Syria’s War-Torn Economy: A Hotbed for Financial Crimes and Corruption

The Syrian Arab Republic, once a centralized government, has been mired in an eight-year-long civil war and has become a breeding ground for financial crimes and corruption. This was revealed in a new report from the Anti-Corruption Helpdesk of Transparency International.

A New Economy Emerges from the Ruins

• The conflict has fractured the government into multiple territorial factions
• Powerful business tycoons have seized control of key sectors
  • Aid distribution
  • Public procurement
  • Security
  • Justice
  • Healthcare
• The war economy, estimated to be worth billions, has created a thriving market for organized crime and illicit trade

Pre-Existing Corruption Reaches New Heights

Before the conflict, Syria was known for systemic corruption. Government officials often used their positions for personal gain. However, the war has significantly increased corruption levels.

Concerns over Aid Diversion

• International aid is a critical source of revenue in Syria’s humanitarian sector
• The diversion of this aid has become a major concern

Flourishing Organized Crime

• Arms smuggling, human trafficking, and drug trafficking have thrived in the chaos
• Volatile exchange rates and lack of regulation have enabled these activities to flourish

Predatory Corruption in Government-Controlled Territories

• Despite the weakened state apparatus in many areas, it has not entirely collapsed
• New forms of predatory corruption have emerged
  • Administrative corruption
  • Complicity in organized crime

Non-State Actors Capitalize on the Crisis

• Extortion rackets and protection schemes have been set up by non-state actors
• The lack of a functional legal framework has enabled these groups to act with impunity

Complex Web of Power Struggles and Economic Exploitation

• The Syrian conflict, which started as a popular uprising against the Assad regime in 2011, has transformed
• The U4 Anti-Corruption Resource Centre, in collaboration with Transparency International, is working to provide insights on the Syrian political economy

This briefing was produced in response to a query from a U4 Partner Agency and is part of U4 Helpdesk’s mission to provide research insights and practical recommendations to anti-corruption practitioners and policy makers.