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Policy Brief

The Future of Syria's Economic Reforms between Regional Integration and Relations with the West

November 12, 2010

Franco Zallio

Following a cautious start, Syria has recently accelerated its economic reforms, and the politically most sensitive reforms could be launched in coming years. Economic reforms, however, remain subject to sudden interruptions, so their credibility requires a strong external anchoring through financial support as well as regulatory mechanisms. Today, however, Syria is blocking its free-trade agreement with the EU, which could strongly anchor its economic reforms. Syria seems to over-rely on regional agreements – in particular the free-trade agreement with Turkey – which, however, cannot fully replace the role of the EU and the West in general. The deepening of Syria’s economic reforms and their growing social impact will increase the relevance of Western support. Western economic instruments will be a very important bargaining chip in the complex strategic game in the region. It is up to the United States and the EU to better tailor these instruments to the future evolution of Syrian economic reforms.

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