Syria’s External Debt: How Much, to Whom is it Owed, and Will it be Repaid?

On the eve of the uprising in 2011, Syria had already lowered its debt burden through a rescheduling program that started in 2005 as part of its broader fiscal reforms. This program helped the government to reduce its debt to GDP ratio from 113% in 2004 to 30% in 2010, supported mainly by a debt forgiveness and restructuring agreement with Russia and Eastern European countries. Most of Syria’s debt is long-term (more than one year maturity), while short-term represents about 10% of the external debt. 

Before the 2011 uprising, Syria’s debt continued to be mostly owed to Russia, following a debt forgiveness and restructuring agreement ratified by Moscow in 2008. Debt to multilateral institutions remained negligible.

The fact that Syria’s reported external debt levels remained relatively unchanged during the conflict, combined with a sharp decline in recorded debt servicing payments, suggests that the composition of Syria’s creditors did not significantly shift after the uprising began.

However, the widely-cited data from The World Bank does not disclose all loans. In fact, in addition to old debt remaining largely unpaid, the Assad regime increased the pace of borrowing from its allies in Tehran and Moscow without disclosing these loans in official government budgets or debt statistics.

After the collapse of the Assad regime, the Minister of Foreign Affairs in the Caretaker Government (CG) revealed that the total debt owed to Iran and Russia is estimated at 30 billion USD. These estimates contrast with leaked documents from Iran’s Ministry of Foreign Affairs, which report that the former Syrian government owed 50 billion USD to Tehran alone. Evidence from other sources also suggests that Syria owed much smaller debts to Russian oligarchs, including for the procurement of basic goods such as wheat and medicine.

However, it is imperative to distinguish between officially recorded debt extended to Syrian government institutions and undisclosed financial support used to sustain Assad’s military operations. The former includes loans that appear in Syria’s public financial records, while the latter consists of unpublished commitments, such as Iran’s funding of parallel security and military formations—including the National Defence Forces or foreign militias such as Fatimyoun and Zaynabyoun—or Russia’s funding of the Fifth Corps. These off-the-books financial arrangements were never publicly reported in Syria’s official debt statistics, making their exact scale difficult to assess.

Syria’s formal debts to Iran were in the form of a credit line used primarily for facilitating oil shipments. However, uncertainty surrounds the limit of Iran’s credit line: As of 2019, Reuters estimated it at 4.5 billion USD, while others put the figure at 7.6 billion USD. Given that Iran claims Syria owes 50 billion USD and only 7.6 billion USD at most is the verifiable civilian debt, it is likely that the remainder of Syria’s debt is related to undisclosed military support. 

As for Russia, Syria’s formal debts to Moscow appear to be smaller. One source reports that Russia extended 1 billion USD in export-financing loans starting in late 2020, but the full extent of Syria’s debt to Moscow remains unclear.

It also remains uncertain whether the CG plans to continue servicing the debts owed to the former regime’s allies, particularly those linked to financing Assad’s military operations. We believe the CG is unlikely to service these loans due to several critical factors. First, there is no international mechanism that creditors can utilize to reclaim the debts, leaving them without a formal avenue for enforcement. Second, Iran in particular lacks the diplomatic and economic leverage over the CG that has historically been essential for securing debt repayments after the downfall of former regimes. Finally, the exact size and terms of these debts are difficult to determine, as they were not publicly documented in Syria’s official debt records, and details of their agreements remain opaque.

The CG is likely to argue, rather plausibly, that these debts were odious, accrued to sustain a regime that lacked popular legitimacy. In fact, the CG has recently demanded compensation of 300 billion USD from Iran for its role in supporting Assad’s war efforts, effectively negating any obligation to repay the comparative pittance Assad owes.

Furthermore, some of Syria’s debts to Iran and Russia were supposed to be paid through investments in Syria such as in the phosphate, telecommunications, and oil sectors. However, the fate of many of these investments is already changing, a topic we will discuss in future issues.

How Syria handles its debt obligations—whether by honoring them, renegotiating them, or disputing them as odious—will shape its ability to access external financing in the future. While a formal credit rating from major agencies like Moody’s, S&P, or Fitch is unlikely to be relevant in the short term, Syria’s financial credibility will still matter for securing concessional financing from institutions like the International Development Association (IDA) or through direct bilateral agreements. The new Syrian government will likely prioritize financial assistance from international donors and multilateral lenders over commercial borrowing, but its approach to debt management—particularly in dealing with contested obligations to Iran and Russia—will influence its ability to secure such support.