September 23, 2015

TSG IntelBrief: The Sustainability of Syria’s War

• After four years of war, the economic situation within Syria is key to the dynamics of the conflict

• Despite losses, the economic base of the Syrian regime remains relatively sustainable

• Of the rebel groups, the Islamic State has developed the strongest economy, primarily based on oil sales

• In the long run, the infrastructure of the Assad regime may allow it to outlast the fragmented opposition.


For decades, the maintenance of autocratic regimes in the Middle East has been an exercise in popular bribery—and the Assad regime was no different. Before the start of the war, the Syrian economy was centered on a strong state, and designed in such a way so as to benefit those close to the government—primarily the Alawite elite—over all others. The remainder of the population was largely supported by government redistribution of resources in the form of subsidies, especially for fuel and food. The central government kept unemployment levels relatively low through its support for the agricultural sector, and through a bloated public sector.

By the beginning of the protests in 2011, this artificial system had begun to crumble. Between 2006 and 2011, a severe drought crippled the agricultural sector, which accounted for 22.93 percent of Syrian GDP in 2009. In some regions of the country, as much as 60 percent of arable land and 85 percent of livestock were affected, and 800,000 agricultural workers lost their jobs. The subsequent rise in food prices removed a central cog of the popular complacency mechanisms that the Assad government had constructed, and the calculus for the general population changed. Without the support of subsidies, fear of the regime was no longer sufficient to prevent popular unrest.

Now, after four years of war, both the government and the opposition forces find themselves facing a similar dilemma: how to maintain control of territory and resources while providing for the civilian populations under their control. The Syrian economy has been devastated by the war, and the current battleground is as much about economics as it is about politics. Oil resources—always important in conflict—are strategically vital to both the opposition and the regime. As the war drags on, control of agricultural resources has become increasingly important for the sustainability of each side. Control of border crossings is also critical, particularly for opposition forces along the northern border with Turkey.

The Syrian government, for its part, has a distinct economic advantage over the opposition groups. The Assad regime remains in control of the central governance structure that ran the country before the war. Central banks are still functioning—albeit with dwindling reserves—and much of the bureaucratic structure is still operational, even in areas controlled by the rebels. The provision of services is significantly more consistent in regime-held areas than in rebel-held areas, helping to maintain popular loyalty in those territories.

Before the war, Damascus and Aleppo were the economic powerhouses of Syria. Though Aleppo is now partially under rebel control, government air power has essentially destroyed any manufacturing capacity in rebel-held areas, preventing the opposition from generating revenue or providing for its own forces. The regime forces have done the same in rebel-held Idlib, which lies on key routes to Turkey and to the coast. The indiscriminate nature of Syrian government bombardment serves two central purposes: to drive out civilian populations, and to destroy any infrastructure that the opposition forces could use to support themselves.

In addition, the highly publicized territorial losses of the regime have often been strategic, rather than acts of desperation. Though the regime only controls roughly 50 percent of the territory in Syria, the areas it does hold are vital to its sustainability. The Assad regime still controls much of the most productive agricultural land in the country, especially along the coast and the western border with Lebanon. Though it has lost the majority of the border with Turkey, the regime maintains one strategic beachhead at the border town of Qamishli, northeast of regime-held al-Hasakah.

Of the rebel groups operating within Syria, the Islamic State has arguably the strongest economic base, drawn primarily from oil revenue generated from captured fields in both Syria and Iraq. In Syria, the Islamic State controls the majority of the oil producing regions, providing it with a key strategic resource and a ready supply of cash from black market oil and gas sales. The Islamic State also controls a key agricultural corridor along the Euphrates, from Raqqa all the way to the Iraqi border. While the loss of these oil producing regions have hurt the Assad regime, continued support from Iran—and to a lesser extent, Russia—has allowed the regime to cover the energy shortfall, albeit at a higher cost.

Other rebel groups have developed their own strategies for acquiring key resources, to include: seizing cash reserves from state banks; looting captured government bases; selling industrial equipment; and kidnapping for ransom. However, the majority of economic support for rebel groups continues to come from foreign supporters, whether in the Gulf, Turkey, or the West. This reliance on foreign aid—and the necessity of maintaining control of border crossings in order to smuggle resources in—makes the economic base for the rebel groups significantly more tenuous. While the Assad regime has suffered severe setbacks since the start of the war, its economic base remains more stable. The Syrian government has, in many ways, adopted a siege mentality, and the Assad regime and its international allies are prepared for a long winter.


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