Despite the political upheaval brought about by regime changes in Syria, the country's central bank gold reserves have remained stable, still close to 26 tons, whereas foreign exchange reserves have drastically shrunk to about $200 million. Syria's economic predicament has further intensified due to limited funding sources caused by international sanctions and war, leaving the prospects for future economic recovery uncertain.
Currently, Syria's treasury holds about 26 tons of gold reserves, approximately the same as at the onset of the Syrian civil war in 2011. According to the World Gold Council, the market value of this gold is approximately $2.2 billion. However, in contrast to gold reserves, the Syrian central bank's foreign exchange reserves have plummeted to around $200 million, significantly below the $14 billion at the end of 2011. The Syrian government has utilized most of its foreign exchange reserves to pay for food, fuel, and war expenses, nearly depleting its dollar reserves.
The New Government Faces Severe Economic Challenges
Since the outbreak of the civil war in 2011, Syria has ceased sharing financial information with institutions such as the International Monetary Fund and the World Bank. Following the fall of the Assad regime, the new opposition-led Syrian government is striving to rebuild the nation's assets. Nonetheless, due to the resource shortages caused by the war, the financial situation of the new Syrian government remains dire.
According to sources, members of the new Syrian government have inspected the treasury and confirmed the status of the gold reserves. Additionally, after the opposition quickly took control of Damascus and overthrew the Assad regime, some looters attempted to break into certain areas of the central bank, but strict security measures protected the gold reserves from being compromised.
Severe Decline in Foreign Exchange Income
Syria's sources of foreign exchange income have been affected by multiple factors. The capture of oil fields in eastern Syria by Kurdish forces and other militant groups has interrupted crude oil sales, a primary source of foreign exchange. Moreover, Syria is facing severe economic sanctions from the West, resulting in a significant decline in foreign exchange income.
The exchange rate of Syria's national currency—the Syrian pound—has depreciated from the pre-war rate of 50 Syrian pounds per dollar to the current rate of about 12,500 Syrian pounds, causing immense domestic inflationary pressure. To ensure the Syrian pound's circulation and economic stability, the gold reserves have not been utilized.
The Future Economic Recovery is Fraught with Uncertainty
The primary focus of the new Syrian government is to lift international sanctions in order to rejuvenate the economy and rebuild the nation's infrastructure, which has been devastated by years of war. At the same time, Syria faces the challenge of the return of millions of refugees, where focus and support from the international community will be crucial to Syria's future economic recovery.
U.S. and European officials have stated they will monitor the political trajectory of the new Syrian government, particularly the governance model of Islamic leaders, to determine whether further actions should be taken. Political scientist John Mearsheimer has commented that Syria's future remains highly uncertain and may remain in considerable turmoil for some time.
Syria's economic future faces severe challenges, while global economic conditions, international sanctions, and political uncertainties will determine the speed and effectiveness of its reconstruction efforts.
