The Future of Revenues in Syria: Challenges and Opportunities for the Interim Government

A money changer conducts a transaction in US dollars and Syrian pounds for a client on a street in Damascus (AFP)
A money changer conducts a transaction in US dollars and Syrian pounds for a client on a street in Damascus (AFP)
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The Future of Revenues in Syria: Challenges and Opportunities for the Interim Government

A money changer conducts a transaction in US dollars and Syrian pounds for a client on a street in Damascus (AFP)
A money changer conducts a transaction in US dollars and Syrian pounds for a client on a street in Damascus (AFP)

Syria faces significant challenges as discussions intensify about the post-Bashar al-Assad era, particularly in securing the necessary revenues for the Syrian interim government to meet the country’s needs and ensure its sustainability. The widespread destruction of the economy and infrastructure poses a dual challenge: rebuilding the nation while stimulating economic activity and ensuring sufficient financial resources for governance.

Currently, the interim government relies heavily on international and regional support during the transitional phase. Donor countries are expected to provide financial and technical assistance to help rebuild institutions and alleviate the suffering of the Syrian people.

However, as the country transitions, external support alone will not suffice. The government must identify sustainable revenue sources, such as managing natural resources, imposing taxes, and encouraging foreign investments.

Opportunities from the Syrian Diaspora

The Syrian diaspora is seen as a significant economic resource, contributing through remittances or involvement in reconstruction projects. However, realizing these opportunities requires the establishment of strong, transparent institutions, effective resource management, and a clear strategic plan to rebuild trust with both local and international communities.

Securing revenues for the interim government is not merely a financial challenge but also a test of its ability to lead Syria toward stability and prosperity.

Securing Economic Resources

Nasser Zuhair, head of the Economic and Diplomatic Affairs Unit at the European Policy Organization, stated that the interim government, currently led by Mohammed al-Bashir, may replicate its revenue-generating models from Idlib. Resources in Idlib were drawn from temporary measures that are insufficient for sustaining a national economy like Syria’s.

In an interview with Asharq Al-Awsat, Zuhair explained that these resources included taxation, fuel trade with Syrian Democratic Forces (SDF)-controlled areas, international aid for displaced persons in Idlib, remittances from the Syrian diaspora, and cross-border trade facilitated by Turkiye.

“The interim government believes that sanctions relief is a matter of months, after which it can begin to establish a sustainable economy. For now, it will rely on the same resources and strategies used in Idlib and other controlled areas,” Zuhair added.

Challenges and Opportunities

Despite the former regime’s reliance on illicit revenues, such as drug trafficking and Captagon production—estimated to account for 25% of government revenues—the interim government has several potential avenues for generating revenue.

International Aid

Zuhair emphasized that cross-border humanitarian aid indirectly supports local economies. “The current government understands that international and regional aid will be substantial in the coming period, particularly for refugee repatriation and infrastructure development,” he noted.

He added that efforts to secure funding from the Brussels Conference, which allocates about $7 billion annually to support Syria, will be critical. Strengthening ties with regional and European countries, such as Saudi Arabia, Kuwait, Germany, and the UK, is also a priority. However, securing such aid depends on establishing a political framework where Hayat Tahrir al-Sham (HTS) does not dominate governance.

He further noted that international and regional support will likely remain a key revenue source for the interim government, including humanitarian and developmental aid from organizations such as the United Nations and the World Bank.

Taxes and Tariffs

Zuhair highlighted taxes and tariffs as essential components of the government’s revenue strategy. This includes taxing local economic activities, customs duties on cross-border trade, and fair taxes on merchants and industrialists in major cities like Damascus and Aleppo.

“The government can also impose income, corporate, and property taxes while improving border management to maximize revenue from customs and tariffs,” he added.

Agriculture and Natural Resources

Syria’s vast and fertile agricultural lands present an opportunity for revenue generation, Zuhair underlined, explaining that taxes on agricultural products could contribute to state income. However, this sector faces logistical challenges and high production costs. By directing the agricultural sector toward self-sufficiency, the government could reduce dependence on imports and create surplus revenue, he remarked.

Additionally, managing natural resources such as oil and gas could provide a significant revenue stream if the government gains control over resource-rich areas like northeastern Syria, the official noted.

