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Published : 02 May 2025, 11:13 AM
The toppling of Syrian strongman Bashar al-Assad has been great for Mohammad al-Badawi. His sales have doubled as beverages he imports cheaply from Turkey into the former-rebel stronghold of Idlib can now be sold in the rest of Syria.
For Haytham Joud business has collapsed. He built his food, drinks and consumer goods empire in the capital Damascus under the tight controls of Assad's protectionist regime. He's alarmed by the new government's experiment with a free market economy.
"With all these imports, we need to see what happens to local industries," Joud said, in a boutique hotel that he owns, tucked away inside the ancient walls of Damascus's Old City.
"It's a big challenge."
Their contrasting fortunes reveal a shift in Syria since Islamist rebels Hayat Tahrir al-Sham (HTS) swept to power in December. Their new government has promised to undo decades of crony rule under Assad, when the economy was controlled by a handful of tycoons.
Assad's mismanagement helped pushed the country of 24 million into an economic tailspin, amid Western sanctions and brutal civil war. Most people in regime-held areas lived below the poverty line, according to the World Bank, and exports were dominated by illegal sales of captagon, an amphetamine-like drug.
Many Syrians are more hopeful than ever that their country can begin rebuilding after 14 years of conflict.
But the rapid opening-up of Syria has shifted economic power towards businesses in the northwest province of Idlib and to HTS-linked entities, more than a dozen senior businessmen, officials and analysts told Reuters.
That's fuelling resentment among some members of the business community and average citizens, mostly in formerly regime-held areas, who fear that one form of favouritism could be replaced by another - stoking tensions in the ethnically and religiously divided country.
"There is a lot of discontent," said Jihad Yazigi, editor of leading English-language newsletter Syria Report. "Things are good for Idlibis, of whom there are very few, and things are very bad for other Syrians, who are numerous."
Despite the backlash, Yazigi said, the momentum behind the new administration - following the ouster of Assad's unpopular authoritarian regime - was carrying it through, for the time being. "Its difficult to oppose it," he said.
Syria's economy ministry did not respond to a request for comment.
While businessmen in formerly regime-held areas struggle to adapt, Idlib's traders are cashing in on their expanded internal market, analysts say.
They benefit from strong ties to neighbouring Turkey, a longtime backer of Syria's opposition poised to play a major role economically and politically.
At his warehouses in the boomtown Sarmada, near the Turkish border, al-Badawi watches a forklift operator shift pallets of Pepsi freshly arrived from across the frontier. "They are thirsty for everything inside Syria," he said.
CENTRALIZING POWER
The shift in Syria's economy aligns with HTS's centralised power structure in the remade Syria. It has installed its allies as heads of key ministries, its leader Ahmad al-Sharaa as president for a five-year transition, and positioned Idlib-based companies as key service providers.
HTS is examining scores of businesses based in former regime zones, searching for links to the old regime and seeking compensation via negotiations with firms deemed to have benefited from Assad's rein.
Public sector salaries across Syria are to be paid by the HTS-linked Shamcash app. But stark differences remain between state employees, depending on geography. In Damascus, people join long lines outside ATMs every morning to withdraw the maximum amount of cash. No such lines are seen in Idlib.
People in formerly regime-held areas still make several times less than employees in Idlib, after a promised 400% public sector salary raise has not materialised.
Many people can't afford the imported Nescafe instant coffee and Bounty candy bars that have replaced the local imitations formerly on offer on store shelves.
Syria's economy was historically a mix of industry, agriculture and a strong trading sector. Annual output shrank by as much as 90% from around $60 billion on the eve of the 2011 anti-Assad protests that sparked the civil war, according to a World Bank estimate.
US sanctions, which have choked activity, remain in place despite a limited suspension, preventing the resumption of wide-scale foreign trade. The US wants the new government to make progress on eight conditions for further sanctions relief. Damascus says it has made headway on most of them.
SPLIT ECONOMY
Syria's new rulers proudly view Idlib as a free-market model that they erected under impossible circumstances after seizing it from Assad's regime more than a decade ago.
