Since the outbreak of the conflict in 2011, Syria’s private sector has been fundamentally reshaped. Small and medium-sized enterprises have largely collapsed, informality has expanded and politically connected firms gained monopolistic positions across key sectors. By 2024, the shadow economy was estimated to account for about 70 per cent of economic activity, with businesses lacking political protection increasingly crowded out. While domestic narratives often attribute the country’s economic distress to Western sanctions, distorted incentives, pervasive state intervention and a collapse of policy credibility have become formidable obstacles to recovery.

Against this backdrop, LIMS has argued for a shift towards market liberalisation, competition and non-state solutions. Through its Syria’s Economic Renewal Journey initiative (SERAJ), LIMS has proposed a radical simplification of the tax system, replacing a complex and fragmented progressive regime with a low-rate flat tax. The aim, according to SERAJ, would be to attract investment, encourage the return of capital, reduce evasion and signal a credible commitment to market-oriented reform to both domestic and foreign investors.
 
On trade, SERAJ maintains that easing Western sanctions, while necessary, would be insufficient on its own. It argues that Syria would also need to lift internal trade restrictions, reduce non-tariff barriers, simplify border procedures and move towards freer trade arrangements to demonstrate a genuine break with economic isolation.
 
Another central plank of the program is the dismantling of cronyism, which flourished under the previous regime and continues to weigh on private-sector recovery. Creating a level playing field would require curbing privileged access to licences, contracts and regulatory protection. LIMS has called for improvements in the ease of doing business, stronger rule of law, less discretionary state control and lower barriers to entry. Recovery, it argues, depends on competition rather than capital inflows alone. Without opening markets, reconstruction risks reproducing the same captured structures that hollowed out the economy in the first place.
 
In the electricity sector, SERAJ proposes moving away from a state-run monopoly towards an unbundled model separating generation, transmission and distribution. Under the proposal, electricity companies could choose between national or local licences, introducing competition between licensing authorities and allowing private producers and distributors to enter at either level. SERAJ argues that such a framework would attract private capital, improve service reliability and reduce the fiscal burden on the state.
 
SERAJ has also called for the privatisation of state-owned industrial firms under a three-track approach. Enterprises already exposed to private competition should be privatised without delay. Where state firms retain monopolies, market entry should be opened before privatisation proceeds. Non-viable enterprises, meanwhile, should be wound down altogether. While acknowledging concerns over job losses and the risk of favouritism in the privatisation process, the initiative argues that delaying reform merely preserves inefficiency, cronyism and fiscal drain. The greater risk lies not in privatisation itself but in pursuing it without genuine competition, which is essential both to limit favouritism and to absorb displaced labour.
 
Finally, following the abolition of in-kind subsidies in December 2024, SERAJ endorsed the removal of remaining subsidies. It argued that the state should step back from the social safety net, leaving support to civil society, charities, religious endowments, non-governmental organisations and diaspora networks. LIMS maintains that decentralised, community-based assistance is more credible, less inflationary and ultimately more effective than state-run subsidies or cash transfers.
 
Taken together, SERAJ’s argument is that Syria’s recovery is not primarily constrained by a lack of financing. Rather, it reflects a deeper crisis of a centrally planned economy that needs to embrace liberalisation, competition and private sector solutions.

• Towards Strengthening Competition and Decentralization and Adopting Market Prices in the Electricity Sector. December 10, 2025: LIMS, Policy Brief (AR)
• Social Subsidies in Syria: Towards an Alternative Model That Strengthens the Role of the Civil Sector. December 10, 2025: LIMS, Policy Brief (AR)
• Facilitating Business by Simplifying Regulatory Frameworks to Curb Crony Capitalism. December 16, 2025: LIMS, Policy Brief (AR)
• Developing a Competitive Fiscal Policy Aligned with a Free Market Economy. December 16, 2025: LIMS, Policy Brief (AR)