Syria and the World Bank have agreed to set up a multi-donor trust fund focused on recovery and reconstruction, they said in a joint statement on Sunday, as Damascus aims to rebuild after a more than decade-long civil war.
The fund aims to provide concessional financing, investment guarantees, technical support, and capacity building.
After more than 14 years of a devastating civil war, around 90% of Syrians live in poverty, and tens of thousands of people are still internally displaced, unable to return to their destroyed homes.
Muhammad Yahya, the UN Assistant Secretary-General for Humanitarian Affairs, had previously reported that four million internally displaced people had returned to their areas of origin in Syria since last December.
But, he also noted that these returns continued to face significant challenges, including damaged homes and shortages of essential services in areas of return.
Yahya warned that the humanitarian situation facing displaced people could deteriorate amid the approach of winter. He called for the needs of the most vulnerable families and individuals to remain a priority alongside ongoing recovery and return efforts.
The Syrian government has committed itself to unwinding Assad’s 'Baathist' economic model. In a meeting of the Arab Media Summit in Dubai last week, President Ahmed al-Sharaa said that Syria is undergoing “a shift from a system resembling socialism, dominated by corruption and bureaucracy, to a more liberalised system based on a free market economy”.
Under Assad, the economy was defined by “corruption, bureaucratic bloat and inefficiency,” Benjamin Fève, a Senior Consultant at Karam Shaar Advisory, tells The New Arab.
The government has sought to liberalise the economy by slimming down overstaffed state institutions, cutting subsidies, and opening the Syrian market to foreign investment.
These reforms have created a positive impact in some sense, with the IMF forecasting more than 10% growth in 2026. However, “this growth has not translated into a lower cost of living or reduced poverty rates,” Caroline Rose, a senior director at the Soufan Centre, explains to The New Arab.
Rose explains that much of the significance of lifting fuel subsidies comes from the major knock-on effects it has in almost every aspect of the economy, causing a cascade of price increases—perhaps most impactfully in food prices.
Food insecurity remains widespread, with 7.2 million Syrians acutely food insecure according to the World Food Programme—an issue compounded by rising prices for foodstuffs and a cut in humanitarian aid budgets globally.