Middle East
HTS to ‘shrink the state’ through privatization and civil servant sackings
Syria’s new Islamist leaders are embarking on a radical overhaul of the country’s economy, including plans to sack a third of public sector workers and privatize state-owned companies that dominated under the Baath Party and the Assad’s.
The first sackings began just weeks after the ouster of Bashar al-Assad on December 8, while the pace of the announced crackdown “against waste and corruption” has triggered protests by government employees, including fears of a “sectarian purge of jobs,” Reuters reported by Riham Alkousaa.
Reuters spoke to five ministers in the interim government formed by Hayat Tahrir al-Sham (HTS), all of whom described the broad scope of plans to “downsize the state.” They said this included the elimination of a large number of “ghost employees” (people who allegedly received salaries for doing little or nothing under Assad).
Reuters lends support to the sectarian narrative, arguing that under Hafez and Bashar al-Assad, Syria was organized as a “militarized, state-led economy that favored an inner circle of allies and family members, with members of the Alawite sect of the family heavily represented in the public sector.”
107 state-owned companies to be divested
HTS’s economy minister, 40-year-old former energy engineer Basil Abdel Hanan, told Reuters that there was a major shift towards a “competitive free market economy.”
The government under “interim president” Abu Mohammed al-Jolani (Ahmed al-Shara) will work to privatize state-owned industrial companies, which Hanan said total 107, most of which are loss-making.
Hanan promised to keep “strategic” energy and transport assets in public hands but did not name the companies to be sold. Syria’s main industries include oil, cement, and steel.
Finance Minister Mohammad Abazeed said in an interview that some state-owned companies existed only to embezzle funds and would be closed down. Abazeed said, “We expected corruption, but not this much.”
Half of the civil servants may be sacked
Abazeed said that based on a preliminary examination, only 900,000 of the 1.3 million people on the state payroll actually showed up for work.
“That means there are 400,000 ghost names. Eliminating them would save considerable resources,” Mr. Abazeed said.
Administrative Development Minister Mohammad Alskaf, who oversees public sector staffing, went further, telling Reuters that the state would need between 550,000 and 600,000 employees, less than half the current number.
Abazeed said that the reforms, which also aim to grant amnesty for penalties and simplify the tax system, aim to remove obstacles and encourage investors to return to Syria.
HTS’s goal is familiar: Reduce bureaucracy, boost exports
“So factories inside the country can serve as a launching pad for global exports,” said Abazeed, who was an economist at Al-Shamal private university before serving as a treasury official in the HTS stronghold of Idlib in 2023.
Since 2017, HTS has been attracting investment and the private sector in Idlib “with less bureaucracy and pressure on hardline religious groups,” according to Reuters.
The new government hopes for a nationwide increase in foreign and domestic investment to create new jobs as Syria rebuilds after 14 years of conflict, three ministers told Reuters.
However, for HTS to replicate the “Idlib model,” it will have to overcome a wide range of challenges, notably international sanctions that severely hamper foreign trade.
The question of the legitimacy of al-Jolani’s government could be raised
Maha Katta, Resilience and Crisis Response Specialist for Arab Countries at the International Labour Organisation, said the economy is currently not in a position to create enough private jobs.
Katta said, “I’m not sure it’s really a wise decision,” adding that restructuring the public sector “makes sense” but questioning whether it should be a top priority for a government that needs to revive the economy first.
While recognizing the imperative for interim leaders to act quickly to get the country under control, some critics see the scale and pace of the planned changes as overreaching.
Aron Lund of the Middle East-focused think tank Century International said, “They talk about a transition, but they are making decisions as if they were a legitimately constituted government.”
Islamist government to administer neoliberal ‘shock therapy’
Economy Minister Hanan said economic policy would be designed to manage the consequences of rapid market reforms to avoid the chaos of recession and unemployment that followed the “shock therapy” imposed on post-Soviet countries in Europe in the 1990s.
Mr. Hanan said, “The aim is to balance private sector growth with support for the most vulnerable.”
