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Syria needs sanctions relief now

Svenja Schulze (SPD), Federal Minister for Economic Cooperation and Development, visits the district of Djubar during a visit to Syria.
Svenja Schulze (SPD), Federal Minister for Economic Cooperation and Development, visits the district of Djubar during a visit to Syria. (Sebastian Gollnow/dpa via Reuters Connect)

With the fall of the Assad regime, Syrians now have the opportunity to build the future for which so many fought, died, and suffered over the past 13 years. Whether they will be able to do so is uncertain. Early indicators offer some basis for optimism, yet if Syria’s still-nascent transition is to succeed, a new government will need to move urgently to repair Syria’s devastated economy. Today, most Syrians live in desperate economic conditions. The United Nations reports that more than 90% of Syrians live in poverty, while the cost of living has tripled in the past three years. By 2017, when violence began to ebb, a third of the country’s housing stock had been destroyed, along with half of its medical and educational facilities and its power grid. In most of the country, electricity is available for only a few hours each day.

For the new government to be seen as legitimate and worthy of support, Syrians will need to feel their economic conditions improving. They will need to see that an economic recovery is being managed not only efficiently, but fairly. Commenting just days after Bashar al-Assad fled to Moscow, his former prime minister, Mohammed Ghazi Jalali, observed that “poverty and corruption led to the fall of the Syrian regime, not the 13-year war in the country.” Years of economic crisis and predatory rule by the Assad regime drained it of support and left it vulnerable to collapse. To avoid a renewed eruption of economic grievances that could easily destabilize a precarious transition, the interim government will need to persuade Syrians that they are better off, and have better prospects, than they did under Assad.

Since the regime’s fall, discussions about how to assist Syria’s economic recovery have focused on sanctions relief. Selectively lifting sanctions on critical economic sectors and institutions, such as the oil sector and the Syrian Central Bank, should happen quickly, while sanctions on Assad regime figures complicit in war crimes remain in place. Unfortunately, quick action by either the United States, the European Union, or European governments is unlikely. All three are using sanctions as leverage to nudge the new Syrian administration toward an inclusive political transition that respects human rights. Following the first meeting between the French and German foreign ministers and their Syrian counterparts in Damascus, Germany’s foreign minister, Annalena Baerbock, underscored the European position, telling reporters that Europe “will not be a financier of Islamist structures.” The Biden administration also shows little interest in quick action on sanctions.

Beyond the Biden administration’s risk aversion, sanctions relief faces steep legal and bureaucratic hurdles. Most U.S. sanctions, including those intended to deter third-party trade and investment, are mandated by law. These include provisions of the Caesar Syria Civilian Protection Act that were renewed on December 23 when President Joe Biden signed the National Defense Authorization Act (NDAA). Congress passed the NDAA on December 18, only days after the Assad regime collapsed, leaving too little time for Caesar provisions to be stripped from the bill. To rescind provisions of the Caesar act, or lift other sanctions passed by Congress over the past four decades, will require quick bipartisan action and the support of the incoming Trump administration. In the interim, the Biden administration has issued a general license that lifts some restrictions on trade and financial flows for six months. This is a welcome step. It will bring a measure of economic relief. Yet the license preserves sanctions on activities essential for reconstruction, including sweeping restrictions on “new investment.” And with sanctions still in place, a temporary general license may not be sufficient to overcome the legal concerns of banks and firms whose willingness to do business in Syria is critical for long-term recovery.

The initial focus of the new Republican-controlled Congress will be on its domestic priorities. Yet congressional action to rescind the Caesar act should not be a heavy lift. In February 2024, the House passed a related bill, the Assad Regime Anti-Normalization Act, with a huge bipartisan majority of 389 votes. If the Trump administration supports legislative action to remove a major impediment to Syria’s economic recovery, Congress could readily act on a bill that would bolster prospects of a stable, sustainable, and legitimate transition in Syria.

To remove sanctions in the face of serious concerns about how Syria’s new administration will govern is not without risks. Yet withholding sanctions relief as a source of leverage may prove far more costly. Without the economic relief that the removal of sanctions makes possible, the prospects for a sustainable, legitimate political transition will become even more uncertain. With spoilers seizing every opportunity to derail Syria’s fragile transition, deferring economic recovery is a recipe for chaos and discord. And while Western governments hold back on sanctions relief to assess its responsiveness, the administration in Damascus is no doubt doing the same, keeping its own balance sheet of how its appeals for relief are being received in Western capitals.

After decades of sharp antagonism between the United States and the Assad regime, there is a fleeting window now, in the early phases of transition, to put U.S.-Syrian relations on a more positive footing, with potential long-term gains for Syrians, for regional security, and for the United States. To reject reasonable requests from Syria’s interim government for urgently needed relief will not only undermine the prospects for economic recovery—sustaining the conditions for mass Syrian immiseration—but also jeopardize opportunities for an improvement in U.S.-Syrian relations that the United States struggled but failed to secure during the Assad regime’s entire 54-year tenure. To grasp this opportunity will require the United States to be forthcoming on sanctions relief. The potential gains from doing so more than offset its possible risks.

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