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ARTICLE IN BRIEF:
The Syrian economy did well in several macroeconomic indices in the past decade, but suffered from growing corruption, social exclusion and the rise of a corrupt oligarchy. A lack of political liberalization and accountability contributed to the Syrian uprising, which has been followed by a dramatic decline in the country's economy as violence has intensified. Syria's fragmentation has also given rise to warlordism and local economies based on theft and smuggling
The war in Syria constitutes a dramatic rupture in both the political and societal dynamics that preceded it. However the longest lasting and most profound impact may be on the economy of the country. The humanitarian crisis inside Syria and the refugee crisis in the neighboring countries are both now global catastrophes. The pace of the crisis so overwhelmed expectations that both the Syria Humanitarian Assistance Response (SHARP) and Regional Response Plans of 2013 - dealing with humanitarian assistance inside and outside Syria, respectively - had to be revised several times mid-year. Domestically, the economic changes brought about since the start of the Syrian uprising in March 2011 fall under two main categories. First, the war has resulted in the severe deterioration of the economy as a result of destruction of lives, physical infrastructure, capital flight and the imposition of sanctions. Secondly, Syria has seen the rise of a war economy and warlordism around the competition for natural domestic resources, foreign funding, and smuggled goods by warring militias and civilians inside the country.
GOVERNMENT RESPONSE TO UPRISING
When the protests in Syria first broke out, the previous economic team and government of Naji al-Otari was relieved of its duty and replaced by a new government that represented more career Ba'athists who were proponents of the public sector. The government announced it would increase salaries and subsidies as well as restore support for manufacturing and agriculture. However, these policies offered too little, too late. Rather than undertaking large-scale investment that would benefit Syrians across the board, the regime sought to target its presumed bases of loyalty among civil servants, workers in state-owned enterprises and the government bureaucracy at large. That half-measure, coupled with the regime's unwillingness or inability to discipline the main objects of popular loathing, such as the president's...