🚨 Beyond Caesar: Why Lifting U.S. Sanctions Will Not Solve Syria’s Economic Crisis

For numerous Syrians, the prospect of suspending or dismantling the Caesar Syria Civilian Protection Act has generated a wave of optimism. Commentators speak of billions poised to flow into reconstruction, and some authorities suggest that the end of the sanctions regime will trigger a rapid economic turnaround. Yet Syria’s economic crisis runs far deeper than one punitive statute. Removing a legal obstacle does not, on its own, rebuild a collapsed institutional system or restore confidence in a financial sector that has been deteriorating for more than a decade. The Shift in Washington’s Approach: From Punishment to Conditional Monitoring latest legislative moves in the U. S.

Congress do not amount to a full repeal of Caesar. Instead, they introduce a model of tight oversight. Sanctions relief will be conditional, tied to Syria’s adherence to eight political, security, and relief benchmarks, including counterterrorism cooperation, removal of foreign fighters from state institutions, protection of minority rights, and implementation of agreements such as the March 10, 2025 arrangement with the SDF. Compliance will be reassessed every 180 days over a four-year period. Furthermore, this shift suggests a move away from “automatic punishment” toward behaviour-linked engagement, but it does not amount to a blank cheque. Potential capital flows will remain tied to political performance.

The Illusion of a Reconstruction Windfall Expectations of an immediate economic boom ignore Syria’s structural constraints. UN and World Bank estimates place reconstruction needs at $216 billion, nearly ten times Syria’s projected GDP for 2024. Even if all sanctions evaporated tomorrow, there is no infrastructure—financial, administrative, or security-related—capable of absorbing such massive capital. A persistent misconception frames sanctions as the primary cause of Syria’s economic collapse. In reality, institutional breakdown, corruption, and systemic dysfunction long predate Caesar. Lifting one legislative barrier cannot reverse decades of erosion.

The Financial Sector’s Crisis of Credibility Even if capital becomes available, the Syrian banking system is ill-equipped to handle it. Structural problems include: Multiple exchange rates Central bank financing of fiscal deficits Weak regulatory oversight Widespread cash transactions outside the banking system A decade-long rupture of international banking relations A system operating under these conditions cannot provide reliable credit, manage significant inflows, or guarantee secure transactions. Without banking reform—including restoring the central bank’s independence and re-establishing international compliance standards—any injection of liquidity risks fueling currency shocks, inflation, and speculative bubbles. Sanctions Relief Is Not Enough: Deeper Obstacles Remain Caesar is only one piece of a wider sanctions…