Where will the new Syrian government get its revenues from?

A report by Asharq Al-Awsat newspaper revealed that the new government in Syria will face major challenges in financing its operations, especially since it inherited a dilapidated economic legacy from the previous regime, which makes its prospects limited in the coming period.

The Saudi newspaper quoted Nasser Zuhair, head of the Economic and Diplomatic Affairs Unit at the European Policy Organization, as saying that the government of Mohammed al-Bashir will most likely follow the same approach it followed in Idlib to obtain revenues, but he pointed out that what the Salvation Government was doing in Idlib to cover its expenses are temporary measures and cannot be relied upon to secure resources for the economy of a country like Syria.

Zuhair explained to the newspaper that the Salvation Government in Idlib was securing resources through taxes and fuel trade, in addition to international aid that provided a large part of the needs of the displaced in Idlib, in addition to external remittances from Syrian expatriates that reached their families, and finally the economic support that the border with Turkey provided in trade between the two sides.

The head of the Economic and Diplomatic Affairs Unit at the European Policy Organization saw that the Syrian Interim Government has great opportunities to improve its revenues, especially since it now has land crossings with Iraq and Jordan, after it used to rely on crossings with Turkey, and these crossings generate large income from taxes and fees.

Nasser Zuhair stressed that Syria has vast areas and fertile agricultural lands, which gives the government an opportunity to increase its revenues from this sector. Agriculture can be a source of funding, by enhancing agricultural production in fertile areas such as Aleppo and Idlib to achieve food security and generate revenues.

He continued that if the government is able to control areas rich in natural resources (such as northeastern Syria), then exploiting these resources can be a major source of income, adding that tax reforms can also be a contributing factor by imposing new taxes, as the interim government can start imposing taxes on income, companies, real estate, and others, and benefit from customs and fees through border crossings and improving their management to increase revenues.

Zuhair noted that one of the factors that could help the interim government in Syria is the reconstruction factor, through international investment fees, by encouraging foreign companies to invest in reconstruction projects in return for specific fees or taxes, and partnerships with the private sector in cooperation with local and international companies in the infrastructure and housing sectors.

He explained that the current government will rely on external transfers of hard currency from Syrians who will support their families in returning to their homes and rehabilitating their properties, and these amounts could reach two billion dollars in the first year in 2025.

Regarding domestic investments, the head of the Economic and Diplomatic Affairs Unit at the European Policy Organization said: "Despite the sanctions, the Salvation Government to which Al-Bashir belongs was able to attract domestic investments in several real estate, industrial, commercial and agricultural fields, relying on the presence of Turkey as an international outlet."

The economic expert added that the Salvation Government will try to do so on a state-wide scale, relying on the difficult economic situation and the state of isolation that the Syrian economy suffered from during the era of the former regime, and this could attract reasonable investments in the first year.

Zuhair concluded that managing vital sectors is an important factor, and the tourism sector can contribute directly, through reviving historical and cultural sites after achieving security and stability, and the participation of manufacturing industries by supporting small and medium industries to restart the economy.

EQTSAD