Syria's economic revival from China's BRI may lead it into debt trap

Syria has joined China's 'Belt and Road Initiative' (BRI) in desperation to revive its economy but it may lead the war-torn country into a vicious debt trap like several other countries.

Syria is seeking funds from China out of desperation so as to reverse the continuous and sharp decline in its economy since 2011, the year civil war intensified. However joining hands with China will come with risks as Beijing's promises are big, but funding and implementation are slow, reported The Times of Israel.

China is incentivizing Damascus' desperation as it is also an opportunity for China to enhance its footprints in the Middle East. Syria is under China's radar as it represents a corridor to the Mediterranean Sea, which bypasses the Suez Canal and connects China to the African and European Continents.

 

Syrian President Bashar al-Assad was also impressed by Beijing's initiatives to thwart direct western military intervention at the UN Security Council. Syria's admission into BRI would help in boosting bilateral cooperation with China and cooperation with other countries along the BRI, which would enable to circumvent the effects of the US sanctions on the country, reported the newspaper.

The Syrian economy has been devastated by war and witnessed massive destruction of infrastructure worth USD 120 billion. As per UN estimates, the rebuilding of war-torn Syria would need around USD 250-400 billion.

Damascus could only allocate USD 115 million for reconstruction out of the total budget outlay of USD 8.9 billion in 2019. The COVID pandemic has added additional pressure to its budget, which is evident from the fact that Syria's budget for 2022 is the smallest since 2011 (USD 5.3 billion) with a deficit of USD 1.6 billion, reflecting the depth of the crisis in the country.

Syria may find these BRI investments from China helpful in reviving its economy however under the present circumstances, Damascus cannot service the debt.