Reconstruction

Reconstruction presents another potential revenue source. International companies could be encouraged to invest in rebuilding efforts in exchange for fees or taxes. Public-private partnerships with local and foreign firms in sectors such as infrastructure and housing could also generate significant funds.

Remittances from the Diaspora

Zuhair stressed the importance of remittances from Syrians abroad, estimating that these transfers could reach $2 billion annually by 2025. Encouraging the diaspora to send funds to support family members and rebuild properties will be a key priority for the government.

Domestic Investments

The interim government has shown its ability to attract domestic investments in real estate, industry, commerce, and agriculture, despite international sanctions. According to Zuhair, leveraging Türkiye as an international gateway, the government could expand this model across Syria, taking advantage of the challenging economic conditions left by the previous regime to draw reasonable investments in its first year.

Tourism and Small Businesses

Revitalizing the tourism sector could directly contribute to revenue, he added, noting that restoring historical and cultural sites, once security and stability are achieved, will attract visitors and generate income.

In addition, encouraging small and medium-sized enterprises will help revive the economy and create jobs, Zuhair emphasized, pointing that supporting manufacturing industries could provide a sustainable revenue stream.



IMF Ready to Help Africa Weather Middle East Shock, Says Zeidane

 Workers sort avocados for export to Chinese markets, at the Sunripe fresh fruits exporters factory in Limuru district of Kiambu County near Nairobi, Kenya June 4, 2026. (Reuters)
Workers sort avocados for export to Chinese markets, at the Sunripe fresh fruits exporters factory in Limuru district of Kiambu County near Nairobi, Kenya June 4, 2026. (Reuters)
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IMF Ready to Help Africa Weather Middle East Shock, Says Zeidane

 Workers sort avocados for export to Chinese markets, at the Sunripe fresh fruits exporters factory in Limuru district of Kiambu County near Nairobi, Kenya June 4, 2026. (Reuters)
Workers sort avocados for export to Chinese markets, at the Sunripe fresh fruits exporters factory in Limuru district of Kiambu County near Nairobi, Kenya June 4, 2026. (Reuters)

The International Monetary Fund's new Africa chief, Zeine Zeidane, said that conflict in the Middle East has created difficulties for sub-Saharan Africa but reaffirmed the fund's commitment to aiding nations under economic strain.

Zeidane, who assumed his role as Director of the IMF's African Department on May 1, oversees operations and engagement with 45 countries across the region.

"My immediate priority is really to help countries in ‌the region to weather ‌this shock," Zeidane said at ‌a ⁠media briefing.

The IMF ⁠has already reached staff-level agreements to provide augmented financing in response to the conflict's effects for Burkina Faso, The Gambia and São Tomé and Príncipe.

For Ethiopia, which has a large IMF program in place, Zeidane said the fund accelerated about $200 million ⁠in financing.

Zeidane warned that disruptions linked to ‌the Middle East conflict could ‌take months to resolve, noting that a ceasefire was already ‌in place but that Gulf nations had ‌indicated it typically takes six to seven months for production and exports to resume fully.

He added that the Middle East's role as a significant exporter of fertilizers would have ‌far-reaching implications for Africa's food security and production costs.

Despite immediate challenges, Zeidane expressed ⁠optimism over ⁠sub-Saharan Africa's long-term prospects, noting that prior to the current crisis, the region was among the fastest-growing globally and had made strides in fiscal consolidation.

"The future, the next growth engine for the world, will be Africa," he said. "We need to support Africa to unlock its potential."

Zeidane, who began his IMF career in 2012, previously served as Mauritania's prime minister, central bank governor and economic adviser to the president. He succeeded Abebe Aemro Selassie, who retired from the IMF in May.


