Commercial diplomacy in Syria is not enough

Last month, President Trump initiated the process of removing Syria from the State Sponsors of Terrorism list, allowing foreign investors to commit capital without the costly threat of US sanctions. A US-Syria business council convened auspiciously in Damascus this past week and billions in Gulf investments have sparked headlines in Syrian newspapers recently. Pundits hastened to declare an economic revolution in the making, and the prospective delisting is expected to only accelerate investment.

The Trump Administration’s stated goal is to bring “security and prosperity to all Syrians” through “investment-led stabilization”. Economic deregulation, lifting sanctions, and publishing sector-specific guides for private investment in Syria are welcome steps. But the administration’s emerging policy seems to rest on a facile theory of reconstruction – that financial connectivity and foreign investment will generate growth, and that growth will inexorably consolidate peace and stability. Though whether that growth begets widespread prosperity for Syrians or the corrosive inequality that drove conflict in 2011 remains an open question, and the administration is doing little to avert the latter.

There is reason to worry the grimmer outcome may grip Syria. In the early 2000s, Bashar al-Assad, supported by Western institutions like the World Bank and IMF, led Syria down a similar primrose path, drawing enormous investment through deregulation and free-market policies. Foreign Direct Investment grew more than ten-fold under Assad – $240m in 1999 to $2.47B in 2009. 

Robust headline growth masked the cronyism driving inequality, as institutions failed to prevent a coterie of regime-tied businessmen from accumulating unprecedented shares of wealth. Rami Makhlouf, Assad’s cousin, reportedly controlled 60% of Syria’s GDP as the head of Syriatel. Public sector hiring froze while private investment flowed into high-profit, low-labor sectors like luxury real estate, banking, and oil. Despite such a surge in investment, the poverty rate remained steady at nearly a third of Syrians from 1997 to 2011. 

There is evidence of emerging Assad-style patrimonialism under President Al-Sharaa. Many newly appointed officials of economic institutions are loyalists of Hayat Tahrir Al-Sham (HTS), the military coalition that Al-Sharaa led to power.

Consider Ibrahim Sukkarieh, the Director General of the Syrian Sovereign Wealth Fund, who was a sector emir for HTS in Idlib. The Syrian Sovereign Wealth Fund, which has been negotiating billion-dollar deals over Assad-linked asset seizures, has drawn criticism for its opacity and disregard for the Santiago Principles. 

Amendments to Assad-era investment laws retained worrying levels of power over businesses within the executive. Nepotistic hiring has also drawn scrutiny, with analysts noting government’s favoritism towards wartime administrators in Idlib for political appointments and pay more generous than what even Assad-era counterparts received. 

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Some hoped things were different when President Al-Sharaa removed two of his brothers, Hazem and Maher Al Sharaa, from their respective roles in the Supreme Council of Economic Development and the Secretary General of the Syrian Presidency. But Maher’s successor, Abdulrahman al-A’ma, is no independent expert; he held senior posts in the HTS-backed Syrian Salvation government. No successor has been announced for Hazem.  

Critics may argue nepotism exists in every government. But in few contemporary cases has such culture fueled a brutal 14-year civil war counting 500,000 deaths and displacing 13 million people.

If the Trump Administration truly seeks stability and prosperity for all Syrians, it should not mistake short-term GDP growth, all but guaranteed for an economy rebuilding from the bottom, as a substitute for equitable governance that consolidates peace. 

A July 1 Shaheen-Warren-Wilson letter to Secretary Rubio presses on power-sharing, women’s participation, foreign fighters, and Russia’s bases, yet proposes no mechanism to hold economic institutions accountable. The tools to fix that already exist. 

When Congress repealed the Caesar Act in the FY2026 National Defense Authorization Act, Section 8369 replaced blanket sanctions with a certification cycle requiring the President to report to Congress every 180 days for four years, with sanctions snapping back if the administration fails to certify for two consecutive periods. But no benchmark, as written, mentions the transparency of economic authorities beyond concerns of terrorist financing. Congress should add one that requires Syria to publish its sovereign wealth fund’s holdings and disclose the ownership data behind state contracts. 

The Treasury holds a second lever as the World Bank’s largest shareholder. The Bank is already re-engaging with a $225 million water and health financing that was announced this April. But even more useful is the $20 million Public Financial Management project approved in March 2026, funding procurement reform and fiduciary oversight.  Washington should expand and condition that financing on measurable transparency, working closely with EU partners already engaging with Syria’s General Authority on Supply & Procurement. 

If Al-Sharaa complies with this pressure, the payoff runs both ways. The regime will strengthen its international legitimacy and buttress domestic legitimacy – a timely intervention as Syrians are growing increasingly distrustful of Al-Sharaa while foreign capital waits for greater transparency. 

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