Syria welcomed the US administration’s decision to remove it from the list of state sponsors of terrorism, where the country had remained for 47 years. In Damascus, the move was described as a historic turning point that could pave the way for economic recovery and postwar reconstruction. Experts discussed how the decision could affect Syrian-US relations, living standards, political stability and Damascus’s return to the global economy.
Military economics expert Ghazi al-Assaf noted that the decision is primarily legal in nature, while its economic consequences will emerge gradually. Removal from the list should reduce legal obstacles to financing Syria and could potentially shift cooperation with the International Monetary Fund and the World Bank from technical assistance toward lending and participation in infrastructure projects. In addition, it will reduce the risks that previously led banks and companies to avoid operating in the country.
Caroline Rose, senior director at the Soufan Center, said the decision could strengthen security cooperation between Washington and Damascus while creating conditions for technology transfers and military cooperation. It also signals to financial institutions and investors that the legal environment is becoming more favorable. However, she said, instability and ongoing security operations will continue to deter businesses: lifting restrictions will not be enough without stronger order and trust.
Political researcher Muayyad Ghazlan Qablawi called the decision the result of Syria’s efforts to return to the international community and overcome the isolation created by sanctions and the US classification. The move could restore hope among Syrians and help create new jobs, but this will require deep reforms and effective state institutions. Ending the designation could also ease access to international financing and weaken secondary sanctions, which previously discouraged even companies from countries not affiliated with the United States from investing.
At the same time, rapid changes in citizens’ daily lives should not be expected. The initial effect will likely be mainly psychological, as the decision should reassure investors and financial institutions. The return of companies, increased investment, job creation and lower prices will take months or years, since the Syrian economy has endured 14 years of war and a sharp contraction: GDP fell from approximately $60 billion to $20–22 billion during the later stages of the conflict.
Removal from the list does not cancel all existing sanctions and restrictions. However, further easing of measures could increase investor confidence, make it easier for banks to operate and accelerate their connection to the SWIFT system. Full integration into the global financial system will require modernization of banking infrastructure and electronic communications channels. The US Treasury Department said that ending the designation, imposed in 1979 over allegations of support for terrorist organizations, is intended to encourage investment and promote Syria’s political and economic stability.
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Which US and international sanctions against Syria remain after its removal from the State Sponsors of Terrorism list, and what restrictions do they continue to impose on banks and companies? — Removal from the State Sponsors of Terrorism list does not, by itself, cancel other sanctions. US restrictions under counterterrorism laws may remain in place, along with sanctions against the Syrian authorities, security forces, specific companies and individuals, as well as export controls and restrictions on financial transactions. European and British sanctions may also include asset freezes and bans on providing funds to sanctioned entities. As a result, banks continue to fear secondary sanctions, conduct enhanced customer checks and often avoid transactions involving Syria. Companies face greater difficulty attracting investment, insuring transactions, purchasing technology and making international payments.
Why does connecting Syrian banks to the SWIFT system require modernization of the domestic financial infrastructure, and what obstacles hindered this during the war years? — SWIFT merely transmits secure messages between banks; it does not replace a national banking system. Full connection requires stable correspondent banks, modern payment and compliance systems, transparent reporting, controls against money laundering and terrorist financing, and compliance with international standards. The war destroyed branches, telecommunications and payment infrastructure, weakened supervision and professional training, intensified dollar isolation and increased sanctions risks. In addition, foreign banks feared fines and reputational damage, so they closed correspondent accounts even when transactions through SWIFT were technically possible.
What role could the International Monetary Fund and the World Bank play in Syria’s reconstruction, given their different lending mechanisms and reform requirements? — The IMF generally provides short- and medium-term support to stabilize economies. It assists with monetary policy, budgets, inflation, banking reform and the balance of payments, usually linking financing to an agreed reform program. The World Bank focuses more on long-term development, financing infrastructure reconstruction, healthcare, education, social protection and public-sector institutional reform; its projects also require transparent governance and expenditure controls. Their participation would be possible only if legal conditions were met, an internationally recognized partner were in place, and sanctions were lifted or eased. In practice, the first steps would include assessing the damage, restoring financial reporting and institutions, and guaranteeing that aid would not be diverted to sanctioned entities.
Full version: After 47 years, how will lifting the “terrorism designation” affect Damascus’s foreign relations?