For centuries, the relationship between security and the economy received little attention. National security was regarded as a separate domain, disconnected from economic issues. Economists studied economic phenomena in isolation, without considering their link to security conditions. However, with growing geopolitical polarization in the international system after World War II—and especially in the later years of the Cold War—thinkers began to recognize a direct relationship between these dynamics, the economy, and development.
As global polarization increasingly threatened the stability of the world economy, interest shifted toward studying the relationship between security and development. New concepts emerged to bridge gaps in this understanding, including the concept of “economic security”—now seen as an integral part of comprehensive national security.
Today, security and development are viewed as interconnected and nearly inseparable. It is difficult to determine which influences the other more—whether security acts as the independent variable and development as the dependent one, or vice versa. In simpler terms: does development strengthen security, or does security drive development? The prevailing understanding is that as development advances, security improves; and as security stabilizes, economic growth and productivity flourish. Societies that organize themselves and meet their basic needs become far more resilient to both internal and external threats.
Security and risk indicators have therefore become central in economic policymaking and are now key benchmarks for global investors and capital holders when comparing markets and investment destinations.
Against this backdrop, the Syrian experience provides a stark example of the organic link between security and development. From 2011 to 2025, Syria endured 15 years of chronic insecurity and total absence of peace due to civil war. This period caused devastating economic losses estimated at around $800 billion (UNDP), encompassing declines in GDP, destruction of infrastructure and assets, government revenue losses, individual hardship, and a collapse in development indicators to levels unseen in modern Syrian history. This reality makes the mission of rebuilding Syria—or rather building a new Syrian state—immensely challenging.
I. The Economic Cost of Insecurity in Syria
1. Macroeconomy
The prolonged conflict dealt a massive shock to Syria’s economy, erasing the progress of four decades (UNDP). Between 2011 and 2023, Syria’s GDP contracted by an annual average of 5.2%, with some years—especially early in the war—seeing contractions of up to 26%.
GDP fell from $61 billion in 2010 (pre-war) to $20 billion in 2023 (World Bank). Had the war not occurred, and had Syria maintained pre-war growth rates, GDP could have reached $120 billion today—six times its current size. In other words, the conflict has cost Syria about $100 billion in GDP alone.
Budget deficits tell a similar story: in 2023, the deficit reached a record 30% of GDP, with projections of 26% in 2024. This means the government cannot cover nearly one-third of its spending obligations—impacting salaries, public services (electricity, water, sanitation, education, health), and even security and defense budgets.
Hyperinflation worsened the crisis: in some years inflation exceeded 150%, with the average annual inflation rate (2011–2024) surpassing 40%. This reflects a near-total currency collapse, devastating purchasing power and imposing severe hardship on households and businesses alike.
2. Human Capital
The war also decimated Syria’s human capital. More than 700,000 people were killed or went missing. Between 2011 and 2017, about 6 million Syrians fled abroad. Although some later returned, around 2.5 million remain outside Syria as of 2024. This means the country lost nearly 10% of its population, disproportionately from wealthier, educated middle-class groups.
Unemployment surged to 75% of the labor force—triple pre-war levels. Out of 6.6 million workers, about 4.95 million are jobless, creating massive pressure on the economy to generate jobs. High unemployment also raises dependency ratios and prevents Syria from utilizing its human resources effectively.
Consequently, Syria’s Human Development Index fell to its lowest level since records began in 1990. Poverty tripled, reaching 90% of the population by 2024 (UNDP)—about 22.1 million Syrians living on less than $3 a day. Around 75% of Syrians now rely on humanitarian aid, placing immense strain on government and society.
3. Public Infrastructure
Syria’s infrastructure has been devastated. One-third of housing was destroyed, leaving 5.7 million people homeless. Between 40–50% of children (ages 6–15) are out of school due to damaged education facilities. Over half of water and sanitation systems were destroyed, depriving 14 million people of clean water or sewage services.
About 70% of electricity generation facilities were damaged or destroyed, cutting Syria’s electricity supply by 80%. The near-total collapse of infrastructure creates enormous financial and logistical burdens for any future government.
II. Opportunities for Recovery and State Rebuilding
1. Reconstruction Costs and Financing Needs
If peace and stability can be achieved, Syria’s recovery will hinge on balancing two realities:
- The enormous reconstruction bill, estimated between $400 billion (UN) and $900 billion (Arab League). The higher figure is more realistic, aligning with the $800 billion in war-related losses.
- The country’s limited ability to finance this process.
While Syria cannot realistically raise the entire sum at once, it does not need to. What is required is phased financing to cover urgent needs—restoring essential services and infrastructure to ensure short-term social and economic stability.
UNDP estimates Syria needs $36 billion over 10 years (about $3.6 billion annually) to stabilize the economy and society. Priorities include rebuilding health, education, and energy infrastructure; boosting productivity and job creation; reducing poverty; and revitalizing agriculture for food security. If achieved, Syria could recover within a decade.
2. Role of International Support
Reconstruction funding cannot rely solely on domestic resources. International donors—Qatar, Saudi Arabia, Turkey, the EU, the U.S., and organizations like UNDP—have already pledged about $58 billion in grants, loans, and investments.
This exceeds Syria’s short-term recovery needs by 1.5 times. However, actual access to these funds is uncertain due to continued insecurity, which deters investors, and because much of the Western aid is conditional on reforms related to human rights, political participation, and governance. These conditions complicate both the flow and sustainability of aid.
Conclusion
Given these realities, Syria cannot rely excessively on external support to rebuild. True recovery depends first and foremost on achieving domestic peace, security, political progress, and the return of displaced citizens. If these conditions are met, Syria can harness its own resources effectively and reduce dependency on external aid. Only then can the country embark on the path toward genuine reconstruction and sustainable development.
