Amid an intensifying liquidity crunch that continues to weigh on Syrian markets, economic expert George Khuzam has raised pointed questions about the fate of the capital urgently needed to revive domestic production and strengthen consumer purchasing power. His critique places the Syrian Sovereign Wealth Fund (SWF) at the centre of a widening debate over public resource management, particularly whether state assets should be deployed to stimulate economic activity rather than held outside circulation.
In a statement published on Facebook, Khuzam argued that locking liquidity inside the sovereign wealth fund, instead of releasing it into the market through capital investments and productive lending, suppresses consumer demand and weakens local output. The result, he said, is a direct blow to purchasing power at a moment when the economy requires every available lever to restore momentum.
The Sovereign Wealth Fund Under Scrutiny
Khuzam urged authorities to direct funds toward industrial and agricultural sectors capable of absorbing unemployment, expanding exportable goods and reducing reliance on imports. Such measures, he argued, would ease pressure on foreign currency reserves and support broader economic stability.
He noted that sovereign wealth funds are traditionally designed to consolidate surpluses and build buffers for future crises. Using them to sequester capital during a period of deep recession and stagnant production, he warned, runs counter to their intended purpose. Khuzam also criticised attempts to maintain the US dollar below 15,000 Syrian pounds (SYP), the official benchmark set before the collapse of the former regime, arguing that market realities diverge sharply. He estimated that consumer goods are effectively priced at a shadow rate exceeding 19,000 SYP per dollar.
Foreign currency, he added, functions as the primary engine of economic velocity. Accumulating dollar reserves inside the SWF rather than releasing them into circulation throttles economic activity. Khuzam’s figures represent his personal analysis and do not constitute an officially recognised exchange rate, nor do they provide conclusive evidence that the fund alone is responsible for the liquidity crisis.
A Severe Liquidity Squeeze
These concerns gain weight in light of the World Bank’s economic assessment published on 7 July 2025, which recorded a 1.5 percent contraction in Syria’s GDP for 2024 and projected modest growth of around 1 percent in 2025 amid persistent constraints on liquidity and foreign aid. The report highlighted acute shortages of banknotes and disruptions in local currency circulation following years of conflict‑driven economic erosion.
Syria’s liquidity challenge extends beyond the volume of available cash. The banking sector continues to struggle with structural limitations that prevent savings from being converted into viable credit for businesses and households. A July 2025 report by the European Union Agency for Asylum (EUAA), citing multiple field sources, documented ongoing withdrawal limits and repeated breakdowns in digital payment systems, severely restricting citizens’ access to funds and basic transaction processing.
Opacity Complicates Evaluation
Questions surrounding the Syrian Sovereign Wealth Fund focus heavily on the total value of assets under management, investment mechanisms and financial returns. A recent report by the Financial Times noted that the fund has not released a comprehensive financial disclosure or audit of its accounts, despite its expanding footprint across real estate, manufacturing and banking. While the newspaper cited an unverified estimate of fifty billion dollars in assets, it emphasised the absence of public balance sheets required for independent verification.
Official state sources maintain that the sovereign wealth fund is intended to safeguard and expand national assets, attract foreign investment and drive macroeconomic growth, asserting that all managed assets and returns remain public property.
Ultimately, the debate over Syrian liquidity extends beyond the question of whether funds are held inside or outside the sovereign wealth fund. It touches on the nature of the assets themselves, their capacity to generate sustainable revenues and the manner in which those returns are deployed. Economists stress that injecting cash alone cannot guarantee output growth unless accompanied by structural financing, modernised banking services, reliable energy supply, adequate raw materials and restored confidence in the national currency.
This article was translated and edited by The Syrian Observer. The Syrian Observer has not verified the content of this story. Responsibility for the information and views set out in this article lies entirely with the author.
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