SYRIA

RISK RATING
Severe
Default High Risk Score 9.00
Normal Average 7.98
Weighted Average 7.99
RISK RATING HISTORY
RISK RATING SCALE

Risk Rating Scale

Severe: 8.0 to 10
High: 6.0 to 7.9
Elevated: 4.0 to 5.9
Moderate: 2.0 to 3.9
Low: 0.0 to 1.9
EXCHANGE RATE
Country Outlook

Syria has been embroiled in a decade of civil war and armed conflict with regional countries. The imposition in 2020 of tough US sanctions under the Caesar Act has resulted in the collapse of the currency and severe foreign exchange shortages. Some four million people in the northwest live outside of Syrian government control, while President Bashar al-Assad’s military has recovered territory from rebel groups over the past few years with Russian military support. More than six million Syrian refugees remain outside the country. Without a semblance of stability and political reconciliation to allow these refugees to return, foreign donors are unwilling to invest in Syria’s recovery. Syria ‘s risk outlook is unlikely to see an improvement without political change and significant reconstruction, and neither currently appears likely.

  • President Bashar al-Assad has maintained a firm grip on Syria since 2000 by imposing an authoritarian personality cult on the country and the ruling Ba’ath Party, just like his father, while exploiting regional geopolitical shifts. A tilt toward Iran and Russia have helped shore up his rule and allowed him to regain most of the territory he once lost to insurgents. However, the collapse of the neighbouring Lebanese economy and tough international sanctions are putting new pressures on political stability. Foreign donors insist on the return of refugees as a precondition for recovery funding, yet few displaced people are willing to return. Former rebel-held Aleppo, which was Syria’s largest city and commercial hub before the conflict that started in 2011, endured years of destructive urban warfare, making few refugees willing to return.
  • Peace negotiations involving Russia, Iran, and Turkey diminish the prospect of a resurgence of full-scale conflict, although there remains the risk of localised and sporadic fighting between armed groups and Syrian state security forces. Russia has become a guarantor of security in state-controlled regions, providing manpower and air support. Israel stages frequent rocket and missile strikes on southern and central Syria against Iran-backed militias such as Hezbollah. Syria’s northwest is home to a mix of Islamist militant and opposition groups, which pose a threat of attack and kidnap of aid workers and foreigners. The area is also populated by hundreds of thousands of internally displaced persons that rely heavily on humanitarian assistance, while localised fighting is recurrent.
  • A war-ravaged economy has been exacerbated by the imposition of tough US and other sanctions that have raised the cost of essentials and imports. The state relies upon unreliable revenue sources, such as dwindling customs and income taxes, which are heavily bolstered by lines of credit from Iran. The recovery of the phosphate sector and oil industry is stymied by militant attacks on pipelines and refineries. International sanctions exempt imports of essential food and humanitarian items, but there remains increased scrutiny of aid to ensure it does not benefit Assad’s government. Without a political transition, meaningful reform, and the assured return of refugees, the Syrian economy has little prospect of recovery, especially since major partners like Iran also suffer economic crises.
CUMULATIVE AND DAILY COVID-19 INFECTIONS AND DEATH RATE
INTERNATIONAL MONETARY FUND | DATAMAPPER
Risk Perils
Political Instability
8.0
Expropriation, Nationalisation, Confiscation & Deprivation
8.0
Contract Frustration & Breach
8.0
Taxation
8.0
Bribery & Corruption
9.0
Regulatory Burden
8.0
Strikes, Riots & Civil Commotion
5.0
Security
8.0
Sovereign Default
9.0
Economic Volatiliy
8.8

Risk Rating Scale (small)

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