Turkey Eyes Economic Gains in Syria’s Reconstruction Despite Challenges

With the Syrian civil war winding down, Turkey is positioning itself as a key player in the country’s reconstruction, seeing both political and economic opportunities. The Turkish government and private sector anticipate lucrative contracts across multiple industries, ranging from construction and steel to textiles and food production. However, recent customs measures by the Syrian interim government and lingering instability present challenges to Ankara’s ambitions.

A Shift in Turkey’s Approach to Syria

Since the onset of the Syrian conflict in 2011, President Recep Tayyip Erdoğan openly backed the Syrian opposition, providing political and logistical support from within Turkey. Over the years, more than three million Syrian refugees have settled in Turkey, peaking at 3.8 million in 2021 before declining to 2.9 million in 2024. According to Interior Minister Ali Yerlikaya, approximately 730,000 Syrians have returned home since 2016. Despite Turkey’s economic difficulties and growing public resistance to refugees, the government has remained committed to supporting the opposition. Now, after 14 years, Ankara is looking to reap the economic benefits of its strategic involvement.

The Economic Scope of Syria’s Reconstruction

Syria’s economic collapse is severe. According to Abdallah Al Dardari, UNDP’s regional director for the Arab States, the country’s GDP has plunged from $62 billion to just $8 billion, while poverty levels have surged from 12% to 65%. The estimated cost of rebuilding Syria stands at $400 billion—an immense undertaking where Turkey sees a major role for its businesses. Ankara hopes to capitalize on Syria’s urgent need for reconstruction, especially in key sectors such as:

• Energy and steel production
• Construction and infrastructure development
• Textiles and furniture manufacturing
• Food and chemical industries

According to Mustafa Gültepe, chairman of the Turkish Exporters' Assembly (TİM), humanitarian aid must come first, but Turkish firms are prepared to help rebuild Syria’s economy. "Whatever our neighbor needs, we will be happy to provide," he stated.

Turkey’s Export Outlook and Steel Industry Prospects

Before the civil war, Turkey-Syria trade reached $1.5 billion, with an ambitious target of $5 billion before political tensions derailed economic cooperation. However, between 2021 and 2023, Turkish exports to Syria still exceeded $2 billion annually. Key exports included:

• Cereals and food products
• Chemicals and pharmaceuticals
• Electronics and steel
• Seafood and textiles

Turkey’s steel industry is particularly optimistic. Veysel Yayan, Secretary General of the Turkish Steel Producers Association, estimates that Syria will need 2–3 million tons of steel for reconstruction. Turkey’s geographical advantage, with the Iskenderun steel plant just 400 kilometers from Syria, gives it a logistical edge in supplying critical materials.

Cautious Optimism Amid Political Uncertainty

While Turkish businesses recognize Syria’s economic potential, they remain cautious due to political instability. New projects are set to begin in the spring, contingent on Syria’s interim government ensuring basic stability. To minimize risks, Turkish firms plan to partner with local Syrian businesses that have ties to the new administration. Murat Akyüz, president of the Istanbul Chemical Exporters Group, highlights the importance of Syrian returnees in bridging business ties: "They understand both markets and can serve as key connectors between Turkey and Syria."

Turkey’s Diplomatic Efforts to Restore Economic Ties

Ankara is actively working to restore diplomatic and economic relations with Syria. Energy Minister Alparslan Bayraktar is preparing to visit Damascus to explore energy cooperation, while Trade Minister Ömer Bolat has already dispatched Deputy Minister Mustafa Tuzcu for trade negotiations. Early government statements suggest numerous agreements have been reached, paving the way for renewed trade and investment.

Customs Hurdles Threaten Turkish Exporters

Despite growing optimism, Turkey faces an unexpected challenge: Syria’s interim government has significantly increased customs duties on Turkish goods. The standardization of customs procedures has raised import taxes by up to 500%, making Turkish exports far less competitive. While Turkey hopes to "cash in" on Syria’s rebuilding efforts, the success of its economic ambitions depends on overcoming these trade barriers and navigating the complex post-war landscape.