The government has announced a 400% increase in civil servant salaries, currently around $25 a month, starting in February. It is also mitigating the impact of layoffs through severance pay or by asking some workers to stay at home while needs are assessed.
Hussein El Khatib, Director of Health Facilities at the Ministry of Health said, “We are saying to the employees who are hired just to get a salary: please take your salary and sit at home, but let us do our job.”
Discontent Among Public Laborers Grows
But discontent among workers is growing. Workers have been showing Reuters lists circulating in the labor and trade ministries, which have scaled back Assad-era employment programs for former soldiers who fought alongside the government in the war.
One of these veterans, Mohammed, told Reuters he was dismissed from his data entry job at the labor ministry on January 23 and given three months’ paid leave. Mohammed said 80 other former fighters had received the same notice, which he shared with Reuters.
Responding to questions from Reuters, the labor ministry said that “due to administrative inefficiencies and implicit unemployment” some employees had been placed on three months’ paid leave to assess their work situation, after which their status would be reviewed.
The plans sparked protests in January in cities such as Daraa in southern Syria and Latakia on the coast.
Daraa Health Directorate employees carried banners reading “No to arbitrary and unjust dismissals” during a demonstration attended by dozens of people.
Demonstrator Adham Abu Al-Alaya said he fears losing his job. He says he supports the elimination of ghost labor but rejects the allegation that he or his colleagues are being paid for doing nothing. He was hired in 2016 to manage records and pay bills.
Abu Al-Alaya said, “My salary helps me meet my basic needs, such as bread and yogurt,” adding that he also works another job to make ends meet.
He said, “If this decision is implemented, unemployment will increase across society, which is something we cannot afford.”
Middle East
Israeli envoy warns red line crossed over Turkish moves in Syria
Israel’s Ambassador to the US, Yechiel Leiter, stated that Tel Aviv received clear intelligence showing Türkiye planned to expand its military presence in Syria significantly, an action Israel deemed the crossing of a “red line.”
Speaking to The Jerusalem Post, Leiter said: “We are not looking for an escalation or a war with either Türkiye or Syria. But a red line was crossed.”
His remarks follow an Israeli air strike on the Abu al-Duhur Airbase in Idlib, Syria, which drew swift criticism from both the Syrian and Turkish governments.
Leiter continued:
“This was seen as a blatant Turkish violation of the understandings. Those who needed access to the intelligence received it. Those who needed to know what was going to happen knew. We made it clear that this was contrary to our understandings, and that is why Israel acted as it did.”
According to Leiter, the failure to heed these warnings led Israel on Tuesday to strike the Abu al-Duhur airbase, where Turkish forces were allegedly expected to arrive.
Syrian officials stated that the airbase was targeted by at least eight strikes, whilst subsequently released satellite imagery revealed damage to the runways.
Leiter stated that the Turkish move contradicted understandings reached during the Biden administration between Israel and the administration of Syria’s new leader, Ahmed al-Sharaa, which “froze the existing situation” in the country.
According to Leiter, these understandings were reaffirmed during a meeting held in Paris in January 2026, attended by Syrian Foreign Minister Asaad al-Shaibani, US Special Envoy for Syria Tom Barrack, Leiter, then-National Security Council head Gil Reich, and Netanyahu’s military secretary Roman Gofman (now director of Mossad).
Leiter continued:
“This freeze means we do not act as long as the Turks do not act, and they do not force us to withdraw. It is also important to understand: whilst we maintain a security zone of only 78 square miles [approximately 202 square kilometres] in Syria, the Turks have, over the past few years, slowly annexed 3,500 square miles in northern Syria—roughly 5% of the country’s territory.”
According to The Jerusalem Post, with the exception of Tom Barrack, the US Special Envoy for Syria and Ambassador to Türkiye, senior US officials did not condemn the Israeli strike in Syria.
“The administration’s policy is that the previously agreed freeze should continue; that is why even Trump did not condemn the strike,” Leiter said.
