise they can find. The institution Ms Sabrine leads, like the Syrian economy, is a shambles. Foreign reserves are thought to have dwindled to as little as $200m, less than a month’s-worth of imports. The central bank is under Western sanctions. So is Syria’s largest commercial bank. The Syrian pound has lost 99% of its value since the start of the civil war in 2011. At 13,000 pounds to the dollar (see chart 1), a quick trip to the market requires bags full of banknotes.Economic mismanagement was a defining feature of the Assad regime, which ruled Syria for 53 years. Hafez al-Assad, the president from 1971 until 2000, wanted a Soviet-style planned economy. There were no private banks, tight controls on imports and inefficient public industries. His son Bashar flirted with the idea of a more open economy, but it was short-lived. Civil war pushed Syria even further into misery. fell from $60bn in 2010 to less than $9bn today. The World Bank reckons that 69% of Syrians live on less than $3.65 a day.The immediate challenge for Syria’s new leaders is to find hard currency. Oil illustrates the problem. Until 2011 Syria pumped around 400,000 barrels per day, exceeding domestic demand. The surplus, mostly shipped to Europe, accounted for 30-45% of Syria’s $12bn in annual goods exports. Since the war began, however, production has dropped below 100,000 barrels per day (see chart 2).Agriculture has suffered, too. Syria was once a net exporter of wheat, though a long drought left farmers struggling even before the war. Harvests have shrunk by nearly half since 2010, and Syria will need to import an estimated 1.6m tonnes of wheat this year. Other sectors have disappeared altogether, particularly tourism, which brought in $4bn annually.As the war dragged on, Mr Assad was increasingly desperate for dollars. His regime made it a crime to use currency other than the pound, punishable by up to a decade in prison. Firms that needed dollars to pay for imports had to source them from state-controlled exchanges, which took a big cut. The regime found creative ways to shake down citizens: it required Syrians visiting from abroad to exchange $100 at unfavourable rates, and forced men to pay thousands of dollars to avoid conscription.To its credit, the interim government has put a halt to such extortion. But it has few good alternatives. It will take time to boost production at oilfields that have been neglected for years (the largest are controlled by a Kurdish militia, beyond the writ of the interim government). The war did extensive damage to farming infrastructure. Tourists will not rush back.In the short term the country will have to rely on aid and remittances from its large diaspora. Officials also hope to secure central-bank deposits from friendly Arab states. Asaad al-Shaibani, the interim foreign minister, plans to visit Saudi Arabia on his first trip abroad. Ahmed al-Sharaa, the country’s de facto ruler, is trying to manage expectations. “Syria needs a year for citizens to feel drastic changes,” he said in an interview last month with a Saudi television network, an assessment that is probably too optimistic.The obvious way to get Syria’s economy growing is to start post-war reconstruction. After 14 years of fighting, the scale of the damage is enormous. Take Aleppo, Syria’s second city. A World Bank assessment in 2022 found that 137,000 of its 660,000 homes had been damaged, while 25% of its bridges are unusable and 35% of its hospitals damaged. Its power plant, the largest in Syria, is out of service.Fixing all this will provide jobs for hundreds of thousands of Syrians. Expertise and raw materials may come from Turkey, which has good relations with Syria’s new rulers and a big, politically connected construction industry. Investors there are optimistic. Shares of Limak, a Turkish cement firm, are up by 17% since Mr Assad fled. But Turkey lacks the money to pay for reconstruction, which may cost between $250bn and $400bn.That will probably have to come from wealthy Gulf states. It is hard to see Donald Trump’s America stumping up much, nor a European Union () stretched by its commitments to Ukraine. But some worry that Gulf states will funnel money to pet projects and favourite groups.For now, it will be difficult for anyone to fund the government because it is covered by a thicket of sanctions. America has blacklisted roughly 700 people and firms in Syria. Other sanctions take aim at the country itself. In 2019 Congress passed the Caesar Act (named after a Syrian army defector who documented regime atrocities) that targeted energy and construction. Hayat Tahrir al-Sham, the Islamist outfit led by Mr Sharaa, is banned as a terrorist group by America, Britain and the .Some of these measures will need review. In 2011 America slapped sanctions on Syriatel, the main mobile-phone operator, because it was owned by Rami Makhlouf, the regime’s key financier (and Mr Assad’s cousin). Two years later it blacklisted the country’s biggest airline for smuggling Iranian weapons. Those measures made sense at the time. Today they may be a drag on needed investment.America says it is willing to reconsider many of its sanctions, including its $10m bounty on Mr Sharaa. European officials have promised to do the same. But Syrians complain they are not moving fast enough.America’s Caesar Act outlined conditions whereby Syria could escape from sanctions, calling for a halt to bombing of civilians and the release of political prisoners. Most of those demands have been met. But on December 23rd, two weeks after Mr Assad fled, Joe Biden signed a military-spending bill that extended the act until 2029. Sanctions are easy to impose but hard to remove—even when they target a regime that no longer exists.
