Turkey: Impact of the Syrian war’s next stage

Turkey: Impact of the Syrian war’s next stage

The Syrian Civil war is nearing its end game. This article, part five of a five-part series on the regional impact of this news, examines the current economic obstacles and opportunities for Turkey.

Part 5: Turkey

Before the Syrian conflict began Turkey, Syria’s northern neighbor, had been pursuing a policy of “zero problems with our neighbors,” and relations between these two countries had warmed and trade had grown. However, that changed soon after the Syrian conflict began. When the conflict began in 2011, then Prime Minister Recep Erdogan called for Syrian President Bashar al-Assad to step down and allowed Syrian opposition groups to operate out of Turkey. In 2016, Turkey took it a step further and launched military operation Euphrates Shield on Syrian territory to stop ISIS and contain the expansion of Kurdish militias. Turkey now maintains de-facto control over the Afrin region of Syria, is interested in expanding the territory under its control, and putting more pressure on the Kurdish population in Syria. Turkey is home to the largest number of Syrian refugees, hosting 64% or roughly 3.6 million Syrian refugees.

Syria’s impact on Turkey

Improved political and commercial relations with Syria, including a free-trade agreement that came into effect in 2007, strengthened the economy and led to a surge in Turkish exports to Syria. In addition to a range of finished goods and refined petroleum, Turkey also invested in capital equipment as it shifted some of its production to Syria. In 2010, Turkey was Syria’s largest individual source of imports, with sales of $1.8 billion, and among their largest export destinations.

There has been a reversal of many of those trade characteristics since 2011, as many Aleppo-based Syrian companies have relocated across the border to Turkey and are selling much of their finished output back in Syria. Since 2013, Syrian have been establishing businesses in Turkey at a high rate and there are now believed to be between 10,000 and 20,000 Syrian businesses in Turkey. Many of these firms have focused on establishing trade relationships with Syrian counterparts still in the country. In 2016, the Turkish government decided to make work permits available to Syrian refugees and 56,024 Syrians had obtained a permit as of 2017.

The downside from the conflict is that large refugee inflows led to greater competition in the informal employment sector and put pressure on public finances that provide services for refugees. Furthermore, Turkish exports to Syria have dropped as a whole, down to $1.18 billion in 2016. Turkish imports from Syria have also dropped from $729 million in 2010 to $63.5 million in 2016.

Economy today

Turkey’s economy has been very strong throughout most of President Erdogan’s time in power. Economic vulnerability and poverty have fallen and GDP growth peaked at 7.4% in 2017. However, due to circumstances beyond the Syrian conflict, Turkey is heading towards economic difficulties and GDP growth is expected to slow in the coming years. It recently underwent a currency crisis where inflation accelerated and the Turkish currency, the Lira, lost significant value compared to the dollar and the euro. This meant that businesses that had taken out loans in foreign-denominated debt would owe significantly more money than they had expected when they took out the loans. In response, the Central Bank of Turkey raised interest rates to 24%, making new loans very expensive, in order to reign in the currency and to try to stop inflation.

Turkey is also a net energy importer, which has put pressure on its current account and is a slight drag on the economy. However, it has made strategic investments through the building of pipelines in an attempt to become a physical gas hub and transit corridor. It plays an important transit role in the growing Southern Gas Corridor that brings Caspian and Middle East gas to Europe. Turkey also continues to incentivize the private sector to search for offshore oil in the Mediterranean Sea and the Black Sea.

Turkey also has a major agricultural industry, ranked top ten in the world, that employs a quarter of its population. The textile and consumer electronic manufacturing industries are significant parts of the domestic economy.  Over the past 15 years, high public spending on construction projects and the availability of easy money led to the rise of the construction industry and many lucrative companies in that sector. Furthermore, the banking sector of Turkey is home to some of the worlds largest companies.

Opportunities in Syria

Ankara views Syrian reconstruction as a major opportunity for its economy and its businesses. The construction sector is a large employer in Turkey. Turkey will be aggressive in pursuing opportunities for its businesses to win contracts and rebuild Syrian infrastructure. Turkish leaders are very interested in playing a major role in the rebuilding of Aleppo, reportedly. They have made this a central point in discussions with Russian counterparts.

Turkey may attempt to leverage it’s relationships and positioning in Syria to obtain state contracts, international grants, or other rebuilding opportunities. It can put pressure on the Assad regime to offer it opportunities because of its troops stationed in northern Syria or it can incentivize the regime by offering to use its influence to impact rebel groups such as the High Negotiations Committee that operates out of Turkey.

Turkey is well-positioned to play a central role as a material exporter or waypoint for goods that are being sent to Syria for reconstruction, beyond the specific role of building new infrastructure. They can export building materials and foodstuffs. Turkey could also import unrefined petroleum from the Deir Ez-zor region, bypassing the Assad regime by purchasing it directly from US-allied Kurdish or local authorities, and refining it and sending it off to Europe.


Turkey’s role in the next stages of the Syrian conflict is highly malleable at this point. There are many variables that will determine what role such as Turkey’s relationship with Russia, Syria, Kurds, and the Syrian opposition and how it positions itself between all those parties. Turkey’s strategic priorities will be limiting the territorial gains of the Kurdish population, acquiring business opportunities for its fragile economy, and increasing its overall influence in the Levant.

It remains to be seen what will happen to the millions of Syrian refugees within the Turkish borders. The Turkish government and the Turkish people seem to have grown weary of their massive presence within the country and the pressure they have put on public services. Many of those refugees have been in the country for years and have put down roots in terms of businesses and educational degrees. However, the government does not seem to be open to granting citizenship and has only naturalized 12,000 of them.

Overall, Turkey and Syria will remain intertwined due to the host of geopolitical, economic, and social connections between them. There will be plenty of opportunities for both sides to engage and benefit, but there are also high-level tensions between the leaders of these countries that could and likely will inhibit that to some degree.

About Author

Alexander Werman

Alexander Werman is a Middle East analyst currently studying Arabic in Amman, Jordan and interning at The Jordan Times. He previously interned at the Middle East Security Initiative in the Atlantic Council, the U.S. Department of State, Search for Common Ground, and the American Foreign Policy Council. His research focuses on security challenges and governance in fragile states in the Middle East and North Africa. He graduated from George Washington University with a Master's in Security Policy Studies in May 2018.