HTS Rule Leads to Closure of Hundreds of Factories Across Syria

In recent weeks, Syria’s industrial sector has faced unprecedented challenges, with significant factory closures and economic turmoil affecting key regions. The primary keyword “Syria’s industrial sector” highlights the ongoing struggles that manufacturers and workers are enduring due to instability and external pressures.

Over the past three months, Syria’s industrial sector has suffered severe setbacks, with around 420 factories, plants, and workshops shutting down across key provinces, including Aleppo, Damascus, Latakia, Tartous, and Homs. The closures followed the rise to power of foreign-backed militants, led by Hayat Tahrir al-Sham (HTS), a former al-Qaeda affiliate, in Damascus on December 8, when the government of former Syrian president Bashar al-Assad was unseated following a rapid two-week onslaught.

According to industrialist Ahmed Anqa, the lack of security has worsened the situation, with unidentified gunmen looting industrial sites like Sheikh Najjar in Aleppo, Hasiya in Homs, and Adra near Damascus. Additionally, unreliable electricity and a sharp increase in diesel prices—up by 30 percent since the fall of Assad—have driven up production costs for local manufacturers.

Manufacturers in Syria now face several critical challenges:

• Fierce competition from foreign imports: Cheap goods from neighboring Turkey have flooded the market without any government oversight.
• Smuggling issues: Smuggled goods, priced at the black-market exchange rate, undercut local producers who depend on the Central Bank’s official rate.
• Electricity cuts: The HTS-led administration’s electricity cuts further strain businesses already grappling with rising costs.

Furthermore, the economic crisis has deepened with mass public sector layoffs. Reports indicate that up to 12,000 employees have been dismissed from Latakia province, along with 500 workers at the General Company for Iron and Steel Products, according to the Syrian Observatory for Human Rights. Additionally, a report by Syria TV suggests that up to half a million state employees could face job cuts as part of the HTS-led administration’s shift toward a “competitive free-market economy.”

“The goal is to balance private sector growth with support for the most vulnerable,” interim Minister of Finance Basil Abdel Hanan told Reuters. However, these sweeping reforms, which include privatizing state-run enterprises and removing “ghost employees,” have sparked widespread concern among the populace.

In light of this turmoil, the International Monetary Fund (IMF) has begun communications with Syrian officials, raising fears that the country might fall into debt traps unless it focuses on boosting production, exports, and building its dollar reserves. Concerns about the potential repercussions of relying on international financial institutions are echoed by various media outlets.

“Syrians should do everything possible to steer clear of the IMF’s debt traps and those of other lenders—whether states or financial institutions. They must strive to avoid the mistakes made by countries that prioritized borrowing over production, exports, and building up their own dollar reserves,” warned The New Arab, a Qatari outlet, last month.

As Syria’s industrial sector continues to navigate through these turbulent times, the implications of current policies and the ongoing conflict remain significant. The future of local manufacturers and the overall economic health of the nation hangs in the balance, demanding urgent attention and strategic planning to revive and stabilize the industrial landscape.

In conclusion, the ongoing challenges faced by Syria’s industrial sector highlight the importance of securing a stable environment for businesses to thrive. As the situation evolves, stakeholders must focus on sustainable solutions that promote local production and protect workers’ livelihoods.