{"id":39555,"date":"2025-09-08T17:50:09","date_gmt":"2025-09-08T17:50:09","guid":{"rendered":"https:\/\/963media.com\/en\/?p=39555"},"modified":"2025-09-08T17:50:09","modified_gmt":"2025-09-08T17:50:09","slug":"syrias-wage-increases-a-test-of-fiscal-sustainability","status":"publish","type":"post","link":"https:\/\/963media.com\/en\/08\/09\/2025\/syrias-wage-increases-a-test-of-fiscal-sustainability\/","title":{"rendered":"Syria\u2019s Wage Increases: A Test of Fiscal Sustainability"},"content":{"rendered":"

The Syrian government has recently issued a series of economic decisions aimed at easing the economic burdens of its population, amid expert warnings about financing challenges and inflation risks. Syrian Finance Minister Mohammed Yisr Barnieh spoke of wage increases to be implemented in three stages, the first of which was the raise announced by President Ahmad Al-Shar\u2019a nearly three months ago.<\/span><\/p>\n

In June 2025, Al-Shar\u2019a issued a presidential decree mandating a 200% increase in wages and pensions, including the minimum wage, which rose to about 750,000 SYP (around $75). In September 2025, a significant salary increase for judges was also announced, ranging from $550 to $1,200 per month, effective from August 16.<\/span><\/p>\n

Experts point out that financing these raises relies heavily on external aid and grants; Qatar and Saudi Arabia contribute around $29 million monthly to support salaries in key sectors, especially health and education. The projected cost of these wage hikes is about 1.65 trillion SYP, or nearly $127 million, to be financed through the treasury, regional support, new investments, and the recovery of foreign assets.<\/span><\/p>\n

These measures come as the World Bank projects weak economic growth in 2025 of around 1%, following a contraction of 1.5% in 2024, amid continuing financial and security crises and sanctions. The International Monetary Fund, for its part, stressed Syria\u2019s urgent need for broad international support, praised the reform commitment of financial leadership, and proposed a roadmap for tax reform and monetary stability.<\/span><\/p>\n

These decisions are being taken as Syrians suffer the worst hunger crisis in their modern history; over 14 million people face food insecurity, while the agricultural sector has collapsed due to drought and climate change.<\/span><\/p>\n

While salary increases are viewed as a necessary interim step to ease living pressures, they face major financing challenges. The Syrian economy suffers from severely weakened domestic revenues, heavy dependence on external support, and declining production.<\/span><\/p>\n

Press reports point to positive signals of structural reforms, improving the investment climate, and utilizing natural resources, but these must be translated into tangible, sustainable projects. Salary sustainability cannot be ensured without genuine improvements in the economy, productivity, security, and the investment environment. Continued external support, rehabilitation of vital sectors, infrastructure development, and tackling the food and climate crises remain decisive factors for economic recovery and stability.<\/span><\/p>\n

Read also: Can Syria\u2019s First Post-Sanctions Oil Export Spark Economic Revival?<\/a>
\n<\/strong><\/p>\n

Warnings of Inflation and the Need for Structural Reform<\/b><\/h2>\n

In this context, Dr. Samaher Al-Khatib, professor of international relations and diplomacy, told <\/span>+963<\/b>: \u201cThis step will be symbolic or temporary only, considering that the Syrian government faces major financial challenges that undermine its ability to finance wage increases sustainably.\u201d<\/span><\/p>\n

She argued that the Syrian economy has contracted by over 85% since 2011, with the Syrian pound\u2019s value collapsing catastrophically (a 270-fold depreciation against the dollar) and no clear state budget, currently estimated at around 52.6 trillion SYP, about $2.6 billion at the former exchange rate, a weak budget compared to the country\u2019s needs.<\/span><\/p>\n

The government depends on several sources to finance wage increases, including external grants (such as Qatar\u2019s $29 million monthly contribution), reallocation of public spending, improved tax collection, and Arab and international investments estimated at around $30 billion, according to Al-Khatib. This involves \u201cimproving domestic revenues from natural resources. Syria has significant untapped resources (oil, gas, phosphates, agriculture). Oil production is 65,000\u201370,000 barrels per day, while national demand is 90,000. Gas production covers only 30% of local needs. Phosphate exports generate $400 million annually but could reach $2 billion if processed domestically. The government is also working on tax system reforms to improve revenues, alongside external support and loans.\u201d<\/span><\/p>\n

This support and grant funding represent a key source of wage financing today, such as Qatari, Saudi, and Turkish assistance in energy, infrastructure, and foreign investments like French management of Latakia Port and Emirati-financed port development projects. Meanwhile, monetary policies such as printing money raise alarm, as \u201cresorting to printing will have devastating inflationary effects,\u201d she warned.<\/span><\/p>\n

Al-Khatib cautioned: \u201cEvery previous wage increase was followed by a surge in prices, rendering the impact on citizens almost negligible. This was evident even before the latest raise was disbursed, as prices of food and essentials rose immediately due to traders anticipating inflation. Increasing the money supply without parallel production growth inevitably drives prices up, leading to monetary imbalance.\u201d<\/span><\/p>\n