The High Cost of Hormuz: $37 Billion Shock Exposes Iraq’s Economic Vulnerability

A drone view shows oil trucks arriving from Iraq on their way to the Baniyas oil terminal, Syria, May 14, 2026.  (Reuters)
A drone view shows oil trucks arriving from Iraq on their way to the Baniyas oil terminal, Syria, May 14, 2026. (Reuters)
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The High Cost of Hormuz: $37 Billion Shock Exposes Iraq’s Economic Vulnerability

A drone view shows oil trucks arriving from Iraq on their way to the Baniyas oil terminal, Syria, May 14, 2026.  (Reuters)
A drone view shows oil trucks arriving from Iraq on their way to the Baniyas oil terminal, Syria, May 14, 2026. (Reuters)

The recent regional war and the closure of the Strait of Hormuz have pushed Iraq’s economy into one of its most serious crises in decades. The massive financial losses are more than just another consequence of regional conflict; they have exposed Iraq’s near-total dependence on a single maritime export route.

As Baghdad struggles to finance public-sector salaries through domestic borrowing and the use of foreign-exchange reserves, the crisis has renewed scrutiny of years of poor planning, corruption, and political obstruction of strategic projects, such as the Basra-Aqaba oil pipeline, initiatives that could have provided alternative export routes and a safety net for the country’s most important source of income.

Financial and energy analysts estimate Iraq’s losses at more than $37 billion, a severe blow to an economy that relies overwhelmingly on oil revenues.

The disruption has forced authorities to draw on domestic debt and accumulated reserves to cover monthly salary and pension obligations estimated at roughly $6.5 billion.

Slow recovery

Although the conflict appears to be winding down and the Oil Ministry has expressed optimism about resuming production, energy experts caution that Iraqi oil fields may require months to return to their prewar output levels.

Before the crisis, Iraq produced more than 4.2 million barrels per day, including approximately 3.5 million barrels exported to international markets.

Observers said the consequences extend beyond the immediate financial shock caused by the freezing of oil revenues. The conflict revealed a “dangerous strategic vulnerability”: Iraq’s overwhelming reliance on southern Gulf export terminals and the Strait of Hormuz as the sole outlet for its most valuable resource.

The crisis has also revived debate over decades of mismanagement and inadequate planning in one of the country’s most vital economic sectors.

Oil trucks arrive from Iraq, on their way to the Baniyas oil terminal, in Qamishli, Syria, May 11, 2026. (Reuters)

A single export gateway

Over previous decades, Iraq possessed several overland export routes, including the Kirkuk–Ceyhan pipeline to Türkiye, the Iraq-Saudi pipeline, and the historic Kirkuk-Haifa and Kirkuk-Baniyas lines. Most have been out of service for years because of wars, political instability, and security challenges.

Successive governments sought to revive export diversification. Among the most significant proposals was the Basra-Aqaba pipeline, championed during the administration of former Prime Minister Mustafa Al-Kadhimi. The project would transport crude oil from southern Iraq to Jordan’s Red Sea port of Aqaba.

Energy specialists regard it as a strategic asset that could have reduced Iraq’s dependence on Gulf shipping routes. Political disputes and regional pressures, however, prevented its implementation.

Limited alternatives

As the crisis intensified and oil revenues dwindled, Iraq attempted to expand exports through Türkiye, Syria, and Jordan. Energy experts said those efforts achieved only marginal results.

Contrary to reports that Iraq was exporting oil through 700 tanker trucks through Syria, former Oil Ministry spokesman Asim Jihad said exports through Syrian territory amount to no more than 200 tankers per day.

He told Asharq Al-Awsat that Iraq is exporting fuel oil rather than crude oil through Syria to avoid bottlenecks at producing fields.

Such shipments, he added, are operationally complex and generate only limited revenue compared with normal export volumes.

On the northern route, Jihad noted that Iraq exports between 150,000 and 200,000 barrels per day through the Kurdistan Region’s pipeline to the port of Ceyhan in Türkiye.

Meanwhile, the older federal pipeline linking Kirkuk to Ceyhan remains out of service because of extensive damage that has yet to be repaired.

A drone view shows the Rumaila oil field in Basra, Iraq, June 8, 2026. (Reuters)

Jihad expressed little optimism that Iraq can establish major alternative export corridors outside the Gulf in the near future, citing time constraints, high costs, and political complications.

He also voiced uncertainty about negotiations with Ankara over future export agreements through Ceyhan, particularly as existing arrangements are set to expire at the end of July.

“The only option left for Iraq is to hope that no new conflict erupts in the Gulf that would once again close the Strait of Hormuz and deprive the country of its primary source of income,” he added.