Despite the tensions, Leiter emphasised Israel’s understanding that Syria is not seeking an escalation or war.
“It is clear to us that the Syrians do not want a confrontation with us. That is why we tell the Turks not to create conflict. There are multiple indications that the move planned by Türkiye was imposed on the Syrians,” the ambassador said.
Leiter argued that this apparent discord was also evident in the conflicting statements issued by Türkiye and Syria following the strike:
“Whilst Syrian Foreign Minister Shaibani acknowledged that a Turkish delegation was in Syria a few days before the strike, the Turks denied this. They need to resolve this matter between themselves.”
Leiter did not rule out a return to direct talks with Syria, as conducted in the past, but said conditions must be suitable.
“Negotiations can be resumed. We want to continue the face-to-face dialogue we previously conducted with the Syrians,” Leiter said.
Leiter added that Israel is not seeking a conflict with Türkiye and remains open to dialogue with Ankara.
“We are certainly open to dialogue with them, but judging by statements from senior officials in the country, they would prefer to wipe Israel off the map,” the Israeli diplomat said.
Alleging that Türkiye hosts Hamas leaders and “channels funds” to Hezbollah and Hamas, Leiter argued that it was inappropriate at this juncture for “Türkiye to begin expanding its influence in Lebanon and Syria.”
Leiter continued:
“Under current conditions, Türkiye cannot be a force that helps bring calm to the region. If only we could return to the state of relations between Jerusalem and Ankara from several decades ago. Back then, we would have been open to Türkiye’s influence in the region. But in an environment where Türkiye funds terrorist organisations, an increase in its regional influence makes no sense.”
Middle East
UAE halts trade with Iran after reported ballistic missile attack
The United Arab Emirates (UAE) has suspended commercial and economic relations with Iran after announcing that Tehran launched two ballistic missiles towards the Gulf state on Tuesday.
The UAE Ministry of Defence stated that air defence systems detected two ballistic missiles launched from Iran towards its territory.
The incident is considered Tehran’s first direct attack targeting the Gulf country since May.
The event prompted emergency telephone alerts to be sent to residents across the UAE.
The Ministry of Defence stated that assessments indicated the missiles targeted maritime traffic, adding that one missile fell into the sea outside UAE territorial waters and the other landed within territorial waters.
The UAE Ministry of Foreign Affairs later announced that “in light of regional tensions that undermine regional and international peace and security, all trade, commercial relations, and financial transactions with Iran have been halted until further notice.”
Iran denied any involvement in the missile attacks. Iranian Foreign Ministry Spokesperson Esmail Baghaei said the claim “contradicts the principle of good neighbourliness and undermines ongoing efforts to strengthen trust among regional countries.”
The missile strikes occurred after a period in which the UAE and Tehran had sought to reduce tensions between the two countries.
The bulk of Tehran’s military retaliation targeted neighbouring Gulf states, which Iran accused of facilitating US-Israeli attacks.
The UAE bore the heaviest brunt of Iran’s attacks against US allies in the Gulf, sustaining nearly 3,000 missile and drone strikes.
Exhibiting the most hawkish stance against Tehran among its Gulf neighbours, the UAE responded with dozens of strikes against Iran.
However, tensions between the UAE and Iran eased following a memorandum of understanding signed between Washington and Tehran in June.
After the agreement began to unravel in early July, Iran largely redirected its attacks towards Bahrain, Kuwait, and Jordan.
In recent months, the UAE reactivated diplomatic and economic channels with Iran while simultaneously strengthening its military ties with Israel and the US.
Tuesday’s missile strikes threaten to disrupt the atmosphere of normalisation that had returned to the UAE.
While Dubai’s financial district was once again filling with bankers, certain commercial activities between the emirate and Iranian ports had resumed.
Furthermore, several Iranian flights to the UAE had quietly resumed.
UAE authorities had also begun permitting the return of approximately 20,000 Iranians holding UAE residency permits who were outside the country when the war began.
