Due to the ongoing conflict in Syria, the information on these pages may not reflect current conditions in the country.

Country Risk Rating

The highest-risk political and economic situation and the most difficult business environment. Corporate default is likely. - Source: Coface

Business Climate Rating

The highest possible risk in terms of business climate. Due to a lack of available financial information and an unpredictable legal system, doing business in this country is extremely difficult.


  • Strategic geographic position
  • Energy transit country
  • Oil potential 


  • Civil war since 2011, 320,000 dead, destruction of many infrastructures
  • Fragmentation of the territory between different groups of influence
  • Oil production is reduced to nothing

Current Trends

Relative Calming of Fighting and Annihilation of the Islamic State (IS)

The Syrian conflict that crystallizes local, regional and international interests appears unlikely to end in the near future, with additional players entering the confrontation between the regime of President Bashar El Assad and Sunni opponents that has been ongoing since 2011. On the one hand, Saudi Arabia, Turkey, and the other Gulf Cooperation Council (GCC) member states – Sunnis – were the first supporters of the opposition. On the other hand, both Iran and Lebanese Hezbollah – Shiites – see the Alawite regime in Damascus as a regional ally to be preserved (Syria remains an important crossing point for weapons equipment sent from Tehran to Hezbollah). Russia, Hezbollah soldiers and the Pasdaran (Guardians of the Iranian Revolution) offer military and logistical support to the Syrian army, which is crucial to maintaining the regime. An international coalition, composed mainly of Western and Arab countries, was formed in 2014 with the main objective of curbing the expansion of Islamic State terrorist organizations and the Al-Nusra Front, close to al-Qaida. The United Nations estimates that half of the Syrian population has been displaced since April 2011, including 4.9 million refugees abroad and 6.3 million internally displaced people in Syria. The Syrian humanitarian crisis has spread to neighboring countries (Lebanon, Jordan, Turkey), who now host the largest number of conflict-related refugees

After proclaiming the “caliphate” four years ago, the Islamic State group is currently in ruins in Syria. The last outbreak of fighting ended in late 2017 on the last two main fronts of the IS. In Raqqa, the self-proclaimed capital of the IS, the “caliphate” soldiers were defeated mainly by the Syrian Democratic Forces (SDF) – composed of mostly Kurdish soldiers – who were, supported by the aerial bombardments of the international coalition. In Deir-Ezzor, regime soldiers and their Iranian counterparts, supported by Russian bombing, won a strategic victory in September 2017 in an oil-rich region.

In 2018, there should be a decrease in the intensity of hostilities and an accentuation of territorial fragmentation. The Astana talks, which bring together the emissaries of the regime and those of the opponents at the initiative of Russia, Turkey, and Iran, should lead to the creation of so-called “de-escalation” zones. However, the IS would no longer be a major player in the conflict. In order to maintain their military bases in the country, the Russians will support the regime of President El Assad, who is likely to remain in power in 2018. The Turks, militarily involved in the conflict, will have the main objective of slowing down the progressive autonomy of Syrian Kurdistan along their border while preventing the Iranian stranglehold on the country and the Idlib zone. Israel bombed Hezbollah’s strategic positions in Syria in 2017, seeing it as a threat and a vector of Iran’s advance towards the Israeli-Syrian border. The Kurds will want to take advantage of the fall of the IS to build a state. Nevertheless, the reluctance of the Syrian, Iraqi, Turkish and Iranian states would make the process very long.

A Chaotic Economic Situation

According to a World Bank estimate, the Syrian GDP has shrunk by nearly 63 percent in the 2010-2016 period. The decrease in the GDP is mainly due to the decline in oil production. Oil GDP fell drastically by 93%, while non-oil GDP fell by 53% due, in particular, to the destruction of infrastructure. Industries have been hit hard, physical damage is high, and economic sanctions make it impossible to export and access financing. The country remains fragmented between different areas of influence, and the continued fighting and bombing of the coalition and Russia continue to cause infrastructure destruction. Following the destruction of numerous houses, rent prices in safe areas rose by 500 to 1000%. Most electrical installations are no longer functional, and the first sources of electricity in conflict zones are car batteries. The majority of schools in the country have been destroyed, which will have a structural impact on human capital. Private investment, which accounted for 12% of the GDP in 2010, represents only 4%. Household consumption is strongly penalized by the downward trend of the Syrian pound, high inflation, and the low number of jobs. If the situation calms down in 2018, oil exploitation could resume, which would improve the country’s catastrophic economic situation. The reconstruction effort, estimated at USD 200 billion, will be at the heart of the negotiations. The countries of the international coalition will condition their participation to take into account their concerns.

Deepening Twin Deficits

Public finances have steadily deteriorated with the intensification of the conflict. The public deficit would have reached 20% in 2015, and could continue to widen. Falling oil revenues and tax cuts resulted in a contraction in government revenues that would have accounted for less than 7% of the GDP in 2015. In addition, public spending has increased significantly under the weight of the increase in military spending. Public debt has become unsustainable, accounting for more than 150% of the GDP in 2015.

The current account balance also has a significant deficit. The rate of openness of the Syrian economy has been drastically reduced and exports have decreased by almost 93% between the beginning of the conflict and 2015. Oil revenues plummeted from USD 4.7 billion in 2011 to USD 0.14 billion in 2015. Exports of the mining sector are now non-existent, whereas they were worth USD 4.7 billion in 2010. Foreign exchange reserves have been depleted, from USD 20 billion in 2010 to less than USD 1 billion at the end of 2015, to fund the external deficit. 


Coface (01/2018)