In Damascus, old cars trundle through city streets left dark by a failing power grid. Painstakingly slow internet keeps online work to a minimum and state institutions have lots of staff but poor productivity.
But in Idlib, roads are lined with fleets of newly imported cars, coming via Turkey from across the world, including Range Rovers and Mini Coopers. They are priced at a third of what they went for under Assad-era customs duties, according to prices quoted by three car dealers.
Although vehicles also arrive via Syria's Mediterranean ports and a southern crossing with Jordan, buyers flock to Idlib because the prices are lower, the car dealers said.
At Idlib's Bab al-Hawa border crossing with Turkey, trade is up 42% in the first quarter of 2025 versus the same period last year, a border agency spokesperson said.
"Idlib's traders will have an imprint across Syria because they are competitive and can get products from anywhere in the world, while those inside Syria have weaknesses," Badawi said.
"I'm very optimistic."
That rosy view is not shared by Joud. Among his most prized enterprises: the exclusive rights to produce Pepsi products in Syria.
But sales are down around 70% since Assad's fall, Joud said, due to competition from importers like Badawi and a crash in purchasing power linked to currency shortages.
"Saying the economy will be free is great, but we have to see the details," Joud said.
Abdallah Dardari, the Syrian-born assistant secretary-general of the UN's development arm UNDP, said the state must develop trade policies, including tariffs, if it wants to protect Syrian industries.
"Do we rely on market forces to determine that, without interventions in the allocation? At the moment, it will not be successful," he said.
'FREE TO BUILD'
Importing even essentials like medicine or wheat under Assad was difficult, with traders requiring months to source hard currency via a state platform while direct dollar dealings were illegal.
Around $600 million deposited into the platform before Assad's fall is now unaccounted for, Syrian officials told Reuters, leaving businesses in formerly regime-held areas with cash shortages. The funds missing from the platform have not previously been reported.
In Idlib, Turkish lira and US dollars are accepted everywhere; Syrian pounds are not. Turkish-supplied electricity mostly runs around the clock and an Idlib-based telecoms network provides fast internet.
Idlib-based businessmen said they had felt empowered to build the economy as a form of resistance to Assad. Those in regime-held areas say they were stifled by shake downs and patronage.
"When the country was freed, we realised that even though we were under bombardment, they were the ones being destroyed," said Mustafa al-Taa, head of the rebel version of Syria's chambers of commerce, established in Idlib in 2014.
In his sleek office in Sarmada, equipped with Wifi, scannable codes are used to register businesses swiftly.
In February, Syria's new rulers appointed his colleague Alaa al-Ali to head the powerful Federation of Syrian Chambers of Commerce, a move seen as a sign of Idlib's growing role.
The chambers are non-governmental but have wide powers to shape business relations in Syria.
"Idlib is a nucleus," al-Ali told Reuters in an interview from the ornate Damascus office he now uses.
But no-one would get preferential treatment based on links to the new authorities, he said, describing his mission as undoing corrupt practises and involving all entrepreneurs in the economy.
"People here didn't think it would be like this. They had a bad image that we came to kill, and plunder, and take their money. Instead, they saw respect," he said.
Eight Damascene merchants attested to a positive shift in tone and approach; the government now listened to them and they felt freer to talk.
"They are accountable, take responsibility and are decision makers," said Nadine Chaoui, a businesswoman from a Christian family who was recently appointed to the Damascus Chambers of Commerce.
"The main difference is corruption. Before, you felt you couldn't get anything done without paying someone. That feeling is gone," she said.
But her pharmaceutical import business has been hit by shifting regulations, smuggling, new competition and a drop in purchasing power, she said.
"We're not really selling."
Meanwhile, at Reva Pharma, a pharmaceuticals production firm set up in Idlib in 2014 by Syrians who fled Assad's government, employees now work double shifts to meet demand for generic medicine.
Reva has also hired more than 100 agents to market their products in other parts of Syria: Aleppo, Hama, Damascus.
"It's been a qualitative leap for our development," said sales manager Mustafa Dugheim, speaking of Syria's regime change.
"The domestic market is huge now."