UAE officials have repeatedly emphasised that the country seeks to avoid being drawn further into a broader regional war.
Nevertheless, efforts to de-escalate tensions between the UAE and Iran have come under increasing strain in recent weeks.
This month, the UAE accused Iran of attacking vessels belonging to the Abu Dhabi National Oil Company in the Strait of Hormuz.
Middle East
US considers land blockade on Iran involving Türkiye and neighbours
To date, the US has imposed sanctions on thousands of Iranian individuals and legal entities; however, the Tehran administration continues to bypass these restrictions by rapidly establishing new structures to replace those that have been blocked.
In an assessment citing expert opinions published by the Reuters news agency, the current situation was likened to a game of whack-a-mole.
Whack-a-mole is known as a game of agility and reflexes based on the concept of hitting plastic figures with a mallet as they pop up unexpectedly from their holes.
Speaking to the agency, experts outlined other options that Washington could deploy to increase pressure on Tehran and raise the efficacy of sanctions.
Potential measures include restrictions targeting independent Chinese refineries, known as “teapots,” which account for a quarter of China’s oil refining capacity.
China purchases more than 80% of the oil exported by Iran, and these refineries process the vast majority of those shipments. Nevertheless, these facilities have limited ties to the US financial system, rendering them partially protected against secondary sanctions.
Another option on the table is increasing pressure on major Chinese banks. The US Department of the Treasury’s Office of Foreign Assets Control (OFAC) has applied secondary sanctions to small firms based in China and Hong Kong accused of executing billions of dollars in transactions for Iranian oil.
The agency has also warned two large banks, though it has not yet included them on its sanctions list.
While taking steps against major banks could deter other financial institutions, such actions carry the risk of Beijing enacting retaliatory measures. Washington seeks to avoid such tension ahead of a potential meeting between US President Donald Trump and Xi Jinping in September.
Experts are also evaluating the possibility of enforcing a land blockade with the participation of Iran’s neighbours: Iraq, Türkiye, Pakistan, Azerbaijan, Turkmenistan, and Armenia.
The Trump administration holds various leverage mechanisms against such nations, including Pakistan, which is requesting a $10 billion swap line, and Türkiye, which seeks to rejoin the F-35 program. Analysts express, however, that implementing such a blockade on the ground and generating the expected pressure inside Iran would be difficult.
Trump has repeatedly voiced threats to impose secondary tariffs on countries that trade with Iran; however, the US Supreme Court struck down the legal basis for such measures.
On the other hand, a anti-Russia “crushing” sanctions bill passed by the Senate includes new restrictions on Iran and grants Trump tariff authority.
This bill must also pass a vote in the House of Representatives; however, the text faces opposition from both Democrats and certain Republican lawmakers.
US Treasury Secretary Scott Bessent announced in mid-August that Trump would disclose new measures designed to raise Iran’s economic isolation to an unprecedented level.
Stating that the US President had instructed the re-establishment of the maximum economic pressure policy against Tehran, Bessent said, “We have moved from Epic Fury to Economic Fury.”
Following Bessent’s statements, Bloomberg noted that Tehran has learned to manage the consequences of a naval blockade and thousands of restrictions. According to the agency’s analysts, the principal obstacle facing Washington is the close economic relationship between Iran and China; indeed, Beijing secures more than 90% of Iranian oil exports. Sanctioning the entities facilitating these purchases would directly reduce Tehran’s oil revenues, yet the US is avoiding this step for now.
Maritime traffic in the Strait of Hormuz remains restricted. On August 11, Iran conveyed its conditions for lifting the blockade in the strait to the US through intermediaries.
Tehran’s conditions included an end to threats and military actions, the lifting of the blockade and sanctions, compensation for damages, and the release of frozen assets.
On August 14, Trump claimed that following the end of the war with Iran, he would declare the Strait of Hormuz to be US territory. Responding to these statements, the Iranian Foreign Ministry warned that the Strait of Hormuz could not be seized “by a tweet, an aircraft carrier, an executive order, or a campaign speech.”
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