To avoid inflation, she calls for \u201cboosting production by supporting productive sectors like industry and agriculture to reduce reliance on imports (which account for 70% of basic goods) and enforcing strict market oversight to prevent monopolies and price manipulation. Distributing the raises gradually (up to 400%) could soften the inflationary shock.\u201d<\/span><\/p>\n

She stressed that \u201cshort-term plans do exist, but this does not negate the need for deeper investment in productive sectors by better utilizing natural resources, particularly oil, gas, and phosphates. The agricultural sector is also promising\u2014once contributing 28% of GDP in 2010, now down to 10%\u2014and requires revival plans.\u201d<\/span><\/p>\n

This includes major investment projects such as building four gas-powered plants and a solar power station costing $7 billion, developing Latakia and Tartous ports with French and Emirati investments, and projects in telecommunications and digital services.<\/span><\/p>\n

According to Al-Khatib: \u201cStructural reforms are also needed, evident in the government\u2019s adoption of a free-market approach, privatization of some public enterprises, and wage system reforms. The government affirms that wage growth is part of a comprehensive plan to reform the salary framework, while also working on amending investment laws to attract foreign capital.\u201d<\/span><\/p>\n

She concluded: \u201cIn sum, the government has limited financial capacity to sustain permanent wage increases, relying heavily on external support for now. There is a real risk that higher wages will trigger a new wave of inflation unless accompanied by production growth and strict market supervision.\u201d<\/span><\/p>\n

While there are plans for investment and production increases, they remain insufficient in the short term to guarantee sustainable wage hikes. The sustainability of raises hinges on external factors: continued foreign support, successful investments, and improved security. In short, wage increases are a positive step to ease Syrians\u2019 hardships, but they remain insufficient and unsustainable without deep structural reforms and productivity gains. Their success depends on striking a delicate balance between monetary and fiscal policies on one hand, and policies to boost production and investment on the other, in her view.<\/span><\/p>\n

Read also: Sovereign Wealth Funds: Global Engines of Growth, But Where Does Syria Stand?<\/a>
\n<\/strong><\/p>\n

A Call for Pragmatism and Stability<\/b><\/h2>\n

Economic expert Nihad Ismail, residing in London, told <\/span>+963<\/b>: \u201cAfter 14 years of internal conflict, economic neglect, and sanctions imposed on the previous regime, the Syrian economy has been drained. Dropping zeros from the currency won\u2019t solve the problem unless accompanied by effective economic reforms. In this difficult stage, raising wages by printing more money will fuel massive inflation, rapidly eroding value and triggering fresh demands for even higher wages.\u201d<\/span><\/p>\n

Ismail emphasized: \u201cAt this critical juncture, Syria must rely on loans and grants from Arab Gulf states and seek IMF support under lenient terms, giving the country a chance to recover, rebuild infrastructure, and rehabilitate its economy.\u201d<\/span><\/p>\n

He added: \u201cThus, Syria can implement moderate wage increases while prioritizing vulnerable groups unable to work. This requires a solid economic base, export growth, and a safe, stable environment to attract Arab and global investments, while rehabilitating agriculture, industry, tourism, and energy resources like oil and gas. This will take years, but economic growth remains the only real solution to raising wages and living standards overall.\u201d<\/span><\/p>\n

He concluded: \u201cInfrastructure, water, electricity, security, stability, healthcare, social welfare, and education remain top priorities at this stage. Syria faces immense challenges, but it can recover if it moves away from sectarian and ideological agendas, avoids regional entanglements, and focuses on pragmatic economic policy and establishing security and stability.\u201d<\/span><\/p>\n

\n","protected":false},"excerpt":{"rendered":"

The Syrian government has recently issued a series of economic decisions aimed at easing the economic burdens of its population, amid expert warnings about financing challenges and inflation risks. Syrian Finance Minister Mohammed Yisr Barnieh spoke of wage increases to be implemented in three stages, the first of which was the raise announced by President […]<\/p>\n","protected":false},"author":107,"featured_media":39557,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"jnews-multi-image_gallery":[],"jnews_single_post":{"format":"standard","override":[{"template":"1","single_blog_custom":"0","parallax":"1","fullscreen":"1","layout":"left-sidebar","sidebar":"default-sidebar","second_sidebar":"default-sidebar","sticky_sidebar":"1","share_position":"float","share_float_style":"share-normal","show_share_counter":"1","show_view_counter":"1","show_featured":"1","show_post_meta":"1","show_post_author":"1","show_post_author_image":"1","show_post_date":"1","post_date_format":"default","post_date_format_custom":"g:i a 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reforms."},"jnews_primary_category":[],"jnews_override_counter":{"view_counter_number":"0","share_counter_number":"0","like_counter_number":"0","dislike_counter_number":"0"},"jnews_post_split":{"post_split":[{"template":"1","tag":"h2","numbering":"asc","mode":"normal","first":"0","enable_toc":"0","toc_type":"normal"}]},"footnotes":""},"categories":[382,19],"tags":[],"ppma_author":[390],"class_list":["post-39555","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-opinions","category-slider"],"yoast_head":"\nSyria\u2019s Wage Increases: A Test of Fiscal Sustainability - 963+<\/title>\n<meta name=\"description\" content=\"Syria raises wages by 200% to ease hardship, but experts warn of inflation, financing gaps, and the urgent need for structural economic reforms.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" 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