Friends,
I have recently returned from a 10-day trip across Syria.
Three things were clear: Gone is the shadow of fear. Returned is a sense of self-determination and pride. And a myriad of economic challenges is emerging.
I found Syrians anxious to rebuild their nation from grassroots public works projects to political activism to poetry and music.
Most of all, I found a people ready to rebuild homes.
Across the country, displaced Syrians are on the move, going back and forth to war-battered neighborhoods while building makeshift temporary lives in Damascus.
In Darayya, Homs, and the Yarmouk Refugee Camp, people are clearing rubble with hands and shovels, assessing what can be saved. Some are even opening car mechanic shops and juice stands in small, salvageable spaces within nearly-demolished buildings.
But Syrians across all segments of society name one obstacle preventing them from reconstructing homes and lives: US sanctions.
From business-owners to farmers to citizens, Caesar sanctions are choking the daily lives of Syrians.
Originally intended to pressure the Assad regime and stop its industrial killing of civilians, Washington has kept them in place to pressure the new, Islamist interim government to abide by human rights and pluralism. Yet these very sanctions now threaten the post-Assad era.
In today’s edition, I will outline the ways in which US sanctions are impacting Syrians, the outlook for Washington lifting Caesar, and how the interim Syrian government is responding to US demands.
-Taylor
Caesar Sanctions
In 2020, the US imposed the so-called Caesar Syria Civilian Protection Act sanctions on the now-departed Bashar Al Assad regime for its crimes against humanity and mass killing of civilians.
The crippling sanctions affect Syrian banks, industry, private sector and imposes strict restrictions on imports.
In the wake of Islamist HTS’s ouster of Assad on December 8, the Biden Administration issued a Syria General License, temporarily easing restrictions on humanitarian aid, electricity, water and sanitation sectors for six months.
Despite this waiver, Syrians still face difficulties in obtaining spare parts, accessing the international banking system, and basic goods.
Money Problems
One of the biggest impacts of the sanctions is on the banking system. US sanctions prevent individuals and corporations from working with Syrian banks.
With investors or importers unable to send bank wires and receive wire receipts, few are willing to hand off hundreds of thousands or millions in cash to intermediaries to take to Syria to complete a transaction.
This is preventing businesses—from pharmaceutical companies to canned goods—from exporting goods.
Dr. Anton Hashash, an owner of a recently-completed, empty, gleaning pharmaceutical factory, put it this way:
“Noone will import from Syria due to Caesar and we can’t get high quality raw materials due to Caesar,” he said. “If sanctions are not lifted in a year, I am going to close down.
The restrictions are also preventing countries such as Qatar, Saudi Arabia and UAE from pouring millions of dollars in investments and reconstruction projects.
The trickle-down hurts Syrians too.
The vast majority of Syrians rely on informal hawala cash transfers from relatives—almost always in US dollars—or carry US dollars with them into Syria.
Unable to exchange at banks, most Syrians rely on black market currency exchanges with a set rate 20-25% below the official exchange rate.
This means that the vast majority of Syrians are losing one-fourth of their income circumventing banking sanctions.
Another side-effect: few are putting money in Syrian bank accounts, hurting the already-strained cash reserves in Syria’s central bank, which was plundered by the regime prior to Assad’s departure and has an estimated $100 million left.
Bulldozers, Cranes, Planes
Hurting Syria’s rebuild are US restrictions on importing construction equipment.
Most bulldozers and cranes date back to the 20th century, with the majority of heavy equipment used in building date back from the 1970s and are nearing 50 years old.
Engineers cannot use drones, aerial photography, and GPS to scan buildings or survey vast damaged areas in order to take stock how much of Syria is destroyed and what can be salvaged.
The estimate that 45% of buildings in Syria are damaged or destroyed is only an estimate.
Hospitals and health centers struggle to obtain MRI machines, X-ray machines, and surgical equipment, as well as essential medicines.
Currently, as it was during the Assad regime, these essential items are being smuggled through the mountains from Lebanon.
Keeping the Lights On
One of the biggest impacts of sanctions is on the electricity grid.
Two-thirds of electricity plants and infrastructure are either damaged awaiting repairs or completely destroyed; stripped bare of parts and precious metals by Assad’s army.
The lack of functioning power plants and incoming oil means that Syria is currently producing 1,300 MW—one-fifth of its needs. Syrians receive an average of two hours of electricity per day.
Complicating efforts to overhaul and improve the electricity grid is the fact that most plants were constructed by European companies. Syria lacks spare parts and technical know-how for expanding and rebuilding plants.
The EU’s announcement this week that it was easing sanctions on the energy and banking sector should provide immediate relief. It is particularly good news for the Siemens-built Deir Ali power plant, which is the current largest generator of electricity in the country and is in need of pumps.
Yet as of writing, the new parts have not flowed in.
Until now, Syria’s interim government is relying on the few spare parts in warehouses that haven’t been looted and craftsmen forging makeshift “local” parts.
Should sanctions ease, Syrian authorities hope to boost electricity to eight hours per day by May and 24-hours-per-day within four years.
Yet should US sanctions remain, this will be delayed—and affect Syrians’ ability to rebuild in damaged areas.
I met tens of Syrian returnees in Darayya and Homs waiting for sanctions to be lifted to rebuild their homes.
If there is no electricity, and no water—the damaged areas remain uninhabitable, affecting displaced Syrians’ ability to return home.
Prospects of Lifting Caesar
It remains unclear if Washington will consider lifting sanctions—particularly as the Trump Administration has expressed no interest in Syria at all.
Even the codenamed “Caesar,” Farid Nada al-Madhan, the Syrian military official defector who leaked images of the killings that led to the sanctions, has called on the US to lift them.
The US has linked lifting sanctions to, somewhat vaguely, the interim Syrian government’s respect for human rights, treatment of minorities, and the removal of Iranian and Russian influence from the country.
Iranian influence has been uprooted; the Syrian government is playing hardball with Russia over reclaiming its military bases.
On the ground in Homs, Maaloula, Damascus, and Damascus countryside, I witnessed Christians, Alawites, Druze and Shiites freely practice their faith and attend community events.
HTS is offering de-facto local autonomy to Christian villages like Maaloula, working with local representatives to take care of municipal services and needs.
An HTS-facilitated National Dialogue held this week called for a new constitution to be drafted and emphasized the importance of freedom of expression and human rights.
In a concluding statement at the end of the dialogue, participants expressed “supporting the role of women in all fields” and “rejecting all forms of discrimination based on race, religion, or sect”.
It is difficult to see what, exactly, more the interim Syrian government can do to meet Washington’s conditions.
With the immense challenges facing the interim Syrian government, an economic collapse hastened by sanctions is a real possibility—threatening an already fragile security situation.
Unless there is action from Washington soon, a rare opportunity for Mideast progress and change will be missed.
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