Cost of the blockade

The Eco Iraq Observatory estimated that Iraq has lost roughly 350 million barrels of oil exports since the Strait of Hormuz was closed on February 28, representing missed sales worth approximately $37.7 billion at average market prices during the period.

According to the organization, Iraq had been exporting between 103 million and 107 million barrels of crude oil per month before the closure. Export losses reached 84.4 million barrels in March, 93.1 million in April, 92.8 million in May, and 79.6 million in June.

Eco Iraq argued that the “New Levant” initiative — a regional economic integration project involving Iraq, Jordan, and Egypt — has become a strategic necessity.

The plan envisions deeper economic cooperation, infrastructure links, and alternative export routes, including the shipment of Iraqi oil through Jordan to Egyptian ports, reducing dependence on geopolitically vulnerable maritime corridors.


Crude Prices Drop, Most Stocks Rise on 'Positive' US-Iran Talks

A pump jack operates near a crude oil reserve in the Permian Basin oil field near Midland, Texas, US February 18, 2025. REUTERS/Eli Hartman/File Photo
A pump jack operates near a crude oil reserve in the Permian Basin oil field near Midland, Texas, US February 18, 2025. REUTERS/Eli Hartman/File Photo
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Crude Prices Drop, Most Stocks Rise on 'Positive' US-Iran Talks

A pump jack operates near a crude oil reserve in the Permian Basin oil field near Midland, Texas, US February 18, 2025. REUTERS/Eli Hartman/File Photo
A pump jack operates near a crude oil reserve in the Permian Basin oil field near Midland, Texas, US February 18, 2025. REUTERS/Eli Hartman/File Photo

Oil prices fell Monday on optimism over US-Iran peace talks, with mediators flagging a "roadmap" to a final agreement, while most equities rose thanks to another healthy start for tech firms.

After a meeting planned for Friday was cancelled owing to fighting between Israel and Hezbollah, the negotiations finally got underway on Sunday in Switzerland with teams led by US Vice President JD Vance and Iran's Mohammad Bagher Ghalibaf.

Traders remain in buoyant mood after news that the two foes had ended their conflict, which had sent energy costs soaring and stoking inflation, sending shivers through the global economy.

There were initial jitters following reports that Iran had called off the talks over US President Donald Trump's threat to carry out more strikes if Hezbollah kept attacking Israel, but mediators Pakistan and Qatar said the talks took place in "a positive and constructive atmosphere".

The mood improved as Qatar and Pakistan announced progress, which aim to address Tehran's nuclear program and reopen the Strait of Hormuz, through which a fifth of oil and gas pass.

The two said the United States and Iran agreed to set up a "communication line" to avoid incidents in the crucial waterway, and "the High Level Committee has agreed upon a roadmap towards reaching a final deal within 60 days, laying the foundation for the immediate commencement of further technical talks".

Iranian Foreign Minister Abbas Araghchi added on X that "mediation has delivered major progress to end Lebanon War".

Both main oil contracts fell in early trade, while most stock markets advanced.

Tokyo climbed two percent, Seoul was up more than one percent and Taipei jumped 2.7 percent.

The gains came on the back of another rally in tech firms, particularly chipmakers including South Korea's SK hynix, Taiwan's TSMC and Japan's Advantest.

Sydney, Wellington and Jakarta also advanced, though there were losses in Hong Kong, Shanghai and Singapore.

"Following the positive response last week to reports of a US-Iran ceasefire, markets are likely to open with a cautious tone to start the new week as it remains clear that the situation in the Middle East remains fragile," said National Australia Bank's Skye Masters.

"The dollar is likely to remain supported, the oil price could swing either way but at current levels the risk is for a lift higher."

Sterling remained under pressure after suffering selling following Thursday's election of UK Labor politician Andy Burnham that ramped up expectations he will oust beleaguered Prime Minister Keir Starmer.

The embattled premier "is expected to announce on Monday that he will step down as prime minister after overwhelming pressure from Labor MPs to make way for Andy Burnham", Britain's Guardian newspaper said.

Investors were nervous that Burnham could introduce fresh spending plans that would add to the country's already huge debt pile.