The Abolition of the Caesar Act Highlights the Challenges of the Syrian Economy and Internal Crises

Despite the U.S. House of Representatives voting to repeal the Caesar Act, imposed on Syria since 2019, observers believe that this step will not necessarily resolve the economic crisis the country is facing. They argue that the roots of the collapse stem from internal factors related to economic, administrative, and security policies.

A few days ago, the U.S. House of Representatives voted to repeal the Caesar Act as part of the 2026 National Defense Authorization Act, a move still awaiting approval from the Senate and President Donald Trump’s signature.

Analysts suggest that if the decision is finalized, it will present the transitional government with a test in managing domestic affairs without relying on external sanctions as the primary cause of the economic crisis. They stress that structural challenges remain.

In past years, the previous regime used the Caesar Act to justify economic deterioration and resource shortages. Observers note that this same rhetoric is still present within the transitional government following the fall of President Bashar al-Assad’s regime, despite the political changes the country has experienced.

The repeal of the Caesar Act does not mean the end of all U.S. sanctions on Syria. Instead, it has been replaced by a monitoring mechanism that requires the U.S. administration to review the Syrian situation every 180 days for four years, while maintaining the possibility of imposing individual sanctions if certain conditions are not met. These conditions include combating ISIS, keeping foreign fighters away from government positions, and protecting religious and ethnic minorities.

Economic experts believe that the economic collapse in Syria is primarily the result of an internally decayed system, including tight security centralization, widespread institutional corruption, monopolies linked to power networks, the absence of an independent judiciary, and the destruction of infrastructure due to years of conflict.

Analysts also point out that the decline in the value of the Syrian pound is due to internal financial policies, such as printing money without productive backing, the expansion of the shadow economy, smuggling operations, and the migration of capital and skilled labor. They argue that the impact of these factors outweighs that of external sanctions.

Observers note that the ongoing political and security instability limits long-term investment opportunities and reinforces a war economy based on illicit activities, amid concerns from potential investors about the legal and security environment.

On the livelihood front, experts expect that the Syrian citizen will not experience immediate improvements as a result of the repeal of the Caesar Act. The economic crisis remains structural in nature, with the possibility of limited improvements in the availability of certain goods, but no significant change in purchasing power or basic services in the near future.