Saudi Arabia and Qatar Pay Off Syria’s Debt to the World Bank: A Step Toward Reconstruction and Renewed International Relations

In late April, Saudi Arabia and Qatar announced—via the Saudi Press Agency—that they would cover Syria’s outstanding debt to the World Bank, totaling approximately $15 million. The move is part of a broader effort to foster regional stability and follows months of intensified diplomatic engagement with Syria’s new leadership, led by Ahmad al-Shara’, who took office after the ousting of Bashar al-Assad last December.

The announcement, released during the IMF and World Bank Spring Meetings in Washington, D.C., marked Syria’s first official participation in more than two decades. On that occasion, Ron van Rooden was appointed the IMF’s new mission chief for Syria, filling a position that had been vacant for more than fourteen years.

The IMF reports that Syria has not had active financial relations with the institution in the past forty years. The last technical mission was conducted in 2009, a year before the popular protests that triggered the civil war. According to IMF Managing Director Kristalina Georgieva, the first step toward genuine economic recovery is the availability of reliable statistical data, which is essential for planning effective policies to generate new income throughout the country. Georgieva also highlighted the importance of taking into account several critical factors, such as ongoing international sanctions, structural challenges, and the role of multilateral cooperation, all within a regional context characterized by shared vulnerabilities that also affect Yemen, Sudan, Lebanon, and Palestine.

Clearing the debt with the World Bank is a necessary condition to reactivate the institution’s financial and technical support.

This could unlock vital funding for key sectors such as infrastructure, healthcare, education, and the banking system. Reuters reports that a senior official from the United Nations Development Programme (UNDP) stated the agency plans to allocate approximately $1.3 billion in aid to Syria over the next three years.

Post-Assad Syrian Economy: Two Sides of the Same Coin

The political transition following Assad’s fall has opened new and unprecedented scenarios on the economic front. According to the World Bank, the previous regime’s mismanagement, compounded by sanctions and civil war, has pushed the Syrian economy to the brink of collapse, leaving most of the population in government-controlled areas impoverished and an economy partly sustained by the illegal trafficking of Captagon — a stimulant drug from the 1960s now widely used across the Middle East.

The rise of HTS has shifted the economic center of gravity towards Idlib, where new businesses are thriving thanks to more flexible regulations, stable currencies (the Turkish lira and the US dollar), and more advanced infrastructure. However, this so-called “economic miracle” is generating new tensions: entrepreneurs from former government-controlled areas complain of favoritism and unfair competition.

On one hand, entrepreneurs like Mohammad al-Badawi, active in importing Turkish goods, have benefited from the opening of markets. On the other hand, individuals such as Haytham Joud, who were raised under the protectionist policies of the former regime, struggle to adapt to the new liberal economic approach promoted by the interim government led by Hayat Tahrir al-Sham (HTS)

Although Idlib has seen an influx of new goods imported at low prices due to reduced customs duties, and trade at the Bab al-Hawa crossing increased by 42% in the first quarter of 2025, industrial production has collapsed by 90% compared to pre-war levels. The promised wage increases have proven insufficient to restore purchasing power, which remains critically low in Damascus, where long queues at ATMs and frequent power outages are commonplace. Compounding the challenges, approximately $600 million vanished from state accounts following Assad’s fall. Abdallah Dardari of the UNDP cautions that the government must implement trade policies to protect Syrian industry; otherwise, reliance on a free market alone will not be enough to resolve the country’s economic crisis.

The Sanctions Dilemma: Potential Opening or Mere Illusion?

Another key factor for economic recovery is the issue of Western sanctions, imposed over the 14 years of civil war by the United States, the United Kingdom, and the European Union as punitive measures against former President Bashar al-Assad. The United States, which does not formally recognize the current Syrian government, has set out eight conditions for the partial lifting of these sanctions. These include the destruction of chemical weapons stockpiles, respect for human rights, and cooperation on counterterrorism efforts.

Syria has submitted a written response, asserting that it has fulfilled most of the requirements but is seeking a “mutual understanding” on certain contentious issues, including the presence of foreign military forces on its soil. In the document, Damascus pledges to establish an office to investigate the case of missing American journalist Austin Tice and to review the status of foreign fighters within its armed forces.

A U.S. State Department spokesperson confirmed receipt of Syria’s communication but clarified that “no action has yet been taken” and that the U.S. position will depend on concrete steps taken by the interim government. While a partial six-month waiver was granted in January, its impact has been limited.

Despite diplomatic efforts and attempts at economic recovery, Syria continues to be the stage for military operations carried out by Israel. In recent months, Israeli airstrikes have intensified, targeting military infrastructure and weapons depots, often near Damascus and along the border with Lebanon. According to Tel Aviv, these operations aim to counter the consolidation of Iranian influence in Syria and the transfer of weapons to Hezbollah. Syrian authorities, however, condemn these actions as violations of national sovereignty and further destabilization of a country already in deep crisis. The escalation of clashes with Israel presents an additional obstacle to political normalization and reconstruction, fueling regional instability just as efforts are underway to attract investment and revive international cooperation.

L’intervento di Arabia Saudita e Qatar per saldare il debito siriano appare come un gesto potenzialmente determinante, ma ancora sospeso: potrebbe rappresentare il primo tassello di una nuova fase di ricostruzione, che sarà possibile solo attraverso la stabilizzazione dell’intera regione levantina e una normalizzazione dei rapporti con gli Stati Uniti.

The intervention by Saudi Arabia and Qatar to REPAY Syria’s debt appears to be a potentially decisive move, though its outcome remains uncertain. It could mark the first step toward a new phase of reconstruction, achievable only through the stabilization of the entire Levant region and the reestablishment of diplomatic with the United States.

Translated by Iuliana Cindrea

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